Beyond the Arches #3: How Patrick Mahomes became a football & franchising MVP
Patrick Mahomes: MVP of football & franchising
2022 was a banner year for Patrick Mahomes. Not only did the superstar quarterback lead the Kansas City Chiefs to a nail-biting 38-35 victory over the Philadelphia Eagles in the Superbowl on a busted ankle, but he also closed the season as MVP and the league leader for passing yards and touchdowns.
It should come as no surprise then that the two-time Superbowl champ is also setting himself for big wins off the field. In June, Mahomes, a Texas native, entered into an agreement with the iconic Texas brand Whataburger to open 30 new locations across southern Kansas and Missouri.
So how much could Mahomes actually make from this deal? Let’s run some numbers.
(One quick note: Because Whataburger has not made its financial disclosure document public, we’ve calculated annual sales per location based on revenue and location data from the Franchise Times. The initial investment data was crowdsourced from various publications.)
The initial investment for a Whataburger franchise is somewhere between $1.2 million and $2 million per location, and each of these locations makes an average of around $3.2 million in sales per year. Let’s assume Mahomes buys in around the midpoint of this range, say $1.6 million. He stands to invest up to $48 million total, so given a 15% profit margin, it would take between 2.5 and 5 years for him to make back his investment. After that, he could pocket as much as $19 million a year from his investment, completely passively.
Let’s also consider what would happen if Mahomes wanted to sell his units down the line. Based on info from DealStats, the selling price for this size acquisition would range from 0.85% to 0.95% of sales. Assuming the average revenue of the acquired locations is in line with the rest of Whataburger’s US-based locations, the acquisition price would likely be anywhere from $81.5 million to $91.1 million.
Now that’s what we’d call a SUPER way to build generational wealth.
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