Jump to content

Opening a Franchise and I Need an Expert


Recommended Posts

Long story short, I'm looking to open a franchise and have narrowed it down to the industry and have talked with several franchisors. I have been close to signing with  one, but my lawyer brought up several flags in their franchise agreement. What I guess I'm looking for now is a consultant who works with franchisees to help look out for potential risks. Can anyone here share the name of someone they trust?

Link to comment
Share on other sites

I’ve always heard that you don’t want to even remotely put a high percentage of your net worth into a franchise and that’s counting amounts that you’re liable to pay over the contract.  And you have to be prepared to work the franchise yourself.

Edited by Nice Guy Eddie
  • Hook 'Em 2
Link to comment
Share on other sites

7 minutes ago, Elvis said:

Talk to this guy

 

12%20Business%20and%20Inspiring%20Lesson

 

Bruce Wayne would never have time to talk with me. That said, I know that franchises always favor the franchisee and in a big way, but I'm looking for the stability of a proven winner here. I'd love to start my own business, but at 47 and with two boys under seven, I don't want to be an absentee dad.

 

1 hour ago, YGIFS said:

Does it involve a substantial real estate component?  If you're in Texas, I got a guy.  In all seriousness.  

Unfortunately, it's going to be a one off in a shopping center, at least to start. Thanks though.

Link to comment
Share on other sites

3 minutes ago, Mr. Blutarsky said:

Unfortunately, it's going to be a one off in a shopping center, at least to start. Thanks though.

The question remains, as per real estate.  Are you signing the lease?  Is it a ground lease?  Is the corporate/franchisor committed to a master lease and you'll be their tenant?  Sub?  Forget I used the term " real estate", what''s your financial and time obligation to the square tiles you walked on in said shopping center?  

Link to comment
Share on other sites

2 hours ago, Chewbacca said:

Is there a franchisor out there that doesn't buttfuck its franchisees?  I can't say I'd jump at being a franchisee.

Enterprise Rent-A-Car gives its franchisees the tools to succeed.

 

step-brothers-talladega-nights-easter-eg

Edited by dcbc
  • Haha 3
Link to comment
Share on other sites

The common issues with franchises are:

  • You usually have to buy branded merch from the franchisor at exorbitant prices that would be easily available for much cheaper elsewhere
  • Any "community" or cooperative advertising offered by the franchisor will be bad/ineffective
  • The "business services" offered by the franchisor will be either useless or annoying, but you have to use them
  • Franchisors often place franchisees in competition with each other, despite agreeing not to, make sure this language is solid
  • The "brand name alone" had better be worth it, because that's all you're sure to get from a franchise
  • It's relatively easy for a franchisor to hold you in breach of the agreement, but the converse is not true, they are hard to get out of

This lady is the queen of franchising in Texas and the southwest. https://www.polsinelli.com/joyce-mazero I'm sure she's expensive as fuck and probably almost entirely franchisor-side these days.  She might be able to refer you to someone.

Edited by TwiceHorn
  • Hook 'Em 2
Link to comment
Share on other sites

1 minute ago, Dbeasy said:

To be a little more balanced, painting all franchises as bad is a littler over the top. I have a friend that just cashed out $200m as a franchisee. I’ve also known many other successful franchisees.  However the odds are tough. 

This. I had a buddy get to the second round of a Chick-Fil-A franchise opportunity in East Texas. He was quickly eliminated, odds of getting a CFA are worse than getting into Stanford. With a 0.13% acceptance rate, it’s harder to become a Chick-fil-A franchisee than it is to get into Stanford University (4.8%), get a job at Google (0.23%), or even become a special agent for the Secret Service (1%). https://www.barstoolsports.com/blog/1809157/apparently-becoming-a-chick-fil-a-restaurant-owner-is-the-hardest-process-in-the-world

Link to comment
Share on other sites

Unfortunately/Fortunately, I have a lot of second hand curiosity and information about franchising, because I have a handful of friends who have done it and I've thought about doing it.

