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Does anyone here invest in franchises?
Posted on 12/17/23 at 8:48 pm
Posted on 12/17/23 at 8:48 pm
I am considering investing in a franchise and then building upon that. It seems like the BS ones that cost $25,000 - $75,000 are a higher risk than the $250 - $500K+ well established franchises.
Do the smaller investments make money? (Example: Sport Clips, School of Rock). It seems like if someone were to go this route, the key would be to own multiple stores. Its similar to having one rental property vs multiple units.
Do any of these franchises allow investors to start the business, but they provide the management if you want to be hands off? I want to manage the administrative duties of the franchisee. I don't want to live at a store as the manager.
Anyone own one or have experience? Thoughts?
Do the smaller investments make money? (Example: Sport Clips, School of Rock). It seems like if someone were to go this route, the key would be to own multiple stores. Its similar to having one rental property vs multiple units.
Do any of these franchises allow investors to start the business, but they provide the management if you want to be hands off? I want to manage the administrative duties of the franchisee. I don't want to live at a store as the manager.
Anyone own one or have experience? Thoughts?
4
Posted on 12/18/23 at 7:53 am to Mariner
IMO Franchises are a great way to make money for the owner(s) of the franchise.
I do know of one franchise that has a relatively low franchise fee and their monthly dues are seemingly low. A buddy who I didn't think was a franchise type actually opened one up and in 5-6 months in he will be in the green.
You'll always be limited in your decision making ability and your margins will always be somewhat limited.
I do know of one franchise that has a relatively low franchise fee and their monthly dues are seemingly low. A buddy who I didn't think was a franchise type actually opened one up and in 5-6 months in he will be in the green.
You'll always be limited in your decision making ability and your margins will always be somewhat limited.
Posted on 12/18/23 at 9:03 am to WhiskeyThrottle
This. I've always been blown away by every franchise opportunity. So expensive.
Posted on 12/18/23 at 9:17 am to WhiskeyThrottle
quote:
I do know of one franchise that has a relatively low franchise fee and their monthly dues are seemingly low. A buddy who I didn't think was a franchise type actually opened one up and in 5-6 months in he will be in the green.
We're waiting.
Posted on 12/18/23 at 11:25 am to WhiskeyThrottle
Thanks. Although low margins it seems that it will make more over a rental property.
Your buddy opened up an existing franchise? Right?
Your buddy opened up an existing franchise? Right?
Posted on 12/18/23 at 2:46 pm to Mariner
quote:
Do any of these franchises allow investors to start the business, but they provide the management if you want to be hands off? I want to manage the administrative duties of the franchisee. I don't want to live at a store as the manager.
This is a horrible idea to start for almost every business. If you don't know the business, you don't know the business. Everyone assumes since they did so and so job they know how to do so and so franchise, I think that's an absolutely horrible way to go into a business purchase no matter the business.
If someone had a money making franchise they could make 10%+ they wouldn't be sharing it on the internet, as they could find a way to increase their stake and make the money on their own.
Good local hands on management is they key to any business growing. If you don't plan on spending the first 6-12 months getting your hands dirty and learning every part of the business from the ground up you are planning to fail imo.
Posted on 12/18/23 at 4:22 pm to baldona
You make a good point and I would agree with you. However, I am thinking more along the lines of the franchise wants to expand and grow, so they let someone take a risk and invest in a store, but the investor does not have the time to roll up their sleeves every day slinging hamburgers. Can't the franchise recommend a rock star asst. manager from say Kansas to come down and run your store as the manager? Do all of these franchises have requirements for the investor to live at the store?
The PJ's that recently opened up near me has a very good staff running it. I asked about the owner, and they said she pops in every other day to go in the office. This shop is the most efficient PJ's that I have ever seen. My point is that you don't need to be there micromanaging everything, you just need to find the right people for the job.
The PJ's that recently opened up near me has a very good staff running it. I asked about the owner, and they said she pops in every other day to go in the office. This shop is the most efficient PJ's that I have ever seen. My point is that you don't need to be there micromanaging everything, you just need to find the right people for the job.
Posted on 12/18/23 at 6:14 pm to Mariner
Like anything else; some are better than others.
I know a Chic Fil A franchise owner. He works like a slave; but, I’d say he makes $150K even in the off years. Bad news; gotta have $1M+ liquid and they select the site. The background check process is tough; more than half of qualified applicants won’t even qualify for a store.
I know a couple of UPS Store owners. You can get in for as little as $100,000. The best ones make mint in wealthy areas and usually have multiple stores. The typical single store owner makes less than $60,000.
I know a Culver’s franchise owner here in Tampa. He’s there all the time; but, little doubt in my mind that he’s making $100K+ and now that he owns the building outright he has an asset easily worth a million or two. Startup costs of $1M+ there too; but, he said he had completely repaid his initial investment by the 5th anniversary.
I know a Chic Fil A franchise owner. He works like a slave; but, I’d say he makes $150K even in the off years. Bad news; gotta have $1M+ liquid and they select the site. The background check process is tough; more than half of qualified applicants won’t even qualify for a store.
I know a couple of UPS Store owners. You can get in for as little as $100,000. The best ones make mint in wealthy areas and usually have multiple stores. The typical single store owner makes less than $60,000.
I know a Culver’s franchise owner here in Tampa. He’s there all the time; but, little doubt in my mind that he’s making $100K+ and now that he owns the building outright he has an asset easily worth a million or two. Startup costs of $1M+ there too; but, he said he had completely repaid his initial investment by the 5th anniversary.
This post was edited on 12/18/23 at 6:19 pm
Posted on 12/18/23 at 6:47 pm to wiltznucs
Sounds like buying a job with crazy risk.
Posted on 12/18/23 at 7:29 pm to Billy Blanks
quote:
Sounds like buying a job with crazy risk.
Franchises appeal to people who want the freedom and the potential compensation upside of entrepreneurship; but, are risk averse and would rather invest in a proven concept than go off truly on their own.
Posted on 12/18/23 at 11:35 pm to Mariner
Own a few franchises of one brand. I’d say if you choose to do so that the franchise has zero competition in the same field. Opening a CC’s coffeehouse next to a Starbucks could be a death sentence. Vice versa if it was a sandwich shop. You want to penetrate the market with little to no competition. Canibilzation in the franchise world is a real thing, and is the difference in breaking even/actually making a 10%+ profit margin.
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