Has Anyone Here Ever Bought A Franchise?
 

i am thinking about opening a sub shop franchise..

the franchise I am looking at is pretty new with only about 30 stores and the closest one about 1000 miles away from me..

i would never open a subway or blimpie store based on the fact of saturation, but this particular franchise seems to offer a unique concept..

does anyone have any experience with franchising and what was your experience?







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I have not, but worked in the food business for over 12 yrs. I can tell you that you may want to check more into that. A sub shop is typically for a hands on owner. If you need to pay a manager, there go most of the profits. The $ in franchises are when you own many locations.

We almost bought a Quiznos a few years back, but decided not to after seeing all of the fees... I don't remember exact figures, but something like $15,000 to transfer to us, a $5000 fee for the landlord of the strip mall to transfer (not Quiznos fault, but a fee nonetheless), 11% off the top goes to Quiznos, and you have to buy their grossly inflated products, meats and veggies.

After all was said and done, if we ran it ourselves and made the same as the previous owner, we would have made only a couple thousand a month profit. If we hired a manager, we would break even at best.

Make sure you look at all of the costs before you sign up...

oh you need to find a thread on here posted years ago where a webmaster named Hershie or Heshie posted a very informative post on a similar thread to this where somebody asked about buying a franchise.

He was the master franchise owner of Dunkin Donuts in a city in upstate New York, think Syracuse or Rochester. His post made owning franchises look like the most horrible way of life imaginable. I think he even said he had a heart attack at about 40 because of all the stress running the franchises. I forget what he said about the money he made but whatever it was it wasn't worth it.

Many of the quality franchises require that the owner actually works in the store. This guy Heshie said the employees were the worst part of it - if the guy who was supposed to bake the donuts at 5AM flaked or was sick, guess who has to go down to the store and do it - the owner.

I've always heard when it comes to Subway franchises you need several to make a good living.

At one point I was looking at buying the New Orleans Saints franchise, but I lacked $80,000,000.00 of the $80,000,100.00 they were asking. In retrospect I think if I would have offered 500 dollars up front it would have been a game changer;)

Be careful of a business that not only controls what your cost of goods are but also what your selling price is.

not to mention that in every franchise agreement i've ever looked at the franchisor can/will make you re-model the store every 5-7 years. they want a new look and you are forced to pay for it.

Willingly taking a job where you hire and manage high school kids is insanity.

I'm convinced those big franchises make their money by raping their store owners.

very good information...

the franchise fee is only $35,000 and 5% of gross...

the total upfront cost will be around $200,000 including improvements and operating costs for the first 6 months...

even with a manager, they are claiming that the net profit should still be between $10,000 to $15,000 per month based on their average store, but like stated in this thread, i dont want to work in the store and if i can't be a hands off owner it probably wont make sense...




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:1orglaugh:1orglaugh

even though the saints suck, you would have probably made your money back the first year with the price of tickets, $80 hot dogs, and $40 cups of beer... :thumbsup





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https://gfy.com/showthread.php?t=560783

that's one of the threads where Hershie has many posts about being a multiple franchise owner. i was wrong, he didn't have a heart attack - he wrote that he dumped the Dunkin Donuts franchises before he would have had a heart attack

Do you have to purchase 100% of your food and supplies from the franchisor? How much can they mark-up from actual costs? Add this % to the 11% they are charging off the top. Is that more than your expected net?

Compare some product costs and see if they are passing on the purchasing power of combined buying or using your cost of goods as a profit center.

Can your costs go up arbitrarily? Like if the franchisor makes a bad decision and needs more revenue?

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I always thought this looked interesting http://www.wingzonefranchise.com/index.html

Also.. dollar tree "everything is $1" stores are great, for sure
I know they make money

I go in there and every welfare case in town is piling up "dollar nickel" items
You know, the kind of shit you buy for pretty much nothing

i can sell you pigeon burger franchise $499.99 comes with a loaf of bread, net, and portable grill :pimp



:1orglaugh check this out http://www.franchisedirect.com/foodfranchises/14 quiznos 12,500 to start

That reminds me of another good hustle a guy I knew had... selling ice cones/hotdogs whatever else to motherfuckers at any beach

Getting an employee who wouldn't steal your cart would be the problem :1orglaugh
It would have to go like this. The guy shows up and it's "Okay, here's the cart, now give me your title and your keys and we'll trade back at the end of the day".

