AgCPA95 said:

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Piercing Mae said:

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A buddy of mine owned a Quiznos and went bankrupt.

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This isn't an indictment of your friend, but per my dad and father who are both in retail real estate, their franchise qualification criteria basically consisted of your ability to fog a mirror. With that, you ended up with a lot of poorly run, under-capitalized stores.

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Didn't they also raise the cost of food inputs significantly (have to purchase from Quizno's) to drive their Corporate bottom line while screwing the pants off their franchisees?

diehard03 said:

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I would definitely jump at the chance to own a Chik-fil-a. Hell, I'd crawl across broken glass to get one.

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Isn't a Chik-fil-A the quintessential "buying a job"?

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Sure, if you want to look at it that way. It's also a turn-key business that nets owners (the ones I know of) ~$200k per year for a ridiculously low buy-in and with a tremendous support system.

Owners are expected to be on-site managers, but that doesn't mean all-day/every-day. You can MAYBE get 2 franchises, but only after demonstrating ability as a single-restaurant owner. Vastly different from (not saying superior to, just different) McDonalds or DQ, etc. where you can get 10, 20, 30 franchises, if you can afford them.

TX AG 88 said:

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diehard03 said:

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Quote:

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I would definitely jump at the chance to own a Chik-fil-a. Hell, I'd crawl across broken glass to get one.

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Isn't a Chik-fil-A the quintessential "buying a job"?

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Sure, if you want to look at it that way. It's also a turn-key business that nets owners (the ones I know of) ~$200k per year for a ridiculously low buy-in and with a tremendous support system.

Owners are expected to be on-site managers, but that doesn't mean all-day/every-day. You can MAYBE get 2 franchises, but only after demonstrating ability as a single-restaurant owner. Vastly different from (not saying superior to, just different) McDonalds or DQ, etc. where you can get 10, 20, 30 franchises, if you can afford them.

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The Chick-Fil-As that open at malls are considered branches (or sub-stores) of a stand-alone store, correct?

I have some Learning centers that show up pretty high on the list. Supplemental education is a growing segment. We bought into our franchise 7 years ago and now have 5 locations.

For most mid range $$ franchise opportunities - you are essentially owning your own job. You can build a decent income you still have a high probability of failure as with any small business. Franchise's give you a good road map and operational support... Maybe some buying leverage and brand recognition to grease the skids on generating revenue but the other 93% of what it takes for you to succeed is going to come from what's sitting over your shoulders.

Opening multiple locations can increase your revenue potential but it also doubles your expenses and splits your attention. If you are the magic that makes your business run right (control freak) and you can't find someone that can fill your shoes and 1 location - then you are probably going to burn out and both locations suffer.

Would I do it again knowing what I know now. 100%! And I'd crush it again! haha
Would I start now as opposed to 7 years ago? 100% - these newbie's don't know how good they have it!

We sent our kids to Sylvan in their Jr High years. They seemed like a pretty neat business model.

No idea, sorry!

Good stuff Finding X! Thanks for sharing your thoughts.

I owned a CertaPro Painters CertaPro franchise from 2004-2008. I signed a 6-year contract and after I closed the business they sued me for breaking the contract. I didn't have the money to hire an attorney and spend time in Pennsylvania to fight it so I was hit with a default judgement of $250,000. Luckily I already owned my home, but it affected things like buying cars, etc... A few years ago I found out a guy who I really got along with in the franchise system was promoted to CEO. I called him and he let me pay $2,500 to settle the judgment.

At that time their business model was that you didn't need to know anything about painting, just know how to run a business. They semi-trained us and we actually had to work as a painter for a few months. After that you ran the business, quoted, sold jobs, etc... I was working myself to the bone and making decent money, but just not enough to hire a full-time manager/foreman which would have solved a lot of my problems.

Depending on the franchise and where it was located I would buy another franchise. I think the demographics/population of my area wasn't large enough to support my goal of making $300,000/year in salary. Some of the top CertaPro franchisees are pulling in $250-$500K.

IMO, it's hard to give anyone 7-10% of your profits, but that's what most franchises want from you. In return you are supposed to get marketing help and brand awareness.

7-10% profits isn't the problem. 7-10% revenue is.

IrishTxAggie said:

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7-10% profits isn't the problem. 7-10% revenue is.

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Yep. edit that.

That is crazy.. How in the world could their contract hold you responsible if the business no longer existed?

That's the point of a franchise agreement

But if a franchise goes under it doesn't mean they are due revenue on business that never happened. If that is in the agreement I wouldn't sign it.

There's typically a floor to what you owe them.

Thanks...

I never knew that. Seems like a recipe for disaster.

Some interesting thoughts on here about the franchising concept....Some good, some bad.

I guess it all depends on the franchise and whether or not the 7-10% of revenue is worth it based on what you get in return...

