Any franchise owners here??

[Noseferatu]

I'm almost 18, thinking very strongly about opening a franchise of some kind, most likely a Wendy's, Subway, or some kind of specialty restaraunt like Bonefish Grille, Chipotle, etc. I'm just wondering what I'll need to do to prepare and how long should I expect after graduating to open one? I understand there are startup costs, etc, but that can all be financed.



Any help is appreciated.

[mike_v_s]

Originally Posted by Noseferatu

I'm almost 18, thinking very strongly about opening a franchise of some kind, most likely a Wendy's, Subway, or some kind of specialty restaraunt like Bonefish Grille, Chipotle, etc. I'm just wondering what I'll need to do to prepare and how long should I expect after graduating to open one? I understand there are startup costs, etc, but that can all be financed.



Any help is appreciated.

Find an owner and schedule an "interview". The couple of guys I know that have done the franchise thing are VERY busy, but love talking about their work. I lost touch with one a while ago, but he was pretty successful. The other one I currently know is on his way down. If you're going to lose your ass, 18-30 is the time to do it. He's just turned 30 and will be starting from scratch ina few months. As for the financing. Yeah, you can get financing, but expect to pay out of pocket (nothing will go as planned) and if you tank...you still owe the bank.

Mike

[XigXag]

Originally Posted by Noseferatu

but that can all be financed.

Screeching halt right there.
While that may have been true in recent times, it is most decidedly not the case anymore. Financing can be HARD to get right now.
And an 18yr old? Unless you have a craXy Mad credit score, and a nice down payment as well, Im going to guess, that you're going to be loaned exactly $0.

If you can in fact get some financing. Id suggest you do alot of research. Not all franchises are the same, and some make it quite hard to make a profit. Their company, their rules, often their suppliers at their price.
And remember- you're a franchise, that means that you follow THEIR rules. Got a great idea for a new sammich? tough, it's NOT going on the menu (yes, there are exceptions).

I applaude your enthusiasm, and desire to make your own way. Im not sure a franchise is what you really want tho.

[iamlowsound]

The franchises with the best return are McDonalds and Tim Hortons (Canadian coffee franchise), most other ones will find you clearing around $50,000 a year profit per store, with McDonalds and Tim Hortons being around double that. At least that I what I heard from my dad's friend who owned a few Wendy's.

lowsound

[iamlowsound]

Originally Posted by XigXag

Screeching halt right there.
While that may have been true in recent times, it is most decidedly not the case anymore. Financing can be HARD to get right now.
And an 18yr old? Unless you have a craXy Mad credit score, and a nice down payment as well, Im going to guess, that you're going to be loaned exactly $0.

If you can in fact get some financing. Id suggest you do alot of research. Not all franchises are the same, and some make it quite hard to make a profit. Their company, their rules, often their suppliers at their price.
And remember- you're a franchise, that means that you follow THEIR rules. Got a great idea for a new sammich? tough, it's NOT going on the menu (yes, there are exceptions).

I applaude your enthusiasm, and desire to make your own way. Im not sure a franchise is what you really want tho.

A lot of franchises require a certain amount of cash in hand that isn't financed as well, so don't just assume that if you can get the financing, you can buy the franchise. I know of a guy that just owns the properties that franchises sit on and rents them out (building, land ect) and makes way more money than the franchise owners ever will. So look into that as an option as well.

lowsound

[jmattbassplaya]

Originally Posted by iamlowsound

A lot of franchises require a certain amount of cash in hand that isn't financed as well, so don't just assume that if you can get the financing, you can buy the franchise. I know of a guy that just owns the properties that franchises sit on and rents them out (building, land ect) and makes way more money than the franchise owners ever will. So look into that as an option as well.

lowsound

Yup. I believe the initial cost for most chains usually starts around $200,000 just to buy the rights to the name.

[iamlowsound]

Originally Posted by jmattbassplaya

Yup. I believe the initial cost for most chains usually starts around $200,000 just to buy the rights to the name.

I had seriously looked into it a few years back, but I came to the conclusion that it wasn't for me. Which is a good thing, because I absolutely hate the food now.

lowsound

[superbassman2000]

Originally Posted by jmattbassplaya

Yup. I believe the initial cost for most chains usually starts around $200,000 just to buy the rights to the name.

I have even seen requirements of a million dollars in liquid assets as well

[Auzzie-Phoenix]

Listen, you're in PA... PA has a lot of things, especially large chain restaurants and convenience stores. The last thing you want to do is open up yet another sheetz. You have to do something that isn't a normal thing for your area. You need to find some sort of niche market to limit competition. Restaurants that are not common to PA include: Waffle House, White Castle, and Hardees. There are plenty of others, but these are just examples of a few that aren't in PA.

Funding is definitely high up there on the list of issues. You might be able to get a business loan, if you can find some partners with decent credit ratings. The key problem is that on top of credit ratings, they'll need some capital up front, as well as something to offer to the lender as collateral. It will be hard, but if you are serious then you can probably find partners.

