Anyone here start/buy a franchise? Pros/cons

[poncho]

Funny…putting in the effort seems to work regardless of the field.

Amen

 

[NIKAL]

We have some close family friends and they own several Little Caesar’s restaurants. They have been very successful, but they also put in allot of work. If someone thinks owning a franchise and having a manager run it for you, you’re wrong. They have purchased a few stores from people who go in and think if they hire a few good people to run it, they can just sit back and collect the checks.

 

[lbhsbz]

Amen

When I was a small child, my grandmother gave me a “gift” one day. It was 2 blocks of wood screwed to a hinge. On the top it said “the secret to success”. When you opened it, it said “WORK”. Now…if she was still alive I’d call bullshit and ask her why it didn’t say “buy NVDA”…but I digress…

There are few easy roads to whatever you view as success, but multiple paths. I’m not there yet, but I think I’ve found a road that leads me in the right direction. Gotta work at it.

 

[PlumLoco]

My sister has worked as a product rep for Vick's cold & flu company until they were bought out by P&G. After 20 yrs of being the supervisor for an are that covered half of CA and AZ she and her husband bought into a snow cone deal (Rita's Ices). They were tight with the district manager and got an awesome site near Azusa Pacific U and some local schools.
Knowing little they were successful enough that when a new store in OC was floundering, corporate asked them to take it over. So now 2 stores in less than 20 months. My BIL was putting in 70-80 hour weeks for a long time at just the one store. After their near fatal accident I think they sold one or maybe both.

Home - Rita's Ice

Rita's Italian Ice is a restaurant chain, based in Bensalem, Pennsylvania, which sells mainly Italian ice, frozen custard, and specialty creations.

www.ritasice.com

 

[OldSchoolBoats]

Curious as to what the contract says you'll get from them in return for what you pay them? I'd figure if they haven't done shit, they're in breach of contract

Nothing in writing but we were sold a ration of shit during discovery like pre negotiated pricing with insurance carriers, insurance leads, proprietary software.....etc.

Basically I got the right to market their name and logo, an equipment list and a marketing plan that was nothing but them telling me to hire a Business Development Manager to be in the field. We tried that and he basically collected a $5k/month check from me for 90 days. They even admit that their "marketing plan" doesn't guarantee any ROI in any specific amount of time.

On our own we have researched and joined several contractor networks for water mitigation and mold claims, on top of obtaining several IICRC certifications, most importantly our Applied Structural Drying, Applied Microbial Remedation Technician and lead certification.

There is no leadership at the top (non existent CEO). All corporate hires are their friends / family, no one with any restoration experience.

It is what it is. I now know more about the business than most of corporate does so we are just going to keep building. We did just under $350k in our first full year, which is pretty damn good I guess.....lol.

Already got an exit plan set up if we get over it, as their NCA agreement won't hold in California. New LLC, name, logo...etc. already done.

 

[JFMFG]

They just put a Dutch bros in Norco in possibly the worst place they could have picked. Going to be interesting. I don’t even go into that strip because of how tight it is. Not truck friendly

It’s freaking horrible.

 

[PlumLoco]

Norco just being Norco I guess.

 

[Mini Kat]

I started my own Chem- Dry franchise from scratch. I learn the business from my sister and brother-in-law. My sister and my brother-in-law learn the business from his brother up in Santa Clarita. My sister and brother-in-law bought a existing franchise called South Coast Chem-Dry and it is still doing great. What attracted me to those franchises is that? You did not have to pay them any percentage or royalties from your work. All you have to do is. All your supplies come directly from them and you have to clean according to their standards. You can work the business directly from your home so you don't have any overhead other than a small flat fee that you pay them once a month.
They only allow one franchise per 60,000 population. I sold my franchise outright gave them rights to business name Transfer franchise over to them to take it over and my phone numbers back in 2005 February. They got no equipment only cleaning products on hand. This is what I started with this business card is see the original and it only grew like a giant from there.

 

[Mandelon]

If you aren't there daily, you better have a hell of a manager because just a couple shitty employees will steal you blind.

Hell, even if you are there they can still steal. Caught my office manager and superintendent paying their personal bills with my company funds.
Ya think you can trust a little old lady to do your books...nope! The lure of easy money is hard to ignore.

