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Founders Club - For Real Estate Entrepreneurs

Feb 15, 2021

The Secrets to Franchise Success with Erik Varn Horn

Connect with Founders Club Host Oliver Graf on Instagram: @OliverGraf360


What are some of the most critical things that contribute to a franchise’s success? Is it the brand? The system? Or a reliable franchisor?

Erik is a multi-brand, multi-unit franchisee and a highly sought after franchise consultant. His franchisee experience includes Liberty Tax, Sola Salon, Club Pilates and YogaSix. Erik is also a successful real estate investor and has interests in commercial developments, hotels, and luxury apartments.

In this episode, Erik joins us to explain what makes a successful franchise operation tick. He shares how he manages to operate multiple franchise operations remotely as he travels the world to pursue his other interests and passions. 

Erik reveals how you can find opportunities within the franchising world, and then implement systems and processes that help you profitably scale up.

This show will be particularly interesting to entrepreneurs and professionals who are looking to augment and even replace their main source of income. We hope you enjoy this show!

Key Takeaways:

02:07 – How Erik kickstarted his real estate business

02:07 – Desperate for funds, Erik starts a lawn-mowing business

03:06 – How Erik cracked his first real estate deal

05:00 – Funding his first franchise with the profits from his first deal

09:20 – Erik ventures into the franchise business

09:20 – Buys a Liberty tax franchise inspite of having zero experience in taxation

10:55 – Should you invest in a franchise with a seasonal business cycle? 

11:50 – Scaling up business in Austin to 42 stores

12:57 – Mistakes that Erik made in his first year

13:35 – Can a “fix and flip” model work for the franchise industry?

15:18 – Can you be completely hands-off while managing a franchise?

15:46 – How Erik sold off his salon franchise business in Orange County to a PE firm

20:35 – Scaling up the business

21:02 – As a franchisor for the roofing industry

21:22 – Conducting Masterminds to help others grow and scale

22:04 – Manages a Facebook community to facilitate peer to peer interaction

24:23 – Feasible franchise options for real estate investors

25:50 – Resources to find opportunities

29:16 – Can you passively scale up a franchise? 

30:10 – The right BRAND and right PEOPLE

30:34 – Who is the right person to manage your franchise?

31:12 – How can you find him/her?

31:48 – Should you give away some equity in your business to your manager? Erik shares his own personal experience

34:00 – How are employee contracts typically structured?

36:49 – Why did Quiznos fold up their operations? 

40:53 – How to conduct due diligence and locate a lucrative franchise opportunity

42:53 – Erik recommends asking broad questions rather than specific ones

43:47 – Minimum investment required to buy a franchise

44:32 – Minimum network requirements

45:53 – Typical cost breakdown

47:30 – Should you consider investing in an owner-operator franchise? 

51:11 – According to Erik, which sector provides some of the best franchising opportunities

52:08 – How getting in early can prove to be incredibly lucrative

54:43 – Erik shares why he doesn’t give much importance to the total royalty percentage 

56:56 – Managing Remotely

59:00 – Empowering managers to take decisions independently

01:01:40 – His biggest challenge

01:03:33 – Collaboration between the franchisor and franchisee can help improve systems and processes 

01:10:00 – Staying on the top of your finances

01:11:22 – Erik prefers daily reporting  

01:13:45 – Erik’s real estate investments

01:13:45 – His foray into commercial development

01:15:22 – Also invests in hotels and luxury apartments

01:18:43 – Reveals he is looking to invest in mobile homes and storage units

01:19:54 – Networking tips to connect with influencers and like-minded people

01:26:56 – One resource/app that Erik uses on a regular basis

01:28:28 – One thing that Erik wishes he could have done differently



“I realized that I did not need to find the money to invest in real estate. I just needed to find the deal”.

“The best thing to invest in is real estate and businesses”.

“As an entrepreneur, you are always looking to grow something bigger and better”.

“A good franchisor is looking at doing things that can help the franchise, and doing these things at a scale that the franchisee cannot”

“When you are looking at a brand, system trumps product all day long”

“If you are always doing stuff, you are not solving problems. And I want to be a problem solver”.

“I think the best franchisors have this open environment where franchisees can come to them”

“The franchisor gets better because of the franchisee”.

“I treat everyone how I expect to be treated”.


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