080: Owning 42 Franchises and Making 8-Figure Exit Deals with Erik Van Horn

Erik Van Horn is an entrepreneur, advisor and the co-founder of Front Street Equity Partners, a strategic advisory and private equity investment firm focused on the franchise industry.

After purchasing his first Liberty Tax Service franchise, Erik went full throttle, eventually growing to 42 locations. After that, Erik built out the blueprint to successful franchising, buying seven more brands as a franchisee, exploring the franchisor space and making a successful 8-figure exit to private equity.

For entrepreneurs looking to build an owner-absentee business, franchising can feel like a logical journey. So today, I’m sitting down with Erik to get the scoop on the franchising world. What are the steps to success? What are the pitfalls? And how can interested investors make their first move into franchising?

Erik Van Horn Tweetables

• “For a typical entrepreneur or someone that wants to leave their 9-to-5 or doesn’t have a job anymore and they want to be self-employed, franchising is kind of an easy next step for them as a franchisee because they just go in and they should just execute what the brand has proven to be true.” – Erik Van Horn

• “If I’m going to be an investor in a brand, I want that brand to be proven.” – Erik Van Horn

• “Look for brands that have high employee retention and the employees actually enjoy working there because it’s a good work environment and they can’t make more money anywhere else.” – Erik Van Horn

✔️How Erik went from mowing lawns to owning 42 franchise locations despite having no prior franchising experience.

✔️A breakdown of what investors eager to get into franchising should do — and what they shouldn’t do.

✔️A look at the potential exit paths for franchisees and franchisors.

✔️What variables will hurt the exit value of a brand?

✔️How franchisors could see a 15-20x EBITDA valuation from private equity on a $5M+ business.

✔️The metrics that make a brand a prime candidate for franchising.

✔️What are the closest options to an owner-absentee model in the franchise space?

✔️Can it be beneficial to work in a business niche you know nothing about?

✔️What is the difference between a franchisee and a master franchisor?

✔️The pros and cons of being an entrepreneur vs. being a franchisor.

✔️Why second franchise locations often struggle more than first franchise locations — and the point at which it becomes easier to scale multiple locations.

✔️Why are tax offices so prevalent in low-income areas?