The Pirate Liquor Store Making $300K a Year

0:00Welcome to Acquisitions Anonymous. Today's episode enabled me, Michael, to win the co-host of the day award, mostly because I gave it to myself as the award. But we found a deal that was in Alaska, freaking fascinating. And if you stick around to the end, you will be shocked to hear that all four of us loved the deal. Like we loved the deal. So stick around, enjoy the episode. Here it is. Welcome to Acquisitions Anonymous. Bye. said Acquisitions Anonymous. Hello, another episode of Acquisitions Anonymous. We don't have 100 % beers anymore.

0:37David Barnett:And thumbs down on just the plus inventory. Hi, Heather here. When I'm not breaking down deals with these guys, I'm helping people get the right SBA loans for their business acquisitions. Because when you're buying a business, the best financing isn't one size fits all. There's the best rate, fastest to close, the specific loan structure that you need, or a little all of those things. That's why my company, Viso Business Capital, works with over 30 different lenders to find you the best funding in less time and with less friction so you can focus on the deal. Sign up for a free live Q &A session on SBA loans at visocap.net, then click Zoom Sign Up in the top right corner.

1:15David Barnett:That's V-I-S-O-C-A-P.net and click Zoom Sign Up. I was debating whether I I could tell the non-PG joke about bedrock that I pulled off at my house today about, you know, if things are going well, the bed rocks, but I can't go there. So anyway, bedrock quality of earnings, everybody. The most PG family-friendly quality of earnings firm. So we were comparing swag. I have my Aquasil shirt on, Bill, and Michael has his bedrock. Oh, a new bedrock swag. Bill's got his, I'm a very well-off W2 employee swag on. Well, it looks good. Do you have like new skinny guy clothes that you're wearing now, Bill?

1:58Have you gotten to go to that? It's like, I have like no clothes that fit me. Like I go in, I'm like, you know, in your head, you're like, I'm going somewhere tonight. I'll just wear that. And then I go in the closet and I put that on and I'm like, I can't wear this. Like it looks ridiculous. So I'm like always scrambling, like all of the things that I have in my head that I can wear. So many of them don't work anymore. I just got a poncho slim fit shirt. Have you had one of those? I have several of those. I love my, well. I have several of those. None of them fit me any longer. Yeah. Ancho, if you're out there listening, you also could be a sponsor of the podcast and we will wear whatever you want on air.

2:31Oh, why don't we have clothing sponsors? That would be awesome. Wait, are we recording? This is live. Yeah, it is live. Somebody send this to Pancho. Hey, this is what happens when you show up one minute late. One minute late. Classic Michael just hits record. I was looking at the group chat as I'm logging in and I see the URL. It says it's a pirate life liquor store. And I was like, oh, heck yes. So today is choose your own adventure. I have two deals to present to you. One is your opportunity, Bill, to have a pirate life in Alaska. Or number two, a very straightforward, easy to understand license plate engraving business.

3:14ooh i like both of those interesting so i was really in on the liquor store the pirate life thing i thought this was going to go great with my pizza boat until you told me it was in alaska i'm just curious about how you have a pirate life in alaska well it sounds like we should do that one then all right tell me tell me more tell me more captain girdley captain girdley all right this is off biz buy sell you can have a pirate life it's a liquor store that does 2.55 million dollars gross revenue and 306 000 in sellers discretionary earnings located in anchorage alaska the asking price is a million point zero seven two so 1.1 million dollars cash flow is three hundred thousand dollars so build gpt i think that's a 3.1 times multiple is what i see and what's interesting is so you said uh ebitda is 184 sde is 306 right so this is exactly 3.5 x sde we can talk about maybe why those numbers differ but they're asking for three and a half times exactly like to the penny sde fascinating okay well somebody backed into that one uh gross revenue there's a typo i hope 255 million 759 thousand 901 dollars where do you think the typo is on this i mean they don't do they don't do 25 million in revenue oh well it says up here the gross is 2.55 million okay okay there we go so they they forgot there's a missing dust here but what's funny is that their total sales are actually 2.557 million 599 dollars and zero cent yeah for zero one cents which they've put in here and it well to show they can't do math that means it should be 2.56 not to be full Gen X on this but that it rounds up not rounds down Anyway, go ahead, Mills.

