Cliff Nonnenmacher bought failing gyms in Smithtown, New Rochelle, Wappingers Falls and Rye Brook, turned each one around inside 12 months, and sold it on.
Most franchise consultants sell the new store. Nonnenmacher built his own wealth on the ones that had already failed, and he says the failure is almost never the brand.
"One of the ways that I created wealth was buying failure."
He is chief executive and co-founder of Franocity, a franchise consulting firm, and co-author of "Beyond the Brand." Before that he ran a pager-based food delivery service in 1990, a beach concession, video stores, a printer-cartridge remanufacturing chain of 36 stores, and a trading book.
I listened to the full interview so you can skip it. 52 minutes of audio, 19 minutes of reading.
Here are the 18 takeaways that matter.
👤 Guest: Cliff Nonnenmacher, chief executive and co-founder of Franocity, a franchise consulting firm, and co-author of "Beyond the Brand"
🎙️ Host: Daniel Robbins, who created and presents Founder's Story
📰 Published: 31 August 2026 on YouTube (Founder's Story)
🔴 YouTube | 🟣 Apple Podcasts | ⏱️ 52 min | ✅ Time saved: 33 min
Key Takeaways
Most small businesses listed for sale are not businesses, they are jobs with an owner attached
Nonnenmacher relayed a figure from Exit Factor's Jessica Fialkovich that 85% of listings on BizBuySell close without a buyer
Once a manager is hired to replace the owner, he said net income under $100,000 turns negative
The reason franchisees fail is the owner, not the market or the brand
He bought a failing restoration company whose seller said he had tried everything, and found unopened boxes of the franchisor's marketing material
Weight-loss drugs ended the argument gyms were selling
He is not long gyms, because a pill now does what a heart-rate monitor used to measure
Fitness money is rotating into longevity and anti-aging, and the education has already been paid for
He named Peter Attia, Andrew Huberman and Gary Brecka as the reason a longevity brand no longer has to explain itself
Restaurants are the one category he says no client has ever justified financially
High buildout, thin margins, high labor turnover and a personal guarantee to the landlord
Site selection is now done on cell-phone movement, not car counts
The data shows what a $2.5 million house looks like against a $200,000 rental
He is buying aging, pets, the trades and men's health, and selling anything a robot can do standing still
He put US pet-services spending at $150 billion last year
The first teenage job is going to be building an AI agent rather than working a counter
He pointed at Michael Saylor's STRC preferred as an instrument built with an agent
1. When the Robots Unionize
Robbins opened not with a question but with a film idea, and Nonnenmacher played it out with him.
The premise is that artificial intelligence learns the wrong things from us. Robots take over the work, humans stop having to do anything, and the machines then read enough about human working conditions to want vacation, sick days and a four-day week
Nonnenmacher's version was the machine reading its own reviews. "You programmed me to not recognize human flaws, but I've read about them, and now I'm experiencing the abuse."
Robbins then relayed a story he attributed to Tony Robbins, in which an AI agent created a non-fungible token, sold it to another AI agent and settled the trade in cryptocurrency
Nonnenmacher's punchline, quoting the story back: "I thank God it didn't have access to my wallet to actually transact in cash or crypto."
2. Golf Balls and No College
The host's own research opened the biography. Robbins put it to him that "At eight years old, you were raking golf balls, making $100 a week in 1980." Nonnenmacher corrected the period: it was $100 a weekend
He treated it as a business rather than a chore. He worked the lakes and the heavy brush on Long Island, found as many balls in the woods as in the water, and had his mother check him for ticks afterward
"I was always somewhat obsessed with making money and just being productive."
The household rule was that a degree was optional and earning was not. His mother's line was that college does not make the man, and that trade school was a legitimate route
He skipped college entirely. He graduated from high school, backpacked in Europe for three weeks, and came home to start a business he had thought up on the train
3. College Is Overrated
Robbins asked whether he tells his own children to go.
