I'm starting to considera franchise either fastfood or automotive http://www.franchiseforsale.com Does anybody have any experience in something like this? Thanks in advance.

Asghar.

 

well, seeing as u r in the usa, the home of the franchising concept, then what i say may not apply to u so much. in australia, it is a different story, more often than not negatively, but sometimes positively.
dont get me wrong, some franchisees are happy in their situation, but i know a lot that are not, and given the situation again, they would never buy a franchise again.
the questions u need to ask urself are these, why a franchise, is there a better way to invest the money, can u do something similar yourself, what is the franchise structure like (how much do u get to keep).
my background, im in food retail, our family company has been involved in food/ restaurants for many years, we have a number of stores and we have pretty much sorted out our operating systems. i have many friends and associates that are in the food retail industry as well as other industries, frnachised and independents, so i have an idea of what they go through.
we operate in shopping centres as well as street sites, so we know the perils of being tenants to bastard landlords, as well as the freedom that having no landlord garners.
all too often, people look at a franshise because they have come across a little bit of money, say an aunt died and left money or a house in a will, it is sold and they use that money to "invest" in a franchise, but often these people come from middle management, or employee backgrounds, with no idea of what it takes to make it work as a business owner (i see it all too often- accountants that think they can make a business run purely by the numbers),
or othertimes, a person may have gotten redundancy or severance packages, and they see the local juice bar "going off" and think ill buy one of them, but they do little or no research into the financials of the business and if they did, they might discover that under all the fancy powerpoint propaganda that they are shown byt he franchiser, the financials of the business will basically pay them a wage and that is it.
look at teh sustainability of the business, is it a fad, will it survive increased competition, as we all know, a good business will soon be copied, is the market saturated??
it might help to give us an idea of what u r looking at in terms of a business, are u buying an existing, proven franchise?
i might sound pessimistic, but i have been in retail long enough to have seen many businesses come and go as well as hear my collegues constantly whine about how they give away at least 10% of what they make each week to the franchiser and receive nothing in return except for "support" which is non-existant.
lmk, pm me if u r really interested, i know that a lot of franchises int eh usa suffer the same problems as in australia, and then dealing with shopping centres is another can of worms

 

Check out this site too: http://www.faqs.org/docs/consumer/franchise.html

 

Thanks, very informative, I'm going to do a little more researching.

 

If you're going to look at fast food take a hard look at Chick-fil-a. I gave serious thought to doing this one several years ago but the location I wanted to go into required the us to be open on Sundays and Chick-fil-a's do not open on Sunday. The cost to be an "owner operator" is very low and they are doing more free standing vs mall locations now.

 

I don't know about franchising personally but know a guy that went the Subway route and is doing very well for himself.

 

I love chick-fil-a. I really wish there was one out here. And that not-open-on-sundays thing, bullshit.

 

Never had Chick-Fil-A but judging from the company website it looks good.

 

don't be fooled by the propaganda.
look at the numbers first, talk to existing franchisees to see how their franchisor/franchisee relationshipis.

think hard about the investment, if it's gonna cost you, say $250k, is the return on that better then if it's in an investment property or shares, etc. is the business there so you have a job? and hopefully something extra at the end of each week?

more often then not, the people i know who enter into a franchise don't stay in it for very long. and i know quite a few people as i'm in the retail game.

 

not all franchises are the same. Often, franchise owners have to tolerate kids wearing their first suit, indoctrinated in corporate-speak, who come in and try to enforce every silly rule and guideline ad nauseum while ignoring the basic realities of real-life business environments. Quite often, the "field" personnel working for many franchises are ignorant of basic business, but got a job parrotting company line in a mistaken belief that they are experts at success because they paid attention during indoctrination.

Taking over an existing franchise can save you a ton of headaches. I'd look for a running store up for sale rather than try to open a new franchise, if it were me. Opening a new store brings a whole lot of headache from dealing with inflexible and esoteric regulations governing the most insignificant aspects of a building. You can always open a new franchise once you've established a relationship with the corporate office and their flunkies. Keep in mind that franchises are full of people who think they know everything simply because they work in corporate, and believe the people opening franchises are newbies with no common sense or any idea of what makes a business tick.

The advantages of franchises are the coop marketing and name recognition. The downside is the local owner is responsible for turning a profit in their locale, despite the fact that the corporate office is only interested in their monthly cut. Ask franchisers about their experience with corporate, especially about hassles with opening a new store.

One in five new businesses last five years - a franchise doesn't change that average. Be prepared for failure, and your tolerance for such. Nothing "runs itself," except into the ground.