The Criteria a Former Banking Executive Used to Choose 2 Franchise Systems

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David spent his career in banking and his family has been in the banking industry since 1971. David has been “retired” since he was 45 after they sold the bank and has been looking for a new challenge for awhile. 

In this video David talks about the detailed criteria he used for choosing what franchise concepts he landed on. Ultimately he ended up buying into two different systems – Spenga and Deka Lash. David also discusses his experience with Thoughtful Franchise Brokers. 


Here is a shortened version of some of the answers David gives in the video. 

Q: What is your background?

A: I graduated from Indiana university with a degree in accountancy so I have a bachelor’s of science in accountancy and then I also stayed a fifth year and I have a minor in finance. I started my career as a CPA with Pricewaterhouse. From there, I spent the rest of my career in banking.

Our family is in the banking business and has been since 1971. I eventually followed in my father’s footsteps and joined him with the bank that he had bought 1971 after spending about 12 years with other banks to gain experience. I ended my career at Chase in capital markets.

I’m 52 and I’ve been retired since about 45. We sold the bank and I chose not to stay on with the new team. Since then I’ve been looking at opportunities such as franchising and the timing was right about a year ago post COVID. I didn’t wanna do anything when COVID hit, obviously a lot of unknowns and uncertainties. I waited that amount of time between kind of retiring to do something because my kids, I wanted to get them off to college. My ex-wife and I currently have a senior at Ole Miss and I have a sophomore at the University of Tennessee. So the timing was right for me to look at something challenging, something fun and something to diversify my income. Not necessarily having to rely on this income but more so the challenge, some diversification of my investment portfolio, and more importantly, something that I felt like I could have fun with. 

Q: What was your criteria for a franchise as you were doing your exploration?

A: There are many opportunities out there as you know, with franchises. I spent some time researching some franchises using my background and experience in accounting and banking. I created a metrics of nine blocks and I said every box needs to be checked and it needs to be checked in its entirety. There’s no half checking. And those all involved everything from the five Cs of credit, you know, from capital, cash flow, competition. I looked at return on equity capital, capital was a huge thing to me, the capital investment and the return there. Then I looked at where I could be passive if I had to be versus being hands on. I also looked at somewhat of a legacy.

That’s how I ended up choosing two concepts, one for me more personally, to fit kind of my hobbies and my habits. Then one for potentially my daughters to possibly take over. So, that being said, as I was doing my research, I felt overwhelmed and me being probably more so the accountant and the banker being very analytical, I felt it was in my best interest to turn to someone professionally that does it for a living.

Q: How did you choose Thoughtful Franchise Brokers?

A: I did my research online, again, being very analytical and anal and I probably reached out to just under a dozen firms and with no particular criteria other than feedback, what was available through the internet and just a perception I got once I had a first conversation with them and that happened to be Charista and Kevin. I kind of paralleled it at the same time and I was kind of cheating I guess you could say a little bit in the fact that it’s kind of like a broker with your house. I wasn’t playing the two against each other, but I had not committed, but I kind of basically had it down to two and then it was pretty clear who I was going to use. So I chose to use Thoughtful Franchise Brokers to help me with my endeavors and here we are today. We’ve closed on the two concepts (Deka Lash and Spenga) and currently in lease negotiation.  

Q: What was your experience like working with Kevin and Charista?

A: Most franchisors want to get you in the door and just make a sale. Yes, they want you to be successful, but beyond the success, which they can’t entirely control, they are looking to make a sale. Once they make a sale, they’ve got your licenses and so I felt it necessary to get good feedback about what concepts, other than what I was reading, that franchise brokers had. So that was filter number one. And then filter number two was the legality of getting through an FDD franchise disclosure document and as much experience as I’ve had at looking at legal documents from the bank side, you need to really have a good sense of clarity on what you’re getting into. 

Those two were critical again, for me, trying to filter good concepts versus not such good concepts, as well as from a financial standpoint. What ones I felt were presenting me with good and accurate information. In Charista and Kevin’s situation, in particular, Charista was more than accommodating and helpful in reading through the FDD, presenting me with cautionary notes, to the extent where I was able to hire an attorney to review the FDD and in doing so incorporated some things that Charista had concerns about. While you don’t get much changed in an FDD, we were able to before we signed the financial disclosure document, and the franchisee agreement, we were able to get some things in our favor. So she was more than helpful there. She was very thorough. It was very telling, again, with my experience, professionally being accounting and banking.

I tend to have very high expectations. My expectations are basically result driven. I think at the end of the day, whether you’re in business or you’re in athletics or whatever, you make the first team and you’re at the top of your industry by the results and they’re not subjective, they’re objective. I thought they proved to me to be extremely knowledgeable, thorough, timely, helpful, and overall, they just exceeded my expectations and I tend to have some pretty high expectations having been a president of a bank. So I don’t think you can do enough homework. Don’t think, you know, if you’re a chef, don’t think you can buy a franchise in the restaurant business or whatever, and you’re not gonna come across roadblocks or things that you have not come across.

Q: Any challenges you’re facing right now?

A: I, for example, the biggest thing that I’m coming through right now is with the inventory and supply and demand. Leases are heavily, heavily landlord favored and depending on how bad you want the space, there comes in to be economics that could prove not viable as much as you love that location in that area. It could be in your territory and it just economically may not prove viable because as we know with housing, it’s out of control.

Q: Any closing thoughts?

A: I guess I will say one more plug to Charista and Kevin and Thoughtful Franchise Brokers is they were also very, very helpful and have given me people for other resources, such as an attorney, who turns out to be out of Pennsylvania – a very highly thought out firm. Once I did more investigation on myself and they reviewed both my concepts at a very reasonable rate, my FDD. And, that’s just another relationship I’ve developed. And so they’re helpful through the process from beginning to end and what’s nice is I can still call them and they’re available at any time.