.38Special
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Trust me, dealing with a franchise can be a nightmare.
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Anyone in the bar/club business??
- Thread starter Sammyb713
- Start date
THEJOKER
New member
Been there done that! They really stick it to you.
Just to share an observation...
Most cities and towns have areas of prime commercial real estate. Predominantly retail. A large percentage of this real estate is occupied by restaurants and other businesses that are mostly franchises. I'm going to go out on a limb and suggest this isn't because they're historically big money losing propositions.
Franchising is highly regulated. Each state has multitudes of laws regarding disclosures of information. If you're looking at a franchise, you're going to be afforded pretty much an open book look at the operation. Hiding bad news isn't a civil issue, it's criminal.
There are franchises and then there are franchises. The top end is occupied by some of the most successful coprporations in the world. Then you have a multitude of bad business ideas. Franchises typically appeal to people that don't have tha million-dollar epiphany to invest their life savings in. And sometimes that's good. Because many times the guy with what he thinks is a million-dollar epiphany is just a guy that lacks the experience, skills and knowledge to discern the difference between genius and something that he just really likes the sound of. Buying a franchise is no different than starting your own business. If you make a bad choice in choosing a franchise, if you fail to ask enough of the right questions of the people you should be asking them of, you'll probabaly do the same with your own ideas.
As far as franchise fees, startup costs and ongoing royalties...
Many times these are forced disciplines. If the company is dictating what equipment you're required to have, where you are permitted to locate and so on, it's because they know what works and they know that shortcuts in these areas are harmful to the bottom line. You may view them as unnecessary- if so, that may be a good indicator to you. The franchisor has done this in lots of other places before. That's whay they were able to show you a portfolio of thriving franchisees with a very tiny number of failures. If they didn't do that, why are you this far with them anyway? On initial purchase, most times those fees cover what it costs for their personnel to teach you the intricacies of their business. There's little profit to be made. Many franchises have ad group requirements. If you're opposed to being forced to participate in advertising, you're probably better off being employed by someone. Going light on promotion of your business is a leading cause of failure. Most amateurs don't believe that. They go on hope that their business will catch on. Advertising is an intangible to them and often looks like a waste of money. In reality, it's expensive to obtain customers. There's no way around it. There's a huge competition for a consumer's attention. If you think of all the businesses you patronize, it cost each of them a significant sum to get you there and keep you there. Now think of every business you drive by every day, never visiting. They probably spent money on you. It didn't work. Welcome to business. So now we have franchise royalties. That percentage every month you have to kick back. This is essentially business insurance. Remember when we were talking about keeping those customers interested and keeping them coming back. About occasionally reinventing your business to keep it fresh? Now you have someone doing that for you. They're doing market research, focus group testing and beta testing that you could never dream of doing. They're going to hand-deliver new products, new marketing and new looks to you with tested success. That's not free.
Franchising may not be for everyone. And undoubtably, there are some out there you should probably stay away from. But dismissing them out of hand is turning your back on a fairly decent sized chunk of our national economy.
Most cities and towns have areas of prime commercial real estate. Predominantly retail. A large percentage of this real estate is occupied by restaurants and other businesses that are mostly franchises. I'm going to go out on a limb and suggest this isn't because they're historically big money losing propositions.
Franchising is highly regulated. Each state has multitudes of laws regarding disclosures of information. If you're looking at a franchise, you're going to be afforded pretty much an open book look at the operation. Hiding bad news isn't a civil issue, it's criminal.
There are franchises and then there are franchises. The top end is occupied by some of the most successful coprporations in the world. Then you have a multitude of bad business ideas. Franchises typically appeal to people that don't have tha million-dollar epiphany to invest their life savings in. And sometimes that's good. Because many times the guy with what he thinks is a million-dollar epiphany is just a guy that lacks the experience, skills and knowledge to discern the difference between genius and something that he just really likes the sound of. Buying a franchise is no different than starting your own business. If you make a bad choice in choosing a franchise, if you fail to ask enough of the right questions of the people you should be asking them of, you'll probabaly do the same with your own ideas.
As far as franchise fees, startup costs and ongoing royalties...