5:22I just saw that this business has been around since 1940. I'm jumping ahead, but that is amazing. Since 1940? And the photo here, Phil, looks like a liquor store that's been around for 80 years. The pirate life is timeless, Michael. Look at this photo. I love it. It's like there's snow everywhere. It's like a winter wonderland. uh me this there's counters oh it's a captain sparrow liquor store yeah i don't know if you can see there's like a life-size pirate ship rising out of the roof of this place are you kidding me yeah this is in anchorage alaska so it is it's near the ocean i mean but not the traditional traditional caribbean pirate that you might imagine oh you gotta keep reading this gets better yeah tell us more keep reading all right business description the only the owner only works 10 hours a week has 10 000 plus members and manages the point of sale remotely captain sparrow is a highly profitable liquor store in anchorage alaska generating 2.55 million annual gross revenue with 306 000 in sellers discretionary earnings it was acquired by fuji inc in 2014 and known by many senior customers as the very first liquor store in Anchorage.

6:46This recession-proof business has built a dominant market position with over 10 ,000 loyalty members and maintains a stellar 4.3 Google rating. Before I go on, Heather, is this like the Fuji that makes film out of Japan? Or who is this Fuji Inc.?

7:03David Barnett:I mean, that's the only Fuji I would know of. If you refer to Fuji Inc., that's what it sounds like to me, which is very strange. why they would buy a liquor store in Anchorage. And in 2014, so are they the current owners and they're selling it? That's how I rate it. These Fuji guys currently own it and are selling it. The owner, okay, business highlights. The owner only works 10 hours per week with remote point-of-sale management capabilities. They have a unique pirate theme that creates strong band differentiation in the market. They have an exclusive rewards point system, the only one of its kind in the area.

7:39They have proven resilience that they thrived during the pandemic while competitors struggled. Strong barrier to entry due to Anchorage's strict liquor license limitations. 10 ,000 loyalty members and seamless operations with detailed work manuals. Which is funny because when you look at the pictures of it, the place looks really messy. And there's a bunch of stuff written here on a piece of paper throughout the whole thing. So anyway, sorry to be doubting. Hey, I have encountered businesses that are run very tightly on paper. Yeah, it is possible. Annual revenue, we talked about this. Inventory value is$210 ,000 and they have$100 ,000 worth of fixtures.

8:18A significant untapped potential exists in Bush orders to remote Alaskan communities, assuming those Alaskan communities allow alcohol. The business currently generates thousands of monthly revenue from these orders through website sales alone with no paid advertising. an active owner could substantially scale this revenue stream through targeted marketing before we go on are you guys familiar with how like alcohol works in like rural alaska have you ever looked at this are you yes i am are you asking um so so there are certain communities there where the indigenous people have been so ravaged by alcohol that it is totally prohibited it in the town like you can't by alcoholism you mean by alcoholism yes yes and um so it's like a huge felony like to fly or take alcohol into these places um even such the extent that the guys who do these like bush flights out to these little towns to make sure they have food and supplies and all that kind of stuff like they are held liable even if somebody else sneaks alcohol beer liquor or whatever onto their plane like and they could lose their license like there are crazy stories about happening.

9:25So it is a fascinating difference between kind of what a dry county or a dry city is here in the US. Interesting. Okay. So there are parts of Alaska where just hardcore no alcohol, but clearly not this place because there's a open liquor store. Yep. On Anchorage. Yeah. Which is, by the way, where everyone in Alaska lives. I mean, there are like 10 people in Alaska and nine of them are in Anchorage. it's totally accurate yeah well and people don't understand how few people there are like san antonio is like the number 30 biggest msa in the country and we have 2.8 million people here alaska has half that in the whole state 738 000 total population in all of alaska yeah and the anchorage population is what anchorage population is 286 000 wow okay i think they have more senators bill than they do have house of representatives wow interesting but but bill you're actually the anchorage metropolitan area is 405 000 so so more than half of all of alaska residents live live in the greater anchorage metropolitan area so if you're going to put a liquor store anywhere this is where you want it to be although the bush delivery thing is kind of interesting can you imagine how much a beer costs if they bring it to you on a bush plane push plane or with the sled dogs or something yeah yeah all right uh the business operates as a well-established local landmark with streamlined processes remote point of sale blah blah talks about that loyal customer base the seller is willing to offer a two-week training with part-time advisory support for several months and detailed operational manuals additional business information and and manuals are available on the company website.

