Franchising Franchise discussions

I found most franchise still run by its original found runs well.

Just observation, not sure of actual stats

 

I know of 3 subways nearby that have gone. Another will probably follow soon. Too many too close together in bad spots.

 

Our local subways trialled doing deliveries. It shut down three weeks later and sat empty for 9 months before they got a new franchisee. I'm amazed that their head office didn't send someone in to run it until they got a new franchisee.

 

I could be a minority but the healthy menu has no appeal to me. Although i used to take kids for their junk food fix,. Now. The menu is a bit of a turn off

As for make your own burger. Someone told me the price. I think it was 13 dollars for a value meal. Frankly the price tag puts me off as i feel id rather go to a local sit down asian for thay price

Frankly i dont really have a suggestion for what mcdonalds can do. I feel that even though i dislike kfc ads with a passion, they and hj would probably suffer less in the future

 

Boost did this as well down the Gold coast. 3 stores within 600 meters of each other. The owner of the first store was making a tidy profit.....Until the greed of the Franchisor established another 2 stores.
The owner of the first store ended up shutting the doors and walking away.
They also setup a second site in a Westfield at Mount Gravatt.

 

Interesting article, I use to own an Eagle Boys up in NT. $4.90 pizzas is rediculous, I'd have refused to do it, rather go broke sitting down than working my but off.

We were lucky in the market we were though, not that competitive. Our cheap Tuesday price was $7.95 (originally it was $5.50 when I took over).

With the super cheap rediculous deals head office use to put out I'd just say they were online specials and push customers online. Eventually you at least get reduced labour costs and people always spent heaps more online.

 

There are definitely good and "bad" franchisors. We are franchisees in two, and they are worlds apart in terms of reasonable fee structures etc etc

 

I just spoke to a franchisor GM yesterday that is starting up in oz. Refresh renovations. Started in nz and had huge growth.
I know little about franchises but this I can see taking off, it's the one stop shop for house reno's. I know there is no "house hold"name like it in nsw and haven't heard of anything in Qld. Assuming it grows like nz which I think it will, it will be like a bunnings or jims. You are the pm and quote the jobs and manage the trades, you need to align with one main builder for the builders licence.

I haven't really liked the idea of being a franchisee but with these guys and their marketing background plus they provide design and admin support and are teamed up with suppliers for supply and discounted rates (plus other stuff I'm not aware of I guess). I first thought why not do it myself but with the branding and building a customer base, they would reduce that "pain"in the short term bringing in customers and getting started.plus less stress in the admin and design side

100k buy in. in nz they are 150k. Pretty sure there was mention of reduced price sure to starting out

 

I worked at Silvio's - Domino's predecessor in Australia (sent Dominos broke and then bought the shell and rebranded) in the late 80's early 90's. Every flavour had a different price but prices were around Large Pizza $14.95, Family $23.95. 2 for tuesdays worked. The franchisee's I worked for were raking it in but there was only Pizza Hut and Silvio's. Then the competition came, the prices dropped and these guys went under within a couple of years.

 

There's money in it at those prices, crust is a pretty good model that has separated themselves from the cheap cheap crap.

 

Yeah, I certianly won't be rushing out to get back into the pizza game!

 

So what make for a good franchise?

It seems that all the common ones that fail are too easily replicated and territories are too small. It's bad enought fighting off competition from others, but then you have to fight for your share from your own fellow franchisees and also adhere to the franchisors operational regulations.

So you get marketing, support and a "system", is that it?

It would be good to see some stats on some of these smaller mum and dad type franchises, lifespan and failure rate.
Some of the stories of initial fit out costs set up by the franchisor are absolutely ridiculous. That in itself probably keeps operators in the game for longer than they want to when they can see its just not going to work out, delaying the inevitable.

 

I would have thought when dominoes began penetrating the market, we had pizza hut, eagle boys and possibly another big or medium one that i cant remember,
that they were going to fail spectacularly, there was a considerable price war already going on ,

but to see them even lower the price point while yet expanding and profiting, I find quite amazing, wages havent fallen, nor have cost of goods, so they must have some amazing formula

if dominoes went bust soon, im sure everyone would be saying in hindsight how bad of an idea it was.

similar lines to pieface

 

What's the story with Pieface?
Care to share?

 

From what I've read in the papers - they cannibalised their own stores by opening too many franchises close to each other. Plus prime leases at high cost, coupled with unrealistic sales forecasts.

 

Just found an article - http://www.heraldsun.com.au/busines...-pie-in-your-eye/story-fngu4eru-1227146507800
The poor guy has to purchase pie stock at $2.70 each, and, pay 8% on gross takings...

So even if you're just taking in enough to break even, you still pay 8% on revenue.
To top it off, if you're financed, there's more money down the drain and more pressure to perform, it's a downward spiral.