You many think owning your own business is getting out of the rat race, but it just puts you out there with more rats.
I have had my own business since 1995. It has been great, and its been awful. It is not easy. Many times all the workers get paid and there is nothing left for you. Then payroll tax is due. And someone gets injured at work but not due to work and bam your workers comp goes up by $1600 a month.

Regulations getting worse by the year. Hard to find good workers. Customer won't pay for whatever reason. I don't mean to sound negative but it is a challenge every day.

I have some friends that own a couple zip codes of BrightStar Care. An in home health care biz. They are killing it. Apparently all you have to do is stock up on Filipino gals and start printing money. https://www.brightstarfranchising.com/home-care/#~1D299c7 LOL They just built a custom home in Lake Las Vegas.

 

[Laguna]

Dutchbros would be the move. As long as you are not opening in the central valley in CA. Whoever opens one in Murrieta or Temecula will be killing it. The elsinore one is nuts to butts at all times.

They are putting one in at Clinton Keith and 15 frwy across from new Chipotle.

 

[Cooter01]

The more requirements for the franchise usually leads to better profits from my research. Something say 20-50k will be a small profit.

 

[JL95]

They are putting one in at Clinton Keith and 15 frwy across from new Chipotle.

That’s my exit lmao gonna be so fat

 

[Laguna]

That’s my exit lmao gonna be so fat

Whole Foods as well I guess.

 

[terrax2]

I'm not a fan of franchises for many of the reasons already stated. I think you should be looking at buying an existing business, either franchise or stand alone. With $150k out of pocket you can net $200k to $300k yearly after debt service. Especially since you want to move out of CA to ? Location is a major factor for whatever direction you go. The more open you are to location the better odds of finding the right fit for you. Then grow the business, perfect processes and systems, hire management so you are semi-absentee, rinse and repeat. I've heard it said that 90% of new businesses fail, 88% of bought businesses succeed. I can't confirm those numbers but seems reasonable.

 

[dribble]

Good friend was a Snap On guy, he parked his truck at my place while his home was being built. He was in the van at 6am everyday and usually till around 7pm or later at night. Made Hella good money but he put the time in.

I bought a motorcycle lift at a garage sale up the road from me. Guy lived in a 2 million plus house and sold it to
move out to a place on the Sac River with a dock and covered lift. He was a retired Snap On dealer.

 

[poncho]

I bought a motorcycle lift at a garage sale up the road from me. Guy lived in a 2 million plus house and sold it to
move out to a place on the Sac River with a dock and covered lift. He was a retired Snap On dealer.

I haven't known anyone with a tool truck in over 20 years so I have no idea how well they do today, my friend did very well with his.

 

[YeahYeah01]

That's the issue, no provided leads whatsoever. Have never got one job from them. Been building it all myself through my sphere, Google and paid lead services.

No national marketing, nothing. For what I have done since launch out here, we could have easily saved the $300k we have into it + royalties and started our own company from scratch.

Is there anything in these types of contracts that specify that will provide X amount of leads per month?

 

[YeahYeah01]

Nothing in writing but we were sold a ration of shit during discovery like pre negotiated pricing with insurance carriers, insurance leads, proprietary software.....etc.

Basically I got the right to market their name and logo, an equipment list and a marketing plan that was nothing but them telling me to hire a Business Development Manager to be in the field. We tried that and he basically collected a $5k/month check from me for 90 days. They even admit that their "marketing plan" doesn't guarantee any ROI in any specific amount of time.

On our own we have researched and joined several contractor networks for water mitigation and mold claims, on top of obtaining several IICRC certifications, most importantly our Applied Structural Drying, Applied Microbial Remedation Technician and lead certification.

There is no leadership at the top (non existent CEO). All corporate hires are their friends / family, no one with any restoration experience.

It is what it is. I now know more about the business than most of corporate does so we are just going to keep building. We did just under $350k in our first full year, which is pretty damn good I guess.....lol.

Already got an exit plan set up if we get over it, as their NCA agreement won't hold in California. New LLC, name, logo...etc. already done.

