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-   -   Anybody ever own a franchise. (https://www.early-retirement.org/forums/f28/anybody-ever-own-a-franchise-79327.html)

retirementguy1 11-03-2015 08:17 PM

Quote:

Originally Posted by frayne (Post 1652827)
Nothing wrong with a little empirical observation and comment. I don't need to jump off a cliff to know the sudden stop at the end is going to cause pain.

Nothing empirical about it so far. The empirical data supports that franchises are more successful than mom and pop shops. Mom and pop shops are under-capitalized and more likely to fail in the first three years. Simple as that. Just to get a franchise you need to have more capital and stability.

retirementguy1 11-03-2015 08:22 PM

Quote:

Originally Posted by pb4uski (Post 1652781)
Why not just work at one for a few months to learn the business and then open your own take and bake pizza shop? We had one in our town about 20 years ago and I loved it.

Most employees are in high school. I doubt I could get a job there. Also, a national chain gets 10% off food for buying bulk. If I set up in the same town I'm not sure I would be able to compete.

Your idea is a good one to learn more about the franchise.

harley 11-03-2015 09:40 PM

Quote:

Originally Posted by retirementguy1 (Post 1652822)
Tell me where to go then?

What a set up line! I can't wait for Haha's response.


Edit: I see you are in NV. When I was looking at rental property in Reno we ate at SouthCreek Pizza. It was excellent! Wood fired ovens, fresh ingredients, really good (but not cheap). When I get back there I plan to go again.

Rickt 11-03-2015 10:49 PM

I have owned 3 three franchised hotels over the past 21 years. Needs a lot of capital investment and loong hours. Must have good manager to succeed. The property I personally manage has been profitable for me but I have sold the other two manager-operated properties after owning them for 8 and 4 years respectively because of marginal profitability. Due to the real estate component of the property(depreciated each year under ownership), I did have capital gain when I sold the properties. I now have one franchised hotel property and will retire after selling it in 2017.

Franchising model works but like any other business it requires capital and long hours. Franchising system makes it easy to grow your business across multiple locations though.

Lucantes 11-04-2015 03:50 AM

Quote:

Originally Posted by bclover (Post 1652597)
:laugh: 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.

:laugh: Where do I sign up for this class!!??:laugh:

Al in Ohio 11-04-2015 08:34 PM

Quote:

Originally Posted by Newventurer (Post 1652600)
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.


Jared and eColi will barely be a ripple to those two giants in the franchise world in the long term. I have a friend that has owned 5 Subway franchises. She bought her first twenty years ago after getting tired of the schedule of an airline stewardess. She makes millions on those five Subway stores. And Chipolte? No way this eColi thing slows them down. They will continue to be making a ton of money.


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Al in Ohio 11-04-2015 08:40 PM

Anybody ever own a franchise.
 
One thing I forgot from her experiences. In the beginning you need to put in loooong hours to be a success, but once it gets going you then need to be gifted in selecting good employees and especially store managers. Eventually the goal is to have each store run by a trusted manager while you do as you please except to check in.


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ExFlyBoy5 11-04-2015 08:45 PM

Quote:

Originally Posted by Al in Ohio (Post 1653318)
Jared and eColi will barely be a ripple to those two giants in the franchise world in the long term. I have a friend that has owned 5 Subway franchises. She bought her first twenty years ago after getting tired of the schedule of an airline stewardess. She makes millions on those five Subway stores. And Chipolte? No way this eColi thing slows them down. They will continue to be making a ton of money.


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I have NEVER heard stats like that from a Subway franchisee. About the best case store sales is about $15K a week. 22% NET profit is running a VERY tight ship, so on a store that performs at NEAR THE TOP you are looking at about $170K per store/per year...and that is the VERY TOP end. When I looked into it with some "decent seriousness" back in 2011/2012, the numbers of a GOOD performing store were about a 1/3rd of the numbers I just posted and I don't think they have gotten THAT much better in the last few years.

And as for the Chipotle franchise...yeah, they don't exist.

Rustic23 11-04-2015 08:50 PM

Never owned one. See my post in 'Opinions Needed: Ice Cream Business For...' for things I have learned from friends pizza business. Not something I would consider for retirement income.

haha 11-05-2015 06:17 PM

I think the average corporate or government worker who buys a franchise will feel that he or she has been run over by a truck. Hard to avoid divorce too.

If you are going to need money beyond retirement, hang on to your cash and do not buy a franchise. Keep working a while longer, or if necessary a lot longer.

To me at least the business and political future looks very little like that in which most of us have spent our lives. It may well turn out that the 50 years between WW2 and the millennium will in hindsight be understood as the high water mark of the Western version of society. Most of us have really liked it, and sometimes don't realize what an unusual state it represents.

Ha

ERD50 11-05-2015 08:37 PM

bold mine -
Quote:

Originally Posted by haha (Post 1653802)
I think the average corporate or government worker who buys a franchise will feel that he or she has been run over by a truck. Hard to avoid divorce too. ...

