CNBC show on franchising

[gotbalz]

Behind the Counter / The untold story of Franchising

News Headlines

It premieres wednesday night at 9PM


I always like the CNBC behind the scenes shows, always very interesting...

 

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[Z5 FILMS]

Watching it now. Good show. Looks like Cold Stone is really shady. If what he says is true, Cold Stone will not be around much longer. Looks to me like they are just out to milk the franchisees for every dime they make (not surprising). When you used to own the 2nd largest grossing store in the US and go on camera and say "You can't make money with a Cold Stone". That's not good.

 

[Darkside]

Watching it now. Good show. Looks like Cold Stone is really shady. If what he says is true, Cold Stone will not be around much longer. Looks to me like they are just out to milk the franchisees for every dime they make (not surprising). When you used to own the 2nd largest grossing store in the US and go on camera and say "You can't make money with a Cold Stone". That's not good.

Yea, and they made him and the other franchisees sign an agreement not to disparage Cold Stone so those suffering can't even speak out against the business which is why no one other than that lawyer would step forth to speak publicly. Procter and Gamble have the right idea; their franchise fee is a percentage of the net earnings, not the gross, so it's taken off profit as opposed to total sales.

They would rather not cripple their franchisees with high gross fees which would put them out of business; if the franchise is making money then they make money, if not then they don't. I actually respect P&G a lot for doing that.

 

[TaxGuy]

Looks like Cold Stone is really shady. If what he says is true, Cold Stone will not be around much longer. Looks to me like they are just out to milk the franchisees for every dime they make (not surprising). When you used to own the 2nd largest grossing store in the US and go on camera and say "You can't make money with a Cold Stone". That's not good.

This is crazy since I was seriously considering going in on a Cold Stone franchise with my best friend and a few others when I graduated college, until we ran the numbers and realized it wasn't for the best. While I always figured that being a franchisee wasn't the answer, I was hoping to atleast get the experience and use it to start something new. Sadly, 5yrs later I've remained on the Sidewalk and my friends are all stuck in the Slowlane

Thankfully though, being on the Sidewalk has led me to my current opportunity that will lead me to the Fastlane, I just need to balance planning with action(about a 20/80 split) as I know the business I am in satisfies all 5 of the Wealth Commandments, taking Nike's advice and "Just Do It!" is the motto now, however, there needs to be a certain degree of planning, i.e. yesterday we discussed all the responsibilities involved, so we know not only what departments we need to take care of, but also what will ultimately be outsourced through hiring. As they say, a great entrepreneur doesn't know everything about everything, but does know just enough about every aspect of their business so when the time comes to hire outside help they can make informed decisions(i.e. hiring an Internet Marketing company and knowing the difference b/w White Hat and Black Hat practices).

Overall that could've been the most valuable piece of TV I've ever watched, granted I missed about half of it, I found out about this wonderful site: Blue Mau Mau and before writing this post started doing research on reviews of the established franchises in my field so I can see what they're doing right, but more importantly, what they're doing wrong so when the time comes our franchise will crush them!

 

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[gotbalz]

I knew they would rip some of these franchises. The kind of money these franchisors want from you is crazy! And then the percentages, buy all supplies from us, all equipment from us. Just nuts! They get you from all angles.

I am surprised they didnt have some Quiznos franchisors on there, they are dropping like flies from what I've read on some forums and in news articles. A couple years ago I saw a local ad to buy a couple existing Quiznos for $15K down each store. I was shocked at how affordable it was, until I figured out where they were and saw one close just as the ad was listed, must have been grasping at straws to try and have somebody get in there. That was when I started reading about them online and saw all the bad publicity about grossing good money but having it all eaten up by corporate with high food costs and still expected to compete with subway on price. They couldnt do it. I guess corporate would run those ads for $3 and $5 subs and the franchisors had no choice but to sell them even though they were losing money on them. Subways have lower food costs the franchisors said, which made them able to profit on the $5 footlong. Needless to say, I ran, not walked away from the opportunity.

I would be more apt to put money down on an existing business with a proven track record than a new franchise location starting from scratch.

Good Show though, like I said I always enjoy the CNBC specials.

 

[TaxGuy]

That news about Quizno's makes me feel even better about how proud my old "Office Space" job was to get them as the big $4.5m account, especially considering what a PITA their food safety audit program was! To say that their standards were as asinine as making sure to put a cover-sheet on a TPS report would be an understatement

On that note, if anyone wants to know how much it sucks to own a restaurant or hotel chain franchise, I have about 1yr experience dealing with their "food safety" and "brand standard" audit programs, most of which are paid for by the franchisee and REQUIRED by the franchisor, much like the coupon programs or my favorite, when BK came out with the $1 double-cheeseburger to compete with McD's "McDouble", the franchisees were PISSED, but had to do it, despite losing a ton of money just because BK said so, so much for running your own business?

 

[Z5 FILMS]

Quiznos will be on the show if they have more of them. I have never heard anything but horror stories about them and franchisees seem to be trying to give them away. They make an excellent subject.

