Richard Harmon of CSG Partners joins Harry to unpack ESOPs (Employee Stock Ownership Plans) for car wash operators—what they are, why Congress incentivized them, and when they can outperform a traditional sale. Richard walks through the ERISA origin story, the 1042 rollover, and modern S-Corp ESOP structures that function like a tax-enhanced, leveraged buyout: owners gain liquidity and diversification, companies reduce or eliminate corporate taxes, and employees build meaningful retirement value.

We cover valuation guardrails (trustee/fair market value), staged transactions (30–49% first bite, later step-ups), financing without personal guarantees, governance with a directed trustee, annual valuations and vesting, state wrinkles, estate-planning angles, scale (middle market to billion-dollar EVs), and why comparing an ESOP in parallel with a private-equity LOI can be eye-opening.

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