Purchasing a franchise..

Discussion in 'Yellow Pages' started by PotGuy, May 26, 2018.

  1. PotGuy

    PotGuy Forum Fetishist

    Does anyone have any experience with this? An opportunity may have presented itself (very early days) but I have zero experience in running my own business.
     
  2. Vicarage Road

    Vicarage Road Reservist

    The best advice I can give you. Get good staff, they make or break a business. I’m in a fortunate position now ( my third business ) where I work solely on my own, so if I make a **** up, I bollock myself. Good luck
     
    iamofwfc likes this.
  3. The undeniable truth

    The undeniable truth Squad Player

    What sort of business ? Can be very restrictive. Had as a client, the company running Perfect Pizza (later sold to Papa Johns) many years ago. Controlled every aspect of their business and squeezed every possible penny out of franchisees. Had to buy every ingredient through PP at marked up prices and internal audit knew if cheaper product was being used. I assume you would be the franchisee here ? If so read the agreement very very carefully....make sure you understand everything.
     
  4. Carpster

    Carpster Reservist

    My brother in law bought a snap on franchise. But went very badly, very quickly. They snap on. Seemed to be putting the squeeze on him to keep buying more and more stock. Always having to carry the new items which seemed crazy. Don't know the complete ins and outs but it ended very badly with crazy amounts owed. He had far too much competition that was selling cheaper products that were just as good if not better.
     
  5. PhilippineOrn

    PhilippineOrn Squad Player

    The people who buy franchises are like Russians or Arabs that buy Premier League football clubs, essentially owning more money than nous. If you have any knowledge of the industry you wish to franchise in then just go it alone . Typically, expect to lose 50% of your profits to the franchiser. Every franchise only serves a minimal local area so just be at least slightly better than them and even your independent hamburger shop will do better eventually than the McDonald's across the road.

    My Cross Courier & Dispatch made Velocity Express, a franchise, close in Sioux Falls.
     
  6. Bwood_Horn

    Bwood_Horn Squad Player

    I do know of a small(ish) group of "Independent Suppliers of Medicinal Herbs and Powders" (New Model Army "followers") based in a tourist-trap/garrison town (an awful lot of discrete business with the squaddies) who took on a "Fast-Food-Franchise" in a very prime site in order to "hide" their earnings. After a couple of years the food outlet was making so much dough that the "other" business was dropped - which was doubly fortunate as the Army had started a much more comprehensive CDT regime.
     
  7. Teide1

    Teide1 Reservist

    Personally I believe you should utilise the skills you already have, the problem with Franchisees is that anyone who has the required amount of money or finance can purchase one, however making a decent living out of them is a different matter!

    Find out exactly what sort of support the franchiser and for how long is going to give you!
     
  8. cthulhu

    cthulhu Keyboard Warrior Staff Member

    Sound like the forum is saying a franchise is a bad idea.

    If you do go ahead post and let us know how you go.

    Best of luck if you do
     
  9. Jumbolina

    Jumbolina Squad Player

    I can only share my experience of owning a franchise in St Louis. I invested everything I owned in a member of staff called Nick Foles and it went very badly. After I was potless the franchise moved to Los Angeles and even worse that assumed clown Nick proved to be rather good at his job in Philidelphia.
     
  10. Arakel

    Arakel First Team

    The problem with franchises is you have to play to someone else's rules. That isn't always appropriate for local market conditions.

    My wife and I own our own business and it's ours in every respect - no franchise dictating terms. As a result, we're far more able to tailor our service to the local community rather than being bound by franchise rules, like some local competitors. And we also have the benefit of not being tarred with a brush from other franchisee's doing things wrong - a competitor was recently given a lot of bad press when it got our that some of their employees were sexually assaulting clients, which impacted even the franchises that didn't have people performing said acts at. Meanwhile, we hoovered up the fleeing clientele.

    That's not to say franchises can't work, but make sure you know what you're getting into and go in with your eyes open. Not all franchises are created equal - some are far better than others.
     
  11. RookeryDad

    RookeryDad Reservist

    PG, if I may ask, what’s your motivation for looking at a franchise?

    Or is it just that the opportunity has cropped up?
     
  12. PotGuy

    PotGuy Forum Fetishist

    Wow, thanks for the responses all, I appreciate them. Definitely more negative /cautious than I expected.

    It is a high-end rental franchise, it isn't the sort of thing that you start yourself to be honest with. It would only be feasible with the head office financing etc.

    I wasn't looking for it, but I have prior in it and I know the current owners well and it just came up one day. I'm going to talk about it with them in a few weeks, we will see if it is feasible or not. I'm not sitting on a huge pile of cash to buy it, but we will see.

    I'll update here if it comes to anything
     
    Bwood_Horn likes this.
  13. The undeniable truth

    The undeniable truth Squad Player

    Just to state the obvious you need to thoroughly understand how the finances would work everything from initial input financial commitment/risk for you (eg any need to remortgage?), to purchasing costs, property rental arrangement/commitment and how the franchise fees are calculated etc. Then you need to model various scenarios in excel ranging between the business really taking off and a slow start and understand what that would mean for you financially. Sorry if that's all blindingly obvious !
     