I recently inquired about a health related franchise. I have a plan, know the market and can use my contacts to establish relationships. Turns out the territory isn't available, so what other areas are you interested in? My response was what other areas have YOU identified as target markets? That was 3 weeks ago and no response. Dodged a bullet there.

HustlerAggie said:

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TX AG 88 said:

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diehard03 said:

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Quote:

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I would definitely jump at the chance to own a Chik-fil-a. Hell, I'd crawl across broken glass to get one.

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Isn't a Chik-fil-A the quintessential "buying a job"?

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Sure, if you want to look at it that way. It's also a turn-key business that nets owners (the ones I know of) ~$200k per year for a ridiculously low buy-in and with a tremendous support system.

Owners are expected to be on-site managers, but that doesn't mean all-day/every-day. You can MAYBE get 2 franchises, but only after demonstrating ability as a single-restaurant owner. Vastly different from (not saying superior to, just different) McDonalds or DQ, etc. where you can get 10, 20, 30 franchises, if you can afford them.

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The Chick-Fil-As that open at malls are considered branches (or sub-stores) of a stand-alone store, correct?

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No, mall locations are not branches of standalone stores.

One of my close friends formerly owned/operated the Northpark Center (a mall) CFA in Dallas, and had to give that location up when he got his standalone store at his new White Rock CFA. When he had the mall location, he was not affiliated with any other store location, but rather operated on his own.

TX AG 88's estimate of around $200k net would be on the low side for good locations. My friend said he netted around $150k at the mall location, and expects to do around $300k at his new location, once it is fully up and running and all the startup costs are paid off.

He loves it, and it pays quite well, but you just have to accept the fact that you'll work in a fast food restaurant to earn it. Much like any job, if you hire good managers below you, you can work less. My friend's ultimate goal is to get another location, but he says it's harder to get a second location than it is your first.

Maybe this is a silly question...

If so many people say there's not much money in being a franchise owner, then why are there so many franchises and why do so many people go into it? Certainly there has to be some sort of monetary incentive?

SkiMo said:

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Maybe this is a silly question...

If so many people say there's not much money in being a franchise owner, then why are there so many franchises and why do so many people go into it? Certainly there has to be some sort of monetary incentive?

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I really think it has a lot to do with the locations these franchises are failing in. The franchise companies saturate the good markets with franchises then continue to sell franchises in the outlying areas. I bet if there was a study done it would be those fringe franchises that fail.

It's an enticing sell.

quit your grind of a day job and run your own business.

most people don't do enough research into the time, money, and risk involved with these franchises.

Diggity said:

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It's an enticing sell.

quit your grind of a day job and run your own business.

most people don't do enough research into the time, money, and risk involved with these franchises.

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True. And I toss around the idea of doing it myself... but fear keeps pulling me back to staying at the day job.

SkiMo - Do you have some ideas? What have you thought about doing?
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I think the draw to franchises is simply the brand, brand recognition and some sort of accountability that other franchisees produce a consistent product wherever the purchase is made. Business owner like having a "play book" that's already been established and they don't have to reinvent the wheel. The only tough part is that the franchisee typically pays royalties for life, which can really add up overtime.

I'm toying around with the idea of opening a small gym...it's a newer franchise and there aren't any in my location. It's kind of a mix between crossfit and orangetheory. I think it's a good business model and would market well. I may schedule a call for tomorrow just to talk and get the details.

Currently I have a really well paying full time job and they say that you can keep your job and still run the business because it's fairly low maintenance. I am no fool and understand it would still be tons of work...but I am looking for something to where I can potentially get into a market and open multiple locations in the metro and quit my 9-5 and run that.

I really would like to be my own boss (sort of) and get out of the daily grind sitting behind a computer and losing a part of my soul each day.

The draw of a franchise is the proven road map. A "guide to success". It's definitely not guaranteed but you get business, marketing, product, & operational support (typically) that can supplement deficiencies on your part as the owner and maybe save you some cash.
In our learning center franchise - there is absolutely NO WAY I could have created the curriculum and skill mapping software for what I paid in the franchising fee and the IP support and operational support is very valuable.
Now the marketing support is very weak but most companies are stuck in the Y2K state of mind and haven't wrapped their arms around 2018 marketing/advertising concepts. That's ok - because it allowed me to start an ad agency to target those franchisees to give them what they needed. (see a need > fix it = profit!)

If you think you have the chops to start up and build a business from scratch and you have all of the KPI's covered either on your own or with key people - then save the 10% royalty payment and Franchising fee and go it alone! It's only money!

F45?

No, but I've received several e-mails that they've seen my resume and I'd be the ideal candidate for franchise ownership.

Not bragging, mind you.

SkiMo has to be talking F45.

If you've been in the group fitness setting for any length of time, you know you can probably do your own thing for the same or less and not have to give up 8-12% of your profit.