Franchising What are some of the worst Franchises ??

Oops I meant I feel more sympathy for people who bought dud franchises than those who bought in mining towns

 

Cup of sorrow: the brutal reality of Australia's franchise king

Quite relevant...

Personally I wouldn’t touch a food franchise with a 10-foot barge pole.

 

In today's paper

Trail of misery for hard-working small business owners

I admit, I looked at a Michel's franchise around 15 years ago but quickly realised the hours and dollars didn't make sense even then.

 

Saw that article.
Feel sorry for the owners.

Years ago while looking for a business I had quick glance at a few similar franchises such as donut king. Michel's. And another popular Cafe franchise that's slipped my mind now.

They were advertising sales of $15k to $25k and I thought to myself no frigging way.
I've never seen more than 2 people buy a coffee and cake.
And you'd have to have a constant queue of about 5 people every second of the trading day to make those figures.

Either the figures are bull. Or they must have a super rush at certain times (inside a supermarket, I doubt it)

So I never went near them

 

Another article in today's SMH - definitely not the franchisee who is making money (& cutting wages).

 

I spent months analysing and visiting franchises a lifetime ago. And yes I did look at a few of the ones mentioned in the article.

The article makes it sound as though franchises are all evil and is like a thing only dumb, greedy or lazy people buy. I wouldn't say the majority of franchise owners are the above. In fact I'd say st worst they're ignorant, Guillable, unlucky or vulnerable.

Yes they charge a royalty fee of around 9% plus marketing, plus you have to buy supplies from the head office plus you don't have any control on pricing, product range etc etc.

However if the franchisor truly had the franchisees best interests in mind then the business model should work.

I've read stories that stores like domino's in particular even make it their primary business to buy back failing franchises and to resell it to another suspecting one after adjusting figures and putting a new spin to it. If this is the truth it's truly disgusting.

A lot of people say oh why buy a franchise. Why not start your own pizza shop without the restrictions, royalties, being tied to suppliers and with out a say in the product.

Simply not as easily said than done. If it were that easy everyone would be doing it. Not everyone knows how to do the whole bells and whistles of a business.


Feel sorry for that 60 year old Asian guy who has two Michel's in Cessnock and works 70 hrs per week and is in a huge loss. Not sure what he was expecting but buying 2 franchises without experience and expecting to sit back and collect the money is a bit naive

 

I know 2 Vietnamese Ladies who went to school with our daughters ,both study Nursing and finished -they worked out very quickly that line of work was not for them once they hit the coal face..
2 years ago they bought out 2 Asian butcher shops wiwo from another Asian Business Lady ,every time we go out there as Asian like to buy off Asians there is a line outside maybe 15 people waiting ..
The same as Taco Bell at Annerley on the inner southside of brisbane no matter what time of day there is always a line up to go inside..

 

It's not simply a case that the business model should work, it does (but mostly for the franchisor). The franchise model is based on consistency ie rigid, well-developed systems which can be adapted to every situation - where there isn't a procedure in the agreement and franchisor input isn't sought, then things can become unstuck due to adding in random actions outside of the franchisor's control.

The franchisor doesn't want to see their baby fail so exert considerable control over operations but the good ones also provide considerable support too. Business development managers, franchisee support, training, software, mentoring etc are designed to assist and improve the franchise however, not all franchisees take up this assistance or necessarily in a timely fashion.

 

Correct and incorrect. The franchise model is to deliver a consistent product pricing quality etc.
If by franchising a business means that every franchise was going to fail all things being equal then its not a good overall business.
No one goes into business expecting or trying to make it fail unless it's some tax write off or some ulterior motive.

If one single franchise is failing due to incompetence or the fault of the franchisee. The franchisor has a million clauses in the contract to resort to fix it.

If other factors come into play eg economy, timing, competition that has resulted in a franchise failing then that is bad luck. But I am sure that when the franchisee purchased it originally the figures would have been optimistic at best[/QUOTE]

 

To be honest. Some people have just a lot of common sense or a gift or talent even though they may not have been in that field ever. It could have been luck or timing who knows.

But kudos to them. Im sure they worked very hard and probably work very hard every day

 

I am near Cessnock and know of only one Michel's - fairly busy but not "sell out". Wonder where the other was supposed to be, which is no longer in existence

 

Building franchises who shall remain nameless who allow anyone to own a franchise without good education, business sense and ethical responsibility.

 

Yes they have ,they sat with us yesterday with our family unit with their Vietnamese Husbands and young children ..The husbands run the business but the Ladies control the money ,and everything plus as they told me
yesterday they have bought out 2 more at Southport on the "GC" Butcher Shops..
I Take my hat off too the parents who came here in a leaking boat ,and worked liked farm animals to put them through private schools,did without everything to make sure the next generation did never suffer as they did,and btw the parents never ever will go back to Vietnam ..

 

And its embarrassing how you've got kids of these hard working immigrants who couldn't speak a work of English until 8yrs old and then they come here.


Fast fwd 10 yrs later. These kids have worked their Butts off and gotten 99.95 on their atar and even scored 50 in English. While many lazy English speaking Aussies get crappy scores in English and overall.

Kudos to the kids. Absolutely amazing

 

Oh the irony!!!!!!

 

I wonder how many of these unprofitable franchises are simply a way to buy yourself and your family a permeant residency permit (via the investor provisions) or a front to launder proceeds of crime (after all the businesses transact in a lot a cash and profit is irrelevant)?

 

Hi

Lots of them.

Regards,

alicudi

 

If the franchisor is serious about it's brand, then this is not an option. They want successful franchisees to keep the attractiveness of the brand not some cash rich inexperienced investors with NFI.

 

Hi

Agreed, those like Mcdonalds only accept those that are going to be successful and have very thorough loop holes to be accepted as a franchisee. However Australia suffers from many franchise systems (not Mcdonald's) that just want the $$$$'s from potential franchisees and don't ever care about the smaller franchisee.

Regards,

alicudi