Anybody ever own a franchise.

[bclover]

My sister, lol of all people said to me last night.. "why don't we open a franchise"??

I think she was dead serious (unfortunately).

So anyone ever own a franchise? I always think of fast food which equals long hours,lots of work.

experience.

 

[tryan]

A friend was unhappy with the tuition bill he could from his son's private college. Proposed the following to his wife:

I'll give our son 250k to open a franchise of his choice. He can work the bussiness for a few years then turn it over to a manager and PAY FOR HIS OWN COLLEGE education. Plus he'll have a job to come home to when he graduates.

Wife didn't go for it. Now jr is in his senior year concerned about where he'll find work.

 

[Moemg]

My SO's son owned a karate franchise . After two years of losing money he shut down now no one mentions it at family gatherings .

 

[bclover]

A friend was unhappy with the tuition bill he could from his son's private college. Proposed the following to his wife:

I'll give our son 250k to open a franchise of his choice. He can work the bussiness for a few years then turn it over to a manager and PAY FOR HIS OWN COLLEGE education. Plus he'll have a job to come home to when he graduates.

Wife didn't go for it. Now jr is in his senior year concerned about where he'll find work.

LOL,
No way could I have given my 19 year old 250K

my kid would get an empty warehouse, construct a pole, blow the remaining money on a "dancer" name "cinnamon" and tell me it's the best class he's ever taken.

 

[Newventurer]

Some upside...possible downside

The news is full of incidents where a parent company's missteps will negatively impact the franchise community - Jared (Subway), emissions (VW), eColi (Chipolte) and on and on.

Things that happen around the world can impact your pocketbook, through no fault of your own.

The Brands high fees for marketing and onerous quality standards can leave a franchisee with little to show for their investment.

My personal thoughts are that the Internet has leveled the playing field for small proprietor owned business where you can have similar visibility on eCommerce vs a franchise if you have a crack eCommerce team working for you.

 

[frayne]

Had a brother open up a pizza franchise, lost his butt, employees stole from him and he just wasn't cut out to work 16 hour days 24/7.

 

[Senator]

I looked at a few 10+ years ago. I also have opened and operated a small tavern.

Laundromat
Tanning Salon
Hair Salon
Check cashing place (the most interesting)
Webcam Model Studio (not franchise)

I had a small commercial space that I was trying to rent. I figured it may be more lucrative to open a business, than just rent the space. In the end, some franchises rejected me as my building was older and not up to their 'standards'. Some suggested my place was a good location, not a great location.

In the end, I found a tenant that has been there to this day.

If the franchise does not do any sales demographics for you, stay away.

 

[utrecht]

I dont know anything about the franchise world but I do know there are a hell of a lot of Subways, Papa Johns, etc that are franchises and I dont see them going out of business so somebody is making money.

 

[REWahoo]

... he just wasn't cut out to work 16 hour days 24/7.

That works out to be 40 hours a day, 7 days a week. Tough for anyone to do long term.

 

[frayne]

That works out to be 40 hours a day, 7 days a week. Tough for anyone to do long term.

LOL, I think you know what I meant ! I'm sure if you talked to him it felt like 40 hour days. He was at work even when he wasn't at work.

 

[REWahoo]

LOL, I think you know what I meant ! I'm sure if you talked to him it felt like 40 hour days. He was at work even when he wasn't at work.

+1

My dad owned a small business (not a franchise) and worked 55 to 60 hours, six days a week. I don't ever recall him taking a week long vacation.

 

[ERD50]

Had a brother open up a pizza franchise, lost his butt, employees stole from him and he just wasn't cut out to work 16 hour days 24/7.

That works out to be 40 hours a day, 7 days a week. Tough for anyone to do long term.

LOL, I think you know what I meant ! I'm sure if you talked to him it felt like 40 hour days. He was at work even when he wasn't at work.

But outside the losing money, thieving employees, and long hours 7 days a week, how did the franchise work out for him?

40 hours a day? Hmmm, 16*24/7 ~ 54.857143. 'Numbers is hard' indeed!


-ERD50

 

[frayne]

But outside the losing money, thieving employees, and long hours 7 days a week, how did the franchise work out for him?

40 hours a day? Hmmm, 16*24/7 ~ 54.857143. 'Numbers is hard' indeed!


-ERD50

I think he tried to make it work for about three years before throwing in the towel. Both he and his wife worked the store, plus other jobs. I think all in all he was about $50K in the hole when he closed shop.

 

[ERD50]

I think he tried to make it work for about three years before throwing in the towel. Both he and his wife worked the store, plus other jobs. I think all in all he was about $50K in the hole when he closed shop.

Losing $50K is tough enough, but a real double-whammy (or triple, since both him and his wife had to work at it) when you had to put all that effort into losing it. Sad.

-ERD50

 

[ExFlyBoy5]

Subway is a great deal if you own 40 of them. Talk about a huge pain! I have a buddy that retired from the AF and opened a Papa John's Pizza place under some "reduced fee" structure for vets. He now has 3 locations and is doing pretty well. One of my Dad's former clients had a number of McD's franchises. He started with one here in ATL and that grew to 7 locations. In the late 90's, he sold them and bought 12 or 13 locations in the Phoenix area. He is no longer with us, but his family is doing quite well $$$ wise.

As I understand it, McD's used to pick franchisees with regard to ability as opposed to net worth. I don't think that is the case anymore. I think the only outfit that does something similar is Chick-Fil-A (not a true franchise, you become a business partner w/ corporate). There can be THOUSANDS of applicants for new Chick-Fil-A locations, but if you are the one that is picked, the amount of $$$ you have to invest is very minimal (it used to be about $5,000...not sure if that's changed in the last few years though).

