I think I have found the recipe for success

[trainer4you2]

Wrote awhile back about my pizza place, we did 1.3 million in gross sales last year. I will admit this year is down some but have opened 3 more store and all of these have taken some customers. One we have a partner, it is doing about 50,000 a month, was doing 75,000, cost very little to open, was a CiCi’s that went out of business so bought all equipment and build out was free. I don’t consider this store a success, pay the bills but not much left over. Part could be location and other part is the town was hit hard with job loses.
I decided to license two more stores, I get 4% of sales after taxes plus make the dough etc for this store, make a little on this but not much. This store is doing around 12000 per week but has only been open 3 weeks, it is not in the greatest part of town but is in the center of a residential area. If it averages 45,000 per month I will make around 22 thousand a year. The other store is around 15 miles away in a town of about 15,000. They are averaging 25,000 per week in 3000 sf and a rent of 1800 per month. This owner is already wanting to open another one in a town around 10 miles away, is working on taking over a Godfathers. I could earn as much as 40 thousand a year from this store. Terms on this store are the same as the first. I have been approached by a couple other people to open one in a town around 40 miles away with a large college and over 100,000 people and someone else in a town about 20 miles from us. Maybe one day I will turn this into a franchise. With the licensing agreement I let the stores sell products we don’t, sandwiches, pasta etc… but I have the right to change it or allow or not allow them to sell something. I guess the licensing gives the licensor more freedom than a franchise.
My brother runs our store, I use to help but have another business and another job so I only spend about 10 hours a month working with the pizza place. This was an investmet for me and so far I have been happy with the choice I made, I risked my saving of 200,000 to open it but I knew I had a good product and believed in it. If anyone is really interested in opening a store from scratch and might be interested in my concept let me know, who knows maybe I will have these all over the U.S one day LOL I know owning the stores myself and hiring people to run them I would make more money but I do believe that you have to be an owner/operator to make it work. If you know you have money on the line you will do the work necessary to make it work. Anyway if you believe in something work hard, put passion into it and make it the best you can. My goal is to be a one stop pizza shop where you can get any kind of pizza you want, we sell thin and crispy, deep dish and NY stye hand tossed, just added a new sauce for people who don’t like our orginal, luckily our orginal has made us a success. Next is to add some gourmet pizzas for those who like that. My vision is why go to any other pizza place when they can get whatever they want at my pizza place.

 

[Scott_Hack1]

Congrats. Be careful that you don’t spend so much time patting yourself on the back that you forget what your real job is. I also wouldn’t project monthly averages for a store that has only been open for 3 weeks – maybe I’m being negative, but I just consider it realistic.

 

[pizzapirate]

trainer4you2:

With the licensing agreement I let the stores sell products we don’t, sandwiches, pasta etc… but I have the right to change it or allow or not allow them to sell something. I guess the licensing gives the licensor more freedom than a franchise.

Its always been my understanding that if you let something go for a long enough period of time you “cannot” change it. By allowing it you are making it permanent.

trainer4you2:

If you know you have money on the line you will do the work necessary to make it work.

I would not sign up franchises based on that philosophy. The landscape is littered with people who either did not understand what it took or were not willing to put in the time.

 

[CaptSammy]

[quote="pizzapirate I would not sign up franchises based on that philosophy. The landscape is littered with people who either did not understand what it took or were not willing to put in the time.[/quote]

I like to call it the restaurant grave yard. Everybody wants to own one until they get one

 

[trainer4you2]

I have tried to talk everyone who wants to open one out of it. I have warned them all about the hours and stresses of operating a pizza shop, mostly employees. My brother and me regreated opening the pizza shop in the beginning, working until 1 in the morning trying to keep up on dough. Probably caused my first divorce, at least partly. Now things do run smoother and my brother runs the shop, I can finally only spend about 10 hours a month there, took 3 years but it did happen. I guess we will see what the future holds. Wish us luck LOL

 

[Wizzle_Wassell]

trainer4you2:

If you know you have money on the line you will do the work necessary to make it work.

So what about all the businesses that fail? - what are you saying? that they didn’t have money on the line? come on get real!

A recent post about someone going into a franchise which hasn’t supported them: http://www.pmq.com/tt/viewtopic.php?t=7812

Your approach (whilst I accept is not a franchise) appears similar. Its hard enough to control a single business (even more so with multiple outlets) I can’t image this issue you could have controlling a business which is only licensing you’re name if something goes wrong.

 

[pizzachop]

Two years ago, when I investigated (and ultimately bit the bullet) on franchising, I explored to an extent the licensing angle and was informed by a franchising expert (admittedly probably a bit biased) as to the risk of “operating a franchise” without “being a franchise” (including Franchise Disclosure Document & Franchise Agreement).

Evidentally, there are fines associated with it. Requiring a licensing fee, an ongoing royalty fee, and maintaining control over the menu/products offered sounds pretty much like a franchise without the expensive investment required by franchising.

Franchise law is governed by the Federal Trade Commission and is what legally protects the “franchisor” as well as the “franchisee”.

Working with family is one thing but attracting outside investors without the proper legal framework in place might leave you legally exposed should an “investor” become “disenchanted” with your “support”.

I would consult an attorney who is familiar with licensing/franchising just to be on the safe side. If you truly have a “winning formula”, franchising might make it even more attractive to investors as well as protecting your investment.