Franchise forums [Where to find franchise opportunities?]

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viralmehta28
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Franchise forums [Where to find franchise opportunities?]

Post by viralmehta28 »

[This thread has been merged with another thread discussing the same topic.

The title is edited to address both threads' focus. Moderator Pops1860]


I am looking to buy a franchise and just starting my research on this. Are there some excellent forums for Franchise like Biggerpockets for real estate or boglegeads for Financial advice. Thank you for your help.
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arcticpineapplecorp.
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Re: Franchise forums

Post by arcticpineapplecorp. »

don't know of any, but the best advice you could get is if you're considering buying any franchise, to first work for a year in one as an employee so you understand the business as well as you can and try to understand the financials to the extent you can get access to. Lessen the future surprises to the extent you can. As the franchise owner questions and lots of them. Learn the business before you buy the business. You should work there first so if you have to run the place for any reason you won't resent it later.

read these:
https://clark.com/business-entrepreneur ... t-for-you/
https://clark.com/business-entrepreneur ... -yourself/
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
DoubleComma
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Re: Franchise forums

Post by DoubleComma »

I don’t want to rain on your parade, but I really hope this isn’t a Subway or Dickey’s BBQ. So many difficult situations with folks losing a lot in those two. Quick google search can deliver more than you can read.
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Sandtrap
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Re: Franchise forums

Post by Sandtrap »

viralmehta28 wrote: Tue Feb 14, 2023 9:26 pm I am looking to buy a franchise and just starting my research on this. Are there some excellent forums for Franchise like Biggerpockets for real estate or boglegeads for Financial advice. Thank you for your help.
To OP:
Questions and notes for you:

1 How much "cash" do you have to invest in a franchise?
2. What type and size of franchise?
a) Working as a "self employed", "independent contractor", for a drain cleaning company that "franchises" a van and all the equipment to you, and sends you on calls in which you get a "percentage". . . (all sorts of structures here, some are for pest control and have bug ears on the van).
b) Tub and shower resurfacing, coating, etc. You purchase the equipment, take a training course, then you have a "franchise". . .
c) Spending a lot of money to go through the owner's or owner to be, "teaching and training course" on how to make a sandwich, or pizza, or. . . and buying all the equipment and so forth from a Nationwide franchise and then opening a branch in various areas. Some franchises "tell you" where you can do this, others do not. Many will help you finance all this.
3. As stated earlier by "arctic. . ", work part time at a franchise in your area that you are interested in, even as a minimum wage worker or delivery person. Find out from "actual experience" vs online reading and talking and browsing the web and reading and talking, what "really" goes on behind the scenes of a working franchise. While you are there, talk to the owners. Learn.
4. Do you have a relative that owns a franchise that you are interested in?
5. How much time do you have to devote to this franchise as an owner? 24/7?

5. Do you have a "bogle" index fund portfolio to round out your financial strategy and provide a good foundation for you before and while you are doing this franchise?

6. What is it about a "franchise" that attracts you VS opening your own business?

j :D
Wiki Bogleheads Wiki: Everything You Need to Know
smitcat
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Re: Franchise forums

Post by smitcat »

No sites that have overall unbiased views that we know of.
Without some method to narrow down the business sector it is very hard to do.
For some basic research on specific Franchise resales in your area you can look to bizbuysell(dot)com and review current listings.
For some basic research on business in your area you can do some or all of the following:
- Local SCORE chapters
- Local SBA centers, often makes sense to visit more than one
- Take a local college course in 'entrepreneurship."
- Some local unemployment offices offer a core 4 business starter course
- Some local chamber of commerce offices can be friendly and helpful
- Visit at least 3 running Franchises in your area of interest open more than one year and ask the tough questions

Another couple of thoughts...
Never start or buy any business without a good business plan
Never start of buy any business without an exit plan
Cosmic Pony 8
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Re: Franchise forums

Post by Cosmic Pony 8 »

I spent 35 years as a marketing consultant to several franchise organizations, so know a lot about this topic. There are franchise shows that take place several times a year in larger cities throughout the country, a google search should turn them up.

