Make their meals so cheap.
Well, this is where franchising shows its “difficult” side.
Depending on the Franchise Agreement, the franchisor may be able to dictate the retail selling price of their products.
Even worse than that, they often require that the franchisor purchases all the raw products, disposables and printed material directly from the franchisor at a premium cost.
Burger King is going through a difficult franchisor – franchisee relationship right now as the head office insists on all their franchisees joining-in their $1.00 cheese burger promotion.
The franchisees say that a cheeseburger costs them at least $1.10 to produce and that the promotion will cause them serious financial stress.
The franchisees have filed a lawsuit against Burger King and it will be interesting to see where this leads…
I know that many readers of this blog and visitors to this website in general, are looking for a business they can run from home.
There are, as you would have realized by now, many web sites promoting hundreds of home based business opportunities, but a quick look at most of them will be enough to reveal that they are exactly what you first thought them to be – poorly cobbled together plans which have little chance of fulfilling the promises made of them.
The Every Franchise site is primarily about franchising, but it also has a sprinkling of business opportunities. One of the problems with buying a franchise is the high entry level. It is very hard to find a franchise that you can get into for a less than $25,000 start-up cost and most of them are well over $100,000. Another disadvantage of all business start-ups is that you rarely can expect to make any profit within the first 12 months. Read More…
I think it was around 1992 when, interested in business opportunities even then, I called a number in response to an advertisement I had seen in a local newspaper. The opportunity was an ink cartridge re-filling business. The person who owned the business was an 18 year old boy. Why was he selling? He was going to university next year and he needed to devote himself full time to his studies. Still interested, I asked what his annual turnover was. A slight pause, umm.. around $2,000, another pause… yep, about that.
Not really enough for you to give up your day job. Still, I wondered what the long term potential might be. It was hard to know back then. Inkjet printers hadn’t been around for long but the Ink cartridges were, and still are expensive. So I kept my day job but also kept a slight interest in watching the the ink jet cartridge business blossom. Read More…
I have completed posting parts 1,2 & 3 of the “Franchise Business Plan”. They are in the Every Franchise Articles Section.
The Article gives a good overview of the reasons for writing a franchise business plan in the first place and what the plan should consist of.
I hope you find it helpful:
Who’s for a McJob?
Lots of people it seems. When the current economic crisis first started rearing its ugly head over a year ago, many fast food franchises noticed business was actually picking up as diners “downsized” their eating habits.
This meant that many existing outlets needed to put on more staff and it also caused a surge in new franchised fast food outlets opening up.
There have been some newspaper articles about how it was tougher for students to get jobs as places like McDonald’s were snapping up the recently retrenched, or the early retirees who were happy to be re-employed.
It wouldn’t surprise me if more than a few family homes were saved from the repo man just because there were jobs available in the fast food franchise business.
So is a McJob really a McJob? The term is one of the more demeaning ones you’ll come across and ranks right down there with “burger flipper” in its offensiveness. Read More…
Looking for a succinct description of a franchise?
Franchise consultant Mark Clifton gives you a brief explanation of how a franchise model must be followed as part of the franchise agreement with the franchise holder (franchisor).
Here is a short, but good, explanation of what a franchise fee is. If you are just starting out in your search for a franchise opportunity you may not be familiar with all of the industry-specific terms. Here franchise consultant Mark Clifton, gives an easy to listen to explanation which only takes a little over one minute.
In continuation of an article we posted earlier we now have posted a short article which discusses not only the methods of financing franchises, but also your start-up costs and cash-flow.
The pros and cons of purchasing an existing franchise outlet compared to starting a brand new one are discussed.
Cash-flow is an important discipline to learn to manage before throwing the doors open for business and the following important point is made: “It is far easier to obtain money for a well researched and thoroughly planned start-up than it is for a struggling franchise that hasn’t met projected expectations.”
Cash-flow projections are also important for obtaining funding and so cannot be over-stressed.
You can read the full article here: Finance | Franchises
And here is a list of all the articles in this series: Franchising Financials (Pt I) Franchise Financing (Pt II) Financing a Franchise, Keeping Records (Pt III) Managing Debtors and Summarizing Financing a Franchise (Pt IV)
I think it was around 1992 when, interested in business opportunities even then, I called a number in response to an advertisement I had seen in a local newspaper. The opportunity was an ink cartridge re-filling business. The person who owned the business was an 18 year old boy. Why was he selling? He was going to university next year and he needed to devote himself full time to his studies. Still interested, I asked what his annual turnover was. A slight pause, umm.. around $2,000, another pause… yep, about that.