 

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[DreamPursuit]

I recorded it so I could watch it again. What really surprised me that franchisors are not required to state an average of what a new franchisee can look to make yearly. It seems that people select to open a franchise because they seem to be the golden ticket. But, in reality you are still going to be subjected to some of the same hurdles as non-franchised companies. While at the same time the franchisor is telling you that you must buy all equipment and supplies from them. So, essentially you are buying yourself a boss.

IMO, if I was to start a company I would take the money that one would use to buy a franchise and spend it on marketing. Then a few years down the road create my own franchise. I would take the good bits that I like from other franchisers, such as P&G's cut of the profits, and fix the lacking bits I see to create my franchise model. Then begin selling them.

 

[MJ DeMarco]

Save yourself the time -- quit looking to buy franchises and get into business with the intent to sell them. Problem solved. :smxB:

 

[darkjediii]

Quiznos will be on the show if they have more of them. I have never heard anything but horror stories about them and franchisees seem to be trying to give them away. They make an excellent subject.

I agree with the Quiznos comments, a family member owned a Quizno's. Nothing but horror stories. They ended up selling it, took a note and the guy who bought it failed and stole all the equipment never to be heard from again.

I am actually in the process of building my brand, I am looking to eventually franchise in near future. I am in the process of trying to open another location in a major mall and am about 50% funded. Just need to find some way to get 100% funded!! If anyone has any ideas let me know please !!

 

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[TaxGuy]

Save yourself the time -- quit looking to buy franchises and get into business with the intent to sell them. Problem solved. :smxB:

That's the ol' MJ I remember, now post that in the Tim Horton's thread too.... it looked like you were getting soft on us there

And oh yea, already ahead of you on that one, bought our domain, registered the Facebook/Twitter/YouTube account and plan on having atleast a crude website up by next week (I've been planning out the content, SEO, etc for the past 2 months)

The only question is should we register the business name now or wait? I guess this'll be something to discuss with GlobalWealth, although I know from our experience that filing as an LLC and getting taxed as an S-corp is the best bet, I know GW knows more about exotic structures that will help keep our assets protected once we start growing in leaps and bounds!

 

[Guest3722A]

That's the ol' MJ I remember, now post that in the Tim Horton's thread too.... it looked like you were getting soft on us there

And oh yea, already ahead of you on that one, bought our domain, registered the Facebook/Twitter/YouTube account and plan on having atleast a crude website up by next week (I've been planning out the content, SEO, etc for the past 2 months)

The only question is should we register the business name now or wait? I guess this'll be something to discuss with GlobalWealth, although I know from our experience that filing as an LLC and getting taxed as an S-corp is the best bet, I know GW knows more about exotic structures that will help keep our assets protected once we start growing in leaps and bounds!

vr4,

you know what I'd like to see, and an idea that I'm speculating would be a homerun...

A tax firm that specializes in trader's accounting.And then I'd like to see them cookie cut and FRANCHISED around the country!

Here's one of your neighbors: Traders Accounting
This guy specializes in trading taxes and has relations with discount broker houses where he gives on-line seminars about the complexities of trader/investor taxes.

To date, I don't think anyone has franchised and positioned themselves as a trading tax specialist.

 

[TaxGuy]

Thanks for the idea topherea, there's a few other niches we're considering selling to, but that's in the Plan B, C side where we're developing Content Systems and Software Systems, both are other ways to Fastlane the business.

The reality is where we want to position ourselves is between the store-front and professional CPA firms and sell to the masses, the irony is we can rival the store-fronts in price while still providing at or above the quality of pro CPA firms, especially when we've got a CPA with over 30yrs of experience at the helm, although if you look at the "Death and Taxes" thread you'll see that there's a misconception among the public that a CPA = taxes when in reality you need an EA and my dad happens to be both and I am shooting for my EA within 2yrs, possibly even by this time next year.

 

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[Z5 FILMS]

I recorded it so I could watch it again. What really surprised me that franchisors are not required to state an average of what a new franchisee can look to make yearly.

Not surprising because there's a million variables. I think people buy franchises because they think its a ticket to big bucks. If they posted expected income they would have a line of franchisees suing saying "You said we could expect to make X amount of money.

Speaking of Quiznos. Here's one for sale from a local business broker. It's for sale for probably less than half of just the buildout costs and is making no money. Any takers??? Anyone?? Hello??? LOL C'mon it's a franchise. Must be easy money right?? LOL

 

[TaxGuy]

"The store meets the new Quiznos standards of equipment and construction"

In order to meet those standards, they had to pay my old employer $350 for an "audit" to tell them that there was a little bit of dust on their counter and that their pepper bar was not fully stocked so they had to pay to order more even though no one eats them. And oh yea, their chips aren't front facing and fully stocked, so they failed the audit and need to pay another $350.

 

[Suhaib Alam]

is this available to watch online anywhere

 

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[DreamPursuit]

I'm not sure you can watch the full episode online, but you can watch parts of it on Youtube. Here is a link CNBC Franchise Documentary: P&G - YouTube. There is also some on the left of the page, under suggestions. Hope that gives you some help.

 

[Suhaib Alam]

all of the cnbc shows come up on there site, im not sure why this hasnt,
i heard cold stones had filed a lawsuit on them for the show, maybe its because of that