The longer I worked with franchisees in fast food and retail, the more convinced I became that I WOULD NEVER invest in a franchise business. But if you do go ahead, be certain you understand:

-All fees that will be paid to the franchisor including equipment costs and such to start and run the business. Food cost and food vendor relationship are really important if you're going in the food service biz.
-Whether the business will be highly impacted by fluctuating cost of goods. One client of mine got into Wingstop and nearly went broke with fluctuations in chicken prices. He couldn't adjust pricing on a weekly basis.
-Most importantly, how strong is the brand and what level of advertising will be provided and at what cost to you. If you are functioning in a larger market, this is all the more important. I worked with one client that had 14 franchised restaurants in Phoenix (big market) and all went out of business over time because even pooling ad funds, they couldn't afford media.
-Finally, will you receive trade area protection so that the franchisor can't decide to put another store near yours if you're successful.

There's a lot more to being a franchisee than people know and the guys developing the business won't share because they want to collect the entry fee.

Best of luck.
Chai123
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Where to find franchise opportunities?

Post by Chai123 »

Hi guys,

I'm pretty new to the community and found out about Bogleheads just googling online communities that valued the importance of entrepreneurship and capital ownership (as opposed to relying on wage labor for your livelihood). I think the most powerful idea I've learned recently is that when you're building a business, you're essentially creating an asset. If run well, that asset represents a stream of growing future cash flows for years to come.

Now I have never owned my own franchise (let alone any business) before - where do you all recommend I go to compare and contrast different franchise systems against each other? It seems like FDDs (franchise disclosure documents) are all behind paywalls. I know there's some sites like Franchise Direct and Franchise Tiger but they're a bit clunky to navigate, not easy to compare several systems at once, and some of the information with investment ranges and expected royalty percentages just seem dead wrong. Where do you guys recommend I go to search for these opportunities?
smitcat
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Re: Where to find franchise opportunities?

Post by smitcat »

Chai123 wrote: Tue Feb 27, 2024 2:39 pm Hi guys,

I'm pretty new to the community and found out about Bogleheads just googling online communities that valued the importance of entrepreneurship and capital ownership (as opposed to relying on wage labor for your livelihood). I think the most powerful idea I've learned recently is that when you're building a business, you're essentially creating an asset. If run well, that asset represents a stream of growing future cash flows for years to come.

Now I have never owned my own franchise (let alone any business) before - where do you all recommend I go to compare and contrast different franchise systems against each other? It seems like FDDs (franchise disclosure documents) are all behind paywalls. I know there's some sites like Franchise Direct and Franchise Tiger but they're a bit clunky to navigate, not easy to compare several systems at once, and some of the information with investment ranges and expected royalty percentages just seem dead wrong. Where do you guys recommend I go to search for these opportunities?
- Franchise and business symposiums in your area
- SCORE
- Local SBA
- Bizbuysell(dot)com
- the Franchisees on the ones that interest you
- the Franchisor on the ones that interest you
Collecting FDD's to review do requires some work but not really that much.
Theseus
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Re: Where to find franchise opportunities?

Post by Theseus »

Find a good mentor at www.score.org. You should be able to search for mentor with specific expertise. But at this point you should be able to get help from any assigned mentor. If you think the mentor is not a good fit or did not provide value in your specific case the. feel free to keep requesting another one until you find a good fit. I have been a score mentor for 7 years and it is one of the most valuable free resource for entrepreneurs.
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Wiggums
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Re: Where to find franchise opportunities?

Post by Wiggums »

I learned a lot by working for someone else who mentored me. He left me to run everything (about 12 months) while his wife recovered out of state from my bad vehicle accident while on a family vacation.

