bpwallace49 Posted February 28, 2011 Share Posted February 28, 2011 I have been looking into buying a franchise for a few years now. I have been doing due diligence on the area, demographic history of the neighborhood, possible competitors, and have financing plus investors lined up with a business plan. Has anyone here owned a franchise before? This would be a food service franchise with a following regionally. if anyone has, are there any unexpected pitfalls you experienced in the process? TIA Quote Link to comment Share on other sites More sharing options...
tazinib1 Posted February 28, 2011 Share Posted February 28, 2011 I don't know about other food service franchises, but Subway is a fantastic investment. I believe the initial cost to purchase a Subway franchise is $15k, due at signing of the agreement. Your initial investment will run between $80k - $240k depending on location, building and zoning codes etc etc etc. I also believe there is a is an annual royalty fee of eight percent, which is figured on each store’s gross sales volume. Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted February 28, 2011 Share Posted February 28, 2011 I don't know about other food service franchises, but Subway is a fantastic investment. I believe the initial cost to purchase a Subway franchise is $15k, due at signing of the agreement. Your initial investment will run between $80k - $240k depending on location, building and zoning codes etc etc etc. I also believe there is a is an annual royalty fee of eight percent, which is figured on each store’s gross sales volume. Good luck finding a block that doesn't already have a Subway. Quote Link to comment Share on other sites More sharing options...
nuke'em ttg Posted February 28, 2011 Share Posted February 28, 2011 restaurant biz is tough, sell some whackin material and personal massagers, better group of people too Quote Link to comment Share on other sites More sharing options...
twiley Posted February 28, 2011 Share Posted February 28, 2011 Buddy owned some Penn Stations. From what I recall, he worked 24/7 until he sold them. I also remember him stating that you need to really own more than 1 to make any serious money unless you're in a killer location. He was also big on the triangular location theory - own 3 locations that form a 5mile triangle around a certain area. Quote Link to comment Share on other sites More sharing options...
Caveman_Nick Posted February 28, 2011 Share Posted February 28, 2011 Buddy owned some Penn Stations. From what I recall, he worked 24/7 until he sold them. I also remember him stating that you need to really own more than 1 to make any serious money unless you're in a killer location. He was also big on the triangular location theory - own 3 locations that form a 5mile triangle around a certain area. A few years back I went to a seminar on opening a Quiznos franchise. The company had a limit as to how many you could buy from them, although there was no limit on acquiring rights to franchises from other franchise owners. In any event, there were some significant requirements as far as what kind of liquid capital you needed to open the store, and IIRC the amount of money you could hope to make from one store was in the $70K neighborhood (there were some projected sales numbers, but I believe this was the high side). The only way to make real money was to own several stores. After my investigation I decided that it sounded like a racket and that if I ever wanted to open a sandwich shop I should just start my own concept. Quote Link to comment Share on other sites More sharing options...
Scooby's Hubby Posted February 28, 2011 Share Posted February 28, 2011 if you open a donut shop or slop-house buffet, then I will need to check your citizenship, please. Quote Link to comment Share on other sites More sharing options...
whomper Posted March 1, 2011 Share Posted March 1, 2011 does IDP Freeley IN NJ count ? Quote Link to comment Share on other sites More sharing options...
MikesVikes Posted March 1, 2011 Share Posted March 1, 2011 (edited) Good luck finding a block that doesn't already have a Subway. I thought it was odd that Subway was running ads at 9 pm on Feb 28 about how you should get a 5 dollar footlong, any footlong during the month of February. How many footlongs did that ad cost anyway? Edited March 1, 2011 by MikesVikes Quote Link to comment Share on other sites More sharing options...
Yukon Cornelius Posted March 1, 2011 Share Posted March 1, 2011 A few years back I went to a seminar on opening a Quiznos franchise. The company had a limit as to how many you could buy from them, although there was no limit on acquiring rights to franchises from other franchise owners. In any event, there were some significant requirements as far as what kind of liquid capital you needed to open the store, and IIRC the amount of money you could hope to make from one store was in the $70K neighborhood (there were some projected sales numbers, but I believe this was the high side). The only way to make real money was to own several stores. After my investigation I decided that it sounded like a racket and that if I ever wanted to open a sandwich shop I should just start my own concept. sounds like a glorified pyramid scam... Quote Link to comment Share on other sites More sharing options...
