Multi-unit Tax Franchise Sold to Young Entrepreneurs
After 22 years in business Barbour Enterprises, Inc., an independent franchisee of Jackson Hewitt Tax Service, was recently sold by way of MidStreet Mergers and Acquisitions.
About the Business
Founded in 1996, Barbour Enterprises, Inc. included 17 individual Jackson Hewitt locations throughout North Carolina and Virginia.
The owner, Chad Barbour, targeted "Small-town-USA" rather than the metropolitan areas. This strategy allowed him to establish a consistent base of customers, with a lower rent and payroll expenses than most franchises.
"I was happy, everything was going great, and I was just moving along," said Barbor.
However, Chad Barbour's life changed forever when he experienced a minor stroke in 2014. Barbour did not sustain any permanent damage from his stroke, but his doctors advised him to reduce the amount of stress in his life.
With over 30 locations at the time in two different states, Barbour was under a great deal of stress. After a period of recovery, he decided it was time to step away from the business.
“The most difficult part of selling was not knowing what I was going to do next. I really didn’t have a path forward, so I think that was the scariest part,” said Barbour.
Finding the Right Buyer
MidStreet performed a valuation, prepared the marketing materials, and listed Barbour's business for sale in 2015.
With the seasonality and attractive cash flow, it wasn't long before Buyers Nancy and Lew Spelgatti jumped on the opportunity.
Utilizing the Small Business Administration 7(a) loan program, the pair were able to close on the business in less than six months.
Although they had no prior experience in the tax-preparation industry, the Spelgatti's were confident in their ability to manage people and understand the tax preparation process.
With the help of Jackson Hewitt's franchise training programs, the Spelgattis have already secured several awards for their franchise performance.
In 2018, this ambitious pair acquired an additional 20-location franchise in Raleigh, North Carolina with the help of MidStreet.
Today, they operate more than 30 Jackson Hewitt locations throughout North Carolina and Virginia.