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Multiple subway franchise?

Tourmaline

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Don't buy a franchise. Sell a franchise.
 
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FHOWARD2

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I would never recommend buying a subway franchise. The margins are simply too thin and you have to own more than a handful in order to make any money. And a franchise of any kind only grossing $265,227 is a red flag, but a Brick and Mortar fast-food chain only grossing that amount is an even bigger flag.

But aside from that there is simply too many unanswered questions here to give a good value. Like, how much are fixed expenses per month, how many employees, where is it located...etc.

I'd run far from this deal.
Asking price is $40,000. Owner is an absentee owner and has 1 FT and 4 PT employees and is located inside a Walmart.
 

PizzaOnTheRoof

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I will never own a franchise. You just give up too much control when it comes to branding, product, PR, and operations.
 

Tourmaline

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Look, you're not on the right forum to ask this to.


You're violating commandment #1.

#1: The Commandment of Control.
As an entrepreneur, you want to control your business whereas no one entity can put you into bankruptcy. For example, will a Google algorithm change kill your business? Will that MLM company go out of business and destroy all you worked for? Will Facebook change its Terms of Service for application calls and all of sudden you're out of business? Did that great affiliate program you've been hawking suddenly stop paying? Or change its terms and now you're shit-out-of-luck? The Commandment of Control eliminates 3rd party risks that can take down your business in one swift stroke. You can either paint your own big picture, or be a swab of paint in someone else's.

In general we don't want to supplement our income. We want to increase our wealth. We want to maintain or achieve an upper class lifestyle. We do not want to ever worry about money.

It doesn't matter how old you are, presuming you're still capable of learning and doing.
 

Walter Hay

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There is a magazine that will give you a little more insight into multi-unit franchising
Franchising.com: Your Complete Guide to Buying a Franchise Opportunity
The magazine is full of interviews of success stories of people who have done it...
There is a lack of diving deep into the process.
But, shows you what is possible.
Common thread... Private Equity partnerships, play in this field heavily.
Franchising.com are in the business of selling franchises. Look for unbiased opinions.
I was looking at purchasing an existing Subway which has the following: Any suggestions on its value?
Gross Revenue:
$265,227
Cash Flow:
$61,529

(Seller's Discretionary Earnings)
EBITDA:
Not Disclosed
Inventory:
$4,000
included in asking price
FF&E:
$15,000
included in asking price
See this post:
Rapid Scaling a business by franchising in which I give recent information about the plight of many Subway owners. It is not only in the USA. Their brand is in tatters all over the world.

Don't buy franchises. The real money is to be made by selling them, and for that you need to start or buy a business that meets, or will meet, the criteria that I refer to in my Rapid Scaling thread.

There is one exception to my rule "Don't buy franchises", and that is I recommend buying a Master Franchise if you want to grow a big business with big profits, but don't rush in. Details are explained in my book.

Walter
 

AubreyJ

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Asking price is $40,000. Owner is an absentee owner and has 1 FT and 4 PT employees and is located inside a Walmart.

The fact it's in a walmart changes things for sure. I'd still be leary...if he is an absentee owner and it's making him money, why sell?

My thought would be that it probably isn't making money, and absentee owner or not it's extremely difficult to grow sales.
 
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Monkeycom

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I know MJ mentioned in his book that a coffee shop will not ever hit the fast lane, so a single subway sandwich shop wont either, but what if say we had 20 shops? Each with a average net of 5-6k a month will put you in a super fast lane. Anyone thought about this?

I'd have an issue about the control.
A wise men told me once "Bad businessman buy franchises. Good businessman create them".

You should read the @Walter Hay's book about franchises.

Best of luck!
 

vinylawesome

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Franchising.com are in the business of selling franchises. Look for unbiased opinions.

See this post:
Rapid Scaling a business by franchising in which I give recent information about the plight of many Subway owners. It is not only in the USA. Their brand is in tatters all over the world.

Don't buy franchises. The real money is to be made by selling them, and for that you need to start or buy a business that meets, or will meet, the criteria that I refer to in my Rapid Scaling thread.

There is one exception to my rule "Don't buy franchises", and that is I recommend buying a Master Franchise if you want to grow a big business with big profits, but don't rush in. Details are explained in my book.

Walter

Thanks for the reminder. I had forgotten I had posted that as it was posted over five years ago. What resource's would you recommend someone utilize to do more research if they were interested in purchasing a franchise and/or multi-unit franchise?

I personally don't have any interest in owning a franchise but thought your recommended resource(s) would be useful to this discussion.
 

Walter Hay

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Thanks for the reminder. I had forgotten I had posted that as it was posted over five years ago. What resource's would you recommend someone utilize to do more research if they were interested in purchasing a franchise and/or multi-unit franchise?

I personally don't have any interest in owning a franchise but thought your recommended resource(s) would be useful to this discussion.
There is a caveat to my answer, and that is that I will always help someone even if they are doing something unwise, and I because I firmly believe that buying a franchise is a bad business decision, this is a reluctant answer:

If anyone really wants to buy a single franchise, the very best resource for them to use is existing franchisees. Talk to them. Unless they are thinking of selling out, they will usually give you a genuine impression of how well it works for them, how easy to get on with is the franchisor. The best question to ask them, after chatting for a while is: "If you were looking for a business now would you buy a franchise from this company?"

The same applies if anyone is considering buying a multi-unit franchise, but..... If anyone is thinking of spending the amount of money one would usually expect to pay for an existing multi-unit franchise, I would urge them to consider what I see as a vastly superior alternative.

That is, buy a Master Franchise from a well established and well run organization. My book explains in detail why that is the one and only type of franchise that I could recommend buying. Even then, first talk to a number of existing franchisees in that network.

Walter
 
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vinylawesome

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There is a caveat to my answer, and that is that I will always help someone even if they are doing something unwise, and I because I firmly believe that buying a franchise is a bad business decision, this is a reluctant answer:

If anyone really wants to buy a single franchise, the very best resource for them to use is existing franchisees. Talk to them. Unless they are thinking of selling out, they will usually give you a genuine impression of how well it works for them, how easy to get on with is the franchisor. The best question to ask them, after chatting for a while is: "If you were looking for a business now would you buy a franchise from this company?"

The same applies if anyone is considering buying a multi-unit franchise, but..... If anyone is thinking of spending the amount of money one would usually expect to pay for an existing multi-unit franchise, I would urge them to consider what I see as a vastly superior alternative.

That is, buy a Master Franchise from a well established and well run organization. My book explains in detail why that is the one and only type of franchise that I could recommend buying. Even then, first talk to a number of existing franchisees in that network.

Walter
Thanks Walter. I appreciate your response. I am a big fan of master franchising. The Janitorial industry has been successful with that model for very little capital outlay. ie. Jani-King, Coverall, Vanguard, etc. I looked into helping a friend utilize a master franchise/franchisor model to franchise their own business. They ended up deciding not to pull the trigger.

I would imagine you would be for obtaining an exclusive right to an area for a brand? For example, there is a company in my area that obtained a multi MSA exclusive for Habit Burger. I've heard their doing well. Another company obtained the exclusive rights to Dutch Bros throughout the area.
Albeit, a capital intensive proposition they still do not have to compete within their own brand with other franchisees.

What are some examples of companies that have utilized the master franchise model to grow their business?
 

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