11:14The owner is transitioning to a new lifestyle as children have become independent and it represents an exceptional opportunity to acquire a profitable semi-absentee business and a protective market with substantial growth potential. Six employees, three full-time and three part-time. It is an 1 ,100 square foot space with optimized layout and one man daytime operation ensures low overhead. Sale includes the built-in remote point of sale system and a$200 ,000 inventory. so it does say and bill this ties into one of the things i think you love to talk about which is competition the anchorage liquor market has strict license limitations creating a strong barrier to entry for new competitors interesting so it's you can't just roll into town and get a liquor license oh and they have a website yeah i was gonna say this website is amazing it also on when you go to the website it says bush order career or business for sale i'm just on the home page it's on the home page so we're not outing them we're actually helping them okay we're increasing distribution here oh i just looked at who the lister who made the listing so that's what i was going to say serious fuji as in fuji inc ah okay i googled and found their liquor license application from 2021 to 2022.

12:35And there's a lot of info on there, but Sirius Fujimoto owns 100 % of this business. Interesting. Wow. Heather, look at these income numbers on the tax return. He put them on his website.

12:49David Barnett:This is the best listing. I love it. Details. So we know if this is really good or not. It feels like the moat here is, of course, the license. And he didn't say anything. Put his P &L website on this website. Wow. That's a first. I've never seen it. I just clicked on it. Oh, look at that. I've never, I've never seen this. This is so sick. So, which means all of his customers, there's a detailed, if you're on, on YouTube with us right now, there's a detailed QuickBooks dump P &L downloadable from captainsparrow.us, which is their homepage. He's a breakdown seasonally. their best months are around the holidays i mean this is an incredible level of detail but not only is it an incredible level of transparency and the way to do it are you guys looking at these financials so his gross income in 2020 was 1.2 million in 2025 it is 2.5 million he has doubled the business he has doubled a liquor store in a relatively small town in six years.

13:54That's incredible on the top line. And that has taken SDE from 159 ,000 in 2020 to 300 ,000 in 2025. I have got to know what this guy, Sirius Fujimoto, did to double a liquor store that's been around since 1940, been around forever. No one else has managed to do this. And in the last, since COVID, he doubled the top and bottom line. This deal is so sick. I am so proud of myself for finding this. Let me just take a moment. You mean you're so proud of Girdlyclaw for finding this? Yeah. My AI bot found it overnight. In 2019, he was having$67 ,000 revenue months, and now he's having like$250 ,000 revenue months.

14:41He's crushing it. Is it all, do you think, the Bush deliveries that he started delivering liquor?

14:48David Barnett:Could be. it could be that's a completely new sales channel he opened up and grew and that could be it because that is there's also a membership there's a membership model yeah yeah what do we think i don't know but on the website it says membership benefits there's four items one is alcoholic depression i'm not making this up this is on their home page uh this is how you get pirate depression is one of your benefits yes i'm telling you pull it up on youtube you go back to the home page it It says, be a pirate to get points. Membership benefits, alcoholic depression, get points with every purchase, more liver damage, and to be a happy skeleton.

15:30You may have the membership in 60 seconds at the store counter. So I wonder if this is like a... Is it possible that it's a liquor store that you can't buy if you're not a member? Girdley's watching the AI videos on the homepage. no this is not an ai video this is the real thing i literally think the owners are japanese immigrants and they are running it like a japanese immigrant this is so cool hardcore do you guys think this membership is like you know pay a hundred dollars a month and get a hundred dollars a month of store credit or something so it's it's making

16:09David Barnett:people yeah yeah it is that's what it looks like pretty cool smart that would be cool They have an AI video. I'm not going to click on that one. This is their 10th anniversary video. So they have their 6th anniversary video and their 10th anniversary video. And maybe that's his, like, how many years he's owned it. He's owned it, yeah. Since it's been around since 1940. One of these guys has got to be Mr. Fuji. Yeah, I think so. So this is an interesting approach that we have, I don't think, ever seen this much disclosure on the podcast, where somebody just bears all. They just say on their company website, I'm selling, this is why I'm selling, here's all the info.

16:50I think like everybody's mind goes to like, this could totally come back and bite you because now all your customers can find your profitability. And like, there's just so many things that could go wrong. But I mean, is it like, is this going to work for this guy? It could. I mean, it's not like it's, you know, disgustingly profitable and everybody is going to be upset at how much money he's extracting from them. You know, like he provides a needed service in the town of Anchorage. There can't be that many liquor stores. And he makes 300 grand a year doing it, which is probably a lot of money in Anchorage, but it's not, you know, it's not filthy.

