looking into the possibility of buying an existing franchise

[bhenken08]

Re: looking into the possibility of buying an existing franc

royster13:

It will cost so much money to move the equipment that it might not be worth it…So you need to consider the removal costs and fit-up costs at a new location…If it is a decent location and lease and a “fire sale” price it might be better to turn the store around, ride out this short period of economic uncertainty and then sell it and use the proceeds to start at a different location…

to move the equipment itself wont be expensive at all. re installing it is another story (Just one big u hal)

 

[system]

Re: looking into the possibility of buying an existing franc

bhenken08:

the bad things about it

1. Employees s===… i have called before and they did not want to deliver. even though the did a week before it was only 5 miles.

“Only” 5 miles! What is the delivery charge there? How much it do the drivers get? Fair compensation for a run like that (10 miles round trip would be 55 cents x 10 or $5.50.) If I was only getting a buck per run, I wouldn’t be excited about delivering that far either.

It’s hard to get quality employees at minimum wage or less. Just like equipment and ingredients, you get what you pay for.

 

[paul7979]

Re: looking into the possibility of buying an existing franc

“Only” 5 miles! What is the delivery charge there? How much it do the drivers get? Fair compensation for a run like that (10 miles round trip would be 55 cents x 10 or $5.50.) If I was only getting a buck per run, I wouldn’t be excited about delivering that far either.

It really is ALL about you gregster isn’t it.

 

[bhenken08]

Re: looking into the possibility of buying an existing franc
gregster:

bhenken08:

the bad things about it

1. Employees s===… i have called before and they did not want to deliver. even though the did a week before it was only 5 miles.

“Only” 5 miles! What is the delivery charge there? How much it do the drivers get? Fair compensation for a run like that (10 miles round trip would be 55 cents x 10 or $5.50.) If I was only getting a buck per run, I wouldn’t be excited about delivering that far either.

It’s hard to get quality employees at minimum wage or less. Just like equipment and ingredients, you get what you pay for.

well min wage is around 8.00 an hour and i always tip around $3.00. if i already hadn’t had 3 beers i would of drove their myself

 

[bhenken08]

Re: looking into the possibility of buying an existing franc

so some of you aren’t sure this is a good idea for me to invest in i can understand that.

but essentially i get to own and experiment with marketing and all aspects (don’t get me wrong i know how to run a shop)
and own all of the equipment for 12K

I don’t want to own a franchise forever, This provides me with the opportunity to buy equipment and a business.
that way when i do decide to open my own independent shop i don’t fall on my face. ( pretty sure i wouldn’t i have 2 years experience as a GM of a chain store)

How much did you guys spend on all of your equipment (small wares, pie board, oven, pos, mixer, walk in etc. more than 12K?

 

[bodegahwy]

Re: looking into the possibility of buying an existing franc

Just a walk-in will cost you 12K.

I know you probably saw my post on your other thread, but you really need to look into the franchise rights. A franchise can NOT be picked up and moved without company approval… not even across the street let alone 90 miles.

The local guy across town almost certainly has the rights to expand and you need to find out from the company what is available for territory.

Furthermore, before you sign ANYHTING and after you find out if the location can be moved at all, yoou need to find out if the franchise organization will approve YOU as an owner and what hoops you have to jump through.

 

[bhenken08]

Re: looking into the possibility of buying an existing franc

bodegahwy:

Just a walk-in will cost you 12K.

I know you probably saw my post on your other thread, but you really need to look into the franchise rights. A franchise can NOT be picked up and moved without company approval… not even across the street let alone 90 miles.

The local guy across town almost certainly has the rights to expand and you need to find out from the company what is available for territory.

Furthermore, before you sign ANYHTING and after you find out if the location can be moved at all, yoou need to find out if the franchise organization will approve YOU as an owner and what hoops you have to jump through.

The CEO told me we can move wherever i want to. but what he says and what the agreement says are two totally different things i understand that. And i will understand if i cant move it in to my city. although i had a very good chat to day with the owner of the store that’s already here in town. he said will support the move as long as I’m not to close. and i help him with a more powerful marketing campaign Like doing a full page add in the phone book instead of a 1/2 page and combining with him on door hangers to get a better deal.