If the guys car is worth enough and he owns it
:1orglaugh

:1orglaugh that will get you burnt you drive off in their car. duplicate title and spare keys they move and open up shop hundreds maybe thousands of miles away. :helpme

I almost did that back in 2005.

Started to do Subway, but like you said...oversaturated. Looked at Quiznos as well because there were very few of them and I like their food.

Finally decided on a Firehouse Sub shop. Excellent food and great theme. Ended up backing out of the restaurant biz and then later the bar biz because my accountant and banker were so against it.

They ended up talking me into buying property in the business district and renting it. That worked pretty damn good. The businesses renting the property basically paid the mortgage and it required little to no work on my part.

But then 2008 happened and I took a bath on all of it. Pretty much gave away all my holdings and lost my investment in it because there was no way I wanted the mortgages hanging over my head after the majority of our tenants went out of business. :(

Bottom line: If you are hell bent on a sub shop...Firehouse kicks ass & the franchise deal they had a few years back was far better than the Subway or Quiznos agreement.

You cannot be hands off owner. You will be stolen from blindly.

Requirements to open a food chain would be this:

1) Not have any similar food chains in the area
2) Be a heavy trafficked area by locals
3) Know the food biz and set it all up yourself
4) Have a trust worthy manager (very, very difficult to establish)
5) Be willing to have "fingers" pay a visit when cash is stolen
6) Cameras

If you are asking this question you likely won't succeed.

I'll avoid the lengthy detailed post, basically if you buy a sub shop franchise you'll be "paying" for a 35k/yr job, if you're lucky.

"...i dont want to work..." = fail
Investing in a company and being a franchise owner is 2 very different things.

What's their co-op advertising arrangement?
If the closest outlet is 1000 miles away then the branding alone in your target market will be a big ($$$) issue.

~

looks like you are stuck doing that gloryhole gig you were telling me about

I would love to own a subway franchise

In a nutshell you are correct. That monthly franchise fee, is usually the profit you would make. There is a lot more to running the business than the fancy projections by the franchisor:2 cents:

:2 cents:

Alot of franchises are out there to scam people like you into paying for a new location. When they're done exploiting you into bankruptcy, the company buys you out for a fraction of what you're worth and takes over.

So that way they get a free location built, make money off of selling you the franchise, make money off of whatever you sold while you were active, and then inherit a fully functioning business for pennies on the dollar.

Example A : The UPS Store. Did you know that in alot of locations its cheaper to call UPS directly to come pick up your package than to go through a UPS store? Thats because franchisees don't get special rates or anything. Its a total scam. I saw a good friend of mine go through it and get burned big time. He lost over 100k opening up a store.

Yes.

FedEx is around the corner from my house, and it's actually anywhere from 30-50% cheaper postage to take a package there and drop it off than it is for me to use a PakMail type of place (by comparison). The market up is nuts!

On top of that, half the time the PakMail/or alike places get the shipping details wrong. Especially on international shipments. Half the time I would get a call the next day telling me to come to the main FedEx office, and refill out something or whatever.

:disgust

Buy yourself a hotdog cart and sell to the drunks after the bar,you be rollin in the bling bling

I think in general a sub shop is NOT the way to go. if you want to open something like that look at Krispie Kream that will make a killing no matter where you are as long as it is a Bakery one.

oliveto bistro dot com was pretty much started by a friend of mine. Oliveto itself is new, but it''s part of Mazzios which has been around for about 30 years and is very stable.

a friend of mine was going to open a cold stone creamery. after looking at all the cost, he would basically have to work the place everyday to make money.

they require that you hire so many people and no one is going to work for $7.25/hr unless you are an idiot high school kid.

at the end of the day, 1 franchise will not make you rich, or probably even pay your bills. a friend of mine his dad owns about 12 different ones and makes as much of those as he does from the 3 diners that he also owns

there's one like 5mins from my house its always packed.

