Sports Bar Franchise for Sale (Florida) – $9.4M Revenue Deal Breakdown

0:00Hey, everybody. Welcome back to another episode of Acquisitions Anonymous. I'm Connor Gross and join the crew today to talk about a multi-unit sports bar franchise down in Florida. We had a ton of really interesting conversations about the industry, why Gen Z isn't drinking, is that a good thing, and obviously what impact does that have to the business. But the highlight of the episode was I asked Michael what the alternative business that would fill the void for Gen Z would be the equivalent to a sports bar in the next generation. And his answer is going to shock you. So be sure to stick around.

0:31As always, I help people find franchises. So if you're interested in getting into the franchise game, feel free to reach out to me. I'd be happy to help you. But regardless, stick around to the end of the episode. This is one that you will not want to miss. Well said, Acquisitions Anonymous.

0:44Michael Girdley:Hello, another episode of Acquisitions Anonymous. We don't have 100 % beers anymore. I'm thumbs downing on just the plus inventory. Are you ready to take a leap into business ownership, but you don't know where to start? Well, look no further than Acquisition Lab, the premier resource for entrepreneurs seeking to buy their dream business. Founded by Harvard MBA and acquisition expert Walker Deibel, the lab is your fast track to success in the search, diligence, and acquisition process. With hands-on support, world-class resources, and a community of like-minded entrepreneurs, Acquisition Lab gives you the tools and confidence to navigate every step of the journey.

1:18Michael Girdley:And we're proud to call Walker and Chelsea, the lab's director, long-time friends of the podcast. They're passionate about helping entrepreneurs like you take the next big step. So don't wait to make your business ownership dream a reality. Visit acquisitionlab.com today to learn more and schedule your free consultation. And when you do, be sure to tell them the Acquisitions Anonymous podcast sent you. Connor? Well, we had Bill before, but he had to go. But you brought another deal, a sports bar franchise. I did bring another deal. In full disclosure, I know franchising. I know nothing about sports bars on the business side of things, but I'm acutely aware of them on the consumer side of things.

1:56So we'll see how well that translates. Multi-unit sports bar franchise generating strong revenue. This is in Sarasota County, Florida. The asking price is$6.499 million. The revenue is about$9.4 million. Cash flow is$1.5 million. Wow. popular sports bar and fast casual dining franchise with three locations and opportunities to open additional locations customers enjoy consistently good food great drinks friendly service and a reliable experience every time that they visit whether for a drink with friends the big game on sunday or dinner with the family experienced franchisor or restaurateur looking to grow and expand long-term multiple franchise uh multiple franchises each location generates over$3 million in revenue in 2024, resulting in over$400K of SDE per location.

2:45Two locations lease, and the third enjoys the benefit of owning their building with a land lease. Take advantage of 16 years of loyal client growth to build and expand these businesses with the opportunity to increase locations. This may qualify for a visa. Only qualified buyers may consider SBA financing. NDA, verifiable source of funds, resume, and resume. to receive details. $40 ,000 in inventory, including an asking price of 700K of FF &E. 98 employees. The seller will provide four weeks of training, and their reason for selling is other interests slash retirement. And they confirmed that this business is an established franchise.

3:27I have no idea what franchise it is.

3:30Michael Girdley:So it could be anything from Chili's to Applebee's to something you've never heard of. Could be. Those sound to me like this wouldn't be on Biz Buy Sale if it was Chili's and Applebee's, but I could be wrong. A lot of those are pretty consolidated. But it does say, so they were established in 2009. So it's definitely something that's been around for a little while. I also missed, so real estate sounds like is included. $2.9 million in real estate is what they share. So that must be the one building that they own. Yeah. So they lease two and they own a third one. It is fascinating the valuations that get put on some of this real estate where so often you see like, oh, the real estate here, they have it worth$3 million.

