Forgive me, that title is a bit of a misnomer. My historical reference point is actually the end of High Renaissance, not medieval times. As my tortured readers know, I have been attempting to tackle some of the many books I avoided in my youth. Last spring I decided it was time for “The Prince”. Machiavelli’s classic gives the reader much to consider; perceptions, alliances, ambition, preparation, and fortune; however, the notion of downstream consequences stood out. When my contemplation of downstream consequences commingled with two industry events last summer the result was a desire to express my opposition to the Franchise Reformation™ movement.

In it to stay but not willing to make the long-term play

A decade ago when one encountered a prospective buyer who was willing to offer only half of what they thought their own business was worth, such buyers might be dismissed as non-consolidators and/or disingenuous. When bolder distributors made compelling offers and reaped the rewards of consolidation, it was difficult to have much sympathy for these deal-missers. The gap between what these individuals thought their targets should be paid and notion of their own business’ worth was too glaring to be accepted. Today, it’s different. Today there is another class of buyers who are only willing to go halfway, but I have sympathy for these buyers.

One day when I was indulging in some paranoid cynicism concerning assaults on the three-tier system I asked myself, if the King of Wu commanded Sun Tzu to tear down the three-tier system, what would Sun Tzu do? I am not an expert on three-tier legal issues or military strategy, and I don’t have the stake in the three-tier system my clients do, yet the question hooked me.

“So Tim, what is a beer distributorship worth these days?”

For me, this is a recurring question; and I’m sure it’s a recurring question for others who determine the value of beer distributorships.

“It depends,” is the short and somewhat vague response I’ve provided in the past. Making that particular statement is not an attempt to be coy, unresponsive, or irksome. The “it depends” answer is provided because professional standards prohibit analysis-free valuations and, more importantly, because the “right” answer is, “It’s all relative.”