Those of your who work for or have worked for "franchised" stores have probably had occasion to hear all kinds of whining from the corporate office about "the poor franchisee" and what a tough go it is running the store and so on. Of course, what they're not telling you is that nobody squeezes the poor franchisee like the corporate office. That aside, though, you may find this article interesting. Whatever the corp office is saying, franchisees are anything but poor. If you're willing to lay out the hundreds of thousands it apparently costs just to get yourself your own little turn-key biz, there's gotta be something nice in it for you. Look at what some poor franchisees are laying out:
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1003246766749&call_page=TS_News&call_pageid=968332188492&call_pagepath=News/News
[ 10-20-2001: Message edited by: remote viewer ]
1.2 million to start a Swiss Chalet!?!? 
That's just nuts!... but probably why you don't see too many of them here, out west.
quote:
The complexity of the financing/royalty arrangements, the vagaries of location and the shifting sands of public taste mean buying a franchise is very much a dice toss, just like a regular startup.
No doubt. You drop a cool mil on a prime location in a strip-mall in the suburbs only to inevitably become the "dirt-mall" two years later when a new strip is built two blocks away.
The only franchise that hasn't gone the way of the dodo bird in my community has been McDonalds (why does my McChicken taste like fish?). Ugh!
quote:
If you're willing to lay out the hundreds of thousands it apparently costs just to get yourself your own little turn-key biz, there's gotta be something nice in it for you.
I don't know... I see franchisees as being suckers... there's one born every minute; and very few, in my experience, ever succeed. The whole franchise scheme sounds like a scam purported by the parent corps'. Then again, I am the worlds biggest skeptic (not to mention cynic 
).
Some are suckers but many are business-savvy investors who know a good deal from a bad deal. There are basically two different kinds of franchisees: the company store manager who gets a franchise at a discount (these guys don't have millions of dollars to invest of their own) and pretty much continues doing what he's always done. Only now the company doesn't pay him a salary and he picks up most of the overhead involved in running the store. These guys tend to be the suckers - they think they're going to play businessman but they really don't have the entrepreneurial orientation to succeed at it. The company also has them on an extremely tight lease and, since they haven't sunk a big pile of their own money into the operation, they don't have much leverage with corporate officials.
Then there are the "real" franchisees - the guys who actually put up the big bucks for their stores. These guys are investors and they know there's more than one way to invest a million dollars. In order for them to sink that kind of cash into a restaurant franchise, they've got to be confident of a healthy return. And they must be getting it too - Cara Operations wouldn't be charging $1.2 million for a Swiss Chalet franchise if nobody was willing to pony up. I suspect the Swiss Chalet franchisees are doing quite well. I wonder how well the workers are doing? I believe UFCW Local 206 is in negotiations for its Ontario Swiss Chalet bargaining unit. We'll need to keep an ear to the ground about that.
[ 10-20-2001: Message edited by: remote viewer ]
And CARA Operations is barely making ends meet. I wonder where the cash came from to make the Second Cup bid? CARA/Second Cup
