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Franchise discussions

Discussion in 'Small Business' started by TMNT, 10th Aug, 2015.

  1. TMNT

    TMNT Well-Known Member

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    http://mobile.abc.net.au/news/2015-...nch-class-action-over-pizza-price-war/6622748

    Now. Im never in the bandwagon of all big companies are the big bad wolf. And often i say "stuff happens" or "you didnt do enough research " or "you took a gamble, and it didnt pay off" to horror franchise stories

    But this is pretty bad. It was out of the franchisees control of what the head office does.

    I however dont give as much sympathy to the pie face franchisees as why you would get into one of those is beyond me
     
  2. Ace in the Hole

    Ace in the Hole Well-Known Member Premium Member

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    1. Franchising is a long-term cooperative relationship between two entities—a franchisor and one or more franchisees—that is based on an agreement in which the franchisor provides a licensed privilege to the franchisee to do business.
    The franchisors want to make their money.
    The franchisees paid for the privilege to operate under the license.
    The franchisor has all the power.

    What could possibly go wrong :rolleyes:
     
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  3. TMNT

    TMNT Well-Known Member

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    Of course. But this is what i dont get

    A failed franchisee is bad publicity.
    A closed shop is 8% royalty of zero
    Sure. They could find a replacemrnt fairly quicky however. There are resources involved for the franchisor even if the franchisee is paying for the fit out etc

    I would have thought a profiting franchisee is more of a win then doing somethinf that will squash them
     
  4. Hysteria

    Hysteria Active Member

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    This paragraph sounds familiar to me....

    He said many franchisees had been forced to give up their businesses because of the price war, which Pizza Hut had anticipated "because the strategy did not allow for franchisees to sustain their businesses"

    I was involved in a well know franchise years ago that expanded rapidly...way to quick actually imo. A lot of franchisees had concerns about the location of the sites being sold as we knew it was going to be extremely hard to make these stores profitable.

    I personally raised these concerns with the national operations manager and his reply...

    "Yes I know these stores are going to struggle, but you know it's all about getting the brand name out there. If they put the whole family in there to work it could work out, but yeah it's gonna be a struggle"

    There was no way these stores could sustain themselves. And they didn't.
     
  5. TMNT

    TMNT Well-Known Member

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    Csn you reveal Which franchise?

    Food?
     
  6. geoffw

    geoffw Moderator Staff Member

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    A lot of the big food franchises are struggling. Some try to continually expand the number of stores regardless of whether the market can sustain it. Others are not innovating in a field where there is a lot of innovative new competition. Many people aren't happy to keep eating the same things year on year when there's a lot of new choices out there.

    I feel that I got out at a good time.
     
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  7. sanj

    sanj Well-Known Member

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    Sounds like pie face
     
  8. geoffw

    geoffw Moderator Staff Member

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    It's not the only one.

    We had a franchise store nearby a few years back, Souvlaki Hut. That store collapsed with the chain not too long after it opened.
     
  9. TMNT

    TMNT Well-Known Member

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    yes, I remember that one too. Anthony Koutfiides and the other footy player did it, the food was good, a tad overpriced,

    maybe its just me, but I dont think any souvlaki franchise is going to work.

    and I also agree with most food franchaises are going down economically.

    amongst all of this dominos reported a 40% profit increase a few days ago, if I recall.

    I think subways and boosts are going down.

    all those new mexican franchises are closing down left right and centre

    i wonder how those new vietnamese rice paper rolls and noodle ones are going?
     
  10. geoffw

    geoffw Moderator Staff Member

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  11. Hysteria

    Hysteria Active Member

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    It was a juice and smoothie chain.
     
  12. Hysteria

    Hysteria Active Member

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    I agree that you did Geoff. I was keeping updated with your posts on SS. As you mentioned, to much competition. Consumers want to try new products. This hasn't had an effect on only on the Franchise community but the big players as well.... Booze.

    Castlemaine Perkin's, XXXX Brewery have all taken a hit and sales are lower because there is now a lot more variety in beer and beverage drinks. Hello Dan Murphy's.....the one stop shop for all your happy needs. This is one store I would be happy to be involved in.... think coles or safeway have some connection??
     
  13. pinkboy

    pinkboy Well-Known Member Premium Member

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    Dan Murphys is owned by Woolworths.

    pinkboy
     
  14. Tony Fleming

    Tony Fleming Well-Known Member Business Member

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    Pizza hit trialled it in new Zealand it worked extremely well(obviously). Dominos jumped the gun before they could start it first in oz and they followed. Neither franchisees are enjoying it. Deliveries are their saviour
     
  15. geoffw

    geoffw Moderator Staff Member

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    Dominos has bucked the trend and has done extremely well, although the market was disappointed. They were probably expecting even better.

    The gps tracking technology has done them good.
     
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  16. Ben Chifley

    Ben Chifley Well-Known Member

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    There has been a Charlie Lovett (gourmet pizza) and a Pieface go broke on my local shopping strip in the last 12 months - in both cases the fit-out alone would have cost tens of thousands... all down the drain. I think there was a belief that it was a fail-proof business system to go by if you picked a reputable brand - but you are smart and have the cash to spend you could probably do better than buy someone else's pre-made idea.
     
  17. Ben Chifley

    Ben Chifley Well-Known Member

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    Carlton and United Brewery brands such as VB, Fosters and Melbourne - once upon a time the only beers you could buy on tap here in Victoria - are now terribly unfashionable among the young 'uns of today. CUB losing their market dominance in Victoria would have been unthinkable in my dad's day... goes to show how there's no such thing as a sure thing any more.
     
  18. TMNT

    TMNT Well-Known Member

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    Absoltely years ago. I asked a franchise lending manager at a big bank about his opinion on boost and he said it was a declijg business. Needless to say his prediction of it falling apart hasnt come to fruition but i beieve its also declining. I thought and stikl think its a fad

    Im also surprised that mcdonalds is still surviving

    As much as i like itm it seems we are heading towarda healthy eating and all the mcdonalds healthy food i ask myself. Why on earth would i go to mcdonalds to order the healthy stuff

    All the new stuff doesnt really appeal to me to ne honest

    I now prefer kfc and hungry Jacks
     
  19. Mombius Hibachi

    Mombius Hibachi Well-Known Member

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    I think it may have more to do with XXXX being a terrible beer.
     
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  20. Simon Hampel

    Simon Hampel Founder Staff Member

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    It's quite smart marketing actually.

    You don't go to McDonalds for the healthy stuff - you go to McDonalds to buy the kids their Happy Meal to stop the complaining. While you're there, you can choose to eat something healthy yourself.

    The healthy options are merely there to remove the guilt of eating at McDonalds - makes it much more acceptable to many people.

    Don't forget, McDonald's don't sell burgers - they sell Happy Meals.

    (I also think their create your taste system is quite clever marketing - allows them to charge a massive premium for something mass-produced where only the assembly is customised - but I don't know how sustainable that is. The CYT burgers are good, but they're not that good).
     
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