This Garage Business Made $590K… Then Everything Changed

Alex Smersniak of Franzy joined the Acquisitions Anonymous hosts to review a live franchisee resale in the premium garage‑interiors space: floor coatings, modular cabinetry, slat walls, car lifts and full garage makeovers. Franzy framed the market opportunity (global garage market projected to $36B by 2028) and supplied deal documents showing a single‑unit operator in Washington with rights to Oregon and Idaho, system history (founded 2005, franchising since 2015, ~50 U.S. outlets, ~7,500 projects/year), and customer demographics (territory median household income ~$86K, median net worth ~$150K). The hosts emphasized that average project tickets run $10K–$30K, the business is discretionary and project based (interest‑rate sensitive), and EV charging is one secular tailwind driving garage upgrades.

The conversation pivoted to the numbers and franchise‑specific diligence. Franzy’s packet showed volatile top line and earnings ($2.0M in 2022, $3.5M in 2023, $1.7M in 2024) and SDE variability (roughly $124K low to ~$590K high; a three‑year average presented at ~$168K). The seller carries sizable working capital — about $220K inventory and $250K FF&E — and hosts estimated the seller has roughly $500K–$600K tied up including franchise fees. Alex and the hosts walked through unique resale dynamics: franchisor approval is required, adjacent franchisees are often the highest‑value buyers (synergies), and sellers commonly prefer in‑system buyers; Franzy’s marketplace aims to widen buyer access. On valuation, panelists converged on a conservative multiple of ~2.5–3.0x SDE given the discretionary nature and 2024 decline (seller reportedly targeting ~3x). Practical takeaways: verify SDE adjustments and owner comp treatment, test why the owner didn’t develop the included adjacent territories, compare the unit’s metrics to FDD comps, and run buy‑vs‑build economics versus the ~ $300K greenfield FDD estimate before making an offer. Hosts closed by noting the category’s appeal — high tickets, formulaic installs, strong social media case studies — while warning that the first unit is typically the hardest to make executive‑remote without multi‑unit scale.