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Thread: Starting a franchise

  1. #1
    AudreyLeigh
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    Default Starting a franchise

    My daughters dad recently informed me that he would like to have my daughter spend the summer with him... im thinking this is the purfect opportunity to travel a bit, make some good money and invest.

    Ive been doing a bit of research on opening a franchise... Im wondering if anyone here has had any experience with franchises? Good/Bad experiences? Questions I should ask and things I should think about before investing?

    Im thinking Coldstone Creamery (closest one is 40 min away and ALWAYS packed) or something like Supercuts... not sure...any ideas?

    Thanks

    Audrey

  2. #2
    AudreyLeigh
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    Default Re: Starting a franchise

    I just found some info on Coldstone... initial investment is $42K but all together to get the store open around $300,000.... id definately have to have someone else invest with me... half and half or so.. im thinking itll take me a year to get it together... seems like a LOT to open a ice cream shop... dunno?

  3. #3
    Featured Member Destiny's Avatar
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    Default Re: Starting a franchise

    I've done a little research on this myself, though like you, I don't have the cash right now. Hey Melonie, how 'bout floating us a loan?

    Like everything else, it seems like the good ones seem to be well worth the investment. I do remember two pieces of advice I got. First talk with a lot of current franchisees and see how happy they are. Second, hire a good lawyer and make sure you understand everything in the franchise agreement and can live with it.
    Dancing is wonderful training for girls, it's the first way you learn to guess what a man is going to do before he does it. ~Christopher Morley, Kitty Foyle

  4. #4
    God/dess Emily's Avatar
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    Default Re: Starting a franchise

    I've thought about it too. There's a home dog training school that looks pretty cool http://www.barkbusters.com/ They are big in Australia, but just taking off here. I read about a bunch of them in Entreprenuer magazine, but most of them are sooooo boring (commercial cleaning, etc). I love dogs.

    But, like you said, the initial investment is huge. There are obviously loans available for this otherwise people wouldn't be able to own them.

    FYI...there is a Coldstone Creamery in the mall here and it is always packed too. The smell is tremendous!

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    Banned LatinaRose's Avatar
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    Default Re: Starting a franchise

    I don't know too much about franchises, but the most important lesson I've learned in starting a business is this:

    Stick to what you know!!

    If you want to be successful, I think the best way is to find something you love and figure out a way to make money from it.

    Going into business for yourself is one of the hardest careers out there. It requires so much dedication (I often feel a slave to my business), but it is the most rewarding job I have ever had (especially compared to stripping!). Keep in mind that a lot of people along the way will try to get you down and discourage you. That is because they don't have the courage to take this sort of risk for themselves. Just remember, at one point people told Bill Gates there was no money in computers!!

    I hope all goes well for you and good luck!!

  6. #6
    God/dess Emily's Avatar
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    Default Re: Starting a franchise

    Of course I think it'd be profitable...otherwise I wouldn't be interested in it.

    And dog lovers will spend big bucks on their dogs. I know because I'm one. I'm also more interested in one-on-one training in my house instead of group puppy classes at Petco or something.

    ...plus their popularity abroad suggests it would do well out here.

  7. #7
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    Default Re: Starting a franchise

    Audrey, the ice cream business is a good business to get into. My aunt and uncle owned one for many years and retired nicely off it. A stone cold creamery just oppened by me last week. I took my daughter, the prices are outrgeous 12 bucks for two icecreams. Try maybe starting your own shop. It will cost you less.

  8. #8
    God/dess montythegeek's Avatar
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    Default Re: Starting a franchise

    What is normally the more important consideration in a franchise than the commitment of money is the commitment of time. Small businesses are not hands-off investments. Businesses are not 9-5 operations or else you will find the money going out the door to a professional manager. Imagine an icecream store being operated by a cadre of high school students, all of whom have friends getting two or three scoops for the price of one cause the boss isn't looking. All this takes time. The right franchise in the right location can be a pot of gold, but a lot of sweat and long hours. Future travelling for work may be out the window. I am not trying to kill your dream, just adding a dose of real world considerations.

  9. #9
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    Default Re: Starting a franchise

    First of all, you'd need to be approved to start a franchise in your area. The most important thing for companies is location. Good thing for you, there seems to be a demand in your area.
    The Cold Stone Creamery site has local contacts ready to take inquries about opening a franchise. Can't hurt to try!



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  10. #10
    Banned Melonie's Avatar
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    Default Re: Starting a franchise

    I've done a little research on this myself, though like you, I don't have the cash right now. Hey Melonie, how 'bout floating us a loan?
    What, loan more money to dancers ? Are you nuts ? (just kidding)

    Actually my uptake on franchises is that you're paying a lot of money up front for the privelege of sharing in somebody else's good idea and national advertising, and you continue to pay a 'cut' of your profits forever. My uptake on any storefront business, franchise or indy, is that you're volunteering for an 18 hour a day job if you want things done right, you want to make a decent profit, and you want to avoid being sued.

