Open a Franchise?

.

.

ive thought about opening a few wings places in manhattan and doing the same :)

http://www.franchisegator.com/Fast-Food-Franchises/

http://www.franchiseopportunities.com/food.asp

Gotta watch, some franchises will cost much more initially up front than others. Many have minimum net worth requirements as well.

.

The restaurant business is a very hard life. If you decide to go this path make sure you have an experienced general manager with a proven track record at other franchises or you will be chasing your tail in circles week after week to get everything done. I had three places over two years and it was absolute insanity most of the time. BUT - I got a lot of satisfaction from hearing from customers, getting good reviews, etc. I still miss it some days even though I never want to do it again :)

OH he changed his sn again huh ;)

extremely hard work

very long hours

requires superior people skills

I'm leaning towards buying a liquor store at the moment. Liquor moves itself, there is very little health issues or skill needed in prep (as opposed to a restaurant). Also looking at 7 eleven.

Opening a Tim Hortons anywhere in Canada will make you rich.

Very hard work. My dad flipped burgers for 6 years at McD's until he was 22 and he considered opening his own franchise. Tough, long hours in a greasy hot restaurant (or you can hire a manager to run it but that'll cost you). Plus you have little flexibility with corporate over many aspects of your restaurant.

Been thinking about this as well, another thing you should consider is size though.

I was talking to a friend about this a few months back and he told me about his brothers current pissing match; apparently one of them has 2 McD's and the other has around 40 really small hotdog/peanut/candy/whatever stands littered across the city.

Guess who's making more?

My mother decided to play with a bit of my dad's $$ when I was in middle-school or so and she, along with a business partner, opened up a few deli franchises in like suburban ares of Mich / Indiana (I was from Chicago). While I love my mother, she's a trained actress and doesn't know much about business (that's the nice way of putting it).... the project's still actually made some money. I don't know how, as they kept making management mistakes that my dad would find out about and literally just laugh his ass off, but they actually somehow survived and turned a small profit. Granted it was one of those "not worth the trouble" type ventures netting a few hundred K per year or whatever, so they decided to sell to a larger franchisee after about 3-4 years, but still... the fact that they made money makes me believe you could make a ton of money from that.

Also, one of the partners at my firm opened up a ton of pizza huts in china in the late 90s and early 00's and he's pretty damn rich now.

I met a guy who owns a bunch of GNC Nutrition stores. He just found a good manager at each one and only works about 30 hours a week overseeing everything. These aren't going to be profitable like a McDonalds or something but I'm sure the start up costs are only 200k or so.

I don't know Low margins, high turnover and franchise fees on top of all that. It doesn't make it appealing. You also have to consider if that's the best place to put down a million dollars.

I mean you might get a better return just day trading, assuming 10% you have 100k a year there...

Talked to my dad just now and we hashed this out for what it would take for me to open "KwikEMart" a "Kwik" brand imaginary convenience store.

At $150/sq foot or so for retail space (back of ass wild guess) and 1000 feet for a smallish store we're looking at 150k in rent a year. We're assuming that I take out a 500k loan for buying the franchise rights and looking at 8 percent in interest a year. So, round numbers, to pay off the debt on the store I'm looking at 50k a year. Maintenance, utilities, and other expenses ("Clean up in isle 5!", "Our sign light is out....It now reads "wart"!") is another 50k a year. So let's call the fixed cost of the store 250k a year.

Me (the day manager) a night shift manager, a low level day employee and a low level night employee, will run the store. The night manager costs 60k, low levels 30k apiece, and I take 120k ("Youse got a problem wit dat?") will run 250k in management costs.

Now lets assume that I have a 40 percent markup on everything I sell. To make my nut of 500k a year (building plus management) I've got to sell 1.25 mil a year to break even. Let's assume further that I am open every day accept Sunday all year round. That's 365- 52 = 313 days a year. That means I have to sell 3993.6 dollars worth of product every day in order to make my nut. That's 166 dollars an hour assuming I'm open 24 hours a day and 249.6 dollars an hour assuming I'm only open 16.