4:19Michael Girdley:And then you ask them, well, what do you pay yourself in rent? They're like$50 a month. It's like, okay, well, these two things don't work together. This sounds too good to be true, though, because if it has$1.5 million in cash flow, the asking price is$6.5 million, but$2.9 of that is real estate. Why does this sound like a good deal? Am I missing something? Yeah, I don't know. I mean, besides it being a sports bar in Florida, I mean, that's kind of... Right, but I mean, it's almost half of the asking price is in real estate. That's a pretty big hedge on the risk of owning a sports bar. Been around since 2009, so 17 years, not bad.

4:58Michael Girdley:The revenue per location is pretty incredible. Like, that's a big check. Well, I guess it's not that crazy, right? You're doing 3.1 million per location. That's not stupid in terms of what you're doing. Yeah, and I mean, you know, margins in the mid-teens-ish, which you know for this kind of business i think is is strong do you know anything about this industry like sports bars in general have you looked at any before no not really i mean it kind of goes to the restaurant being a restaurant tour is really hard um i'd be curious just like what is the caliber of the franchise here is it a known brand with something unique that brings people in you know my time i've spent in florida like there it's just strip mall after strip mall and there are so many just random like gators sports bar with kitchen uh there and there's a lot of people in them because there's not much to do in florida except sit around and drink and get sunburned um i just lost half of our listenership in florida so i'm sorry sorry everybody but it's There's a lot of people who are sitting there, let's just like drinking Bud Lights inside of these bars when I go past them on Tuesday nights, you know, in Florida.

6:20Michael Girdley:So it's very much part of the culture in Florida, for sure. I would be very frustrated in that and understanding what the client base looks like. So I live in Durham, North Carolina. I went to school in Chapel Hill and still, which is much better than Durham. So I spend a lot of time in Chapel Hill, which is obviously a college town. And so I go to a lot of these, you know, sports bars just like on a random night to meet with someone and they're dead and then i go in on a game day and obviously they're just you know packed out and every time i just think about like how does this business owner manage cash flow when their revenue is that volatile not on a monthly basis but literally on like a day-to-day basis and so um yeah i don't know how that impacts the pnl and to what degree but um i think it would be a lot more attractive to find something where it has an established customer base that is frequenting it throughout the week rather than something that's very driven by one-time events.

7:19Michael Girdley:They are asking here for an experienced franchisor, I think they mean experienced franchisee or restaurateur looking to grow and expand to a long-term franchise. And then they quote the cash flow as SDE, seller's discretionary earnings, I wonder how much the owner is spending a lot of time handholding these restaurants to make them this profitable. Because this is really good. They're making$1.5 million on$9.4 million in revenue. That's really good for the restaurant industry to be doing that well based on stuff I've seen in the past. And I could be wrong there, but it feels like these are being really well run.

8:01Michael Girdley:and it makes me wonder, what's the secret? Is the owner in there, hands dirty all the time? Yeah. Where did you see that they're looking for an experience? Oh, yeah. This bullet break is here. Yep. I see it exactly right. And I'm seeing that more and more in the food industry that brands are specifically asking to bring on people that have industry experience, which I think in the food industry is a very good thing because I think that most people starting a business should not dive headfirst into food without experience. But yes, that also could be an indicator that they're just very much involved in the operations.

8:48I mean, 98 employees, that definitely starts to make me sweat. But then you look at the revenue number and it's not, you know, it's not completely out of whack, given that most of these people are going to be part-time. Yeah.

9:06Michael Girdley:Well, that's pretty standard for restaurants, right? Or even fast food places. What's the number that a typical Chick-fil-A employs, like 80 people or something like that? It's ridiculous. That's a good point. Yeah. So it's actually not as bad as I would think. And it says employees. I wonder how many of them are actually W-2. I guess a lot of the back of the house people for sure are. So actually pretty reasonable. Sarasota, not the worst place to be in the whole world. I mean, it's no North Carolina, but pretty good. Yeah. I don't know a ton about the different revenue streams and something like this, but a friend of mine that owns a brewery, I mean, he makes ridiculous margins on the beer that he brews and basically breaks even on everything else, like the food and obviously makes money on drinks.

