Let's talk about becoming a franchise owner

I think you all are nuts for wanting to own any kind of fast food oriented franchise.

I work in this industry currently but making my exit very very soon so I have a unique perspective. I also work with the new franchisees who come to me for the operations training before they get into their new stores.

With the company I work for, and no I wont tell you who, the profit is just ok. I saw several P&L statements last year for multiple restaurants and just to give you an example. 800,000 in revenue, 130,000 in profit.

You have to deal with lots of turnover, people stealing from you, benefits, and depending on your area, shitty customers. Sure you might be thinking youll just hire a general manager to run the place. lol

It's not that easy. Owning these places is hard work and a huge time commitment. Why the hell would you want to go bust your ass with this type of investment? My advice would be to look somewhere else.
 


teck112 said:
I think you all are nuts for wanting to own any kind of fast food oriented franchise.

I work in this industry currently but making my exit very very soon so I have a unique perspective. I also work with the new franchisees who come to me for the operations training before they get into their new stores.

With the company I work for, and no I wont tell you who, the profit is just ok. I saw several P&L statements last year for multiple restaurants and just to give you an example. 800,000 in revenue, 130,000 in profit.

You have to deal with lots of turnover, people stealing from you, benefits, and depending on your area, shitty customers. Sure you might be thinking youll just hire a general manager to run the place. lol

It's not that easy. Owning these places is hard work and a huge time commitment. Why the hell would you want to go bust your ass with this type of investment? My advice would be to look somewhere else.
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Your example is $800,000.00 in revenue? ROFL. You MUST be kidding with me right now.
 
You are honestly suggesting to me that you think that McDonalds and Tim Hortons (or many other fast food franchises) do only $91/hour in revenue?
 
five guys is catching on big right now, and they make real good food. I'd get in on that if anything.
 
TFLNetwork said:
You are honestly suggesting to me that you think that McDonalds and Tim Hortons (or many other fast food franchises) do only $91/hour in revenue?
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Location has to be huge. I can think of McDonalds that would be lucky to average $90/hr in revenue.
 
Never worked for mcdonalds. I have worked for tim hortons and the avg weekly sales were around 17-20,000 at the location I was at. So on the high end Tim Hoes was making a little over a million a year in revenue.

And the example I gave you was from a national chain, mid level volume, and I saw the numbers with my own eyes.

If you think you are going to walk into such and such companies franchise department and they are going to toss a monster revenue store into your lap you are wrong. Any real estate worth a damn has most likely already been bought up by current franchisees. Most of these companies also allow current franchisees to reserve areas around their stores and in state for set amounts of time for a fee.

Mcdonalds I hear requires 1 million in liquid cash before they will even talk to you.
 
True I agree with location, but, from what I have seen and heard speaking to numerous franchise owners... they are WELL into 7 figures at each location. Granted, I don't think I would go into a franchise now, simply because of the workload that it requires (maybe with a partner).
 
jtgoodgame said:
five guys is catching on big right now, and they make real good food. I'd get in on that if anything.
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One just opened up by me about 3-4 months ago and I decided to go check it out a couple of weeks ago. I can't lie it tasted great but 2 double bacon cheese burgers + 1 drink shouldn't cost $15+
 
teck112 said:
Never worked for mcdonalds. I have worked for tim hortons and the avg weekly sales were around 17-20,000 at the location I was at. So on the high end Tim Hoes was making a little over a million a year in revenue.

And the example I gave you was from a national chain, mid level volume, and I saw the numbers with my own eyes.

If you think you are going to walk into such and such companies franchise department and they are going to toss a monster revenue store into your lap you are wrong. Any real estate worth a damn has most likely already been bought up by current franchisees. Most of these companies also allow current franchisees to reserve areas around their stores and in state for set amounts of time for a fee.

Mcdonalds I hear requires 1 million in liquid cash before they will even talk to you.
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To add to this, I worked at a Subway in high school for three years and our average daily revenue was $1800 - $2000. And we were one of the busier Subways around. But our owner owned a number of Subway franchises, five of them I think.
 
Subway is a different animal. Franchise owners of subway who make any money usually own several of them - why do you think subway just overtook McDonalds for # of US locations total? McDonalds is nothing like this.
 
Owning the land/building helps tremendously. With the low interest rates a few years back, one franchisee owner was into "sale/lease back" as he grew his burger restaurants. He owns land and essentially pays rent to himself.
 
vgeek said:
Location has to be huge. I can think of McDonalds that would be lucky to average $90/hr in revenue.
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Totally. Most of them don't operate 24 hours and most sales will only come in during peak hours.

I used to work in one of these franchises, the operation cost can go up to $80K - $100K/month, so if you're not making an average of $3000/day in revenue, you're fucked. And just think about it, how many cups of Starbucks coffee do you need to sell a day in order to generate $3K? A LOT!

And not to mention you still have to pay for the initial license fee (anywhere between $100K to $1MM depending on the brand) and they'll suck 5%-10% of your monthly revenue.

The margin is not high and it's probably going to take at least 2 years before you break even (if you're lucky)...

If the location is bad, you're not going to make it, period.
 
How restrictive are they in terms of promotion usually? Like doing special coupons for just your store only. I know this one subway owner used to run promotions that stores not owned by him didn't have to drive up business. Wondering if any of them outright restrict it?
 
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