Many times these are forced disciplines. If the company is dictating what equipment you're required to have, where you are permitted to locate and so on, it's because they know what works and they know that shortcuts in these areas are harmful to the bottom line. You may view them as unnecessary- if so, that may be a good indicator to you. The franchisor has done this in lots of other places before. That's whay they were able to show you a portfolio of thriving franchisees with a very tiny number of failures. If they didn't do that, why are you this far with them anyway? On initial purchase, most times those fees cover what it costs for their personnel to teach you the intricacies of their business. There's little profit to be made. Many franchises have ad group requirements. If you're opposed to being forced to participate in advertising, you're probably better off being employed by someone. Going light on promotion of your business is a leading cause of failure. Most amateurs don't believe that. They go on hope that their business will catch on. Advertising is an intangible to them and often looks like a waste of money. In reality, it's expensive to obtain customers. There's no way around it. There's a huge competition for a consumer's attention. If you think of all the businesses you patronize, it cost each of them a significant sum to get you there and keep you there. Now think of every business you drive by every day, never visiting. They probably spent money on you. It didn't work. Welcome to business. So now we have franchise royalties. That percentage every month you have to kick back. This is essentially business insurance. Remember when we were talking about keeping those customers interested and keeping them coming back. About occasionally reinventing your business to keep it fresh? Now you have someone doing that for you. They're doing market research, focus group testing and beta testing that you could never dream of doing. They're going to hand-deliver new products, new marketing and new looks to you with tested success. That's not free.
Franchising may not be for everyone. And undoubtably, there are some out there you should probably stay away from. But dismissing them out of hand is turning your back on a fairly decent sized chunk of our national economy.
hotjava66
New member
Lots of good info here, I have always wanted to do something like this. I have lots of ideas about bar/food joint, but every time I get serious about it I run the numbers, I cant make it work as a second business. These guys are right, you WILL have to be there ALL the time, thats the nature of the game according to most successful owners I know. Or you have to get a manager that knows their stuff, is trustworthy, and doesnt want to be paid big money, tough find IMO. The keys to this business is location, atmosphere, constant promotion and reinventing as needed while keeping the core stuff everyone likes. If you want the right crowd(money) it revolves around the help you get. Nice looking, talkative, quick, friendly help keeps people in the place. Most guys would rather sit all day and be served by the super nice girl next door than some hot chick with an attitude. If you can combine both you will have guys sitting all day. Simple easy to make food that everyone likes but you dont need a kitchen and chef for is a must. You will have to get used to the lifesyle, but since you are a woman you probably wont be banging the help and getting in trouble like lots of bar owners I know lol. If it is something you really want to do, and you can put together a business plan that works and is vetted well, with lots of contingency and money set aside for unforseens I say go for it. But only if it is 100% what you want to do. You prob wont have time for other ventures for a while.
Hiring good help...
With our kids off at school, we like to eat out a few times a week. We enjoy trying new places. We seem to be on a string of bad waitresses. The one we're experiencing now is the waitress that "shares" We had one the other night that wouldn't leave the side of the table. She droned on and on about HER HUSBAND. Where he worked, what he did, how wonderful he was, their hobbies. We almost left in the middle of our mea. It was like that obnoxious person you can't shake at a party. Nice girl. But I wanted to spend dinner with someone else. The person I brought.
We had another that was telling us all about her dog. Now maybe I'm just odd, but I reaaly don't want to hear about our waitresses dog's worm condition and subsequent diharrrea WHILE I'M EATING.
I think this is a symptom of our new-found obsession with sharing. The under-30 crowd has become so used to spending all their time sharing every second of their lives via cellphone, Facebook, twitter and such that when disconnected they frantically grasp for reconnection.
With our kids off at school, we like to eat out a few times a week. We enjoy trying new places. We seem to be on a string of bad waitresses. The one we're experiencing now is the waitress that "shares" We had one the other night that wouldn't leave the side of the table. She droned on and on about HER HUSBAND. Where he worked, what he did, how wonderful he was, their hobbies. We almost left in the middle of our mea. It was like that obnoxious person you can't shake at a party. Nice girl. But I wanted to spend dinner with someone else. The person I brought.
We had another that was telling us all about her dog. Now maybe I'm just odd, but I reaaly don't want to hear about our waitresses dog's worm condition and subsequent diharrrea WHILE I'M EATING.
I think this is a symptom of our new-found obsession with sharing. The under-30 crowd has become so used to spending all their time sharing every second of their lives via cellphone, Facebook, twitter and such that when disconnected they frantically grasp for reconnection.
hotjava66
New member
Hiring good help is the toughest part of being in business, and each business needs a different breed of help. If there is one part about having a business I hate it is employee related stuff, second only to the battle to get paid for work. At least in retail/service you are paid at the time of sale.
hotjava66
New member
Wow, never had anything that bad, but nothing suprises me these days. You must be one of those nice people who look like a good listener lol.
JupiterSunsation
New member
I got the serial killer vibe, like he was imagining how you would look in a "gimp suit" or better yet screaming for you to "PUT ON THE LOTION!"