I think this one was a hard one for you since you were not in the restoration business from the get go so knowing what was BS and what was real would have been really hard. I just did my ASD class this week and one of the All dry guys from rancho were there and had similar things to say as you. The part that would concern me for your situation under the franchise and having other ALL dry's near you, is that your success could also be there success, if someone has a good experience with your company and word mouth goes out to someone not in you specific zone they would google and get another franchise and you loose the revenue, but I guess that could go both ways with our locations. Also if you end up on a preferred vendor program or tpa you jump through all the hoops under All dry and then youd have to do hem same if you split.

 

[lakemadness]

I bought a Franchise and launched in August 2022. We are a restoration company (Water/Fire/Mold).

If I knew what I know now as to how it would all unfold and how I basically get ZERO help from corporate, I would have just started my own company. We are getting screwed right now with this company, but it's partly my fault for not asking better questions and doing more due diligence.

Feel free to shoot me a call and I can provide you with more insight, as well as what to look for when considering a franchise. I have learned a lot in this process and feel like a franchise system is a great way to go when starting a business, just have to make sure to pick the right one.

Shooting you a PM with my number.

Sorry to hear. That's too bad. Hate to say it, but the value of your operation when you want to sell will also be substantially less because you're a franchise. If you were independent and of size, you could be bought up at a much higher multiple. I have a friend who owns an independent, buyers are pounding on his door. Private equity has been very active in this space and multiples get big. I personally made a run at one last year. They were running about $5mm in revenue and fairly profitable. I couldn't justify their ask price as it wouldn't have adequate cash flow to provide a fair return v risk. Private equity snatched it up and rolled it into their existing and growing system. Can't compete with PE money unless the seller/owner is just 100% against selling to PE.

IMO, some industries make no sense for franchising.

 

[lakemadness]

I own a franchise quick-serve restaurant. The first one I opened returned my investment plus a very handsome return within the first 12 months. We've been open for 11 years and revenue has consistently increased each year. I wish I had 20 of em. I put in about 15 minutes a week after the first few months we were open. Which is why I opened a second one shortly after the first one. That second one was break-even. Sold it to the franchisor at a small loss two years later. Location, location, location. I even thought my second location was better. You never know.

I own other non-franchise businesses, too. Mostly in the commercial property services world. As I mentioned above in another post, in some industries it doesn't make sense for a franchise, IMO. When it doesn't make sense, usually the only one making money is the franchisor and the franchisee really had no business getting into business for themselves.

 

[rivermobster]

I bought a motorcycle lift at a garage sale up the road from me. Guy lived in a 2 million plus house and sold it to
move out to a place on the Sac River with a dock and covered lift. He was a retired Snap On dealer.

Was that Red?

Back in the day, Snap-On dealers had GIGANTIC coverage areas. Now?

No way. They car hardly make a buck with the tiny little areas they give em to service.

Red was FORCED by Snap-On to cut his area in half. So guess what he did?

He gave half to his son!

This was back the early 80's. Aint nobody making Good money at Snap-On anymore.

Last Snap>On guy I was friends with, gave up his truck for a pool cleaning route.

 

[YeahYeah01]

Sorry to hear. That's too bad. Hate to say it, but the value of your operation when you want to sell will also be substantially less because you're a franchise. If you were independent and of size, you could be bought up at a much higher multiple. I have a friend who owns an independent, buyers are pounding on his door. Private equity has been very active in this space and multiples get big. I personally made a run at one last year. They were running about $5mm in revenue and fairly profitable. I couldn't justify their ask price as it wouldn't have adequate cash flow to provide a fair return v risk. Private equity snatched it up and rolled it into their existing and growing system. Can't compete with PE money unless the seller/owner is just 100% against selling to PE.

IMO, some industries make no sense for franchising.

The private equity are was concerning me in the restoration business. I cant help but the the PE firms are linked with the insurance carries.

 

[lakemadness]

The private equity are was concerning me in the restoration business. I cant help but the the PE firms are linked with the insurance carries.

I bet there is some crossover, for sure.

 

[Ace in the Hole]

Saw this on loop net today... The ones out in the area are always dead, bad management currently IMO. Could be a good opportunity for someone who actually knows the business?

https://www.loopnet.com/biz/Business-Opportunity/5-burger-king-franchise-businesses-southwest-region/2217042/

 

[wfowahoo]

I know most Mac Tool dealers in LA,Orange, Inland empire have gross sales over a million. Just you and a truck.No employees. But you have to do 10 hours a day. Do half the time and get half the pay.