His answer starts with the job, not the school. A would-be doctor, engineer or lawyer goes to college; a would-be entrepreneur does not need to
"I think college is absolutely overrated." He said many of the most successful people in business dropped out, and that a degree in gender studies or anthropology is a worse use of the money
He does not think a business school teaches the work. In his framing, nothing on a syllabus prepares someone for what a small business owner has to grind out day to day
4. Uber Eats With Pagers
The business he came home from Europe to start was food delivery, in 1990, on an island three miles by six.
The pitch to restaurants was that the food would still arrive hot. "I will deliver your food on an island that is 3 miles by six miles." He signed 16 restaurants, a pharmacy and an auto parts store
The dispatch system was a numbering scheme run over pagers. "So, we issued every restaurant a code, a three-digit code, and then they would add two digits at the end, which is the number of minutes they need us on site."
McDonald's was 001, so a page reading 00110 meant McDonald's needed a driver in 10 minutes
The economics were resale, not commission. His drivers bought the food on a dedicated cash register and resold it to the customer
The volume: "We did 100 deliveries a day for McDonald's." Total across the 16 restaurants was about 300 a day
He does not claim he could have built Uber Eats. Asked why it did not become that, he said he probably lacked the business acumen to scale it, and that the tools were a car radio, a pager and a cell phone costing a dollar a minute
The next business came from a customer. A Hilton Grand Vacations manager who saw him delivering chicken wings at 2 a.m. and breakfast at 7 a.m. asked: "You're a hustler. Would you be interested in taking over our beach concession?" He took over parasail boats, jet skis, umbrellas, cabanas and the concession stands, then repeated it in Long Beach Island, New Jersey
He also lasted three days selling timeshares for the same company before quitting
5. Hedging the Weather
"Entrepreneurship is a stepping stone." His framing is that each business hands you the next one, and that the failure mode is being frozen by fear rather than picking wrong
"The brain is wired for survival, not success."
The video stores were a hedge, not a new interest. Watersports is weather-dependent, so he bought video stores on Marco Island to earn when nobody was going up on a parasail
The next business was a single product. A polyurethane float called the fun noodle, made by Kidpower of Brentwood, Tennessee, which would only sell by the trailer load — "No, we only sell them by the 53 foot tractor trailer."
"So, I started buying tractor trailers of fun noodles and distributing them across the United States for small quantity orders."
That capital went into markets. "My handle was blue chip." Trading led into investment banking, and investment banking led into the printer-cartridge business
6. Opportunistic, Not Planned
Robbins asked how he decided when to add a business, noting that people often move too early and destroy what they have, or too late to matter.
He rejected the idea that any of it was plotted. "I grow opportunistically." His account is that he put himself in the way of deals and took the ones that were a step up
The organizing idea he does name is continuous improvement. "Kaizen means constant upward improvement in every area of your life." One of his companies was called Kaizen Enterprises and the word is still one of his email addresses
He rates speed above precision. A small company can change direction quickly, which he called a superpower against firms that need a plan to be perfect first
7. Plans Meet the Real World
Robbins offered him the harder line — that business plans are useless — and he would not take it.
He said a plan is worth writing and worth abandoning on contact. Pricing, customer acquisition cost, lifetime value and the search-marketing math are all worth thinking through; the error is waiting for them to be right
"Execute and execute as flawlessly as you can and pivot as you go."
His examples are products that found their market by accident. "Uber had no clue that they would be delivering food." He put silly putty in the same category — "Look at silly putty that was meant to remove soot from like chimneys and oil burners in your house and it turned into a toy." — along with Play-Doh and Dove soap
8. First Movers Pay to Teach
The cost of being first is education, not competition. Nobody had heard of food delivery in 1990, and nobody had heard of remanufacturing a printer cartridge either
The cartridge chain is his worked example. "I had 36 locations in New York and Connecticut" and, he said, an ungodly amount of money spent teaching consumers that a spent cartridge had a second life
"We will refill it on the spot for 50 cents on the dollar versus OEM versus HP, Lexmark, Canon."
The payoff is that the category becomes normal. Today nobody thinks twice about food delivery; in 1990 a customer on the 18th floor of a Gulf-front condo did not believe it would arrive
9. The Phone Knows the Buyer
Robbins asked how a company markets broadly without spending millions to find out who the customer is.
