trojanman10984

iTrader: (1)

i agree...thats just a "signing fee" basically to use their name...than you gotta consider building, signage, supplies, etc. so the initial cost can be greater than you first imagined.

edit: after reading that link...yea 115k is about right...than adding buidling cost or first months morgage or lease in as well.

SirBLaughs

iTrader: (1)

Go to your local Barnes and Nobles magazine section.
There, in the business magazines you'll find at least 4-5 different "Franchsing" mags that will give you all info you need to setup any range of franchises.

FYI: Subway, McDonalds, big boy franchises need at least $1mill. in the bank and at least half mill to be liquid for them to even blink your way. With that said, there are smaller franchises that everyday people get into.

I've been preparing to get myself into a franchise for the past 3 months. I go back and forth with the idea that Im not going to be my own boss which is my biggest hold back at the moment...

S14 n Tsx

As some of the guys mentioned, 15k is just the franchise fee...

I do appreciate you kind words.
I'm not just looking at subway... I looked at bunch other sub shops and few frozen yogurt places.
The thing with walmart is that... there aren't too many walmart around my area, and I'm not sure if there is any spot available to being with... I will definitely keep that in my mind. I'm actually going to meet up with business planner to talk more detail about it... I will definitely bring this up to the guy to see if there is any spot available.

Far as I understanding about subway is that, there won't be any profit until I start opening more stores.
There is no way that Subway franchise requires 1mill to start... McD and other bigger franchise does require minimum $1 mill just buy the name, but Subway no near that cost.

juniorbean

iTrader: (5)

You're a fool. We got rid of them due to a lawsuit for a new location we were unable to get financing for. Our open stores were collateral damage. Not only were our open locations successful, but they were top in the region in sales. And when we sold the assets, we sold everything for a profit.

Eat before you talk son...

juniorbean

iTrader: (5)

S14 n Tsx - If you have any questions PM me. I will say that the only time I recommend buying a franchise is if you can buy an existing location. Even then you need to be VERY careful b/c you need to find out why they are selling.

We had two locations, one we built and one we bought. Both did very well in sales and the one we built actually had higher gross numbers, but the startup costs were more then double... so it would have taken a lot more time to make back our investment.

We actually had a very good franchise experience, however, typically I advise against them. If it was a different market, I'd say go for it b/c then you could build up the sales and sell the business for a profit. That is not the case today. Even if you had the #1 store in the system you will not be able to sell it for a significant amount of money... and with franchises, you typically make more money off of the sale then you do off of the store itself.

If you have any specific questions, feel free to shoot me a message.

Oh and Subway is typically $250k-$350k... but expect to be on the higher end of that range.

S14 n Tsx

I really appreciate for your inside info. I met up with few business planners, and it seems more complicated than I thought. I am still open to do anything... it can be franchise or start my own business. Obviously there are pros and cons to buying a franchise... visa verse for starting my own business.

I heard that banks aren't giving out any kind of loan to new business owner.. is this true? I thank my parents for supporting with the fund...

I will shoot you a pm soon.

trojanman10984

iTrader: (1)

^^^no loans unless you are in well with a bank

juniorbean

iTrader: (5)

We've done franchise and non-franchise businesses, so put together a list of questions and shoot me a PM. If you want, I can PM you my email address if that's easier then sending a PM (in case you did everything in Word or something).

As for the banks... they really are not lending. We did a small business loan for the store we built, and a standard loan for the location we purchased (since the dollar amount was much lower). The SBA loan took about 7-9 months to get and the "standard loan" program does not even exist anymore!

We actually knew someone who was investing in a larger franchise where the building is owned. He was putting down $750k of a $1.1m investment... and even with his impeccable credit and history, plus a down-payment of nearly 70%, he could not get a loan.

It really has nothing to do with who you know or whatever... the bottom line is that banks are just not taking any risks with businesses right now... despite what the government has been trying to do.

hornyleprechaun

That is ridiculous

juniorbean

iTrader: (5)

As my buddy in the mortgage industry stated... "the pendulum has swung from conservative to stupid". This appears to be true for lending in general...

juniorbean

iTrader: (5)

I was talking to someone recently about a franchise opportunity and thought of this thread.

Did you end up moving forward with anything?

