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Buying Businesses in a Pandemic is a Real Thing

Warren Buffet, the famous American investor and philanthropist, has said, “Price is what you pay. Value is what you get.” And despite the pandemic, plenty of investors are seeing great value in investing in franchise opportunities.

In recent weeks and months, the acquisition atmosphere has supported a buying strategy for private equity investors to acquire franchisors, for franchisors to acquire complimentary franchise brands, and for franchisees to acquire additional locations.

In addition, the current economy has reinforced an attraction towards “essential” businesses as well as brands that promote being in business for yourself, but not by yourself, both in the U.S. and around the world.

“Restoring” Faith in Private Equity

When financial markets seized and unemployment rose, one major announcement captured attention in the private equity arena when MPK Investors acquired Restoration 1 and bluefrog Plumbing + Drain in April.

CEO Gary Findley, who had been entertaining investment interest from multiple suitors, said operating essential service trade businesses that were in demand throughout COVID-19 was a plus. The investment community agreed by closing the deal despite the unprecedented shopping environment. Franchise Times magazine recapped the event, saying “Restoration 1 Lands New Investors, Standing Out Amid M&A Pause.”

Findley said, “This extraordinary partnership is a testament to the strength of our brands, the industries we operate, and our confident abilities to take things to the next level in the service trades.” With ambitious goals to grow even further, the strategic investment also includes plans to build or acquire complementary home service brands.

Inspecting Another Opportunity

At Neighborly, there is no end in sight as the world’s largest franchisor of home services embraces an overarching goal to “Own the Home.” And that now includes home inspection.

On July 2, the multi-billion-dollar/multi-brand franchise organization announced the acquisition of HouseMaster, the world’s first and longest-lasting home inspection franchise. The acquisition marks the 25th brand for Neighborly and the addition of another 170+ franchise owners to the greater Neighborly network. To-date, that grows the Neighborly platform to more than 4,000 franchise owners across 9 countries with more than 900+ associates to support them.

Now as part of Neighborly, the brand that pioneered the home inspection business will operate alongside Neighborly’s many home service brands that repair, maintain and enhance the home. The combined reach resulting from the acquisition means that more than 10 million customers across the Neighborly organization will have access to the best home service professionals in the world.

Kathleen Austin Kuhn, president of HouseMaster, said, “Having grown up in the business, I recognize that joining the larger Neighborly organization marks a historic moment for HouseMaster as a launching point for growth like we’ve never seen before.”

Flexing Business and Fitness Muscle

Then there is the Gold’s Gym franchisee who powered up his presence in Jackson, Tennessee, by acquiring Jackson Sport and Fitness in town. The more updated big box gym was the perfect backdrop for the Gold’s Gym brand, as franchisee Robert Dennis relocated operations while also honoring memberships of both operations at his new address.

While commercial real estate weathers the pandemic, many people in franchising are using their position of strength — literally and figuratively — to grow their investments to the next level.

The new Gold’s Gym of Jackson is a perfect example and even celebrated the deal with a grand opening celebration over the July 4th holiday weekend that kept social distancing at the forefront and a bright business future ahead.

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