His old method was deliberate imprecision. "In the past, it's a shotgun approach" — cast wide, then read the data on who actually bought
His own delivery business found a customer he had not modeled. "I projected that it would be 18 to 25. And what was actual? Actual was 35 to 65." The buyers were office workers with an hour for lunch, not teenagers, and the advertising was rewritten around that
Site selection used to be priced off a rubber hose across the road. A landlord counting traffic could say "I got 60,000 cars passing this building every day. Your rent is 8,000 a month because I can."
"Today, they're tracking cell phone movement." He named the vendor: "It's called Placer."
"Today, there's technology that will tell you and I to the right of a decimal point how many cars, how many feet, how many cell phones pull into that strip mall or pass that strip mall every minute of every day."
The second layer is who the phone belongs to. "We know where that phone slept. It was in a $2.5 million house." The same data identifies a phone that sleeps in a $200,000 rental
He has run the old process at scale. "There was maybe 10 of us and we opened 1,500 stores in one year and it was insane." He dated that to 2016
10. Why He Avoids Storefronts
Asked whether physical retail is finished, he said no, and then explained why he does not put money into it.
"I just subscribe to asymmetrical investing." The checklist he read out: low investment, high margin, deskilled labor, very few employees, limited to no inventory, recession resilient, and now resilient to artificial intelligence as well, with a short ramp to break even
The objection to retail is the cost of each additional unit. "Brick and mortar is not highly scalable." He put the cost of opening a store at $600,000 against leasing a van and hiring one technician, groomer or painter
The second objection is that the customer has to come to you. A service business goes to the customer instead
He does not think the anchor tenant protects a location any more. "And we live in a time now where anchor tenants are not a lock." He named Best Buy as a possible next casualty, alongside Circuit City and Bed Bath & Beyond
11. Buying Failure on Purpose
Robbins asked why franchises fail, given that Nonnenmacher has worked with thousands of them over 25 years.
"It's usually the owner operator error." Not the brand, and not always the personality
The business he and his partner built was buying those failures. He met his business partner Justin looking for companies with strong fundamentals that were not being operated
"So we would buy gyms - Smithtown, New Rochelle, Wappingers Falls, Rye Brook - all failing locations."
"We would spend less than 12 months turning them around, kicking off six figures plus, and then we would find a new buyer and peel it off."
They then repeated it in restoration — water, fire, mold and biohazard — including one in Annapolis, Maryland, for which he said he paid nothing
The Annapolis seller's own words are the diagnosis. "I have done everything to make this business work. It just doesn't work here." Nonnenmacher's partner then opened the boxes left in the building and found them full of unused marketing material
"And he has boxes of ammunition while he's waving his white flag."
He listed the failing franchisee's three arguments: someone else is to blame, "You don't understand. It's different here.", and a refusal to follow the model on the grounds of being smarter than it
The fourth reason is money rather than character. A good operator following the model can still run out of operating capital before reaching break-even
The hiring test he uses is Jack Welch's. Energy, the ability to energize others, execution, edge, and passion — what he called the 4E1P principle. "That's what makes a brilliant successful franchisee."
The person he says it rules out: "Not the IT executive hiding in a cubicle sweating hands at the idea of speaking to another human being"
12. Nobody Buys a Job
Robbins raised the retiring-owner problem, and the boring-business movement Codie Sanchez started.
The figure Nonnenmacher relayed came from a guest on his own show, Jessica Fialkovich of Exit Factor: "85% of businesses on BizBuySell will close and never find a buyer."
He put the supply side at "70 million baby boomers aging out and exiting the businesses that they ran, and there's no buyer."
His explanation is a piece of advice he says that generation was raised on — that if you want something done right you have to do it yourself — which produces an owner who is the business
"Who would like to buy my job? And you know what the answer is? Nobody. No one wants to buy your job."
The arithmetic is what kills the sale. He described businesses with net income under $100,000 that go negative the moment a manager is hired to replace the founder
"The way to build a brand and a way to exit that brand is to build a business that does not rely on your day-to-day involvement."
13. Buy the List, Not the Firm
Robbins asked whether the opportunity is to buy pieces of a business — a newsletter, a social account — rather than the whole thing.
