The Franchise Owner's most trusted news source


Log In / Register | Aug 20, 2017
  • Dear Franny (Guests Post Questions Here)   1 day 11 hours ago

    Hi Don

    Please don't publish the reason for my question about sourcing FDDs as last time Uri and I surveyed franchisees we got some push back from franchisors. We also (of course) don't want franchisees have a heads up abotutour survey. 

    Thanks.

    and, I ran into Liz last weekend at a law teaching conference. She looks really well and is, by now, in your country somewhere. 

    Best wishes

    Jenny

  • Dear Franny (Guests Post Questions Here)   1 day 11 hours ago

    Hi Don

    How's things over your way?

    Uri Benoliel (Israel) and i are going to do some research on how franchisees rate the chance of their franchisor failing, and if so, how they think it will impact on them. We want to survey franchisees via their emails and therin lies outrcurrent challenge.  

    Are you able to give me any help with sourcing free FDDs? I can access the Minnesota ones easily enough but can't get a reliable link to Wisconsin. The Californian ones don't seem to list current franchisees' email addresses, just their phone numbers - not much use for research f they are on a 'do not call' registry.

    I've looked at the links you posted on BMM in 2007 but they don't seem to work for me now. Thanks for any help you can provide. The research should be very revealing.

    On another matter, I've just (with 2 friends) signed a book contract to write about all the law that affects franchising in Australia - quite a big project. Our completion date is Sept next year.

    Best wishes

    Jenny

     

  • Franchise Horror Stories   2 days 39 min ago

    Awesome blog. I enjoyed reading your articles. This is truly a great read for me. I have bookmarked it and I am looking forward to reading new articles. Keep up the good work!
    translate

  • Dear Franny (Guests Post Questions Here)   2 days 15 hours ago

    is private eclub another boris bugarski entity?

  • The UPS Store, Tales of Gore   3 days 20 hours ago

    Its true. Look into history of this frinchise.

  • Franchise Horror Stories   3 days 22 hours ago

    WOW~ Amazing! Agree with you. My dear friend :)

  • The UPS Store, Tales of Gore   1 week 4 days ago

    I'll revise my comment... I'm a customer now using my third closest UPS store, as the two that were closer to me both went out of business in the last 5 years.

  • The UPS Store, Tales of Gore   1 week 5 days ago

    I can tell you that in the northern suburbs of Detroit all but one of the UPS Stores went out of business.

  • MAACO   1 week 5 days ago

    There is a graph at the bottom of the page linked below quoting source "Maaco disclosure document 2016". If you follow their math 23% over 3 years. So every 7 years the bottom 250 churn top 200 remain. Of course this is rough because a few of the top 200 flip too. It means they sell a lot of franchises with no overall growth.

    At one time they claimed "800 franchisees" because if you are married they make you suck your spouse into the agreement. 400 franchises = spouse + spouse = 800 franchisees. pretty slick right?

    http://www.unhappyfranchisee.com/uh-oh-bullied-maaco/

  • MAACO   1 week 5 days ago

    Good note that gives color to the numbers.

    How much are the reported number of franchise and franchise churn numbers?

  • MAACO   1 week 6 days ago

    What is the FDD figure?

    The FDD and its various categories in Item 20 account for the change in ownership, although the general public may not be able to see it. Even if Maaco is inaccurate in their government filings about the changes in location ownership, it's a better place to start than the nice round number that you've seemed to pull out of thin air -- the bottom 250. What are the reported numbers?

    From there we can then fine tune it to see if there is a fudge factor. But we need the official numbers first. What are they?

  • MAACO   2 weeks 2 days ago

    The simple method would be, if Maaco provided accurate information. How many franchises have you sold and resold this year? Since they are stagnant, and have been for so many years, the churn rate is every franchise sold each year.

  • MAACO   2 weeks 3 days ago

    The problem with trying to extrapolate anything from the FDD is, as with anything this Franchisor does, they are experts at manipulating the data in their favor.