Aman

Wow, didn't realize how old this thread was. Sounds pretty great running your own franchise(s). I bet it's a lot of work, though.

juniorbean, did you find any post-secondary education helped you when you were in the business? Or did you learn mostly from experience?

juniorbean

iTrader: (5)

Learned from experience. Got some general training from the franchisor, and leaned on one of our fellow owners the first few months. After that just learned as we went. The first year I ran the store as if I was the manager. That way I knew everything... and knew how to do every single thing, from top to bottom. Then after the first year we put people in place at each location and just built the businesses outside of the stores (catering, fundraising, charities, schools, etc)....

S14 n Tsx

Thanks for asking!

We (my parents and I) are still in search for a right business. LA market is terrible right now, so we decided to wait a bit. I will definitely hit you up for more help if we figure it out what we want to do.

I looked up so many different franchises but nothing that grabbed our attention yet.

I been jobless for 6 months now... I'm dying to start something, but would rather sit at home then burning $100k+ something won't last long.

Do you have any ideas? I wish the market was better... When do you think market will pick up again? some said that within two years. sigh.

S14 n Tsx

If I find the right franchise that I want to do then I will definitely work there for a few months to get the system down before me jumping into the business without knowing anything.

Owning a business is not easy due to heavy hours that I have to put into, but I think I'm more of owning my business than working under corporation. I hate kissing someone's ass for nothing...

Mizouse

Wonder what I would need to start up a strip club franchise(there are franchises right? Like Deja vu or spearmint? )

GIBSON6594

I remember you saying you have 0 savings. Franchising is risky, as is any small business. I would avoid it until you have had the chance to save up some funds first.

S14 n Tsx

You need win a jackpot before you can start one. without any money and no experience, you are going no where.

Mizouse

Geez way to smash my dreams...

S14 n Tsx

lol.

trojanman10984

iTrader: (1)

been thinking of moving away from the hotel/motel business into the food industry. my dads friend owns a joint call Nothing but Noodles. its based out AZ fairly small chain in about 6 states. a little pricey to start up but great turnaround. his revenue is about 40K a week. check them out! none in the state of CA as of yet. the website is nothingbutnoodles.com

i might venure out into this and see how it goes

juniorbean

iTrader: (5)

Working in the system is a good way to get into it as well. It all depends on what you choose. We did an ice cream franchise which typically employs HS age kids. We figured, if they can be trained on all products in a few days, we can learn easily.... which we did. The running the business part just comes with being there. We went with the flow our first year, but after that we then knew the cycles during the season, effects stuff like weather, daylight savings, school vacations, holidays, etc. had on the business, and were able to plan accordingly. The first year, I just worked there as much as possible myself. After learning all of that from being there, I was able to hire and plan going forward. You will have to do this no matter which route you go...b/c even working in another location will have different then what your location may be.

But you're right... market sucks. I personally do not expect much of a change until at least 2013. Until people are back to work and the housing market picks up, we're going to at least stay flat for a while. That said, a recession is actually a great time to go into business (if you pick the right one). Once you choose a franchise you want to be involved in, you can probably pick up one which is in distress for pennies on the dollar. Example, one of the owners we know just bought a competitors shop and is turning it into their shop. Got it for under $10k. To give you an idea, our build out was over $330k. So there are opportunities out there and you can get a huge leg up if you find something like that. But be do your homework and be prepared to work a ton. Also, be prepared to not take a salary for at least the first year... if not 2-3 years. We were lucky that we were able to turn positive cash flow in a few months... but that was also in 2007, which was a different time. Even when we closed the locations in 2009 we had positive cash flow... but by then we were established for a couple of years. It will be tougher to jump out now... but it can be done... just be prepared for what will have to go into it...

S14 n Tsx

^^how come I keep on missing this thread?

I appreciate for your personal experience info... I will keep this thread updated with soon as I get something.

I am most likely to learn to spanish while I'm searching for a job/business. My parents believes that I should learn some spanish for my future.

Pete2010

I'm taking a class right now in grad school to help on how to learn how to buy a small business. It seems that it can "sometimes" make more financial sense to buy an existing business, or distressed business than to go and open a single location. I think i'm speaking more of things like quick/fast food type places (not necessarily franchises).

A few businesses i'm looking at are health/fitness/tanning salons which can have some high margins (but could be risky if they were just "tanning only"). But also places like beer/wine/liquor stores, where you can take an absentee owned company and apply some energy and internet marketing (facebook, twitter, etc) to bring in new/loyal business.

So I guess the question in, for someone who's looking to buy their first business, better to start a new franchise operation, or buy an existing business?