9:54But so I'm curious how that impacts things if you're not brewing your own beer. Like I would assume that definitely the margins on that take a hit. So I'm just curious where that, what are the revenue streams in this where they're making all of that money?

10:09Michael Girdley:Yeah, I don't know enough about the industry to know. I mean, these are great. This is a great case in point why an experienced franchisee or an experienced restaurateur is the right person probably to buy a business like this because you know what you're getting into. I don't even know where those guys make their money. My suspicion always with these micro brew houses and stuff like that is there's a lot of hidden costs they don't factor in when they're brewing their own beer because it's fun to brew your own beer. but it just from a logical standpoint doesn't make sense that brewing your own beer and a small scale is going to give you a cheaper per beer cost than just having bug weiser deliver it when they have 150 years of figuring out how to do that at scale you know very cheaply and efficiently right but yeah i have no idea how these guys make money or where the profits are so zooming out a little bit i i'm curious michael what you think about like this industry long term because like generationally, have you seen the stats on Gen Z's alcohol consumption?

11:19Drinking? Yeah. Yes. Not good.

11:21Michael Girdley:If you're selling alcohol. Not if you're selling alcohol. I honestly, I have mixed feelings about it because I do think that alcohol is terrible for you and, you know, obviously has a lot of downsides. And I also think that, frankly, for Gen Z, it's like the damage to your liver that it does at 25 years old versus the damage that social isolation, that if you're not using alcohol as a social lubricant, can lead to. I think Gen Z should drink more, but that's my take. Oh, man, I thought we were going to get to argue about this, but you're agreeing with me.

12:03Michael Girdley:I actively tell my kids, go out and get in trouble. Go do some stuff. Go out and have some fun. Go take some risks. go get get nuts so they're listening i think but yeah i've heard scott galloway talk about this and his his line is make reasonable bad decisions that might pay off or something like that you know so i've talked to i mean i've i've talked to my kids about why why there's this level of trepidation it's it is a function of several things but one of the biggest ones is making those kind of mistakes is so much higher risk now than when I was a kid, right? I'm 51. So like, if you were to go back and look at some of the stuff me and my friends did when we were 19 years old, like there is no way we were like not going to be living.

12:57Michael Girdley:Like if you fast forward those actions to today, like there's a potential for those actions to stay with you for the rest of your life. And like, I mean, if you're interested, just go look at Instagram. or TikTok where ladies are talking about their dating experiences and basically shaming men for making mistakes or even talking to them, right? And so if you go talk to these young men, the risk reward is so out of whack where they're just like, it's not worth it to even try because look at this, I'm risking total social isolation and shaming at a period of life where I really just want to belong, which is high school and college, like it's not worth it anymore.

13:38Michael Girdley:And frankly, like the women are not making it any easier by going out and like shaming these men, even anonymously. So it's, I appreciate what Galloway saying. It's a tough thing to fix because of the way technology and culture is right now. It is. And then it's like, yeah, okay. You get shamed, you know, for a bad decision or not even a bad decision, a mistake that you made, which forces you into social isolation and now we have you know ai chat bots that you know gen z guys can go and and fulfill synthetically fulfill you know the void of social isolation um that that brings and i think that it would be much better to go out to a sports bar like the one that we're evaluating right now and the other thing is is like i do think that um like uh well i mean weed cannabis has is now like that those rates have skyrocketed and i do think that like scientifically scientifically speaking yes i do think that alcohol is worse for you than cannabis um for your body but the again the social dynamic there is completely the inverse alcohol typically makes you more social and cannabis makes you less social so um yeah i'm i yeah they need to drink more we need to drink more.