    When you try to derive their churn rate you have to dig deeper than you are able from what they provide.

    First big problem is they reuse center numbers. What this means is you can not tell how many times a location has churned over. For example they may have a shop assigned unit M0078. Looks like the shop has been in business forever, number 78, well that shop may have turned over 10 times. Looks historic and successful from their disclosure.

    Second big problem is they do not have to include earning for any shops that do not report 2 weeks or more of earnings during the year. Generally shops do not report earnings because they can not afford to pay the royalties. So the data you receive in the FDD is very skewed. The bottom 100 shops or so are not included.

    Yes, they have 100-200 shops that struggle and have stayed in business. The reality is the bottom 250 are the constant churners, whether resale, new and failed, walk away, etc.

  • MAACO   2 weeks 3 days ago

    "All they do is churn through franchisees."

    What is Maaco's franchise churn rate, or franchise unit turnover rate, as calculated by their latest Franchise Disclosure Document?

    I agree with you. This brand looks like a zombie brand -- i.e. stagnation and no growth. Evidence of a zombie brand would be big discounts in store resale prices. I would imagine that Maaco owners are having a tough time selling their old stores at a decent price.

  • MAACO   2 weeks 4 days ago

    Just a side note. They do not have unit growth in the past three years as reported. The additional units are what Maaco calls "satellite stores". Since so many of their shops do not draw enough business to make a Maaco shop viable, they have 30+/- stand alone sales offices that are not shops but are sales kiosks. An ancillary sales office in a strip mall etc. trying to funnel customers to a shop. These satellites are included in the statistics as additional locations. Most of these additional sales offices do not generate enough additional business to the failing shop they are meant to support, and do not justify the additional rent, staff cost, etc.. Just an additional expense to the Maaco franchisee, additional revenue to Maaco Corp. and a way to pad their falling shop numbers.

  • MAACO   2 weeks 4 days ago

    Check the bar graph from this Entrepreneur ranking.

    https://www.entrepreneur.com/franchises/maacofranchisinginc/282545

    Clearly shows how stagnant they have been for at least the last ten years. Reality is even longer. All they do is churn through franchisees. No growth, just need a steady stream of new owners to fleece and Corporate stays in business. They are losing franchisees in Canada and have no Company owned shops.

  • Liberty Tax   2 weeks 5 days ago

    You're not accurate in this statement. They MAY not be enforceable. It is completely dependent on which state you live in and the actual non-compete. There is no blanket statement to say whether they are enforceable or not.

  • MAACO   2 weeks 6 days ago

    Could you call me to talk about these maaco franchises. I've read all the negative comments about this franchise but would like to talk with a previous owner. My number is 201-468-9218. Text if you can also.
    Thanks

  • MAACO   3 weeks 52 min ago

    I finally was able to sell my Maaco and get out after nine years of losing big money. A company is buying up Maacos for dimes on the dollar because so many are in really bad financial shape. I have never made a penny in nine years of ownership. I had to turn mine over to my son and go back to work full time just to keep pumping more money into it. When I started my Maaco I had five house, two of them fully paid off, A retirement plan, and three 401Ks. I also had about $350,000 in the bank.
    Now after nine years I still have the five houses (I couldn't sell because of the liens for the SBA loan) but they all have 80%+ mortgages on them, my bank account is zero and all but one of my 401Ks are gone. The one 401K I still have is from a job I took in 2011, and I have had to hit it several times too,
    I now am finally free of the Maaco nightmare but as a parting gift I now have $80,000 in credit card debt to pay off, all went to Maaco. So now that I can sell my houses I am doing so and even after selling all of them, and using the proceeds to pay off Maaco credit card debt, I will still have about $20K in CC debt.
    So anyone who is even remotely considering a Maaco as an individual owner should first, get a psychiatric evaluation. If you pass that then you need to be 100% committed to losing everything you have ever worked for and contemplating suicide and or bankruptcy many times.
    Oh and corporate cannot care less if you are making or losing money. You pay your 8% franchise fee no matter what. They absolutely will not even reduce this by even a dollar to help you out.