    The closest I have come to the idea of opening an indy storefront business was when my sister and I considered buying a local restaurant which recently went up for sale. But after doing all of the homework we decided against it. Even though my sister and I could have covered having one of us on premisis during all hours that the restaurant would be open, the common and major problems remained ...
    - finding decent staff who would be willing to work for a reasonable rate of pay plus actually show up for work plus not offend customers
    - finding only mildly outrageous insurance carriers (NY comp is inescapable and astronomical)
    - eeking out a profit given NY property taxes, utility bills etc.
    - dealing with 'uncle Guido'
    - not being able to take a real vacation for the rest of my life

    After a good deal of deliberation, I decided to buy more gold and silver instead !

  11. #11
    AudreyLeigh
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    Default Re: Starting a franchise

    One of the good things i see in doing a franchise is that Coldstone is a known company... like Baskin Robins... people will go there just for the name etc... and they are WAY expensive. I took my best friend there with her 2 kids and my 1 and spent $30 on ICE CREAM! but its soooo good...

    Well, i am going back to cosmetology school in sept so maybe i should just open a salon when im done... maybe with a coldstone in it.. haha..

  12. #12
    God/dess Emily's Avatar
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    Default Re: Starting a franchise

    why are you giving up on the idea of the franchise? I think it's an awesome idea.

    I have a friend (granted, he had a lot of capital to start it with) who built a laser hair removal franchise and it's doing tremendously well.

  13. #13
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    Default Re: Starting a franchise

    I like the franchise idea. As with any business, it's not just the startup costs- it's also having enough to live off of for the first 2 years. Because it's perfectly possible that the first years will net you close to nothing- hopefully not, but you need the $$ to support yourself just in case.

    Have you considered buying an already established business? I think this is what I would do. You can check their old records and get a pretty good idea what kind of income you can expect, see what they've been doing right, change what they've been doing wrong...also the startup is a lot less, as buying the business will generally include everything you need to operate.

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  14. #14
    Sitri
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    Default Re: Starting a franchise

    I owned several franchises. Basically I agree with Melonie.

    After working in corporate America for many years, a franchise appealed to me because I need a solid concept and all of the details on how to open a business. It also provided me with image, sales materials, and a national client base I could tap into right away.

    After a few years, this initial hand holding was costing me $100,000 / year in franchise fees. In addition, I was building equity in the franchise and not necessarily my business. The orginal franchisor sold out and then I was paying royalties to people who did not have a clue about the business. They went into receivership after 18 months.

    In hindsite, I would have been better off building my own business plan or hiring a quality consultant.
    For any franchise you have to know that if it is successful, you can sell it and FULLY benefit from the value of the business without the franchisor unduly restricting your ability to sell or being forced to sell to them at a low price.

    If your are not careful, you have just sold yourself into slavery. Once you are in, you can not get out...........easily or cheaply.

  15. #15
    Banned Melonie's Avatar
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    Default Re: Starting a franchise

    If your are not careful, you have just sold yourself into slavery. Once you are in, you can not get out...........easily or cheaply.
    Very true Sitri ! All franchise deals seem to have a very ugly 'underbelly' which new franchise start-ups seem to ignore, but which 'mature' and profitable franchises usually see as bloodthirsty vampirism ! I also agree with you that if a person is going to essentially devote their entire lives to building a new business for 2-3-5 years, that the initial advantages of a franchise easing the startup difficulties is small potatoes compared to the $100k / 10% per year in franchise profit sucking which will go on forever.

  16. #16
    Senior Member grinew127's Avatar
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    Default Re: Starting a franchise

    Basic premise of a franchise is this. Somebody else own the buisiness, you work it, make it successful, and you get a share of the profits. I t won't be so bad if you fail, you would not be responsible for nearly all the expenses that the buisiness incurred. But you get to hold the bag.
    It is the same situation with share-cropping (which my maternal great grand father done). It was a form of economic slavery and it still is. This is a more modern version with flashing lights, fancy dancy boxes, packaging, and slick talk. And we have come full circle.

  17. #17
    Banned Melonie's Avatar
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    Default Re: Starting a franchise

    Technically, franchises are not the same as 'sharecropping' unless the franchise "owner" accepts financing from the parent company. Generally the franchise "owner" does in fact own his building/business. However, you are correct that franchise agreements are usually very restrictive in regard to the franchise "owner"s freedom to be entrepreneurial (i.e. only approved products, approved prices, approved advertising, etc. by the parent company may be offered). Franchise agreements also include a hefty percentage kickback to the parent company in exchange for the franchise "owner" being allowed to use the parent company product name, allowed to benefit from parent company national advertising, etc.)

  18. #18
    Veteran Member leebay88's Avatar
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    Default Re: Starting a franchise

    Franchises are appealing it you have the rights to open the stors in a certain area. For example when Baja Fresh started opening in NJ, one guy bought the rights to all the Baja Fresh restraunts that would open in Northern NJ. Basically he franchised a franchise. Obviously the cost was enormous but in essence that is how you get the leverage.

    Also a lot of Franchises rely on the reasestate the property sits on to give it that extra boost. Just make sure you factor that in when analyzing the situation. Realestate hasn't always been a great investment.

    Def not a 9-5 job and franchise fees can be steep. I spent almost a year evaluating different opportunities in that area and decided there wasn't enough excitement in it to keep me movitivated.

    GL

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