You Might Also Like: Think Big, Buy Small

Rick Ruback (0:01)

Hi, I'm Rick Ruback.

Royce Yudkoff (0:02)

And I'm Royce Yudkoff.

Rick Ruback (0:03)

We're the co-hosts of Think Big, Buy Small, a podcast from The Howard Business School.

Royce Yudkoff (0:08)

What if you could become a CEO without starting a company from scratch?

Rick Ruback (0:11)

Every day, entrepreneurs buy small businesses and step into leadership roles. But how do you find the right business, finance the acquisition, navigate your first hundred days, and lead a company you didn't create?

Royce Yudkoff (0:23)

Think Big, Buy Small explores those questions through candid conversations with entrepreneurs who have done it themselves. They share the strategies, surprises, mistakes, and lessons behind buying and running a small business.

Rick Ruback (0:36)

Whether you're searching for a small company, exploring entrepreneurship through acquisition, or simply curious about becoming a small business CEO, this show offers practical insights and inspirations for people who've been there.

Royce Yudkoff (0:50)

Here's an episode of Think Big, Buy Small.

Rick Ruback (0:52)

We hope you enjoy it.

Royce Yudkoff (0:53)

And if you do, follow the show so you never miss a conversation.

Welcome to Think Big, Buy Small, a podcast from Harvard Business School about entrepreneurship through acquisition. We're your hosts, Royce Yudkoff and Rick Ruback. Rick and I are delighted to have as today's guest, Michael Horowitz. Michael is a former researcher who successfully bought, operated and later sold a very successful restaurant franchisee and has since gone on to stay involved in the ETA community as an investor. We're going to learn about Michael's journey, but most of all, Rick and I are going to focus with Michael on franchising and assess what size opportunity this is for potential searchers. Should they be including franchisees in their search? What are the pros and cons of this opportunity?

Rick Ruback (1:49)

I'm so excited to have this conversation because for years now, you've been telling me about the great opportunities that are in franchising, but I've always been suspicious, so I'm really looking forward to this conversation.

Royce Yudkoff (2:00)

That's going to be a great conversation because you're right. I've felt forever that it's been an overlooked opportunity in plain sight by searchers and quite reasonably, you've had the position, show me. We've got Michael Horowitz who's going to show us.

Rick Ruback (2:14)

Who's going to show us.

Royce Yudkoff (2:15)

Yeah. Michael, let's start by just tell us a little bit about your background and your journey through life and career so the audience gets a sense of who you are.

Michael Horowitz (2:23)

Great. Thank you for having me. I've listened to this podcast regularly, so it's very exciting to be part of it. My background grew up in South Florida, a very entrepreneurial family. My dad was involved in several businesses growing up, and also I was fortunate enough that he worked from home. So as a kid, I frequently got to sit in, listen to calls, see what he was up to, and that sort of sparked a business bug from an early age. I ended up starting my career out of college in venture capital. I had tried a hedge fund like internship, didn't really understand investing when you couldn't speak with the management teams and ask them all the questions you want to.

Well, I had a great time in venture, also felt something wasn't quite a right fit there, and suddenly learned about search as I was thinking about applying to business school.

Rick Ruback (3:04)

You didn't like investing in crystal balls.

Michael Horowitz (3:07)

I didn't like investing when the prices were very high, and the people who were asking for money were saying, we don't have revenue and we don't have a plan to get revenue yet, but it'll work out in the future.

Rick Ruback (3:16)

Yeah. Hopes and dreams.

Michael Horowitz (3:18)

It's the market for hopes and dreams.

So came to HBS, was student of yours in 2014

And I initially had no interest in franchising. I really just cared about living in New York City after I graduated. And so pitched traditional search investors on a New York City focused search fund. Rightly so those investors all said, that's a bad idea. We won't give you any money for that. But I plowed right ahead and did it self-funded instead. I had a pretty difficult time, got a few companies to the LOI stage, but nothing that was worth or able to close. Took a job in real estate, thought maybe that would be the entrepreneurial opportunity for me down the road.

But had some classmates who had bought Burger King restaurants and were very successful. And so started shamelessly thinking maybe that's something I could do. And after another 18 months search, found a seven-unit opportunity to acquire Wingstop restaurants in Columbus, Ohio. The two people that I was searching with were both at hedge funds at the time. So their opportunity costs to be the ones who quit, moved to Ohio and ran this business was much higher. I really wanted to run something and by then my resistance to I must live in New York at all costs had been worn down. I was single, had very little to lose moving there and so said, I'll operate, let's buy this, let's give it a shot and moved to Columbus. That started the Wingstop journey.