This post is the first of two parts. Please check back on Thursday for Part 2.
When Michelle Shriver took over an existing unit in 2010 to become a Tropical Smoothie Cafe franchisee, the transition was less than smooth.
“We learned a big lesson with the first store we bought. The minute we got there, everything started breaking,” the franchisee said in an interview with Franchise Chatter.
The ice machine went on the blink. Half the blenders went down. The freezer needed fixing. But once everything was back in working order, Shriver and her husband/partner Kriss Shriver were able to increase year-to-year sales by 27 percent, she said.
And by the time the Shrivers were ready to acquire a second Tropical Smoothie location in the Las Vegas area in 2012, they did something smart that any investor should note if buying an existing franchise that requires some specialized equipment: they had the seller warranty critical items to make sure they were going to work for a specified period of time.
When purchasing their second location, the Shrivers kept some of the purchase money in escrow to cover the cost of repairing or replacing any equipment that malfunctioned during the first three months of operating the store due to normal wear and tear. They also asked the previous owner to supply any existing active warranties on equipment. Michelle Shriver also suggests that potential franchisees ask previous owners to supply maintenance records on the equipment so the new owners can see when it has been repaired and for what reasons.
Third Time’s a Charm
In December 2012, the Shrivers opened a third Tropical Smoothie, this time building out a new store, but they carried with them the lessons learned from acquiring existing units, Michelle Shriver said.
For example, she has learned how important it is to have a competent team of employees who are are happy with their employer and the operation of the business.