mingster

OK so I've narrowed down to 2 options that I'd like to get the fine folks of S2KI's opinion on:

1. Franchise: I'm very interested in a few franchises that I've had personal experience as a customer and believe in the products. Below are my top choices in particular order:
- L&L Hawaiian BBQ
- Subway
- H&R Block/Liberty Tax Services
- Kumon Math & Reading Learning Center
- Boba milk tea store
- Jimmy John's (may have trouble qualifying on their net worth requirement though)

2. Rental properties: I'm also thinking of going back to my roots in SoCal and invest in some condos as rental properties since prices are really low right now, and with the cash on hand I can probably bag 2 to 3 condos and leverage the current low(ish) interest rate though I'm not sure how the banks would look at me buying 3 primary residents within a span of a few months, renting the previous one out each time...

Any thoughts/suggestions/opinions/comments?

rob-2

Have you owned a business and/or run a full business unit before?

mingster

Those people who knows me from the beginning of S2Ki knows

Yes, I have had experience running my own business(s) but decided to go back to corporate world for the stability.

s.hasan546

Since you know the business world you know that even franchises require a level of owner involvement that you might not be able to give to the franchise without making sacrifices at your corporate job. Also a lot of franchises are not OK with absentee owners.

Also subway is a great franchise to own but this greatly depends on your market. If your market is as saturated as NY Metro than i wouldn't do it.

Personally if you just want an extra thing on the side do rental properties/real estate. Buy foreclosures/short sales, fix em up, sell em/rent em. This is more of a part time job. A franchise is a full time job.

You can run a franchise with minimal hours after you establish the business. I have a franchise right now. Ive been here every day or the past 4 months straight. Within 3-4 months i will be able to hire someone and just work on weekends to keep up with the paperwork.

Also Never put full trust into your managers. Also look at your ROI, Some of these franchises like mcdonalds and dunkin donuts have ROIs of 3-4 years. IMO thats too long. My current franchise, granted its hard to get approved, ROI is 1-1.5 years at most. Remember with a franchise your buying yourself a job.

magician

I assume that you mean payback period, not ROI (Return on Investment, which is generally measured as a percentage, not in years).

s.hasan546

Yessir sorry about that

rob-2

If you can manage running the business than you also pick up the benefit of being able to expense a bunch of things, miles, phone and such. This might prove to be some of the greatest short term gains for you.

However the risks are not the same. A business could chew through all your money and leave with you nothing; while the rental property will be there renter or not.

If you have a corporate job I don't know how you'd start up a franchise, you'd need a trusted manager.

Have you run ROI projections on both?

riegerm3

I don't have first hand experience with a franchise. So I can't give you much input on that, but my family has 15 rental properties.
2 in CA and the rest in TX
It has worked out quite well for us. People are always going to need a place to live.

A franchise seems like too much work having to deal with day to day operations. Then having to pay them royalties for using their name must suck.

If you can do the basic DIY household things you can save yourself a lot of money and keep tenants happy.

We also just started up a small student tutoring business beginning this month and so far so good.


Good luck with your business venture.

Young_R

Good info here. Keep them coming!! Mingster, I know you are asian so you must be a owner of a business.

smurf2k

lol.


anyway, im looking really hard into a JJ or Wingstop.

I would be going in with 2 or 3 friends to split the risk. (actually this is the most difficult part... finding non conservative friends)

Wingstop down here are ridiculously low maintenance in terms of day-to-day operation. If you've ever seen them: theres almost no kitchen.. fry station on 1 wall and saucing / potato dicing station on opposite wall (basic menu .. all they stock is wings, beans, and fries are cut fresh). most of the time i've observed its only a single, or 2 employees working in the "kitchen", and 1 or 2 at the front. 60% of their business is take-out ... seems really easy for someone with no restaurant experience (i.e. US)