  14. Diamond

    Diamond Squad Player

    A guy I used to work with moved his family to America and took on a franchise in the New York area. The franchise was part of a burger chain called whataburger, (if I remember right). Fast food in America? What could possibly go wrong?

    Well him and his wife were strict vegetarians and she point blank refused to handle the meat. It went very badly.
     
    The undeniable truth likes this.
  15. The undeniable truth

    The undeniable truth Squad Player

    My wife also refuses to handle the meat these days :D
     
  16. wfcmoog

    wfcmoog Tinpot


    I think franchises come in a wide range. I've no personal experience of them, but my job involves dealing with a large number of franchise networks in hospitality.

    Some, I think are a dud. Franchisees are paying a % of profits for a concept which is easily replicable and with no particular USP. Others are paying for a strong brand, with training, support, guidance and basically, a business in a box.

    I think that it comes down to judging the merits of the franchise itself. Are they offering you value, or just using you to scale up their business? It sounds like you're getting more than just a template business from them, with H/O support and assistance setting up a business where the start up costs would otherwise prohibit your entry.

    Good luck with whatever you choose to do.
     
  17. RookeryDad

    RookeryDad Reservist

    I've not been involved with franchises but have started several businesses.

    The old one about it costing twice as much & taking three times as long as you planned should always be part of the thinking.

    The franchise basis maybe speeds you up.

    What impact on costs?

    I'm also allergic to legal fees but my partner in the current set up has, wisely, insisted on investing in these this time.

    What protection would you have against the franchisor dishing out loads more franchises in future?

    Anyway, PG, take your time & good luck.
     
  18. Relegation Certs

    Relegation Certs Squad Player

    I know someone who now owns 3 Dominos pizza franchises (or did, not seen him for a few years) and made a very decent income. But the first year of his first franchise was very difficult. Working long hours every day of the week.

    He said knowing how to handle minimum wage staff was the biggest challenge.
     
  19. RookeryDad

    RookeryDad Reservist

    Sannino, Walter & many others might think it is the maximum wage folk who are the trickiest.

    Lloyd Dyer is employed by Burton Albion.
     
  20. Bwood_Horn

    Bwood_Horn Squad Player

  21. Clive_ofthe_Kremlin

    Clive_ofthe_Kremlin Squad Player


    Ha ha ha.

    Speaking as one of those minimum wage staff, I would say knowing how to handle inexperienced bosses is an even bigger challenge. A lot of them seem to think they're Henry 8th inspecting the serfs. Delusions of grandeur doesn't cover it.

    It often takes a good couple of months to bring them to their senses and start talking normally and logically.
     
  22. AndrewH63

    AndrewH63 Reservist

    The best judge on if a Franchise will make you money is to talk to your bank. If you have the money McDonalds and Domino Pizzas will make you lots of cash - But you will work very hard for the first two to three years and you will need lots of money up front as working capital. Do well and they will expect you to open further branches or move in a nearby competitor on to your patch. Things you don't think about like the spot price of cheese can make a big difference to your profits and will keep you awake at night. So make sure you can manage your cash flow (basics for any business - but vital for a new one). Other low entry franchises will often make you a living. But little more than setting up a window cleaning round. Which is my recommendation. A low entry business with plenty of demand in North London/home counties. It just needs you to apply the basics of any business. Be efficient, get your pricing right, advertise and put in some effort. You don't even need a ladder if you go posh and use a van with pumped distilled water and a window cleaning lance.
     
  23. Relegation Certs

    Relegation Certs Squad Player

    You're not wrong. He was an ex city of london type and had no experience of mixing with "your sort" at all. He was a total **** if truth be told.

    But after a year or so of mixing with the oiks, he became a far more decent and tolerant person. The experience cleared up his racism too, when he realised brown people were actually his best employees and it was whitey who was the feckless lazyarse.
     
    Clive_ofthe_Kremlin likes this.
  24. Relegation Certs

    Relegation Certs Squad Player

    Yes you need pots of cash to get started. I think dominos is a quarter of a million quid a pop (probably more now) and mcdonalds will be even more.

    Edit: a point on setting up a window cleaning business. Encroaching on someone else's window cleaning turf in many parts of london will see you get your legs broken...
     
  25. The undeniable truth

    The undeniable truth Squad Player

    Capoue was the last good franchise we bought.
    Kaboul, not so good.
     
    RookeryDad and Watford Gav like this.
  26. Unhappy bunny

    Unhappy bunny Squad Player

    Lots of excellent advice here. Do your research and be very careful. Remember, even the Liverpool franchise didn't work out for Hicks and Gillett
     
  27. PotGuy

    PotGuy Forum Fetishist

    For those interested, I'm not taking it. Long story short, too much money, too much risk, too little reward.

    Thanks for all the advice :)
     
  28. UEA_Hornet

    UEA_Hornet First Team Captain

    What was it a franchise for?
     
  29. Bwood_Horn

    Bwood_Horn Squad Player

    It's funny you mentioned risk as on that R4 thingy I linked to mentioned that (figures are from memory) only 20% of all "stand-alone" businesses were still operating after 5 years whilst 90% of franchises were...
     

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