  • Jazzercise Franchise????   3 weeks 5 days ago

    As a brand new, fresh from audition franchisee......some of these commments make no sense to me. I messed up in my audition and still made it. Every single person in my group made it (20 of us...)

  • Dear Franny (Guests Post Questions Here)   6 weeks 3 days ago

    There is one store still open from that time period in North Ogden, Ut. I believe that she also works for the corporate Real Deals office. Other than that, you are right!!

  • Dear Franny (Guests Post Questions Here)   6 weeks 3 days ago

    I just read an article of a 'near retirement' couple who are opening a Real Deals in a nearby city. I am sickened to read about the huge remodel that they are planning and the associated costs. (more than 1/2 million). They will then pay for the franchise, their opening inventory, displays, pos, etc, etc, etc. I am horrified! I want to reach out to them and tell them to run. Their nest egg is essentially down the toilet! They will have a huge grand opening, things will look great. Then, they will see that with the low margins and lower buying power of Real Deals that they will not be able to actually show a profit. They will ask to change margins, or market differently, or buy items that would appeal more for this region. They will be politely turned down. They will continue to followup pleading their case and then they will be told that they are not team players, and that they need to just follow the system. Meanwhile they will continue having big days selling, but not quite big enough given their poor margin. At the end of the year the accountant will tell them that he will list the business as a 'hobby' given its low actual income.
    It would be a great side business if you have VERY low overhead and and a small loan at the bank. A half million dollars? Forget about it!!

  • Does anyone have any information on Environmental Waste Solutions Franchises?   7 weeks 19 hours ago

    The biggest waste is the money you waste on this bullshit company and nobody's found a solution for Darwin Williams' years of ripping people off.

  • Coffee News   7 weeks 2 days ago

    I just want to say, I'm currently doing this NOW.

    The city population is about 100K in the place I'm trying. 1400 business JUST IN THE CHAMBER.

    I actually went full color. The paper is brochure quality, it looks awesome. The logo is a good representation of the community.

    I have a website, joined the chamber, had all marketing material done locally, etc. It's extremely eye catching. I write the content. I do that layout (placing ads/text) BUT DO NOT DO THE GRAPHIC AD DESIGN. I charge a small ad-design fee ($20) for graphic ad design and that goes to graphic designer (I have a few different ones that freelance per project).

    I estimated original start up under 2K. I exceeded that because I got website, cards, brochure, etc done local (more expensive than sourcing it out online). $2500 is a good figure. I purchased 1000 promo copies of the paper (had mock ads) and 1000 brochures/cards. I plan to print monthly (10K copies but will distribute them out weekly to ensure stands are always full). My breakeven monthly, will be 12-13 ads per monthly issue.

    Everyone is blown away by the product, they love it EXCEPT....

    I thought all these businesses would advertise. You have shopping centers opening everywhere here with businesses. This is the problem:

    When I went to the more upscale parts of town (that obviously had the budget), that were opening in these new fancy shopping centers, I couldn't get past gate keepers. Receptionists, assistants, front desk people, their job is to keep people like me away from business owners.

    Your constantly referred to their e-mail. I would e-mail later that evening, and followup a few days later, never got 1 response (after 40 e-mails and no response I had to stop doing that, waste of time).

    I walked into 20 (no exaggeration) on first day and never got to speak to one decision maker.

    I said, OK I will go to the other parts of town where I know if I walk into "Tony's Auto Repair," I can speak to Tony. The "Tony's" in town can never make a decision. I have people telling me, despite introducing themselves as "owner" they have to speak with a spouse. I'm constantly told to come back later in the week. I have yet to have someone say, "Wow, this is great, lets do it." Maybe I'm panicking because it's 3 days into sales, 60 businesses and no one is willing to buy.