Yeah. Not really.
L
LadyDaze
Guest
That place does that well down here in the St Pete area. I salivate everytime Nick brings a burger home (on the way from the marina no less)
I choose not to eat from there because the place is FULL of peanuts and they use peanut oil in the fryer's. I unfortunately developed a nut allergy; maybe a blessing in disguise the way the scrumptious burgers look; :drool5:
We know the franchise owner from the St Pete location from our marina bar...he still looks extremely tired all the time, and just shared a story with me the other night. He got a call from the store location and one of his new hires passed out in the dining room. What a downer for the patrons. He suspected the guys was doing drugs earlier in the day...Needless to say, even with a less risky start up (i.e. not a bar) you still have to worry about the staff...ugh!!!!
I slung drinks/food through school, great quick, easy gas money. All the owners I knew were shady and or drunk all the time. My grandmother owned restaurants and bars...she died of cirrhosis at a young age; never drank until she got into that biz...and it all happened rather quickly
There is lots to think about, and many situations to consider. I wish you lots of luck SammyB!
MarylandMark
Charter Member
My #1 vice!! They got their start in my area over 25 years ago. In my late teens and early 20's we would drive 40 minutes each way 1-2 times a month to eat there. 40 minutes is not far to drive to a good restaurant but kind of a lot for 'just' a burger and fries.
Not normal- try them again after they get the kinks worked out (guessing it is a new franchise). I use to love Fuddruckers, they aren't even close to as good.
Because IF you found one, you would have to pay them more than you will be making.
fund razor
Founding Member
That does it. I am opening a taco joint called "Cinco Hombres."
flight club
New member
Is it zoned for topless entertainment?
MarylandMark
Charter Member
Flight Club, Maryland Edition coming soon! :_boobies: :boobflash:
MarylandMark
Charter Member
Imagine being best buds with Flight Club! He has both- like 10 times over on one and 10 times that 10 times on the other!
Expensive Date
New member
My thoughts as a Franchise owner.I am under an older contract which states"No limits on other products or services that can be provided as long as distributor meets minnumin requirements".You will never see something like that today.And while many are worthwhile the big restaurant chains are more geared toward multiple unit owners.Not the guy with 100k to invest as for failure rate McDonald's as an example the franchise could go out of business every week and you will never know.McDonald's owns the building they will just come in and run it as a company store but there failure rate is pretty low.
On the Five guys thing you are at best looking at 40% profit before expenses.Which include there 6% electric, employees, Workman's comp,payroll taxes etc,restaurant building repairs and cleaning.So when all said and done you might see 6% to 7% total profit before taxes.If the store does 5K a day thats $350.00 a day now if you are a multiple owner and have three stores two with a full time manager and the other two are making $250.00 (less because of the manager) you are up to $850.00 a day if everything goes right...it won't and if 5k a day in sales is right its probably a little high.
You can make money doing anything if its done right but if I was under the current Matco franchise I would not be in the same position I am now.Might want to look a a sub shop Jersey Mikes will be much lower start up costs and get you some restaurant exp.Then you can get something else later and through a manager in the sub shop.
One other thing my deal with Matco is as long as I want it most other current franchises are 10 year terms which means they can change the game after 10 years.Just had a distributor leave in my district last week because he would not sign the new deal.Went to Cornwell they gave him 35k to sign with them.They actually have a decent agreement.But stay away from the tool business.I works for me but its not easy and not for everyone.
http://www.jerseymikes.com/franchise/default.asp
On the Five guys thing you are at best looking at 40% profit before expenses.Which include there 6% electric, employees, Workman's comp,payroll taxes etc,restaurant building repairs and cleaning.So when all said and done you might see 6% to 7% total profit before taxes.If the store does 5K a day thats $350.00 a day now if you are a multiple owner and have three stores two with a full time manager and the other two are making $250.00 (less because of the manager) you are up to $850.00 a day if everything goes right...it won't and if 5k a day in sales is right its probably a little high.
You can make money doing anything if its done right but if I was under the current Matco franchise I would not be in the same position I am now.Might want to look a a sub shop Jersey Mikes will be much lower start up costs and get you some restaurant exp.Then you can get something else later and through a manager in the sub shop.
One other thing my deal with Matco is as long as I want it most other current franchises are 10 year terms which means they can change the game after 10 years.Just had a distributor leave in my district last week because he would not sign the new deal.Went to Cornwell they gave him 35k to sign with them.They actually have a decent agreement.But stay away from the tool business.I works for me but its not easy and not for everyone.
http://www.jerseymikes.com/franchise/default.asp
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Expensive Date
New member
My truck.Wife too
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