Anyway...most franchises that are worth anything, you have to have pretty substantial net worth and for me, if I met those requirements, I have no reason to w*rk anyway, so why would I jump in?

 

[retirementguy1]

I have considered a Papa Murphy's franchise. It's a take and bake pizza concept. I think it is a pretty good business model. Relatively low overhead for food service. No ovens to buy and maintain, just a couple refrigerators and a mixer. Need around a $300k net worth with $80k liquid. I've worked the last ten years in full service restaurants. It's always pretty stressful and I thought this would be a good alternative. Oh, and they are my favorite pizzas.

 

[ExFlyBoy5]

I have considered a Papa Murphy's franchise. It's a take and bake pizza concept. I think it is a pretty good business model. Relatively low overhead for food service. No ovens to buy and maintain, just a couple refrigerators and a mixer. Need around a $300k net worth with $80k liquid. I've worked the last ten years in full service restaurants. It's always pretty stressful and I thought this would be a good alternative. Oh, and they are my favorite pizzas.

The only locations of Papa Murphy's I have known are all closed. I'd be careful with that franchise!

 

[braumeister]

A friend of a friend owns over a hundred franchises, at least three different business models. He says the key is to hire the best managers you can find and treat them very well. Then you just sit back and count the money.
He's one of the richest people in the state where he lives, so that makes him worth listening to.

 

[RenoJay]

There are a lot of existing, profitable businesses for sale at bizbuysell.com. Why pay $250k to start a franchise while "hoping" for customers when you can buy an existing business for $250k that already earns $100k/year from existing customers?


Sent from my iPhone using Early Retirement Forum

 

[athena53]

About 10 years ago, one of my collegues in the actuarial field decided to open up a ColdStone Creamery franchise because he was passionate about ice cream. They provided training; I remember him bringing samples to work.

He opened up in a university town nearby and it did not work out well. I think he had the usual problem of getting reliable help so put in way too many hours himself. He eventually locked up and gave them the key and went back into the insurance business. He said that the amount of risk he assumed to what HQ assumed was unconscionable (i.e. he took all the risks).

Things I'd worry about: inflated costs of equipment/ingredients you're required to buy from HQ, how many competing locations they can open nearby, how often they'll blanket the world with offers and coupons which you must honor even though you lose money and, as noted above, dumb things HQ can do (including just closing down) that can kill your little business.

I'm not cut out to be an entrepreneur- can you tell?

 

[retirementguy1]

The only locations of Papa Murphy's I have known are all closed. I'd be careful with that franchise!

They seem do to pretty well where I live. They were popular in Utah where I grew up, I don't remember seeing one close. When I moved to Las Vegas 8 years ago there were only two in the city, now there are over 10 and I think only one has closed. The franchisee chooses the location and really needs to do the homework before jumping in.

I had one open up just a couple blocks from me. I talked with the owner; retired military. He had never owned a business or worked in food service. The store has been open a few years now and seems to be doing well.

 

[tryan]

my kid would get an empty warehouse, construct a pole, blow the remaining money on a "dancer" name "cinnamon" and tell me it's the best class he's ever taken.

.... heard colleges now offer "Pole Dancing" as a credited class.

A friends sister married a trust fund kid worth 2-3M. He decided - after never having w@rked - to open Dominos Pizza near the Cape. He sunk a 7 digit sum into building out his territory .... 4 stores. Then - not wanting to w@rk - he hired a six figure general manager to run the show. Then he went back to doing nothing. One by one the stores failed. By the time she divorced him, she left the marriage with DEBT ... no assests left.

Not for the thin skinned.

 

[rodi]

The Brands high fees for marketing and onerous quality standards can leave a franchisee with little to show for their investment.

We had a Baskin Robbins at our local grocery store strip mall. It disappeared several years ago - after 15 years of operation - when BR corporate dictated a remodel/re-image. The owner closed it down rather than invest the close to $50k it would have required to stay compliant as a franchasee... Now it's a franchise frozen yogurt place... seems to be doing ok.

A friend's husband bought a laundrymat franchise business while still in college (and working as a realtor... not sure when he found time to date my friend.) It was a winner for him. He had 3 employees total, did his own maintenance, had shiny new machines... he was making more money from this than from his realtor gig (which was his primary gig.)

 

[FUEGO]

A friends sister married a trust fund kid worth 2-3M. He decided - after never having w@rked - to open Dominos Pizza near the Cape. He sunk a 7 digit sum into building out his territory .... 4 stores. Then - not wanting to w@rk - he hired a six figure general manager to run the show. Then he went back to doing nothing. One by one the stores failed. By the time she divorced him, she left the marriage with DEBT ... no assests left.

Not for the thin skinned.

Q: "How do you make a million bucks?"

A: "Start with 2-3 million, open a few franchise pizza restaurants, and get out while you still have a million left"

I'd skip the franchises and open up your own place. Find a partner if you don't have the skills and refuse to learn. Not that you'll make a ton of money either way, but at least you get to control costs, menu, location, advertising, etc. Of course it's rare to hear of anyone going into food service and making a killing, so a big YMMV on that one.

 

[aja8888]

One of my ROMEO buddies in town owns 6 Burger Kings in the area. It's been his deal for over 20 years. He was smart (and well off) enough to own the land under the buildings. His kids run three of them (he's 64 now).

His pet peeve: Burger King is constantly creating ways to have products that make less profit margin and create higher labor costs.

His advice to me and our ROMEO group on franchising: Bring money, lots of personal time, then pray that you have a real job to go back to.

He has said that most franchises these days are designed for sucking the cash and life out of the franchise buyers/operators.