Investing in Franchises

Just curious if anyone here has any knowledge on investing in franchises. I mean purchasing a Subway location for example.

 

Buying into a franchise is a large investment, however they are a lot more successful than starting up your own buisness. You'd have to invest $100k+ into the buisness, depending on your franchise of choice ofc, and you also have to pay royalty fees etc, however, there is a lot of support given through a franchise. They direct you on where to set up, what to do, buisness plans etc. so you don't have to do all of that yourself. Not only this, but you also have a set customer base+reputation, investing in a franchise is definately a good idea if you have enough money to do so, much more safer than starting up your own buisness..

 

Yes like said above all though I have not personally invested in a franchise for the course I am doing I have to learn about them and they can be very successful if you buy into a big franchise. However it is also a lot of money to depart with and a big risk. Some franchises also require you to go on certain courses aswell. For example the Mcdonalds franchise need you to go on several courses about running a restaurant and managing a restaurant Etc.

Most franchises also pick the location of your place and you normally have no say over where the location is. However it does have to be relatively close to your home.

 

Franchises are like skipping the start-up phase of a business and jumping straight to operations and management. It is less risk, and less potential reward, than starting a company from scratch, but still very risky. A family friend of ours lost quite a bit of money on a well-known salon franchise.

If you are considering buying a franchise, this would be a great time, as franchise sales were down significantly the past few years. Before you do, however, make sure you know what it takes to manage a business. Even if it is just a Subway location, you will be in charge of every aspect of that business, with only a few guidelines set in places by the franchising institution. If you want a little more information about it, contact me on msn at [email protected] I currently work at an incorporation firm, so I know quite a bit about franchises and other legal business entities.

Hope this helps,
Mhfan12

 

Investing in a franchies is more of a full time job rather than investing. A friend of mine has been working a Mc Donald's for the past 7 year, and has been promoted to a day shift manager. That job is nothing to shake a stick at, high burn out rate, unskilled workers, high pace, and upfront customer service. she is earning 70k plus benefits and works closely with the owner/operator. programs exist within franchises that allow manager to become an owner/operator which is usually a million dollar investment for a new Mc Donald's. Consider working at one, part time if you have a career before making a large investment.

 

I just bought a book yesterday called "Buying a Franchise in Canada" as I am interested in this, when I get around to reading it I'll let you know more.

 

Thanks mate. Where did you buy it?

 

I don't think you "invest" in a franchise. You would literally have to purchase the franchise rights and become the owner and run it yourself. Investing in a franchise, would just be purchasing it's stocks.

The only way I can see it is, if you give someone money to purchase the franchise and they run the business 24/7 and give you the cut.

 

If you are in a franchise in a company then they really try to control you, if they bring out a new oven for example you have to buy it otherwise they terminate your contract also you have to buy from their suppliers etc. Also it does cost quite, location is vital. My friend owns a Domino's Pizza franchise here in the UK.

 

I was wondering the same thing as you did so I looked into it a little bit awhile ago before lol. Actually, in order to start up a Subways franchise it's actually comparatively cheaper in comparison to something like maybe McDonald's. In order to start a franchise, you must pay an initial down payment (which is something like 5,000$ I believe for Subways) and then you have to pay for the cost of the building, the building space, the workers, and the interior of the restaurant (such as food, chairs, tables, etc). At the end, the investment of a Subways is something around 60,000$ I believe it was. It's actually a full time job in order to own a franchise but it's possible to just hire multiple managers to do a good portion of the work for you. Of course, if you were to hire a manager then it would cost something like an extra 50,000-70,000$ for their paycheck or something like that. Depending on how well the franchise you started up, you should receive anywhere between 65,000$ a year in profit to an upward 150,000$ during your first year although around the lower ends are more likely. Don't really quote me on this as I've only spent a few days researching this awhile back ago. Might've possibly changed by now.

 

Thanks. Yeah I would want to hire a manager instead of managing it myself, but I was wondering do franchises like Subway help you find your managers?

 

Franchises usually do quite a bit to help you succeed, because their success depends on your success.

However, at least in the early stages, a franchise isn't something where you can just hire people to rely on to take care of everything. The owner has to play an extremely active role early on.