 

[rivermobster]

I know most Mac Tool dealers in LA,Orange, Inland empire have gross sales over a million. Just you and a truck.No employees. But you have to do 10 hours a day. Do half the time and get half the pay.

And how much of that is profit the guy gets to keep? After HAVING to purchase the truck and the tools and the insurance AND the fuel?

I don't wanna say no names...

But there is a inmate ,that posts regularly here, that WAS a Mac tool dealer.

He can out himself if he wants to.

 

[Your ad here]

I know most Mac Tool dealers in LA,Orange, Inland empire have gross sales over a million. Just you and a truck.No employees. But you have to do 10 hours a day. Do half the time and get half the pay.

What did they net?

 

[poncho]

And how much of that is profit the guy gets to keep? After HAVING to purchase the truck and the tools and the insurance AND the fuel?

I don't wanna say no names...

But there is a inmate ,that posts regularly here, that WAS a Mac tool dealer.

He can out himself if he wants to.

My friends Sons Best Friend just bought a Mac franchise, really great Kid, been a mechanic at a Benz dealer for a few years. At 25 years old he's a hustler, wishing him all the success in the world.

 

[wfowahoo]

I was a dealer for 35 years. It is amazing how many people dont want to work. It takes two to five years to pay off initial investment, after that home free.

The people I see fail are the ones who got in with mommy and daddy's money. Fail every time The successful ones risk their own money,have a family, and are driven.

Its not only sales but not being afraid to ask for your money. A two year distributor called the other day. He was upset that his 2023 customer losses were over 30 thousand. He forgot his gross sales was over a million. What business only losses 3%

 

[Angler]

Examples would be:

Recharging fire extinguishers once a year became law in the mid eighties.

A typical bill is over 1300 pages. When it passes, their are opportunities galore, for those that are willing to read it in its entirety, then also be able to spot the business opportunities.

Just my 2 cents

Actually, the fire extinguisher only needs an annual inspection (just replace the tag), then recharged every 6 years (most extinguishers).

 

[boatpi]

I’ve never had a franchise, but a few things to think deep about . first of all you do a start up business it’s going to own you close to seven days a week for the first two years.
Add to that the difficulty in locating quality employees and keeping them on your staff.

Secondly, make sure you have a very good accountant and or a CPA on board from almost the beginning. Don’t get behind in any taxes because you could be overwhelmed if your business takes off and that becomes secondary when it should not.

And lastly, I think social media, and the ability to promote online, has really changed the franchise business. you may be able to start as noted in previous comments, your own business, without any franchise. If you have the right product ,in the right location, social media can promote it and make it a bomb on its own.

It took about 17 months for our business to takeoff, primarily through social media and homeowners, realizing they wanted our product as opposed to the focus on selling to contractors. It’s all about the end user.

We were asked many times if we will franchise our operation. we’ve elected not to do that but continue to expand slowly with distributors in various states and we don’t even charge for that. It just has to be the right person.

And in the end, figure out under the best circumstance, how much you could really put in your pocket and as noted above, you may have to have several locations to make really big money. I don’t know where you’re at right now in life but really big money is not 100 or $200,000. It’s 500,000 and above. Welcome to 2024.

 

[rivermobster]

Anyone here start a franchise? What was your experience and what generic field? Curious if the juice is worth the squeeze to get me out of the corporate world and CA.

Any info is appreciated.

I'll tell you what I know, and that is...

I Should have left the car dealership network a Lot sooner than I did.

ANYONE that does honest work, follows through with what they say they are going to do, is Assured of being successful in their own business.

But what is the actual goal in this life? To work forever? Or retire ASAP?

Set your sights on Your goals, put everything else in the rear view mirror and ignore all the noise around you.

The future gets self evident real quick, when you make your Long term goals a priority.

 

[PRORACER7474]

Been a Matco Tools dealer for 38 years, started with 5k to my name and it has worked out really good. I am down to 3 1/2 days a week now after selling off some of my route. Was able to put 2 kids tru college ones a CPA and ones a Lawyer. My wife is wanting to retire and I keep stalling just having to much fun.

 

[CLdrinker]

Buy a Bob Moses Ceramic coating franchise. Seems no shortage of dumb shits paying 5k for a wax job.