17:30So I don't, people are so afraid of it. you know maybe the employees i think one of the biggest risks here is the amount of line item detail that he is exposed so like if if i work at this liquor store which by the way all the employees will eventually see this because one of them will see it and they'll send it around if i work here i can see the payroll expenses by month and i can know how much i make and i can kind of figure out i can guess accurately or inaccurately either way enough to cause a problem for the owner how much everyone else is making as well and ask for a raise i think that is kind of the biggest risk here is your your employees realize that there's room in the p &l to give them raises or they're underpaid relative to their peers etc but let's contrast that where you know

18:18David Barnett:the u.s we have very limited data that's publicly available do you know in the uk all companies financial statements are public little small yeah i just looked it up to be sure i was right uh it's statutorily annual accounts for uk limited companies and plcs are legally required to be filed with companies house where they become part of the public register that anyone can search for free i've been told this before by people looking to buy businesses in the uk and just the contrast that you could actually, this kind of information is available for every business that's out there, whether for sale or not.

18:55David Barnett:So I think in this country, we're so the opposite of that, that this is very shocking, but maybe it's not so scary to just go ahead and put your financials there and cut right to the chase and get a deal done. It's a taboo in our culture about talking about money and finance and salaries and all those things, which is, I don't want to say it's uniquely American, but it is very American. Yeah. because we are considering how capitalist and money we are. Yeah, true. Yeah, so we don't know. The question though, okay, so this guy, Mr. Food, I'm going to call him Mr. Fuji, has grown this business. He's doubled it in six years in Anchorage, Alaska.

19:32He says sort of your next growth leg is going to be these Bush orders. But as Mills taught us, more than half of the population of Anchorage is already, or of Alaska rather, is already in Anchorage. and of the people in the bush i mean how many of them are even in the areas around anchorage i imagine it gets pretty dispersed after that and as mills also said it's got to be pretty price prohibitive you know to get a bottle of captain morgan or whatever delivered to your bush camp so i just can't see like how much are we really going to grow on the bush orders what's crazy y 'all is that like he has, I mean, he's done some amazing things on the website.

20:14You can click the tab that says Bush order. And then there's like a sample cost worksheet where it breaks out all of the costs, the shipping, there's gotta be a minimum or something like that. And I didn't have time to delve into it, but the shipping fee is only like, you know,$35, but it's like the example is Smirnoff, 750 milliliters, quantity 14,$5 packaging fee,$35 shipping fee, and a 15 % city tax at the city where it's going. I mean, he makes this very easy for people to figure out, which tells you that there's got to be a ton of barriers. Like Michael said, there's got to be a ton of barriers to people having done this the way that the status quo always does it.

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21:30They'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. What's fascinating about this is the Japanese are a famously extremely high-trust society. And here this guy just moved to Anchorage, Alaska and said, I'm just going to pretend like it's still Japan. like in japan you can go out and if you leave a hundred dollar like there's tons of stories heather you may have heard these were like like ten thousand dollars in cash gets turned into like a police station because people are like so about harmony that they're like oh i would never just keep that money because how would the other person feel um but it's fascinating this guy like basically lived that japanese culture and then just brought it to anchorage alaska and he's doing the same thing with how he's selling the business which is like well i trust everybody yeah i'm just

22:26David Barnett:go tell them everything we'll see what happens information out there yeah exactly i love it i think there is something refreshing about this it reminds me of the lego minifigure episode that we did like where the business is so unique like you can't say you know hey i'm selling uh you know pirate inspired liquor store in anchorage and like hide it you know and that's like a lot of the value I think is like what it is and where it is. And it was kind of the same with that Lego minifigure episode, like whatever, 400 episodes ago where all the information like you could get at, like it was searchable.

23:04It was Googleable. Like we didn't sign an NDA like always, but like we found any, you know, basically the guy's brother, I think listed the business for him and it was all very transparent. I think that approach is like shockingly refreshing if done right. Oh, oh, I just figured out why they keep mentioning the liquor license thing. Would you like to know? Yes. Yes. Alaska has a quota system on retail liquor licenses. Alaska limits the number of alcohol license issued per community using a quota system. One license per every 3 ,000 residents in a given census area. Generally speaking, the quota for most license types has been met in most larger communities like Anchorage.