How the fuck do these places make money?

The fuck kind of convenience store isn't open on Sundays, dude?

So, if I am open 7 days a week that comes to 3424.65 dollars a day, and only 142 dollars an hour assuming I am open 24/7. That still seems really high.

You can't run your store and manage it well while taking care of company needs. Day manager has to be at the store. Who is going to go take care of health department/employee issues/book keeping/supplier negotiations/financing/insuring etc. etc. All those appointments add up and they are during the day as well. Can't be in two places at once.

I've been in the trenches. It's blood, sweat, and tears. You have extremely tight PM's to work with as has been stated.

You can make money but you need to be well capitalized. Also as a franchisee you have to pay what they deem you owe to their advertising budget. Uniforms, procedures, recipes, all go through them. They fine you if you don't follow their handbook.

I'm not saying don't go into it, but make sure you have it very clearly spelled out if you do. And make sure it is a product you love and believe in, or it's just another job with all the risk on your shoulders. My belief in my product kept me going, without out it I wouldn't have bothered.

Hey Monkeysama,

CNBC has a special with Darren Rovell tomorrow about franchising at 9pm EST.

Thought that may give you an inside look.

Top chains like Chick Fil A or Firehouse require someone to actually work for the company for 2 years before starting their franchise. Anyone out there willing to put in the time to work for them with a promise of capital on the back end to start a franchise?

Monkey,

I have some experience this area. Your rent costs are way too high, and management costs a bit too high. Also your expected profit(your take/unit) seems a bit high as well for a convenience store, although it is feasible.

For a gas station, and mind you I am not familiar with this particular retail business, but I would imagine you have to divide your revenues into 2 sections realistically, gas money & store purchases. Gas margins are close to nothing, but due to sheer volume need to be accounted for. I am more familiar with restaurants, not sure exactly what you are looking for in info but I will try to help if I can.

Capital costs for most restaurants as I'm sure you know vary quite widely. A tilted kilt type restaurant(full service) is in the millions, while some quick casual type places can be in the low hundreds of thousands. That being said, almost all the decent franchises have minimum net worth requirements.

If you are truly feeling blue sky, and have some cash to play with, there are a few ways you could tackle opening a franchise.

First, where do you want to open? If in an established urban area, you will most likely need a new or hotter concept, as older things, such as Mcdonalds are pretty saturated in most areas. Ex might be a firehouse subs or lennys, slightly more upscale than Subway sandwich shops. These are experiencing some decent growth right now, riding the general sandwich trend but catering to those looking for a higher quality item than what subway provides.

Categories to avoid would be frozen yogurt or burritos, in most places. Some areas they have potential, but lots of overbuilding in those sectors.

2 ares with strong potential for growth in the future, but are just getting started, are quick casual ethnic aside from Chinese, and quick casual taco joints. Quick casual(or fast casual as it is otherwise known) refers to a type of restaurant which has proliferated in recent years which offer higher quality food than fast food, but in a quicker service environment than a sit down full service restaurant. Think Chipotle or Five Guys.

If you are in a high growth area then you have more options, and a McDonalds could rake in the $$$. Anways hope this was of some help, let me know if I can clarify anything for you. Really though your best source of info is other franchise owners from whichever system you are looking at.

I see restaurants and franchises as two different beasts. To me, McDonald's isn't really a restaurant (of course it sells food) when comparing it to family-owned restaurants, which are much more difficult to operate and turn profitable.

My Aunt owns three 7-11's and has done pretty well for herself, but she says buying into a 7-11 now is a foolish decision. She said that if I wanted to buy one on Long Island, it would cost about $900,000 and I would be lucky to pull in $60,000 per year after getting raped by franchise fees. The market also continues to get more saturated every single day. She says the best way to make money with franchises is to find a good system, but find it in the earlier stages of development so the market is not saturated. The franchising company will also more than likely charge less in franchise fees if they trying to promote rapid expansion. America only needs so many 7-11's, when growth begins to slow corporate starts to nickel and dime franchisees to improve profit margins.