Opening a Franchise and I Need an Expert

[Mr. Blutarsky 133]

Long story short, I'm looking to open a franchise and have narrowed it down to the industry and have talked with several franchisors. I have been close to signing with  one, but my lawyer brought up several flags in their franchise agreement. What I guess I'm looking for now is a consultant who works with franchisees to help look out for potential risks. Can anyone here share the name of someone they trust?

[Kennythetiger 9376]

Derka knows. 

[Chewbacca 7767]

Is there a franchisor out there that doesn't buttfuck its franchisees?  I can't say I'd jump at being a franchisee.

[YGIFS 19449]

Does it involve a substantial real estate component?  If you're in Texas, I got a guy.  In all seriousness.  

[Elvis 3371]

Talk to this guy

 

 

[Nice Guy Eddie 13509]

I’ve always heard that you don’t want to even remotely put a high percentage of your net worth into a franchise and that’s counting amounts that you’re liable to pay over the contract.  And you have to be prepared to work the franchise yourself.

Edited September 28, 2023 by Nice Guy Eddie

[Mr. Blutarsky 133]

7 minutes ago, Elvis said:

Talk to this guy

 

 

Bruce Wayne would never have time to talk with me. That said, I know that franchises always favor the franchisee and in a big way, but I'm looking for the stability of a proven winner here. I'd love to start my own business, but at 47 and with two boys under seven, I don't want to be an absentee dad.

 

1 hour ago, YGIFS said:

Does it involve a substantial real estate component?  If you're in Texas, I got a guy.  In all seriousness.  

Unfortunately, it's going to be a one off in a shopping center, at least to start. Thanks though.

[YGIFS 19449]

3 minutes ago, Mr. Blutarsky said:

Unfortunately, it's going to be a one off in a shopping center, at least to start. Thanks though.

The question remains, as per real estate.  Are you signing the lease?  Is it a ground lease?  Is the corporate/franchisor committed to a master lease and you'll be their tenant?  Sub?  Forget I used the term " real estate", what''s your financial and time obligation to the square tiles you walked on in said shopping center?  

[dcbc 14465]

2 hours ago, Chewbacca said:

Is there a franchisor out there that doesn't buttfuck its franchisees?  I can't say I'd jump at being a franchisee.

Enterprise Rent-A-Car gives its franchisees the tools to succeed.

 

Edited September 28, 2023 by dcbc

[TwiceHorn 31440]

The common issues with franchises are:

• You usually have to buy branded merch from the franchisor at exorbitant prices that would be easily available for much cheaper elsewhere
• Any "community" or cooperative advertising offered by the franchisor will be bad/ineffective
• The "business services" offered by the franchisor will be either useless or annoying, but you have to use them
• Franchisors often place franchisees in competition with each other, despite agreeing not to, make sure this language is solid
• The "brand name alone" had better be worth it, because that's all you're sure to get from a franchise
• It's relatively easy for a franchisor to hold you in breach of the agreement, but the converse is not true, they are hard to get out of

This lady is the queen of franchising in Texas and the southwest. https://www.polsinelli.com/joyce-mazero I'm sure she's expensive as fuck and probably almost entirely franchisor-side these days.  She might be able to refer you to someone.

Edited September 28, 2023 by TwiceHorn

[Dbeasy 15042]

To be a little more balanced, painting all franchises as bad is a littler over the top. I have a friend that just cashed out $200m as a franchisee. I’ve also known many other successful franchisees.  However the odds are tough. 

[Shaggy3.0 1695]

1 hour ago, Nice Guy Eddie said:

I’ve always heard that you don’t want to even remotely put a high percentage of your net worth into a franchise and that’s counting amounts that you’re liable to pay over the contract.  And you have to be prepared to work the franchise yourself.

Correct

[Shaggy3.0 1695]

1 hour ago, Mr. Blutarsky said:

Bruce Wayne would never have time to talk with me. That said, I know that franchises always favor the franchisee and in a big way, but I'm looking for the stability of a proven winner here. I'd love to start my own business, but at 47 and with two boys under seven, I don't want to be an absentee dad.

 

Unfortunately, it's going to be a one off in a shopping center, at least to start. Thanks though.

An inline / end cap location? If so, find a decent attorney to work the commercial lease, start small, then profit.

[EastHorn 281]

If it's bike shop they say the key to success making a million dollars on a bike shop is to start out with 2 million dollars.  

[boilerhorn 1375]

On 9/28/2023 at 3:52 PM, EastHorn said:

If it's bike shop they say the key to success making a million dollars on a bike shop is to start out with 2 million dollars.  

That rule applies for almost every franchise or sole proprietorship.

[bschoolprof 6252]

Is it an eskimo hut?  I know just the guy.  

[BillyMadison 7]

Acquiring Minds has had a few good episodes on franchising lately. Specifically the episode with AJ Wasserstein. Also great intel in their show notes.

Check Acquisitions Anonymous - they did an episode with the “Wolf of Franchises” that is very good 

[Gil Bang 25921]

On 9/27/2023 at 6:55 PM, BeardIP said:

Unfortunately/Fortunately, I have a lot of second hand curiosity and information about franchising, because I have a handful of friends who have done it and I've thought about doing it.

One friend, about 5 years ago, got in to a Whichwich and went belly up in three years. Went broke on it.

One friend, about a year and a half ago,ened a relatively new concept. Because it was so new, the estimations and guidance the franchise team coached him on was way off, and he ended up threatening to sue and they gave a lot of concessions on the fees and first year royalties and other costs to keep him in the boat and to rightsize some of their growing pains as they were new to franchising themselves. This was for like a QC Kinetix treatment center concept, not food. He has SBA loans and not turning a profit yet.

Another friend is in the middle of it now, he's using these guys: https://www.thefranchiseconsultingcompany.com/ and is looking at a hair cut franchise. Something like a Sports Clips or Great Clips, I believe.

Another guy I know franchised a paint and body shop, and has been rolling out new ones every 2-3 years, and is absolutely killing it with a good portfolio. He's a multi-millionaire. 

The key takeaways for me were that food franchises were the hardest and that to make REAL money, you have to have multiple franchises. Not just 1 or 2, but 5 or 6. You can make retirement and lifestyle money off of 1 or 2 depending on the franchise, but there are probably easier ways to make that after the stress and costs and expenses.

A few years back, a bunch of haircut shops opened up in my town and adjacent towns.  They were a chain, but Icannot remember which ones.  One day, they all closed on the same day.  I had been getting my hair cut there for a while, so I ran into a gal that had worked there as she was now working at another local shop.   She told me that the owners were immigrants and to get here legally, they had to invest a certain sum into businesses.  They chose the hair shops, and as soon as they were legal, they said fuck it, closed everything, and retired.