23:45That means a new packaged liquor store license may not be available at all as the cap may have already been hit. That's the enterprise value. Yeah. Yeah. Now, that being said, I'm looking, they are far from the only liquor store in Anchorage. I mean, there is one, two blocks from him, the Brown Jug, Spenard, and Northern Lights liquor store. And then probably 10 blocks from him is North Pole Liquors. They're all thematic. uh north pole liquor sadly does not appear to be santa claus themed uh unfortunately the the pirate theme kind of takes the cake um and there's in and out liquor kind of which is not in and out the the um the burger place the burgers yeah um but the brown jug guys have two locations which is interesting.

24:34And there is also a Costco wholesale that comes up when I search liquor. And I can't confirm that they do or don't have liquor, but the fact that he's thriving despite Costco being in town is good. I mean, I think the real crux of this is can you own this business and not live in Anchorage? No way. I don't think so. Although it does say remote point of sale system like five times and he says he only works 10 hours a week but if the proverbial shit hits the fan for this business and you're let's just say hypothetically in south carolina and your manager decides like you know what i quit like you've got to go to anchorage and like you know stop the shelves and they get there right yeah yeah i think you've got i think you've got to be at least close by but there's no such thing as close by i mean you can live in seattle and you're still forever away Way from it.

25:31Yeah. Yeah. Heather, how could somebody finance this deal?

25:36David Barnett:There is this program called the SBA program that could be used. And actually, you know, SBA loans famously, even before the whole ETA boom hit our space, at least in the Los Angeles area where I live, liquor store sales as a business acquisition, those were done with SBA loans for as long back as I can remember. This is like a type of business that traded sort of regularly and where people sort of understood it as, you know, the moat is usually the liquor license and the transfer of the liquor license itself is really kind of the value that they were buying. And looking at the, you know, the revenue and the EBITDA, they were all pretty consistent one to the next.

26:19David Barnett:This one is a little fascinating because it has grown and I wouldn't, I can't still think of how he did that. but these are these are easy to finance with an SBA loan. I would imagine there's significant inventory in a business like this so like working capital is probably non-trivial. Right it's a retail it's retail. 200 ,000. Yeah 200 ,000 of inventory on the shelf and that's got to be included I believe they said it was included in the price so that's easy the inventory. If that's included in the price I mean that makes the price even more reasonable. Yeah. Right. It's three and a half times at with 200K of inventory.

27:01So it's three times probably somewhere else though on his website. So I think on biz by sell, it says it's included on, um, on his own website. He says it's a million 72 plus inventory around 200 ,000. So a little bit of conflicting info there.

27:18David Barnett:Okay. I think it's clear. Mr. Fuji does not have a broker. P &Ls are on the website. So that also means I was going through the P &L. There's some significant scrubbing that you have to do. Like he's got taxes and taxes and licenses line item. That's like 80 and 90 ,000 and then goes to 8 ,000 in the trailing 12. He's got, and then of course he's got ad backs that take him from 180 to 300. You know, I got questions. So like, but this is where a lot of times you will find alpha in small business deals is in the mess. Like if you're willing to wade through, figure out what the financial business actually are, and be it appropriately, you can very often buy great businesses that way.

28:02David Barnett:But this time you actually get a huge head start because before you even put in your LOI, you have all this detail. whereas you know most buyers out there are getting very limited information before the LOI and getting most of this kind of detail right after the LOI which I think is I personally think is crazy for business brokers to do that the way they do because that's why we have so many LOIs that don't close you know they're not getting enough they're not getting sufficient information before the LOI this is nice you would get it you could actually construct an LOI that could close yeah you're right he does acknowledge on his website he has a link to like business transfer process and he acknowledges i think the most difficult part about this deal which is that the state board of it's actually the municipality of anchorage can they have to review and approve your purchase of this business so like he has a very like formulaic approach to what it's going to take to buy this business.

29:05Phase three, which is approvals and closing, he estimates to take four to six months. Like you've got to do a dog and pony show with the municipality to say why you are the best buyer for this business. Which means you pretty much have to move there because they're probably not going to approve you if you don't.

29:22David Barnett:You probably have to already live there because you're not going to move there before you get the liquor license approved and they're going to want you to be there to approve it. So for all the meetings, you need to already be there. Yeah. Yeah. This is such a fascinating case. It also kind of like is listing this thing on BIS buy sell the right answer here? I mean, there are, as we've already established, about 400 ,000 people in the world who are qualified to buy this because they already live in Anchorage. Right. And nobody in the continental. I mean, what are the odds somebody that's not already in Anchorage is going to buy this like almost zero?