Bier Meister Posted March 1, 2011 Share Posted March 1, 2011 edible butt plugs? Quote Link to comment Share on other sites More sharing options...
twiley Posted March 1, 2011 Share Posted March 1, 2011 I thought it was odd that Subway was running ads at 9 pm on Feb 28 about how you should get a 5 dollar footlong, any footlong during the month of February. How many footlongs did that ad cost anyway? You buy blocks of time so they probably had the entire month. Similar to billboards you see on the highway with events that have already passed. You lock in for a month then in some cases they can't fill the space again so they keep the billboard up until they do. Quote Link to comment Share on other sites More sharing options...
Caveman_Nick Posted March 1, 2011 Share Posted March 1, 2011 sounds like a glorified pyramid scam... Not exactly. It's just that your first 39% or so went back to corporate Quiznos in food cost, franchise fee and advertising cost. Quote Link to comment Share on other sites More sharing options...
i_am_the_swammi Posted March 1, 2011 Share Posted March 1, 2011 I thought it was odd that Subway was running ads at 9 pm on Feb 28 about how you should get a 5 dollar footlong, any footlong during the month of February. How many footlongs did that ad cost anyway? Not really. Subways collects, in addition to its franchise fee, a sales and marketing fee from its franchisees (usually .25-.50% of revenue) to be used for national and regional advertising promotions. Add all those .25's up from thousands of stores, and its a ton of cash at their disposal. In addition to the promotion itself, much of the prime-time spots are just about top-if-mind awareness....keeping the Subway name in people's heads. That's a plus for the entire organization: generating business for individual shops, attracting new potential franchisee and luring hungry customers. BP, if you have any questions on franchises, let me know....I was the Director of Franchise Sales for Hawthorn Suites Hotels for 6 years (95-00), so I know quite a bit about the advantages and pitfalls of owning a franchise. Quote Link to comment Share on other sites More sharing options...
bpwallace49 Posted March 1, 2011 Author Share Posted March 1, 2011 Not really. Subways collects, in addition to its franchise fee, a sales and marketing fee from its franchisees (usually .25-.50% of revenue) to be used for national and regional advertising promotions. Add all those .25's up from thousands of stores, and its a ton of cash at their disposal. In addition to the promotion itself, much of the prime-time spots are just about top-if-mind awareness....keeping the Subway name in people's heads. That's a plus for the entire organization: generating business for individual shops, attracting new potential franchisee and luring hungry customers. BP, if you have any questions on franchises, let me know....I was the Director of Franchise Sales for Hawthorn Suites Hotels for 6 years (95-00), so I know quite a bit about the advantages and pitfalls of owning a franchise. I will shoot you a PM swammi, thanks! I have the financing, exact business and even location picke dout, it is just asking around if anyone has had "unforseen" circumstances arise if they owned a franchise before. and about Quiznos. mY Club president started quiznos with his brother, and have been starting up other chains (like Smash B rothers) becasue Quiznos looks like a dying albatross lately. Funny stuff . . . Quote Link to comment Share on other sites More sharing options...
Square Posted March 1, 2011 Share Posted March 1, 2011 and about Quiznos. mY Club president started quiznos with his brother, and have been starting up other chains (like Smash B rothers) becasue Quiznos looks like a dying albatross lately. Funny stuff . . . Kind of sucks because I actually liked Quiznos every now and then and the one around me closed up. Quote Link to comment Share on other sites More sharing options...
Caveman_Nick Posted March 1, 2011 Share Posted March 1, 2011 Kind of sucks because I actually liked Quiznos every now and then and the one around me closed up. I'm guessing they did not do a good enough job ensuring the profitability of their franchises, and things have gone bad for them. You need the franchises to support the infrastructure needed to support the franchises. If that makes sense. Quote Link to comment Share on other sites More sharing options...
