Hey everyone,
A ton of small businesses are built on the founder’s face.
If that’s you, think about the customers who buy from you personally. They call your cell, they ask for you by name. If you left tomorrow, they’d follow you.
That personal brand is a huge asset that takes years to build.
But it's also the best way to avoid seeing real problems.
It happened on a billion-dollar scale with Papa John’s, but the principles are just as important at a $1M business.
Let’s take a look.
Are you buying a business? Verify those numbers are actually true.
A Quality of Earnings report answers questions like:
Is that revenue recurring or one-time?
Are the owner's personal expenses buried in the P&L?
Did earnings spike last year for a reason that won't happen again?
I started a brand new QoE firm called Bedrock. We landed a one-in-a-million rockstar CPA to lead the charge named Will McCurdy.
Need a Quality of Earnings report? Book a consult with Will today.
The meltdown was beside the point
Today, Papa John’s is in active decline. It’s down 77% from peak, bleeding locations, and losing ground to Domino’s every year.
The easy explanation is:
Founder John Schnatter said some things he shouldn't have, got cancelled, and torched a brand he spent thirty years building.
That’s all true, but I’d argue it’s not why the company is in such trouble today.
Here’s my take:
For decades, Schnatter's face was on every box, every commercial, and every ad campaign. Brand recognition was huge, not to mention an NFL deal that made them one of the most recognizable brands in America.
Beyond John’s face, their moat was “Better Ingredients. Better Pizza.”
Their competitors, especially Domino’s, couldn’t compete on face recognition. But they could compete on ingredients.
So Domino’s rebuilt their pizza from scratch, ran a huge campaign admitting their old pizza sucked, and invested a fortune in logistics (online ordering, delivery tracking, etc) to close the gap.
By 2017, the quality gap had mostly closed, and Domino’s was way ahead on scaling and tech.
But Papa John’s never asked themselves the uncomfortable question:
If we took John's face off the box, what do we have left?
The founder-brand was so emotionally resonant, and so loud, that the erosion happening underneath stayed invisible.
Then John had some widely-publicized meltdowns and got ousted from the company.
There was’t much left underneath.
MY NEXT FREE LECTURE
My next free lecture is on how (and where) sellers hide problems in the numbers.
Come out and you’ll learn:
Exactly where sellers inflate profits before a sale
The 5 deal-killers that show up in financial due diligence
How to use what you find to renegotiate the price
Plus, we'll be saving tons of time for your questions. And you’ll get to meet my company Bedrock’s brand new CEO Will McCurdy.
Reserve your free seat for DEALKILLERS
April 16 • 12 CT / 1PM ET
See you there!
What to do in your own company
How to tell if you’re too founder-led
For some businesses, being entirely founder-led is fine. A lifestyle business with no exit plans? Or you’re early in your growth? There’s nothing to fix. Plenty of great businesses live and die on their founder.
But if you’re established, and imagine yourself retiring, selling, or even taking a serious vacation at some point…
Imagine handing your business to a capable operator tomorrow. Does most of the revenue walk out the door with you?
If so, your founder-brand is doing work your product should be doing. It might be okay for now, but you’ll have a harder time scaling up, selling, or getting out.
(Or for some harder data, look at your win rate on referrals versus cold prospects.)
What to do about it
The goal isn't to stop being the face. There’s no point throwing away a competitive advantage.
The goal is to make sure it's amplifying a strong product story, not substituting for one.
Can you describe your quality advantage in specific, concrete terms like “fresh dough and proprietary sauce”?
It also means building things that survive you: documented processes, a team customers trust, delivery that's consistent whether you're in the room or not.
And by the way - if you want the long version of the Papa John’s story, I made a whole video on it here. Very interesting stuff.
TOGETHER WITH MY COMPANY NEAR
A buddy of mine was doing his own books until 2am every night. Revenue was growing, but he couldn't afford a US controller at $150K.
He hired one through Near for about $45K. Fully bilingual, Big Four–trained, worked the same time zone as him.
Within 3 months he had clean financials, actual forecasting, and stopped dreading the end of every month. He told me it was the single best hire he's made.
That's a story I hear constantly. Near places senior professionals from Latin America, in finance, ops, engineering, marketing… in under 21 days.
If there's a role you've been putting off because of cost, talk to my team.
Book a free call → hirewithnear.com/girdley
3 things from this week
Appetizer: Did you know we actually like businesses sometimes on Acquisitions Anonymous? Bill and Heather kinda dug this 50-year-old courier operation. That’s a lot of goodwill built up — and it’s never at more risk than when the business is changing hands.
Main: Have I mentioned my podcast cohost Heather is a badass? Helping 23 people close business acquisitions is insane volume. (Work with her if you want SBA funding!)
Dessert: I made an April Fools tweet about going to Turkey for hair implants. Some top notch AI hair in the replies from you folks.
If you don’t have images enabled, you probably don’t want to turn them on for this.
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Thanks for reading!
Michael
P.S. Don’t forget to grab your seat for my free lecture on financial dealkillers. Learn the business buying mistakes you can’t afford to make (or if you can afford them, they still suck really bad). RSVP here.
P.P.S. Today’s topic synced up perfectly with a Chase Passive Income shitpost this week. Read the whole thing here.
MORE WAYS I CAN HELP YOUR BUSINESS
💡 START → The Low-Risk Business (ebook)
The 5-step framework I’ve used to build multiple businesses from scratch. 40 pages of hands-on, practical guidance. $29… or free if you refer 1 person to this newsletter.
📈 SCALE → Read my free playbooks
Simple walkthroughs on finance, ops, people, and sales processes.
🌎 HIRE → Talk to Near
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