Location is a big key factor. If I remember right, Hermitage has a lot of long-haul trucks and coal transport drivers passing through at all hours of the day, so a 24-hour restaurant would probably benefit you more than something that's open from 9a-11p. Find out the major trucking routes in your area and consider plots near those as possible locations.

Also, consider asking a lawyer for some advice regarding legal issues, as well as asking an accountant about basic business financial information and tips. Take a few college courses towards mba and accounting. Take a few classes on social science, psychology, business ethics, marketing, and basic business law (over the course of several years to add to an mba). If you dedicate yourself to learning information like this, it will only serve to help you in the future as an entrepeneur. It will also help you when dealing with your franchise accounting, dealing with employees, and your rights and responsibilities under law.

[drteeth]

Consider that you are very young to be managing your own business. There are a lot of aspects to this (day-to-day management, finances, personnel management, ... ) and you need to be able to handle all of those, at once. I think it would be a good idea to get some experience in these areas before you start for yourself.

[MJ5150]

Originally Posted by Auzzie-Phoenix

The last thing you want to do is open up yet another sheetz.

Why not? Sheetz is the coolest store on the planet. I want to open one where I live, but Joe Sheetz told me no.

-Mike

[mike_v_s]

Originally Posted by Auzzie-Phoenix

Listen, you're in PA... PA has a lot of things, especially large chain restaurants and convenience stores. The last thing you want to do is open up yet another sheetz. You have to do something that isn't a normal thing for your area. You need to find some sort of niche market to limit competition. Restaurants that are not common to PA include: Waffle House, White Castle, and Hardees. There are plenty of others, but these are just examples of a few that aren't in PA.

Funding is definitely high up there on the list of issues. You might be able to get a business loan, if you can find some partners with decent credit ratings. The key problem is that on top of credit ratings, they'll need some capital up front, as well as something to offer to the lender as collateral. It will be hard, but if you are serious then you can probably find partners.

Location is a big key factor. If I remember right, Hermitage has a lot of long-haul trucks and coal transport drivers passing through at all hours of the day, so a 24-hour restaurant would probably benefit you more than something that's open from 9a-11p. Find out the major trucking routes in your area and consider plots near those as possible locations.

Also, consider asking a lawyer for some advice regarding legal issues, as well as asking an accountant about basic business financial information and tips. Take a few college courses towards mba and accounting. Take a few classes on social science, psychology, business ethics, marketing, and basic business law (over the course of several years to add to an mba). If you dedicate yourself to learning information like this, it will only serve to help you in the future as an entrepeneur. It will also help you when dealing with your franchise accounting, dealing with employees, and your rights and responsibilities under law.

I'm also going to add that, at least in the case of the guy I currently know, each location he considered had to meet certain criteria and even if it did, they still had to approve it. The building renovation to get it up to their specs was out of his pocket.

Mike

[tycobb73]

the type of chain you're talking about has net worth requiremtns that you will not qualify for. If you have a wealthy father and he bought the franchise and let you manage it....But you by yourself will not be able to buy one.

[PSPookie]

I have run several successful Madden franchises. Good fun.

[TechJunky]

I looked into a Chipotle franchise a while back, and it said they don't franchise. You can just do the leg work and find a location for them and they take over. Don't know if that changed though, but if it did, hurry up and build one up here in northeast pa!! I'm sick of driving two hours for a damn tasty burrito. I still will cause it's worth it, but if there were one locally, I could support it by myself.

[LiquidMidnight]

Originally Posted by MJ5150

Why not? Sheetz is the coolest store on the planet.
-Mike

http://www.youtube.com/watch?v=orlFI7SbS8A

[blendermassacre]

Originally Posted by superbassman2000

I have even seen requirements of a million dollars in liquid assets as well

Chipotle requires $2 or $3 million in assets (home, businesses, etc)

I can promise you that you don't want to own a franchise. My father in law has for quite some time, and it's a huge headache. the employees are probably the worst part, as you're going to be utilizing the bottom of the barrel when it comes to employees who are willing to work in food.

Usually to become a franchisee, you have to manage a store for a while (for domino's it's 6 months).

The financial situation right now is not good for starting a business. Walking into a bank with no capital, and trying to get a loan for a new business in this economy is a joke, at best. You will need at least $20,000 to 50,000 liquid investment to be able to start.

[Simo98]

I don't know about in the US, but in Australia franchises are a good way to go broke, particularly food related.

For starters, you don't have much control over your business, also there are huge setup costs, as you have to re-decorate the entire premises to fit in the Subways colour scheme or whatever.

I have seen several franchises go broke in my local area before they even open, simply due to re-modelling costs.

Once they do open, generally people will not eat at a franchise store while they have other options, unless its a major one like maccas or something.


But, if you have the ability, and the motivation, and a plan, go ahead!

[FF Petro]

Some of the best advise I have heard came courtesy of Clark Howard. He advises that you work at a franchise you are interested in for about a year. Working there you can tell if the company is actually somebody that you want to work with and you can see how to improve the workflow from somebody else's store.

[Eric Perry]

Originally Posted by MJ5150

Why not? Sheetz is the coolest store on the planet. I want to open one where I live, but Joe Sheetz told me no.

-Mike

This!!!