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|View Poll Results: Your Thoughts on Buying A Franchise|
|Own a franchise and would do it again||0||0%|
|Own a franchise and would not do it again||2||40.00%|
|Franchises are the way to go - Would definitely buy||2||40.00%|
|I would/already own a business but would not consider a a franchise||1||20.00%|
|Multiple Choice Poll. Voters: 5. You may not vote on this poll|
| ||Thread Tools||Display Modes|
|01-22-2007, 03:25 PM||#1 (permalink)|
Join Date: Jan 2007
Is Buying A Franchise a Good Idea?
This is a question that I wonder about for several reasons. First, I bought a franchise about two years ago and I must say I definitely have mixed feelings. I also have subscriptions to all of the magazines that talk about the explosion of franchises or the top 100 or 500 franchises and I wonder if it is a good idea or are the only people that are making money are the ones selling franchises.
I know I have read several articles of franchises where the franchisees were losing evrything, but it appeared that it was a good franchise to buy based on the different magazine articles. The franchise the article named specifically was the UPS store, but I wonder if this is the same results for many other franchises. I am very interested to get some feedback on what some other people have experienced.
A little more about my franchise is I think it is a good franchise, but when the franchise does not have such a strong name nationally or maybe I should say is still building its reputation nationally, a lot of money, time, and effort are spent by the franchisees to develop those local markets. So is the benefit of buying a franchise there if building the local market is solely your responsibility?
|01-22-2007, 04:47 PM||#2 (permalink)|
Join Date: Dec 2006
Location: Suburb of Chicago
Do not take this personally, however I think that buying a franchise is like buying a job. You owe a huge amount of royalties to the Franchisor as well as a precentage of your revenue, you are typically not turning a profit for a few years and you are busting your tail doing it. Plus, you are told almost exactly how to do everything and must comply with the Franchisor's rules, methods of operation, etc.
Obviously, there are some advantages i.e. turnkey operation, ongoing training and support (in most cases), 5 year survival rate, etc.
I am a huge proponent of having multiple streams of income i.e. passive/residual as well as active income so that is a large factor in my feelings towards a franchise as well. Your success in a franchise is 100% determined by how many customers you can get in the door.
Many people do succeed with owning a franchise, but at what cost? Sometimes hundreds of thousands of dollars in initial investment and 60-80 hours of their life each and every week.
I do hope this is not the case for you Brian and that you do experience much success without having to put in an inordinate amount of hours, however franchising just is not my cup of tea
|01-22-2007, 07:45 PM||#3 (permalink)|
Join Date: Nov 2006
I agree with what PMcDonald said. A franchise provides you with:
Last edited by Baltar; 01-22-2007 at 07:50 PM.
|01-22-2007, 11:57 PM||#4 (permalink)|
Join Date: Nov 2006
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• Little to no risks
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|01-23-2007, 01:28 PM||#7 (permalink)|
Join Date: Nov 2006
|01-28-2007, 03:53 AM||#8 (permalink)|
Join Date: Nov 2006
Location: Boulder, Colorado
I'd say it depends on what your goals are.
Is your goal to do something you enjoy? To have cashflow from a business you can ignore? To learn more about business/business building?
I've thought about franchising several times, and have rejected it because I'm most excited about building the business. I want to see if I actually can create an entirely new entity that can go on without me.
But if you just want money without effort, franchises have the best chances of succeeding. Not that buying and setting up a franchise isn't effort, but you get help, and if you do it right you can ignore it thereafter. When you build your own business it's more like 24/7 emergencies for 3 years straight with no guarantee that you'll even have a positive net worth at the end. So I guess many franchises are just as much effort, but far less stress.
But if you need money quickly, franchises are not the way to go. They have huge set-up fees, and take a lot of your up-front revenue. It could be a little while before you start to see a profit -- a couple months at minimum, and a couple years is not out of the question. Whereas my roommate built a computer-repair "business" that was profitable on the first day -- he spent $50 on a hard drive, and got $150 for installing it in a computer.
If your intention is to buy a job rather than a passive-income generator, then you have to consider your personality type. If you really like (for example) fixing motorcycles, but detest advertising and paperwork, then franchises are definitly the way to go. It won't eliminate the need for accounting, but it will make accounting as brainless and painless as possible.
But if you're the sort of person considering starting your own business instead of just getting a job at (for example) Bob's Motorcyle Repair Shed, there's a good chance that you don't like having people tell you what to do. In which case a franchise is a terrible idea -- they're telling you what to do all the time.
So what do you want out of a business? That will determine whether franchising is for you.
(I didn't vote in the poll, since I have no personal experience with franchising.)
|05-21-2010, 10:58 AM||#9 (permalink)|
Join Date: Sep 2008
A guy came and spoke in my entrepreneurship class several weeks ago.
He talked about his business history. Basically he started out owning a burger restaurant that he started himself, then one day closed that up and later bought a franchise.
Today he owns something like 20 or 25 franchises in small towns here in Texas. He said he owns several different things, like Subways, a Taco Bell, a few gas station/mini-marts, a few Church's Chicken's I believe, some Pizza Huts (or it might have been Domino's), and some other things.
He was very successful overall and he told us that the best franchise he would recommend starting would be a Subway, because it has a relatively low cost for the franchise ($15k I believe, instead of other franchises that charge more), and also because people view Subway as "healthy" and he believes that the market is moving towards healthy food now and in the future.
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