If you want to open up a highly successful sandwich shop then take a trip to Santa Monica, Ca and visit Bay Cities Deli. The parking lot is so full that people actually wait in line on the street and block traffic. As far as I know they almost never advertise. They get free advertising on shows like Entourage.

What is their secret? High quality ingredients. Wow, what a concept. Who would have ever thought of such an idea?

Follow their business model and you won't need to pay some jackoff franchise fees. I promise you 100% you will grow to hate whatever company you buy a franchise from. Everyone I have ever known who bought a franchise regretted it.

this is the one i am looking at...

http://primohoagies.com

thumanns is what boars head used to be in terms of quality...





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nice, fyi this company will put any Subway out of business. Always very busy, fresh cheap food that is higher quality than Subway, blazing fast service. Good study
http://www.jimmyjohn.com/franchise/franchise.aspx

Have you considered just running your own restaurant or whatever?

Check those numbers very closely. The $10k - $15k figure seems very high. Margins on a fast food restaurant business are very slim. 5% - 10% at best!!

I own a Samurai Sams ( franchise ) fast food joint in Phoenix, had it for 3 years.. I am a total hands off absentee owner with a manager on site. I barely make a profit, maybe 5%, After I pay off dept in 3 - 5 years, I will net $30k a year profit. not bad.. but, I only invested $70k total. So, check those numbers...

Duplicate title takes time.. or use to.... I don't know what all they will do electronically now, these days.. But back in my time you could hold a title/car for the day as security on something for the day (at least a day).

we already have that here..

i think their sandwiches are ok, but they dont give you any meat..




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They make their own doughnuts?
God what a bitch that must be... I don't know about that
And you will have $10/hr morons who will mess it up all of the time

Not a good idea

i thought about it, but i was thinking turn key would be better for me in terms of not having to invest a lot of time in the business..




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I see franchise ownership as being a bloody mix of self employed+business owner(it sure as HELL isn't an "investor role" situation- not by any stretch of the human imagination!!)... As someone said, why buy a job? You take ALL of the risk and have just about NO control.. sound good? No, it doesn't. Unless you're buying something serious like a Mickey D's or a Burger king, and I can't even imagine what THAT must cost. Even then. No control. All of the risk. It is all on you.

And even the big ones do stupid shit to put you out of business
Fucking Mickey D's thinks they're going to become the hilton inn - they're wasting BILLIONS on this ridiculous fuck up, last I read anything about it

You want to spend 100k or less and really make some money? Lease a commercial property that has no structures (cheap, see) - put a trailer on there, like the one white trash lives in, you know? Buy 50 cars... Hire some clown to work on them.. hire another clown to sell them..

Do that and make sure you're around whenever money changes hands and you can make more than you might think. You just have to buy the cars RIGHT.

I guarantee you that a little dealership will be 1/10th the headache a franchise will be and the risk is a lot lower and you WILL make more money.

Of course, now that I really think about it, there's nothing to keep them from applying for duplicate title in advance .....

Good looking out Brass Monkey..... I like your posts :thumbsup

I like them but I do think they are overrated.

Honestly, the best sandwich shops are always the local joints run by the owners (who probably don't make much money) but want to put out a quality product and are doing their "dream." That's probably true with most styles of restaurants.

I try to stay away from chains as much as possible. Though that's personal preference, nothing to do with investing, LOL.

Food business seems very rough to me with way too many variables and not enough profit to cover the risk.

KK has been having trouble.

how far back? were they called car stamps? :1orglaugh

Buying a franchise is like buying an RV.

The idea sounds good, but the figures never add up.

A friend of mine opened a Quiznos (sp?) back in 2003 and now he has 4 of them, plus 2 other types of fast food companies. All are in L.A. near Hollywood. He doesn't work at any of the stores anymore. But when he started he slaved at the first one to build up equity in it to use as collateral towards buying more.

A writ of that thar sale done been made to the other fella :1orglaugh

There was thing called Sub&Stuff... here in kansas.. these two local guys owned and ran them. The best fries and turkey subs on the fucking planet.... they were fake processed food like everything else, but christ they were good!!! I think I would pay a lot just to eat there one more time

God damn those fries were good

Jesus

Funny timing.

http://finance.yahoo.com/loans/artic...ge-quiznos-wsj