What does /biz/ think of franchises?
ausfag here, I have $150,000 ($112000 USD)
was thinking of starting up a franchise, most likely a Subway
I would like to be able to lie back and live on the profit,
and would prefer if I didn't really have to be involved with the business once its set up
questions
>is this a realistic dream? have heard you need several subways to make a decent living
(I own my house so expenses are significantly lower than most)
>is subway the best franchise I could get for my money?
>any other advice / info regarding franchises would be fabulous
Also ITT Franchise discussion
>>1164470
I don't know the numbers, but, I assume that Subway would be the best. Reason being that they can be alot smaller than a mcdonalds or a KFC, so rent would be cheaper. However, I've heard that they are the most popular chain now, so, u might have a bit more competition.
>>1164470
I've heard that franchisees in place get to dole out the new location areas. Don't know how true that might be. Some nepotism issues I think. Do subway franchisees get rights of first refusal on growth?
>>1164470
You're probably going to need more 112k. I think a McDonald's is like 300k so I imagine a Subway would be closer.
>>1164470
you're going to need multiple stores
the margins are so low that risk concentration will ensure you lose everything
>>1165413
Naw, Subway is both more compact in size + uses less high tech doodads.
So I'd say it should be far cheaper to start a Subway.
What kind of profits does a subway net?
Because if you want to lay back why not use the money to buy some land/real estate and just rent that out?
Seems more convenient and safe than a franchise which is bound to the fate of the brand. People might not like Subway in 10 year but they will need to live somewhere
I wanna start a starbucks. We dont have one
My opinion of franchises are that they are a bit safer than going your own way, but the initial investment and profit split they want annually is outrageous.
Just consider all the things you could do with that money in growing your own restaurant with your own ideas and own food. If you even know the first thing about business its not that complicated. The keys being advertising and marketing.
I could never do a franchise. Besides, Subway is shit.
>I would like to be able to lie back and live on the profit, and would prefer if I didn't really have to be involved with the business once its set up.
You'd have to run the numbers but I doubt one location will generate enough profit to pay a manager and yourself, most franchise owners manage the venue themselves to cut back on paying a manager. I would consider managing yourself for a few years, while you find people you can trust, and once you set up a second franchise, you can pay two managers and live off the excess (but don't expect to be rich, though).
There's a lot of misinformation in this thread. Cheapest start up costs for a franchise is Firehouse Subs. I think Jonny John's is next after that. Subway is pricey and absolutely rapes their franchisees to the point that there was a lawsuit not too long ago over no longer having to buy from Subway suppliers to stock locations.
You'll need multiple locations to be comfy, OP. As it sits, I don't believe you have enough money. I'm just going off the top of my head, but Subway is upwards of $200,000 liquid and $500,000 in assets to start. You can't simply go by how much tech a restaurant has. Dunkin is one of the priciest franchises around, with start up costs nearing $1mm.
OP, Forbes did a series on different franchises and their costs. See if you can dig that up and get some decent info.
>>1166217
Chick-Fil-A is the cheapest and most profitable franchise that exists today. It is even mote profitable than McDonalds. Good luck opening one, however. The waiting list is thousands of people long. You also have to be a Christian and be a dedicated church member, family man, and active in the community. If you can even open up one Chick-Fil-A you will be a gauranteed multimillionaire in 5 years.
>>1166228
This. I heard Chick Fil A costs like $10k to open and the average owner makes $300k a year (some more). The average Chick Fil A pulls in almost $3 million a year which is more than even Krispy Kreme. Shit is a literal gold mine. Oh fuck would I love to get my hands on one of those. Its nearly impossible unless you know someone through church though.
Most parent companies of the franchises do pretty well, they often collect rent, supply costs, interest and profit sharing.
McDonald's pays a 2.5% dividend, and has another 2 billion in profit they sit on, how much is left for the owners of the franchises?
Service industry is a hard industry to invest in, customers can be really fickle. You're also competing with immigrant restaurants who have their entire extended family working for free.
If you want to set up a business, pick up something that's more niche than that. I know a guy who bought a cement truck and works in a rural area. Heavy equipment or something else that isn't glamorous is a better choice.
>>1166244
The church part is somewhat secondary.
You get promoted from within. Like 10+ years experience at Chick Fil A, then they put you in the manager program, where you will be relocated to be an assistant manager elsewhere. Anything that questions your character will stop this. Divorce, child out of wedlock and anything legal above a traffic ticket and you wont get it.
Making 300k is good, but it's just as hard as going to med school.
>>1166069
They don't do franchise licenses... At all. Weird, but that's the way it is.
>>1164470
Can i give you a really good suggestion?
https://txjerky.beefjerkyoutlet.com/
Open one of these in Sydney or Melbourne.
Beef jerky is becoming more and more popular, and there's almost no good sources to get it.
I went to one of those stores in Texas and it was amazing. Spoke about opening a branch internationally, and they'd be able to do it.
>>1167878
they do
but not to your average joe.
such as the ones in schools and conference centers
>>1164470
you would still need to put in the hard yards of working at the business for a few years. you need to train employees, make sure they get it right, then the few employees you have managed to retain long term who arn't complete fuckups, you make into managers who will stick around and run the business for you. the key to starting up a business is micromanagement until you manage to find quality staff. expect to pull 70 hour work weeks for a few years until its off the ground. there is more to running a sandwhich shop than just lel, anyone can make a sandwhich.
>protip: staff will balk at the idea of cleaning toilets even though IT FUCKING NEEDS TO BE DONE
>staff will avoid cleaning
>staff will avoid working
>staff will avoid arriving on time
>staff will steal
>staff will extract as much value from you as possible while putting in the least amount of value into the business
>there are a few rare people who will work hard and not rip you off
>it takes a long time to find these people
>it's even harder to retain them
>>1168113
open it on the military base, recession proof
Is froyo a thing yet in Aus? Pretty big here, just put it in front of a college or mall or wherever there area lot of girls. I heard they can be really profitable, the margin on the yogurt is crazy . Plus its pretty hot in down there too.
>>1164470
Work at one for a couple months and see how it operates. Then quit and clone it. A guy I knew did that after working at Dunkin Donuts. There is a way to buy pretty much everything you get at DD without the franchise markup. He took all the best workers with him and hired a bunch of qts and now has all hipsters loving his place for being "independent".
