25 Meineke franchise units in 30 months
Two ex-banking friends raised $2.8M in friends and family to roll up a fragmented auto-repair franchise, structured deals creatively across cash, SBA, seller financing, and sale-leasebacks
The Setup
Jack Foster and Jake McLaughlin were childhood friends with parallel bank-and-PE careers (Foster: Goldman, KKR; McLaughlin: Baird, Prospect Hill Growth Partners). McLaughlin's PE firm had invested in franchise concepts (Orange Theory, Crunch, Sweat House, Dogtopia), which gave him a structural understanding of multi-unit franchise economics. They built a thesis: pick a franchise category that was hyper-fragmented, served a category with proven product-market fit, was not yet attracting sophisticated consolidators, and had aging operator demographics creating acquisition opportunities. They picked Meineke.
Why Meineke (and Why Not the Alternatives)
- Quick lube: rejected because of EV exposure and unclear exit economics. - Car wash: over-penetrated, capital intensive, highly competitive. - Collision: already had sophisticated PE consolidators. - Auto repair: earlier in growth stage, better unit economics, less EV-threatened.
Meineke specifically offered: 700+ franchise locations at entry, hyper-fragmented (largest franchisee had 25 units), aging owner base, and minimal existing consolidator activity. The franchisor's brand value (operating since the 1970s, trust advantage in a low-trust category) was viewed as legitimate payment for the royalty.
The Capital Structure
$2.8M raised friends-and-family. Expected 10 locations. Actually executed 25 in 2.5 years. Capital called deal-by-deal, not upfront. All investors on identical terms. Founders contributed personal capital alongside investors. Carry structure: stepping function increasing to 30% above 4x multiple.
Financing for individual deals was deliberately heterogeneous: - First three units: 100% cash equitized ($1.2M total) - Retroactive $500K loan from local community bank - Mix of subsequent deals: fully cash, 90% LTV SBA loans, seller financing, sale-leaseback arrangements - Current portfolio leverage: just over 1x debt to EBITDA
8-9 of the 25 locations were purchased using accumulated cash flow from operations and sale-leaseback proceeds, not new investor capital.
The Acquisition Cadence
15 acquisitions over the 2.5-year period (some single units, some multi-unit packages). Average deal size 1.5 locations. The economic logic: deals banks wouldn't approve became the highest-margin opportunities. The Carolinas 3-unit acquisition that opened the platform was fully equitized because banks balked; it became the home run.
The Operating Team
- Foster and McLaughlin: deal sourcing, capital structuring, market entry decisions - Joe (COO): master mechanic, former regional manager at a similar brand - 10-person team with decades of auto repair experience - Operational presence in three primary markets
Per-Location Economics
Approximately $1M revenue per location, 20% store-level EBITDA margins. Portfolio targets: 25-30 locations, $30M+ sales, $5M+ corporate EBITDA. Plans for potential exit rather than indefinite continued growth (franchisor concentration limits constrain scale).
Operating Moves
- Cultural injection. Most acquired stores had fatigued sellers. New ownership brought KPI structures, goal-setting frameworks, professional development, "higher standard level of accountability" per the founders. The cultural shift drove same-store revenue growth on top of acquisition growth. - Variable compensation. Performance-based comp tied to specific business metrics. -
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