 

[Wizzle_Wassell]

Re: looking into the possibility of buying an existing franc

bhenken08:

i help him with a more powerful marketing campaign Like doing a full page add in the phone book instead of a 1/2 page

see, thats where I’m going wrong - I need a bigger advert in the phone book :roll:

 

[bhenken08]

Re: looking into the possibility of buying an existing franc
Wizzle Wassell:

bhenken08:

i help him with a more powerful marketing campaign Like doing a full page add in the phone book instead of a 1/2 page

see, thats where I’m going wrong - I need a bigger advert in the phone book :roll:

lol i personally don’t believe in the huge phone book adds but if that’s what i have to do so be it

 

[bhenken08]

Re: looking into the possibility of buying an existing franc

OK so i finally got some info on the restaurant over the phone i get to see the lease and all of the numbers on Wednesday.

so here it goes

shop doing 12-15k a month average

4k food per month
700 week labor
1400 rent
every 4 months 350 extra for maintenance
Gas 180
electric 300
phone 128
insurance 108 per month plus 25 for each driver
Royalty 250

oh and he owes the building owner 5k for upgrades

so i have to pay him 5k for equipment

and the building owner 5k

 

[Charles]

Re: looking into the possibility of buying an existing franc

I am leaning towards
http://www.wpclipart.com/small_icons/misc_7/.cache/thumbs_down.png

First off, at $15K a month, that is only $180K a year (on the high side of his “estimate”… low side is $144K). How much do you plan to pay yourself from this business? That is a really, really low earning store.

What is the market like? Is this guy just not doing a good job? How does it compare to other franchisees in both numbers and market?

How much obligation would you be taking on? Will you be contractually stuck with them for a long period?

I guess unless I figured that this business was really just poorly run and was a diamond in the rough, I would not want to take on someone else’s headache. Unless those figures can be improved upon substantially, you may well be working for less than minimum wage or for nothing… owners get paid last contrary to a minority opinion that we are getting rich off this risk.

Good luck/

 

[bhenken08]

Re: looking into the possibility of buying an existing franc

Charles:

I am leaning towards
http://www.wpclipart.com/small_icons/misc_7/.cache/thumbs_down.png

First off, at $15K a month, that is only $180K a year (on the high side of his “estimate”… low side is $144K). How much do you plan to pay yourself from this business? That is a really, really low earning store.

What is the market like? Is this guy just not doing a good job? How does it compare to other franchisees in both numbers and market?

How much obligation would you be taking on? Will you be contractually stuck with them for a long period?

I guess unless I figured that this business was really just poorly run and was a diamond in the rough, I would not want to take on someone else’s headache. Unless those figures can be improved upon substantially, you may well be working for less than minimum wage or for nothing… owners get paid last contrary to a minority opinion that we are getting rich off this risk.

Good luck/

this guy works at a big plant in this area and is never at the shop his x used to run it. now he just wants out i plan on moving it and giving it a fresh start.

plus in a couple of years i may drop the franchise and just use the equipment in my own brand shop. and i figure if i can make a little along the way and get all of the equipment for 10k why not. were talking about every thing you would need to open a place.

 

[Charles]

Re: looking into the possibility of buying an existing franc

bhenken08:

plus in a couple of years i may drop the franchise and just use the equipment in my own brand shop. and i figure if i can make a little along the way and get all of the equipment for 10k why not. were talking about every thing you would need to open a place.

Well, be sure to figure in all the uncompensated hours you will put in towards that cost. Also, if you proceed, make sure you pass it through an attorney and have a contract. You need to be very, very careful you are not buying some debts you don’t know about or that the franchisor has a non-compete preventing you from opening your own store if you leave them.

I am not trying to discourage you. Just want to make sure you don’t let exuberance obscure prudence.

 

[Wizzle_Wassell]

Re: looking into the possibility of buying an existing franc

bhenken08:

plus in a couple of years i may drop the franchise and just use the equipment in my own brand shop

You would be entering into a franchise agreement with this company. These agreements are not simply contracts of convenience that you can turn on and off. I really think you ought to look into this in detail before you go any further.

 

[bhenken08]

Re: looking into the possibility of buying an existing franc

so i just got the model number of the oven

its a triple stack
Marshall Ps536gs

whats the value of one of these
it was used and maintained by Costco before this guy bought them

 

[Wizzle_Wassell]

Re: looking into the possibility of buying an existing franc

bhenken08:

Wizzle Wassell:

bhenken08:

i help him with a more powerful marketing campaign Like doing a full page add in the phone book instead of a 1/2 page

see, thats where I’m going wrong - I need a bigger advert in the phone book :roll:

lol i personally don’t believe in the huge phone book adds but if that’s what i have to do so be it

this thread is getting silly now - so why do something you don’t believe in?

This thread is getting very confusing now, sure this shop has a triple stack oven - are you wating to buy equipment, a franchise or what? We appear to be going around in circles (or maybe another shape - I’m not sure).