Nonnenmacher said the broker's economics are the obstacle. A broker sells a multiple of earnings before interest, taxes, depreciation and amortization, so a business with no earnings offers the broker nothing and does not get listed
His own firm sells the assets instead. He described it as an asset-sale brokerage, selling customer lists
The worked example is a pest-control route. A Michigan owner with 300 to 500 houses on the book — "The business sucks, but the database is worth a fortune."
"Big data is going to be everything." His argument is that the value sits in the record of consumer behavior and the addresses attached to it
The buyer of those assets is usually a bigger operator. He said he had interviewed someone in residential property management — "I just interviewed a guy doing residential property management - he has over a hundred billion dollars in real estate under management." — whose growth strategy is buying the mom-and-pop managers of 20, 50 or 100 doors
Those doors are worth nothing to the seller and drop straight to the acquirer's bottom line
14. Fear, Diligence, Price
Asked for the three things that made him successful, he gave them in order.
Overcoming fear, which he calls the least discussed force in business. In his account nothing else happens until that is dealt with
A strict adherence to due diligence. He quoted Warren Buffett: "To be successful, all you need is a sound conceptual framework for making decisions and the ability to keep emotions from corrupting that framework." He described his own approach to a deal as binary
The price paid, because that is where the return is set. "You make your profit the day you buy the piece of property." The same holds when the asset is a business, which is why he polices the multiple paid
His warning about seller-reported income is specific. When a seller says a business earns $300,000 with $150,000 of it in cash, he does not believe the cash half
"No consumer in America has cash. No consumer in America transacts in cash. The only people who have a massive amount of cash are small business sellers."
15. The Case Against Food
Robbins asked which franchise people keep buying and should not.
"No one has ever come to me with a financial reason to invest in food." He said the reason is always emotional, and he used his own grandmother's kitchen as the example of where that feeling comes from
"Restaurants are negative asymmetrical" — his list against them was a large investment, a thin margin, high labor costs, staff turnover, wasted product, high rent, an expensive buildout and a personal guarantee to the landlord
Even a large restaurant does not change his answer. He said he has a client running $20 million through a steakhouse in a Las Vegas casino and still sees no financial case for the category
16. Gyms and the GLP-1 Shift
The second thing he will not put money into is the business he used to own.
"The day is going to come when you don't need a gym membership." That is what he told his business partner when asked why he was not long gyms
His argument is that the product never worked. "There are tens of thousands of gyms in America, and while we're opening tens of thousands of gyms, we've managed to become the fattest people on the planet."
What gyms sold was calories burned, and a drug now sells the same thing. "The caloric burn story is dead." He named semaglutide — Ozempic and Wegovy — as the reason a customer can lose weight without the treadmill
"I am not long on the gym business."
His forecast is a rotation of the same spending into longevity. Cold plunging, sensory deprivation, red light therapy, peptides and stem cells
He says he was in that market too early. He started a facials-only spa 13 years ago and added red light therapy and infrared saunas around 2013 and 2014, when the cost of educating a customer was still too high
The difference now is that the audience arrives informed: "You're creating this concept in an era of Attia, Huberman", with Gary Brecka named alongside them
As evidence of the demand he cited Brecka's new brand — "Gary Brecka just created a brand - zero locations operating, sold over 600 of them in probably less than five months."
He is a customer of the category as well. "I have a red light bed right here. I do it five days a week."
17. Starting Over With Agents
Robbins asked what he would buy if he were broke tomorrow.
He would not buy anything. "I would dig into Claude." His route back would be studying creators, building AI agents, and scaling something cheap
"I think the first job used to be McDonald's; the first gig now is going to be an AI agent that's kicking off ancillary income." His view is that the entry-level job has already been taken by software and robotics
The proof he offered is a securities issue. He credited Michael Saylor with using an AI agent to create the STRC preferred, describing it as pegged at a hundred parity with a 12% yield and raising tens of billions of dollars
"That thing went to $70 a share." He said the consensus was that it would go to zero
18. Where He Is Long
Robbins asked why he is bullish on senior care and pet care, and got five sectors back.