    I had one ad sold, I thought I had broke the loser streak. I call today to let him know I was coming in, he literally stated, "I decided I don't want to do it. I want to save the money." This is coming from a real estate agent backed behind a big brand, that is spending close to $2K in rent.

    To advertise in my paper, I'm only asking a bit more than $100 for the month. Yet I have owners talking about budget. Prices are transparent, not hidden. Nothing is complicated, no contracts, no tie-ins, I'm going straight per month pricing.

    I try not to get jaded, but it's just disgusting to me. I can walk into a grocery store and spend $50 on a few bags of groceries. The advertisement price of my paper is the price I pay for my cell phone per month. Business owners are not looking at advertisement as: I am the dog groomer, if 2 people come in off this ad, I've made my money back.

    I guess my job is to sell them this idea. However, I priced it low so I wouldn't be dealing with this. My family owned small businesses, we always looked at advertisement as how many customers to get ROI.

    I've been on the side to who I'm selling too, so I thought this would be pretty easy. I have a business degree. I have years experience in customer service (NOT SALES). I always dress professionally. I try to find out what my business owners are trying to achieve (what product, what service, do they want to push).

    It's HARD MANNNN. Do not attempt this if you cannot sell. I'm not at the point that I may have to hire someone to help me sell the ad space which will be taking more $$ out of pocket. I'm getting more organized versus driving around and stopping in. I'm planning sales routes using an app for my stops, so I can hit them one after another.

    This is not for the faint of heart. I would have saved my $3K (I'm a part-time student/work part-time). I was hoping this would free more hours so I can go back to school full time and sell ads a couple days of the week.

    Another thing I read about CN. You will have constant turnover of ads. I've heard you lose about half each billing cycle. So getting "established" and having this thing on auto-pilot is out the window.

    I did speak to a previous franchisee of CN who had hers in another community (CN has never been in my city) that she did have it for about 7-8 years until she retired. She said her paper was always full, but you had to sell those ads.

    So we shall see what happens. My first issue was suppose to come out in Aug, I may push back till Sept.

    I would say this is less about product and more about sales capability.

  • Franchise Horror Stories   8 weeks 4 days ago

    I owned a senior care franchise for 6 years before selling it in 2016. My experience with my franchisor was actually very good. I invested knowing I would have to work hard which I did and I became very successful in the business. I did find that I WAS the business though so I could never be absentee and senior care is 24/7 with no weekends or holidays off. You never know when a senior is going to need care and to be successful you have to be able to respond quickly. In this business, not just the franchise, I became married to my cell phone. I could never be away from it due to the unknown nature of employee call offs or short notice care needs. This is the part I got tired of and made the decision to sell. I also found that I didn't require much, if any assistance from corporate and I got tired of paying royalties and ad fund fees every month. I knew going in though that this was required so I don't blame the franchisor for it. It's just part of the game. Once the business was established, I found that I could take a day off or a weekend, as long as I had my cell phone with me. Some weekends were very quiet while other weekends, my phone exploded. Again, this is the nature of the industry, not the fault of the franchisor. I wouldn't blanket the entire franchise world as being bad as I had a very good experience and gave me the experience to open my second business. Good things: Franchisor was there for assistance if I needed it. They were very helpful in working with me to sell my franchise when I made that decision. Very responsive to any questions or suggestions from the field. Made an effort to connect other owners to offer support and share ideas. Bad things: I don't feel like I got the advertising support that I was paying for. I could have used those dollars locally to do better things. That's my only negative thought about my franchisor. My new business is not a franchise so I no longer have to pay royalties and ad fees but I have better sense of what is needed to be successful from my franchise experience. Bottom line is don' go into a franchise thinking you will be successful and make money just because you are associated with a franchise. It takes hard work and dedication on the part of the owner. Once you get the business up and running successfully, you can the enjoy the benefits of being a business owner. More money. Flexible schedule. No boss telling you what to do. Signed, Happy with My previous franchise experience.