Most businesses fail within the first few years. Having enough capitol and being present at the business is very important. You should read the publications from the small business administration. I found the resources to be educational and helpful.

You have the potential to build something great. Follow your dream.
"I started with nothing and I still have most of it left."
mrsbetsy
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Re: Where to find franchise opportunities?

Post by mrsbetsy »

I would steer clear of Home Franchise Concepts and any of their brands:

https://www.unhappyfranchisee.com/publi ... lzmLxNkEo8


This includes: Budget Blinds, Concrete Craft, Tailored Closet, Two Maids, Kitchen Tuneup, AdvantaClean, and more.

Ideally, look for one that has a set royalty rather than a percentage. They JUST changed their royalty structure and it's 5% including shipping and installation. Many franchisees are not going to survive and they will not renew their 10 year contracts.

We just got out in the knick of time and retired.
Walkure
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Re: Where to find franchise opportunities?

Post by Walkure »

Wiggums wrote: Tue Feb 27, 2024 4:00 pm while his wife recovered out of state from my bad vehicle accident while on a family vacation.
you found a franchisee for your injuries? :shock:
exodusNH
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Re: Where to find franchise opportunities?

Post by exodusNH »

Chai123 wrote: Tue Feb 27, 2024 2:39 pm Hi guys,

I'm pretty new to the community and found out about Bogleheads just googling online communities that valued the importance of entrepreneurship and capital ownership (as opposed to relying on wage labor for your livelihood). I think the most powerful idea I've learned recently is that when you're building a business, you're essentially creating an asset. If run well, that asset represents a stream of growing future cash flows for years to come.

Now I have never owned my own franchise (let alone any business) before - where do you all recommend I go to compare and contrast different franchise systems against each other? It seems like FDDs (franchise disclosure documents) are all behind paywalls. I know there's some sites like Franchise Direct and Franchise Tiger but they're a bit clunky to navigate, not easy to compare several systems at once, and some of the information with investment ranges and expected royalty percentages just seem dead wrong. Where do you guys recommend I go to search for these opportunities?
They are not as profitable as they seem. The average McDonald's location takes in $3.2M. After rent (often paid to McDonald's), other McDonald's fees, labor, and costs, the profit is $290k. That's after you've sunk $100,000s into getting a location up and running.
Jack FFR1846
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Re: Where to find franchise opportunities?

Post by Jack FFR1846 »

I looked into a bunch maybe a decade ago. Go directly to the home site of the franchise. McDonalds, Subway, Music Go Round. They can be extremely helpful. I found Music Go Round to be the most helpful with all expected costs, ability to work with existing franchise owners and a much, much lower cost than others like McDonalds and Subway. I also found that some like Subway require more than one location to get the franchise. I'm not sure if you can buy a single location. I didn't have enough interest in them to go talk with owners. I did find existing franchise locations for sale. To me, in the end, getting a franchise felt like an expensive way to get my own business where I'd have to work 80 hours a week just to get it going.

Off the top of my head, a McDonalds is around $1M. Music Go Round, including buying inventory was about $350k and has far more locations available. They do provide support like nationwide inventory visible to those who visit the site, so someone could buy a guitar from your store who is 1000 miles away and you'd ship it out.
Bogle: Smart Beta is stupid
smitcat
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Re: Where to find franchise opportunities?

Post by smitcat »

Wiggums wrote: Tue Feb 27, 2024 4:00 pm I learned a lot by working for someone else who mentored me. He left me to run everything (about 12 months) while his wife recovered out of state from my bad vehicle accident while on a family vacation.

Most businesses fail within the first few years. Having enough capitol and being present at the business is very important. You should read the publications from the small business administration. I found the resources to be educational and helpful.

You have the potential to build something great. Follow your dream.

"Most businesses fail within the first few years."
Not really accurate - but you can get the real data at your local SBA office.
smitcat
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Re: Where to find franchise opportunities?

