Opportunity

Pizza Shop Talk The Think Tank
1

Hey…

I have posted here on and off for quite some time but never got around to registering, but this gave me a good reason.

I have been searching business listings and came across a potential location and I am sure you guys will agree it is a PASS but I still wanted opinions.

The price of the store is 25k or so including lease deposit. It currently is a closed location from a marginal franchise. I know little about the product mainly because I have never sought it out or wanted to try it (pretty telling).

I guess the store had been there 4-5 yrs and during good times did 350k in sales but after being run absentee the sales went to pot and they had to close doors.

The business could be resumed as the current franchise or opt out and open somthing different.

After viewing the franchise site, it doesnt look bad product wise but it reminded me of 10 other small to mid chains out there and it wasnt eye catching.

The location is in a upper class area where price point might not be a huge issue, but then the issue also will be with labor and rent.

Rent is 3500 a month, which if calculating off best case net sales that is over 10% rent…add franchise take and likely issues with employees I dont see this ever being a 500k-1M store, thus the best profit wise might be buying a job…

As far as demographics, there isnt much competition around but based on how the town is situated this location doesnt have more than 20k people within a 5-7 mile radius…

I have many years of experience but I dont have a process or business model created (employee handbook, recipes, processes etc) so I dont know how practical it is for me to easily create a recipe and put together an operation, thus my view of going with a franchise as my first lean.

Any thoughts? If the location were better I would be more inclined but even with a cheap entry price point I dont know if I should even give it a shot…

2

No comments???

:cry:

3

I think you already know the answer.

The rent is high for those sales.

As for a franchise, I don’t know much about it because we are an independent but 350,000 doesn’t go far.

I suggest if this is something you are PASSIONATE about then spend some time getting things together. Asking yourself what kind of place you want to be, what makes you different than all the other places around, what kind of menu and services do you want to have? What kind of financial situation are you in? How much do you have to put into it, how much do you have to carry you? What kind of lifestyle do you have now…do you want to give that up? (Time and financially)

The location problem is easy compared to the other things that go into the biz. (Not to minimize the difficulty of finding a great location but I think there are more important things to figure out first)

The ONLY thing that keeps me in business some days is I absolutely love it. I love the chaos, I love my product, I love the good and bad times. Some days I want to run and get out but deep down I have a PASSION for this.

By your post I didn’t “hear” that from you, I could be wrong but that was my take.

I don’t think the pizza biz is for someone who want to dabble in the biz. You know what they say… You are what you eat and I am a pizza fanatic. I love every aspect of the product, the people the whole pie. :lol:

Closing the doors has NEVER been an option for more than a couple of thoughts. They are going to bury me before I give in!

If I sound like a nut…this biz may not be for you!?

:roll:

4

350k is something you’d have to work UP TO. A franchise should bring in more sales immediately due to brand recognition. 350k can pay you enough to draw a meager-decent salary (depending on what is meager and what is decent). $3500 a month for a 350k place is too much. $25k for the equipment is too much. The doors are closed. The previous owner is on the hook for $3500/month to store the equipment. He might get $25k at auction, but when the auctioneer takes his 30-40% cut, that’s the end of that.

5

Keep in mind that rent should be no more then 10% of sales. If the store was doing 350 K … then that would be about then your rent should be no more then $2900.

If the store was doing $9000 a week, then the rent would be inline.

6

Hello pizza,Kris has said a mouthful and very true.I also think that 3500.00 a month is outragious especially w/ only 20,000 people in 5 mile area.That really isn’t a lot of people when your trying to make those numbers.And then your thinking of giving another % of your money to a franchise?All I can say is don’t do it.

                                    Good luck,Niccademo