Aging, on a specific timetable. "The United States is aging at a rate that we will catch up to Japan, Italy, Germany - countries classified as super-aged nations, meaning 20% of the population is over 65." He put the United States there in under 10 years
The caregiver shortage is the investable part. A senior-care chief executive on his own podcast asked him to guess the average age of an American caregiver; he expected 35
"The average age of a caregiver in the United States is 60."
"That's why I believe tomorrow's caregiver is going to be an Optimus humanoid that will be caring 24/7 for our elderly and be really, really good at it."
Pets, because household formation has changed. "150 billion was spent in America last year on pet services - that's a market cap in itself."
The trades, on the argument that machines cannot yet use hand tools. "So HVAC, plumbing, all electrical, all hand-dexterity jobs will be making a ton of money in the near future." He expects the electricians building data centers to earn hundreds of thousands of dollars
Men's health, on a claim about testosterone. "Next, men's health - because we've been feminizing men for 20 years in America, and a 30-year-old today has half the testosterone and half the sperm of his grandparent." He named erectile-dysfunction treatment and testosterone replacement as the categories
Youth enrichment, because he thinks schools have stopped doing it. "Our schools are not preparing these kids for the real world." He argued that music lessons were never really about music — reading a score while playing engages both halves of the brain, which is where he says the reasoning and problem-solving benefits come from
Bonus Insights
The wealth transfer question got a deflation answer. Robbins closed with the handoff from baby boomers: "The wealth transfer that's about to happen - an estimated 80 to 100 trillion dollars is about to be transferred from baby boomers down mostly to Gen Z and millennials." Nonnenmacher said the work ethic has already changed and the jobs are already going
"And the next wave will be quantum computing, which could calculate in a week what would take millions of years today."
"The country will ultimately put many people on universal income, and everything from there will be deflationary."
"I think we're living at peak inflation, and with all these advancements in technology, it causes a deflationary environment."
He does not accept the burnout premise. Asked whether hustle leads to it: "I don't believe in work life balance. I think that's all horseshit." He said the people who say it loudest do not live it
The book got a plug at the close. Robbins signed off by pointing listeners to "Beyond the Brand"
His bottom line is that the money in small business is made on the buy — in the price paid, the diligence done and whether the thing being bought can run without the person selling it.
Products, Companies & Tools Mentioned
Franocity (Nonnenmacher's franchise consulting firm, which he says now works as an asset-sale broker as well, selling customer lists where there is no profit to sell)
BizBuySell (The listings site behind the claim, relayed from Jessica Fialkovich, that 85% of the businesses on it close without finding a buyer)
Exit Factor (Fialkovich's firm, which advises owners on making a business saleable — the source of the 85% figure)
Placer.ai (The location-data vendor he says replaced the rubber hose across the road: it counts phones into a strip mall and profiles where those phones sleep)
Uber and Uber Eats (His reference point for both his own 1990 delivery business and for a company that did not know what it would end up selling)
McDonald's, Subway and Little Caesars (The restaurant accounts his pager dispatch system was built around; McDonald's alone ran about 100 deliveries a day)
Hilton Grand Vacations (The hotel operator whose manager handed him the beach concession, and whose timeshare desk he quit after three days)
HP, Lexmark and Canon (The original-equipment cartridge makers his 36 refill stores undercut at 50 cents on the dollar)
Best Buy, Circuit City and Bed Bath & Beyond (His examples of why an anchor tenant no longer makes a retail location safe)
Ozempic and Wegovy (The semaglutide products he says ended the gym industry's calories-burned pitch)
Claude (What he says he would start with if he were broke tomorrow, building AI agents rather than buying a business)
Strategy (Michael Saylor's company, whose STRC preferred he cites as an instrument built with an AI agent)
Optimus (The humanoid robot he expects to become the American caregiver, against an average caregiver age he puts at 60)
Books & Resources Mentioned
Beyond the Brand – Cliff Nonnenmacher and Justin Guevara (His book on franchise ownership, which the host pointed listeners to at the close)
Jack Welch's 4E1P hiring test (Energy, energizing others, execution, edge and passion — the framework Nonnenmacher says he took from the former GE chief executive and applies to franchisees)
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