Cunning Runt Posted March 1, 2011 Share Posted March 1, 2011 I don't know about other food service franchises, but Subway is a fantastic investment. I believe the initial cost to purchase a Subway franchise is $15k, due at signing of the agreement. Your initial investment will run between $80k - $240k depending on location, building and zoning codes etc etc etc. I also believe there is a is an annual royalty fee of eight percent, which is figured on each store’s gross sales volume. It's true. I worked with a Subway Development Agent out of college and did franchise sales and sitee selection/lease negotiation for 8 yrs. At that time, the first francise was $10k and subsequent ones were only $1k. Quote Link to comment Share on other sites More sharing options...
bpwallace49 Posted March 1, 2011 Author Share Posted March 1, 2011 I'm guessing they did not do a good enough job ensuring the profitability of their franchises, and things have gone bad for them. You need the franchises to support the infrastructure needed to support the franchises. If that makes sense. Actually a LOT of it has to do with the expansion of Subway everywhere, coupled with other upstarts like Jersey Mikes, Jimmy Johns, ETC. Add in a disasterous media campaign with those gawdawful singing cats, and they have gotten HAMMERED in the last few years. Their price points are higher than Subway and you get less food. The overall concept is failing in the face of increased competition, and the "toasted subs" isnt enough to differentiate the chains. Look for a smash burger near you soon . . . . Quote Link to comment Share on other sites More sharing options...
Chief Dick Posted March 1, 2011 Share Posted March 1, 2011 Judging by your Mystery Huddler photos I'm guessing you are looking at a hot dog franchise? Quote Link to comment Share on other sites More sharing options...
TimC Posted March 1, 2011 Share Posted March 1, 2011 I have the perfect location of a Chik-Fil-A around here. You could not lose money if you tried. I'll bet a Chik-Fil-A costs a pretty penny though. Quote Link to comment Share on other sites More sharing options...
bpwallace49 Posted March 1, 2011 Author Share Posted March 1, 2011 I have the perfect location of a Chik-Fil-A around here. You could not lose money if you tried. I'll bet a Chik-Fil-A costs a pretty penny though. How Much Does a Chick-Fil-A Franchise Cost?Friday May 22, 2009 Chick-Fil-A Franchise Find out about owning a franchise. Get the info you need fast & free! Got $5000 laying around? Then you can forget the burgers and throw your money down on a license to operate a Chick-Fil-A. But get in line. Chick-Fil-A only gives about 75 of the 10,000 applicants per year the right to operate a franchise, and along with this right comes strict stipulations. Your store will be closed on Sunday to give employees a day off to rest or worship. You will not own the property upon which the store sits, nor will you be allowed to select your location. Investment information is conspicuously missing from the company’s website as well as the net, but good credit with a proven business track record will get you considered for a franchise. You will have to surender a whopping 50% of the monthly net profits. If you looking for a low cost franchise and low on cash, maybe Chick-Fil-A is the way to go. As long as you don't mind giving away 50% of the net profits (income after expenses.) You may feel more like a Chick-Fil-A employee, but you are only risking the $5000 franchise fee Holy crap . . . 50%????? Quote Link to comment Share on other sites More sharing options...
TimC Posted March 1, 2011 Share Posted March 1, 2011 Holy crap . . . 50%????? 50% is pretty high, but I don't mind the restrictions too much. It keeps the product from becoming over-saturated and worthless (like said Subway). Hmmm, $5k is pretty cheap. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted March 1, 2011 Share Posted March 1, 2011 Kind of sucks because I actually liked Quiznos every now and then and the one around me closed up. Yep, love me some Quizno's. We used to have three here and I'd eat there about once a week. Now only one is left, and it is on the opposite side of town. I probably eat there once every two or three months. Quote Link to comment Share on other sites More sharing options...
bpwallace49 Posted March 1, 2011 Author Share Posted March 1, 2011 50% is pretty high, but I don't mind the restrictions too much. It keeps the product from becoming over-saturated and worthless (like said Subway). Hmmm, $5k is pretty cheap. You also cant select yur location or own the land it is on. Sounds pretty darn restrictive to me. . . . Around Chicago land, burgers are oversaturating the market. Meatheads, Five Guys, Smash Brothers, etc are all new upstarts that are competing with the usual McDonalds Burgers king, wendys in the area. When the Chick Fil A opened, they had lines for weeks. But considering the upfront fees involved ina franchise outside the original fee, the payback would have to be al least 2-3 years minimum with a 50% gross agreement. Quote Link to comment Share on other sites More sharing options...
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