Post by smitcat »

Jack FFR1846 wrote: Tue Feb 27, 2024 6:17 pm I looked into a bunch maybe a decade ago. Go directly to the home site of the franchise. McDonalds, Subway, Music Go Round. They can be extremely helpful. I found Music Go Round to be the most helpful with all expected costs, ability to work with existing franchise owners and a much, much lower cost than others like McDonalds and Subway. I also found that some like Subway require more than one location to get the franchise. I'm not sure if you can buy a single location. I didn't have enough interest in them to go talk with owners. I did find existing franchise locations for sale. To me, in the end, getting a franchise felt like an expensive way to get my own business where I'd have to work 80 hours a week just to get it going.

Off the top of my head, a McDonalds is around $1M. Music Go Round, including buying inventory was about $350k and has far more locations available. They do provide support like nationwide inventory visible to those who visit the site, so someone could buy a guitar from your store who is 1000 miles away and you'd ship it out.
"To me, in the end, getting a franchise felt like an expensive way to get my own business where I'd have to work 80 hours a week just to get it going."
Depends on the business, location, and the person I guess - was not our experience at all.
smitcat
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Re: Where to find franchise opportunities?

Post by smitcat »

exodusNH wrote: Tue Feb 27, 2024 6:11 pm
Chai123 wrote: Tue Feb 27, 2024 2:39 pm Hi guys,

I'm pretty new to the community and found out about Bogleheads just googling online communities that valued the importance of entrepreneurship and capital ownership (as opposed to relying on wage labor for your livelihood). I think the most powerful idea I've learned recently is that when you're building a business, you're essentially creating an asset. If run well, that asset represents a stream of growing future cash flows for years to come.

Now I have never owned my own franchise (let alone any business) before - where do you all recommend I go to compare and contrast different franchise systems against each other? It seems like FDDs (franchise disclosure documents) are all behind paywalls. I know there's some sites like Franchise Direct and Franchise Tiger but they're a bit clunky to navigate, not easy to compare several systems at once, and some of the information with investment ranges and expected royalty percentages just seem dead wrong. Where do you guys recommend I go to search for these opportunities?
They are not as profitable as they seem. The average McDonald's location takes in $3.2M. After rent (often paid to McDonald's), other McDonald's fees, labor, and costs, the profit is $290k. That's after you've sunk $100,000s into getting a location up and running.
'They are not as profitable as they seem.'
Depends on the business and location - spending some time on 'bizzbuysell' you can research these metrics and if you become very interested there are deeper dives for data as well
alex_686
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Re: Where to find franchise opportunities?

Post by alex_686 »

Walkure wrote: Tue Feb 27, 2024 6:01 pm
Wiggums wrote: Tue Feb 27, 2024 4:00 pm while his wife recovered out of state from my bad vehicle accident while on a family vacation.
you found a franchisee for your injuries? :shock:
You are reading this backwards. Wiggums caused a “accident” to the owners wife and then the owner gave him control.

From what I have seen of Wiggums on TV, very on point.
Last edited by alex_686 on Wed Feb 28, 2024 7:58 am, edited 1 time in total.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
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StevieG72
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Re: Where to find franchise opportunities?

Post by StevieG72 »

Welcome to the forum!

Franchise opportunities can be a minefield to navigate! The best way to describe a franchise is you are buying a job.

There is money to be made, but it can be a crapshoot. I know franchisees in the same business where some make a lot of money, and others lose money. While some of this can be based on the operators performance, often times it is just the location.

Due diligence can not be overstated when researching any business opportunity.
Fools think their own way is right, but the wise listen to others.
Chai123
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Re: Where to find franchise opportunities?