One friend, about 5 years ago, got in to a Whichwich and went belly up in three years. Went broke on it.

One friend, about a year and a half ago, opened a relatively new concept. Because it was so new, the estimations and guidance the franchise team coached him on was way off, and he ended up threatening to sue and they gave a lot of concessions on the fees and first year royalties and other costs to keep him in the boat and to rightsize some of their growing pains as they were new to franchising themselves. This was for like a QC Kinetix treatment center concept, not food. He has SBA loans and not turning a profit yet.

Another friend is in the middle of it now, he's using these guys: https://www.thefranchiseconsultingcompany.com/ and is looking at a hair cut franchise. Something like a Sports Clips or Great Clips, I believe.

Another guy I know franchised a paint and body shop, and has been rolling out new ones every 2-3 years, and is absolutely killing it with a good portfolio. He's a multi-millionaire. 

The key takeaways for me were that food franchises were the hardest and that to make REAL money, you have to have multiple franchises. Not just 1 or 2, but 5 or 6. You can make retirement and lifestyle money off of 1 or 2 depending on the franchise, but there are probably easier ways to make that after the stress and costs and expenses.

  • Hook 'Em 3
Link to comment
Share on other sites

1 hour ago, Nice Guy Eddie said:

I’ve always heard that you don’t want to even remotely put a high percentage of your net worth into a franchise and that’s counting amounts that you’re liable to pay over the contract.  And you have to be prepared to work the franchise yourself.

Correct

Link to comment
Share on other sites

1 hour ago, Mr. Blutarsky said:

Bruce Wayne would never have time to talk with me. That said, I know that franchises always favor the franchisee and in a big way, but I'm looking for the stability of a proven winner here. I'd love to start my own business, but at 47 and with two boys under seven, I don't want to be an absentee dad.

 

Unfortunately, it's going to be a one off in a shopping center, at least to start. Thanks though.

An inline / end cap location? If so, find a decent attorney to work the commercial lease, start small, then profit.

  • Hook 'Em 1
Link to comment
Share on other sites

On 9/27/2023 at 6:55 PM, BeardIP said:

Unfortunately/Fortunately, I have a lot of second hand curiosity and information about franchising, because I have a handful of friends who have done it and I've thought about doing it.

One friend, about 5 years ago, got in to a Whichwich and went belly up in three years. Went broke on it.

One friend, about a year and a half ago,ened a relatively new concept. Because it was so new, the estimations and guidance the franchise team coached him on was way off, and he ended up threatening to sue and they gave a lot of concessions on the fees and first year royalties and other costs to keep him in the boat and to rightsize some of their growing pains as they were new to franchising themselves. This was for like a QC Kinetix treatment center concept, not food. He has SBA loans and not turning a profit yet.

Another friend is in the middle of it now, he's using these guys: https://www.thefranchiseconsultingcompany.com/ and is looking at a hair cut franchise. Something like a Sports Clips or Great Clips, I believe.

Another guy I know franchised a paint and body shop, and has been rolling out new ones every 2-3 years, and is absolutely killing it with a good portfolio. He's a multi-millionaire. 

The key takeaways for me were that food franchises were the hardest and that to make REAL money, you have to have multiple franchises. Not just 1 or 2, but 5 or 6. You can make retirement and lifestyle money off of 1 or 2 depending on the franchise, but there are probably easier ways to make that after the stress and costs and expenses.

A few years back, a bunch of haircut shops opened up in my town and adjacent towns.  They were a chain, but Icannot remember which ones.  One day, they all closed on the same day.  I had been getting my hair cut there for a while, so I ran into a gal that had worked there as she was now working at another local shop.   She told me that the owners were immigrants and to get here legally, they had to invest a certain sum into businesses.  They chose the hair shops, and as soon as they were legal, they said fuck it, closed everything, and retired. 

  • Hook 'Em 1
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.



×
×
  • Create New...