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What franchise to buy?
I was thinking of owning a franchise, I was wondering what advice people can give for a newbie? I was thinking of a restaurant or coffee shop. It is different from my usual on-line endeavours but thought I would do something different!
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u r missing few franchises on
u r missing few franchises on this list. Jason's Deli, Taco Bell, Popeye's. Just name a few
McD "Before Rent" SOI Misleading
What good does it do to exclude Rent from Store Operating Income, when in the McD system (in the US) the stores are rented from the Zor? (In the US, McDonald's is a real estate company that sells hamburgers, more than a hamburger company that owns real estate.) It's not like someone can say "Gee, I own a gas station that isn't doing too well, I'll just convert it to a McDonald's and make $600k, there will be no rent since I own the place".
Another factor is that only Zor-approved "Operators" can obtain licenses from McD Corp for the use of McD rademarks, recipes, systems, etc. You can't just buy a store and THEN take two weeks of training to be taught how to run it. While the "Hamburger Uinviersity" final course only takes a week, the three other levels of certification you need before you will be admited to HU typically take close to a year to obtain since demonstrated on-the-job expertise is required.
I've said it before, the value of a franchise is inveresely proportional to how easy it is to obtain one. (So Chik-Fil-As should be pretty valuable!)
what?
What is it that causes Newbie to want to own a restaurant or coffee shop? What business experience does Newbie have in the restaurant or coffee shop business? What is it about Newbie's set of skills that causes him/her to believe that they are suited to running a restaurant or coffee shop?
Or will this just be one more case of someone thinking that they don't need to know anything, just take 2 weeks training and "follow the proven system"?
What restaurant franchise should I buy?
Since you asked what restaurant franchise to buy, here is an answer. During this recession, market research nudges me towards quick-service restaurants. Here are some of my favorite QSR picks as of today:
Chick-fil-A.Pros: $2.5 million in sales per shop in 2009. Wow! Closed Sundays too. Double wow!!
Cons: (1) No franchisee association or cooperative? None?!? I changed my mind. Strike it from my list. (2). It's harder to get into than Harvard. Only one franchise applicant in a hundred are selected. (3). A strong southern evangelical white culture that has benefits in that the Sabbath is taken off and franchisees read from the same page, but it goes against my multi-cultural and multi-ethnic background from Hawaii.
McDonald's
Pro: Gotta love the agility and leadership of this brand giant and the $2.2 million sales per store / $600k average operating income before rent. A collaborative culture that has franchisee cooperatives and associations.
Con: (1) Expensive. Total investment $1.8 million. (2) A really tough franchise agreement.
Panera BreadPros: Their average restaurant's net profit is 11% of $2.1 million in sales. And 47% of the system performs better in sales. The network has seen a stellar rise.
Cons: (1) No franchisee association or cooperative. (2) It ain't cheap. $650k total investment.
KFC
Pros: Average $1.4 million* sales per store, of which 61% is for cost of goods and labor. A long history of proactive franchisee associations and coops who make decisions for the chain. They have built KFC into the giant it is today.
Cons: (1) Current CEO prefers franchisees who sheepishly advise, not boldly decide. (2) Losing market share.
McCafe
and Tim Horton's areis about as close as I personally would like to get to a coffee shop. I'm closely watching Dunkin' to see what improvements are made in that troubled system.Hope that helps.
Note: You probably can tell I didn't just pop those top choices out of my head. The metrics are sorted and filtered from quantitiative lists that I'm currently working on, numbers that nowadays any Internet surfer has access to. The qualitative observations, the pros and cons, are my short-hand. That should bring you to the point were you now have a million and one questions. For example, how in the world did I come up with that short-list? And where are the upstarts?
A word of caution: there are salesmen in search of those who can easily be separated from their money. They look for people who stop at easy answers.
*KFC's 2008 FDD says $1.01 million
You are a fool!
No one cares what you think and your analysis is less than weak.
Guest, Don is not a fool!!!
His success with BMM is awesome. He may be the very source that will turn franchising into a win, win deal for the zee and zor.
I am not anti-franchising. I am against taking advantage of people in the franchising world.
Top restaurant choices
I think folks know how much of a fool I am. No surprise there.
If you've got a better list of top choices, let's hear it, along with why.
Be careful. The filters automatically stop posts that name call before any of us can read it.
Top 5 QSRs by sales per store in biggest 50 franchise systems
I'm having fun crunching numbers this weekend. After writing so much prose, it's a nice break to switch to numbers. Here's the top five sales per store by quick service restaurant brand.
Notice how Chick-fil-A (1,197 restaurants), McDonald's (31,967), Panera Bread (1,327) and KFC (12,459 restaurants) float right to the top of the stores with the highest earnings, sales per store.
Methodology: These QSRs are filtered from the top 50 franchise systems by worldwide sales volume—hotels, restaurants, service, all business format franchise sectors except for auto dealerships. That means that these numbers are heavily weighted towards big franchise brands. In other words, there may be a small startup system of two or twenty franchises with $5 million in sales per store. An SPS of $5 million would be phenomenally high. But the insignificant brand would definitely not make this list because it lacks established brand recognition and power as represented by worldwide sales.
Sales per store are calculated as reported worldwide sales divided by the number of total stores. For these numbers, fast casual restaurants are lumped in with quick service restaurants.
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