14:57I'm still jizzy. Hey everyone, it's Bill. And I want to tell you about maybe the

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16:25Michael Girdley:It's interesting to keep harping on this. I'm seeing more and more younger Gen Zs just being totally disinterested in having any online footprint at all, right? And they're just like, I don't want to be, I don't want somebody to swat us. I don't want somebody to be able to know who I am. Like my kids are just like totally disinterested in all social media because they're just like, yeah, screw it. Like there's no upside to this. So they're checking out. So my hope is that, you know, post COVID and all the impact that it had on these young people, that they'll kind of snap back to kind of the middle as the pendulum swings, so to speak, and get out and have an adventure.

17:09Michael Girdley:And I am seeing that. Like it's just taking the levels and say my generation did. We were doing crazy shit at 14, and this generation's waiting until they're 24, hopefully. Yeah, yeah. So with that said, from a business case, though, I would be very concerned about the long tail of investing in something where if what we're assuming is through, which is that their profit is very heavily skewed towards alcohol sales. um i just think that with that being as necessary as it is to this thing staying afloat i despite a good deal would be very very hesitant to jump into something like this would you agree yeah i mean i think it's there's there's definitely not a lot of tailwinds like younger generations are are small they're not drinking uh i've seen since i stopped drinking i've seen my my spend per night out go down significantly because there's no$60,$70 bottle of wine on the bill with it.

18:13Michael Girdley:And it's just like, I'll have a club soda. So that is definitely a tailwind. I'd be interested in seeing when somebody dug into this business, like where's your profit and what is the trend rate in each of those profits? I think you're bringing up a great point. So, and what do you think, if you had to predict, what could be the Gen Z equivalent of a sports bar like given the changes that we've seen what is a business opportunity that may in the future build a void that would be left if bars die out not die out but they go you know so far i'm seeing two things like there's there is some evolution of like discord chat rooms that has to grow for folks my kids have a lot of online friends that they've never met in person and so i think there's some evolution that will happen there around online communities that are for sure for real um you are seeing like elder gen z doing these maybe you've seen on like these uh coffee raves and stuff are you familiar with these yes yeah so it's a crazy deal like people go out don't drink anything totally sober go to like 10 a.m on a sunday morning to like a rave at a coffee shop.

19:23Michael Girdley:I don't know about you, but I'm six foot five, goofy looking, and I am incapable of dancing in normal light with no alcohol involved. So I don't dance, but these people just go and do it. It's pretty impressive to watch. Yeah. And I know, I mean, I have friends in California. They've said that their equivalent of like going out in the traditional sense is like everybody just goes and takes edibles and goes and gets ice cream or something. you know so there's a like people still want to go out and want to interact with people in real life um it's just i just think that it's going to look different 20 years from now than what you know it has in the past in terms of the bar scene and stuff like you'll still have your novelty bars in every city that you know everyone visits it's a tourist attraction and is the is a draw but i just think it's going to be really challenging to run a business like this and develop a loyal, standing customer base.

20:23Michael Girdley:I'll give you, you asked for a business idea. I'll give you a better business than this. Sorry, church. These people are going to churches. Churches are a great business. I mean, it's... Nobody wants to. The customer retention tool of salvation is a great, it's a lot of leverage that you can use to maintain customers. You know, it's flat pricing based on your revenue, you know, 10 % of your income goes to the church. Kind of like a franchise. It's funny. I never thought about that parallel. Yeah, no taxes, no taxes. Oh, have you seen like a lot of churches now, they're not even building buildings.

21:04They just meet in like a school. So they have very effective use of real estate. Let's go plant a church, Michael. This sounds fun.

21:11Michael Girdley:I run around some folks that are very, they're atheists and very violent atheists. And so they went nuts because a local evangelical startup church talked the school district into renting out their theater at the local school for church service. And my atheist friends were like, whoa, whoa, what's going on here? This is not what's supposed to be going on from a community sports standpoint. So it was kind of funny. But yeah, continue your way. I was going to also say the craziest thing about the church business is it's one of the few businesses where you don't actually, like, your gratification period is enormous, right?

