How Buddy's Home Furnishings Acquired and Conquered Its Way to Huge Growth
The brand makes a second appearance on the Franchise 500 list through its eager multi-unit franchisees and a fine-tuned strategy.
Buddy's Home Furnishings has spent years trying to fine-tune a strategy: The rent-to-own furniture dealer was acquiring other companies' stores, converting them into a Buddy's, and then selling those stores to multiunit franchisees. This came with an inconsistent payoff; the brand ranked No. 190 in our Franchise 500 list in 2018, but it hasn't ranked since. It also led to a kind of data roller coaster, with its numbers of franchise and company-owned units going up and down.
Now the brand appears to have its growth on track. The multi-brand franchisor Franchise Group acquired Buddy's in 2019 and retooled its franchise development program. Buddy's now has 37 corporate and 274 franchised units, which helped it land at No. 226 on our list. Buddy's CEO Michael Bennett reflects on the changes.
How did Franchise Group fuel growth?
Franchise Group brought experience in franchise development and leadership. In 2020 we said, "All right, we're going to sit down and put together a plan." And through that, we aligned a great management team in collaboration with our Franchise Group parent. That helped us bring in some folks that were very interested in growth.
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[The multiunit franchisee company] Bebe is one of them. They're up to 56 stores now. Our top three franchisees are continuing to look at opportunities to grow along with another good half dozen to a dozen franchisees that are looking for additional stores.
Speaking of multiunit franchisees, how did they play a part in the company's growth?
There are times when we'll acquire stores from various companies, and we have multiple franchisees that want them, because they want to grow in their local markets or expand even into new states and new territories. Our acquisitions almost immediately get franchised out to our franchise public. We negotiate those deals in advance. Now 88% of our units are multi-franchise owned.
How do you ensure a smooth transition from acquisitioning stores to franchising them?
We have the turnkey program to do that. Our point-of-sale system is very adaptable. Our leadership, IT, and development departments have been tested. The heavier lifting is really data conversion.
You have to have an operations team that can help teach the system, whether it's our learning management system, GM boot camps, or our 100 hours of in-store training that we provide our franchisees.
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And of course, every franchisee is going to have a consultant assigned to them that knows all the buttons to push inside of our company. They're very familiar with what support is available to help a franchisee through any obstacle.
It all comes down to us fundamentally having the right leadership in every department.