Investing In A Franchise Outlet

Discussion in 'Self Employment' started by Corie Henson, Feb 12, 2016.

  1. Corie Henson

    Corie Henson Very Well-Known Member
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    Some seniors I know, particularly those who received a substantial retirement pay, had invested in popular franchise outlet. Two seniors were partners in a fastfood restaurant specializing in the beef and rice called Tapsilog which is a favorite native breakfast. Another opened up a bakery for the morning bread called pandesal. That was also my plan until my husband said that opening up a franchise store needs a lot of capital because just the franchise itself costs 500k pesos, that's more than $10k.

    If you have the money, would you invest in such a venture? When the going is good, it can be a source of steady income.
     
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  2. Yvonne Smith

    Yvonne Smith Very Well-Known Member
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    I think that this is not one thing that I would do, assuming that I had the money to invest (which I do not have).
    Right now, they are trying to raise the wages for workers in the fast food industry up to $15 per hour, which is more than many workers who are doing far more skilled jobs are making.
    Employees were picketing outside of the McDonalds offices, and marching down the streets in Washington DC, campaigning for higher wages. Their complaint was that since McDonalds was such a large company, and made so much money, that they could easily pay their workers more money.
    However, most of these McDonalds are franchise , and are owned by people who have bought the franchise, and not by the McDonald's corporation.
    So, even if it forced McDonalds to pay higher wages, then the privately owned ones would have to make adjustments, too.
    These fast-food jobs are not supposed to be for a full-time worker who is trying to support themselves, and maybe a family. They are mostly part-time positions, and were always filled by either students or other people who just needed a little extra cash.
    The people who have these jobs and want to make it a career would then work hard and go into management, which paid more.

    If we get someone like Hillary or Bernie Sanders elected to the pressidency, who wants to promise the $15 minimum wages to people, then most of the franchises, and maybe even some of the corporations will be closing their doors. Franchise owners will be going bankrupt in some cases, probably.
     
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  3. Chrissy Cross

    Chrissy Cross Veteran Member
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    No, don't think I would invest either if I had the money. My sister in Colorado a few years ago bought a burrito franchise and what a financial disaster that was.
     
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  4. Ruby Begonia

    Ruby Begonia Very Well-Known Member
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    Fast food can be very iffy. These days there is so much emphasis on healthier eating, stopping diabetes, etc. Healthier food franchises might succeed I had read some where. If I had the funds to spend I might consider something like that.

    I wonder if the fast food workers get their 15.00 per hour, will people who are tempted to abandon the unhealthy food at BK and McD type places anyway, might just stop going altogether when the cost of a heart-attack-in-a-bag skyrockets?
     
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  5. Corie Henson

    Corie Henson Very Well-Known Member
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    I have noticed (not only in this site) that healthy food is an issue with the seniors. Maybe those investing in fastfood franchise should rethink their stand. But aside from the unhealthy food, my concern with the franchise is the profit which seems that the franchise giver earns so much while the franchisee earns a little. Those who bought franchises had in mind that they could earn from the store without doing anything because the franchised store is designed to work by itself.

    A former colleague works for a big company of food products and beer and soda. The conglomerate had also joined the franchise business by selling franchise for the morning bread called Pandesal. You provide the place, you pay the franchise fee, they do the design on the shopt, they supply the materials and you pay for it, of course. They also supply the trained personnel. In one outlet near our village that is owned by a popular pro basketball player, there was a ribbon-cutting and press release when it opened last year. But before Christmas, it closed shop. From what we heard, it was not earning and the owner was losing money.
     
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  6. Chrissy Cross

    Chrissy Cross Veteran Member
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    I didn't realize how much work they are, my sisters was a chain called " Big City Burrito" if I remember right.

    Her husband still kept his job, he has a very good paying one, hes top management and makes 6 figures but it was going to be an investment and something for my sister to do part time. The seller kind of fudged the profits and it didn't do as well as expected. The workers would always call in sick, always some problem or other. What was to be a few hrs for my sister turned out to be from 6 am to 6 PM every day doing all kinds of jobs. I remeber her making beans in a pot the size of a garbage can with a spoon the size of a shovel, lol. Her husband would go in after work to help, her 2 daughters in HS at the time would help, I even flew to Colorado for a month to help my sister for free.

    It was a nightmare and they ended up selling at a loss. Their loss was close to $200,000 if I remember right.
     
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    Last edited: Feb 12, 2016
  7. Chrissy Cross

    Chrissy Cross Veteran Member
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    The same sister I was just talking about was telling me yesterday of a new restaurant she had lunch at with some friends. It was called Modern Market and it was a healthy restaurant and prices weren't bad. They even posted the nutrition on every food item on the menu. She had some kind of salad with chicken and it was $9.

    I looked them up but they aren't in California, just Colorado, Arizona, Texas and maybe one more state I don't recall.
     
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  8. Ruby Begonia

    Ruby Begonia Very Well-Known Member
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    There you go, @Chrissy Page!
     
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  9. Chrissy Cross

    Chrissy Cross Veteran Member
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    If only I had the funds.....
     
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  10. Ruby Begonia

    Ruby Begonia Very Well-Known Member
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    small business loan.
     
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  11. Pat Baker

    Pat Baker Well-Known Member
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    I have heard that the investment needed is high to start a franchise. I would be concerned not only for the amount of money involved but the time it takes to see a profit and the amount of time you may have to spend working the business.
     
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  12. Chrissy Cross

    Chrissy Cross Veteran Member
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    All true Pat Baker!
     
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  13. Spencer Berrett

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    I looked at a number of franchises, but never bought one. I seriously looked at a pay, pack & ship store, a senior's home health-care company, and a used computer store. You are not the final say, you are not your own boss. It's all in the name of protecting the franchise. So goes the pitch.

    In every instance, I came to the same conclusion: you are paying for your job if you expect to participate in it. Silent investment works, but I've seen too many franchises fail. The 'franchisor' is so many times only interested in "skimming" the cream. 2-4% percent royalty fees from the sales line is huge when carried through on a cash flow sheet.

    If you are good at some sort of skill, you should go take 2 years of business classes at a community college, then go do it when you believe you can. You will save a lot of money. Be careful & watch your wallet! There's a lot of vultures out there, everyone. :confused:
     
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