21:55Michael Girdley:Because you bring somebody to the religion and it's like, okay, you're going to heaven or hell. Like, well, you're not going to know for another 40 years. So see how it goes. Like, there's no NPS score because, like, it doesn't, you know, you're not getting there. Yes. Yeah. Yeah. Well, we're not looking to buy a church today. We're looking to buy a sports bar. So I think we'd be smarter to start a church than start a sports bar. But the acquisition opportunity we have in front of us, I don't hate it as much as I thought I would because of the real estate that's included and because they seem to be performing well.

22:37So I think that like on this spectrum of sports bar deals that we could evaluate, this seems like a pretty good one. Understanding the same. Yeah. Yeah.

22:46Michael Girdley:I think this all comes down to the brand. Is this a good brand you want to be in? Or is this like Gators rando thing? Right. Is it like, let me give you a better spectrum. is it margaritaville or is it like gators random sports bar trashy bud light signs on the you know and and miller light signs on the wall type thing and where is it in the middle of the spectrum and you know if it's you know and then as you double click on that are you in chilies or are you in one of the dying brands like tgi fridays like you know there's there's two different two different things so i think ultimately like that's how somebody should evaluate this not based on historical performance.

23:26Michael Girdley:It's all about like, what's going on with this brand and what is the future of it? And, you know, you see what Chili's is doing, doing really well. And you see how TGI Friday has declared bankruptcy. And then, you know, what are you getting? Because it's all, it's all about it. Yeah, totally. And particularly if they have a more transient customer base, like a Margaritaville obviously would. They have a lot of, in fact, I know someone who invested in a Margaritaville, in a condo, in a Margaritaville resort. and they were just talking about how that is like exactly what they pay for is they have this database of all of the margaritable customers that they market to and that's what inflates the value and so there may be a similar dynamic here if it's a more touristy spot uh which i would expect you know sarasota potentially but um but yeah there's always a part of me that has said I would love to own a bar.

24:20And I have that thought for like two seconds before the rational side of me kicks in and says, I'm just going to own other businesses and then make money and spend my money in bars. Yeah,

24:33Michael Girdley:I think before you get into this, it's worth going to visit with a few of the people who are already franchisees and see what kind of cars they drive, see how healthy they look, see how happy they are about their life. I had a friend, actually, he owned a bar. and they did fine. You know, one of those doing like a million dollars a year in revenue and he would take home$200 ,000 a year. He said, hey, here's why it was horrible. Here's why it was horrible. Your clients are people who are there doing chemical therapy for damages that they have, right? People that show up at a bar at midnight on a Tuesday night are not there because it's a healthy thing to do.

25:14Michael Girdley:uh then on the other side like the employees are often there because they can't get any other jobs and then then you have your last data point which is uh the authorities like at least here in texas they treat you like you're a default criminal like the texas uh alcoholic beverage commission like small bar owners are basically the scourge because these guys want to have zero drunk driving deaths and they attribute the bar owner as the criminal in that situation not the person who got themselves drunk and went and got in an accident so you have scummy people doing scummy stuff and the government is out to harass you and hurt you at every turn he's like he's like i'm quitting he quit it basically he opened a crossfit job he's like i'm gonna go do something healthy yeah and get away from all this and that's a huge point that we didn't even hit on as the liability of something like this.

26:10There is absolutely no upside from a PR standpoint to being a bar owner. It's like there's only... No one's going to go have a great time and you get nearly the amount of PR upside as somebody that goes and crashes or worse. So there's only downside there. And I mean, I know bars where I live that have been effectively shut down, not because they were told legally they shut down, but they just had so much legal blowback, they couldn't withstand it. And so, again, there are ways to drive$1.5 million of EBITDA that don't have the same level of liability, in my opinion. There's easier ways.