Buying a Franchise - How to Make it SUPER Fastlane and Make MEGA Millions.

[Guest-5ty5s4]

FRANCHISORS FAIL and when they do it is not always only the loss of their business and investment that the franchisees suffer. In many cases, the failed franchisors seek to blame their franchisees for failure of the system, and in doing so they sue them!

Who would have thought that a franchise as successful as Bennigan's would ever file for bankruptcy? Or Mrs Fields Cookies? Or what about Curves? - probably one of the fastest growing franchises ever. See this : CURVES: The Rise & Painful Fall of the Curves Franchise Chain

For those with no previous interest in franchising, or with poor memories, here are a few more well known franchisors who declared bankruptcy: 7-Eleven, Baker's Square, Boston Market, Ground Round, Denny's, and Burger Chef.

Ground Round was a somewhat unusual case in that many franchisees banded together and formed a cooperative to maintain operation of the system under their control and that saved them from a huge loss.

Most of these failures are history, but some are quite recent and ongoing.

I repeat: Never think that buying a franchise is a secure investment.

I also repeat that selling franchises of your successful business enables what is probably the fastest scaling possible.

Walter

If Franchisors have such an amazing business model, how can they possibly go bankrupt?

Also, why not just do better due diligence as a franchisee?

If buying a franchise is always a bad deal, does that mean selling franchises is a scam? (I guess that would be like the never-ending MLM debate)

Also, it looks like what my original post described may have been more like a Master Franchise!

 

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[Walter Hay]

1. If Franchisors have such an amazing business model, how can they possibly go bankrupt?

2. Also, why not just do better due diligence as a franchisee?

3. If buying a franchise is always a bad deal, does that mean selling franchises is a scam? (I guess that would be like the never-ending MLM debate)

4. Also, it looks like what my original post described may have been more like a Master Franchise!

1. They don't all go bankrupt. My franchising business grew to the point of operating successfully in four countries. My franchisees were more like personal friends, and conferences were great times had together. I only lost one franchisee and that was due to his gambling addiction making him unable to pay his royalties.

I was at the point of sealing the deal on the sale of a US Master Franchise when my urgent heart surgery put an end to my ability to handle such a growing enterprise. Imagine - I could have been presiding over a network that included 260 franchises in the USA!

2. Good question. Some of those I have advised against proceeding with their planned franchise purchase were excited and starry eyed. That's not a good state of mind when looking at a big investment. Legal requirements demand extensive disclosure, but many people don't bother to read it all.

3. It's not always a bad deal. My franchisees consistently earned 4 to 5 times the national average salary, (after paying me 10%). I have a letter from one crowing about making $50,000 profit on a $57,000 sale, saying how nice it was to make that much for 1/2 day's work.

4. Yes it might have been. Some Master Franchises can open up a vast business, which is why I suggest a Master Franchise as the only kind worth even considering, but there are many people who buy multiple franchises and do very well.

Walter

 

[Balkins]

Unless you're buying Chick-fill-A* there's solution for control problem.

Take a risk, first, with one franchise, say one location for McDonald's,
earn and then open different franchise** - like Chipotle.
Basically, diversifying . If one brand loses appeal you can keep running others.


*) Chick-fill-A has different model where one owner can have only one restaurant.
**) This is assuming there are no Non-Compete-Agreement or similar clauses in franchise deal.

I'm sorry my friend but do you know how much money you need start a McDonald's or a Chick-fil-A?

You literally have to be a millionaire. Check it out let us know what you find out.