I'm often amused (in a good way!) by haha's ability to turn a phrase, and nail it.

Yep - I worked in production support, and for many years production ran 24/7. In parallel, I was part of future planning, so had to attend all those meetings and late night and early morning conf calls. We were in a competitive business, driven by extremely competitive management. I thought it was a pretty tough row to hoe.

Yet, I always thought managing retail was as tough or tougher, for all the reasons mentioned in this, and the 'ice cream business' thread. Not for the faint of heart. But someone who is smart, and motivated, and can put up with it all might do well. But if they had other options, those options would likely be better. As something to do to cushion retirement - no way!

Quote:

It may well turn out that the 50 years between WW2 and the millennium will in hindsight be understood as the high water mark of the Western version of society. Most of us have really liked it, and sometimes don't realize what an unusual state it represents.

Ha
This is likely true, though some unforeseen advances might change things for the positive. I do think that my parents, who saw the depression and then the post WWII boom, thought we would not do as well as they did. Hard to compare, but even though there was so much opportunity for hard workers in the post WWII boom, I would not trade my life/times for theirs.

My kids seem to be off to a good start, but they had the advantage of a stable family environment, and all graduated from college with useful degrees. So they definitely have a leg up on many others.

-ERD50

Sunset 11-06-2015 12:28 AM

Quote:

Originally Posted by retirementguy1 (Post 1652684)
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.

I liked the one near us for their super heavy pizza, but it went out of business.

Sunset 11-06-2015 12:42 AM

I know a couple that bought into a pizza franchise, near Boston. They both worked at it for about 7 years.
They finally sold it because they were tired of working 12-14 days, no control (HQ sends out coupons, the franchise fee (its a lot like mutual fund high fees only higher).

For all the hours of work they did each week, when they calculated it out, they realized they were working at a lot less than minimum wage!

papadad111 11-06-2015 05:09 AM

Quote:

Originally Posted by aja8888 (Post 1652847)
The franchise owners that post here are all still at work.....:facepalm:


Took the words out of my mouth. +1

Islandtraveler 11-06-2015 08:19 AM

Be Careful What You Wish For
 
I just retired in August after being a developer as well as a franchise owner for 28 years. It has treated me well over the years but is by no means a clear path to success. Careful examination of the parent company must be made with an understanding of their growth philosophy and franchisee support. Not all franchises perform the same throughout the country. Be careful when reviewing success percentages and focus on the transfer rate. Just because a store remains open doesn’t mean that it is profitable. Many stores can turn over at a substantial loss to the owner and may or may not make money over time. Take the time to read the FDD and definitely try to speak to other owners to gain additional perspective. I am not completely down on the franchise model but have a firsthand view of its limitations as well as opportunities having been a franchisee as well as a company representative. I see a need for a franchisee advocate to assist in navigating some of these issues. I have been kicking around the idea of doing some consulting work down the road but plan on working on my golf handicap first. :coolsmiley:

soupcxan 11-07-2015 02:54 PM

Franchise (v): to buy yourself a job

foxfirev5 11-07-2015 03:04 PM

I have a relative that RE'd from a good govt job to go out and buy a franchise first then rental property. The bad news is that another 6 months on the job would have paid for the first five years of the business ownership. haha you nailed it.

BlueAFMom 11-07-2015 05:37 PM

Father, then brother, had Chick-fil-A restaurants which is not a true franchise but a business partnership. Father was very successful but worked non-stop. Brother took a different approach with a higher paid manager and made less (long story but eventually lost the business in a nasty divorce).

After being the child of a franchise owner, working nearly every holiday and most of the seasons others were having a good time, I chose military service and have loved the 30 days paid vacation, federal holidays, modest tax bracket, and about to enjoy the COLA adjusted pension and low-cost healthcare.

In the end, I think we'll come out about the same and I worked less hours. :) Would never even consider doing it 'in retirement.'


Father's advice would be to get in, work hard, save the $$, and get out...5-10 years max.

sengsational 11-07-2015 09:28 PM

Quote:

Originally Posted by pb4uski (Post 1652781)
Why not just work at one for a few months to learn the business and then open your own take and bake pizza shop? We had one in our town about 20 years ago and I loved it.

Thats what a friend of mine did. Flower shop, but yeah, go mom and pop!

Pajaro 11-08-2015 06:07 AM

Quote:

Originally Posted by Al in Ohio (Post 1653318)
Jared and eColi will barely be a ripple to those two giants in the franchise world in the long term.

They will still make money, but consumers have long memories. I still don't eat at Jack in the Box after their eColi killed 4 kids back in 1993. I also can't stand the thought of shopping at Food Lion after their Dateline (could have been 20/20) expose. Heck, I still see "Jane Fonda in the crosshairs" stickers in urinals at USAF O'Clubs, and most officers weren't even alive during her anti-military days.


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