5 Lessons About Franchising from Buddy’s Home Furnishings

In this week’s episode of the Tracer Franchising Podcast, I sat down with Mitchell Lee, Senior Director of Franchise Development at Buddy’s Home Furnishings. Buddy’s is a rent-to-own brand with ~300 locations that’s been around since 1961. What stood out most to me wasn’t just their niche model, but the bigger lessons any franchise buyer can apply.

1. Multi-unit ownership is the real test of system strength

• If 70–80% of franchisees expand into multiple units, that’s a signal the model works.

• If almost everyone stays stuck at one unit, it usually means the economics, staffing, or scalability don’t support growth.

• Lesson: Always ask: What’s the average number of units per franchisee? and Who’s the largest operator?

2. Strong franchisors lead from the front with corporate stores

• Buddies runs 32 corporate units. That lets them:

  • Prove the model is profitable,

  • Train new franchisees in real stores,

  • Test new initiatives before rolling them out.

• Lesson: A franchisor that operates corporate units is often more grounded. If they don’t, you risk being the guinea pig.

3. Cashflow management is just as important as sales

• Rent-to-own requires heavy upfront inventory spending ($200k–$400k in the first 6 months).

• Smart structures (lines of credit, net-60 vendor terms, centralized purchasing) can make or break franchisee cashflow.

• Lesson: Don’t just look at revenue projections. Map out how cash moves in and out during the first year.

4. Staffing strategy impacts scalability

• Buddies’ model works with five full-time roles per store. That’s easier to manage than juggling 20 part-timers (as in many food concepts).

• Full-time roles = less turnover, better culture, and clearer accountability.

• Lesson: Always examine the labor model. Does it rely on high-churn, low-commitment labor, or stable roles you can actually fill and retain?

5. Transparency builds trust

• Some franchisors make money by marking up supplies. Buddies explicitly does no markup, using vendor rebates only to fund IT and support.

• They also publish detailed Item 19 earnings data (sales ramps, quartile breakdowns).

• Lesson: Ask exactly how the franchisor makes money beyond royalties and whether they publish transparent financial performance data.

Closing Thought

Franchising is about systems, cashflow, labor, and transparency. Buddy’s shows what a responsible franchisor looks like—but the bigger point is how you evaluate any system.

If you’re exploring franchises and want a structured process to do this right, you can find resources at TracerFranchising.com.