Post by Chai123 »

This is all very helpful guys. Some of these websites like bizbuysell or franchisedirect to provide a nice way of getting started. Sadly some of the more niche systems that are likely not to be as saturated as a McDonalds or Starbucks require that I hop on the phone with their representatives before giving me an FDD *sigh*. If only there was a more convenient way to compare and contrast all the options out there - I'm surprised there's no centralized database for this. It's a pain in the ass just to find FDDs alone. Or to find other pre-existing franchisees who I could contact for their experiences.
barnaclebob
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Re: Where to find franchise opportunities?

Post by barnaclebob »

Are you really building an asset with a franchise or are you buying a job and leasing a business model?
smitcat
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Re: Where to find franchise opportunities?

Post by smitcat »

Chai123 wrote: Wed Feb 28, 2024 2:56 pm This is all very helpful guys. Some of these websites like bizbuysell or franchisedirect to provide a nice way of getting started. Sadly some of the more niche systems that are likely not to be as saturated as a McDonalds or Starbucks require that I hop on the phone with their representatives before giving me an FDD *sigh*. If only there was a more convenient way to compare and contrast all the options out there - I'm surprised there's no centralized database for this. It's a pain in the ass just to find FDDs alone. Or to find other pre-existing franchisees who I could contact for their experiences.
"If only there was a more convenient way to compare and contrast all the options out there - I'm surprised there's no centralized database for this."
Yes - it is a bit or work... but if this seems like a lot of work how will running your own business seem like?
About 30 years ago we set up our 'filter' for which business's to checkout - it had most all of our 'wants' in a business that we could rate and add up to compare. Having that filter allowed us to immediately eleminate a very large % of the pool , doing some research on 10-20 after that was not all that hard before doing a deeper dive on the ones left.
We abolutely did not need an FDD to get that filtering down to a very small number of interests for us.

"Or to find other pre-existing franchisees who I could contact for their experiences."
Besides using the SBA we also used the Yellow pages, internet and physical visits to contact current business owners.
The SBA often had meetings with many business owners (10-25) that we met. Over time we have been at 3 SBA centers , one SCORE location and a few
largely attended business symposiums on available business's.
NYGiantsFan
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Re: Where to find franchise opportunities?

Post by NYGiantsFan »

Chai123 wrote: Tue Feb 27, 2024 2:39 pm
Now I have never owned my own franchise (let alone any business) before - where do you all recommend I go to compare and contrast different franchise systems against each other? It seems like FDDs (franchise disclosure documents) are all behind paywalls.
You can search for old FDD on Google. Just search for FDD with name of franchise. For example, Dunkin old FDD https://fddexchange.com/wp-content/uplo ... D_2010.pdf points here. There should not be much changes in FDD from recent past to present.

Best way to gain knowledge is to talk to current franchise owner. Figure out who is owner of the location (for example restaurant franchise) and try to talk to person directly. Try to talk to small owner (person having less than 5 location ideally).
Question you want to understand
1) Average volume per location
2) Different expenses (payroll, material cost etc) beside rent
3) Net profit
4) Will you be able to get bank financing (7/11s are notorious for not being able to get bank financing).
5) Resale value (If you are buying existing franchise)
6) Do you need to purchase territory for new franchise? How quickly do you need to develop entire territory (5/7/10 years etc)?
7) Minimum investment and net-worth requirements
8) Can you own other franchise/business beside owning this franchise? (McDonald and Chick Fil A want their franchise to work full time there).
9) Is corporate lawsuit friendly? Search Google for recent cases against franchise by particular franchisor. That will tell you more about heavy handed franchisor who is in multiple litigations.
Chai123
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Re: Where to find franchise opportunities?

Post by Chai123 »

I actually came across this very interesting site that finally had what I was looking for - https://franchisenow.me/. They have an easy to navigate database of a good chunk of franchise systems (they claim +1,400) including the most recent FDDs. Plus you can filter the whole data base for industry, investment amounts, and royalty rates. To top it all off they even have a section where current franchisees leave reviews of their experiences working with their systems and folks can pay to schedule calls with them. Pretty neat collection of info.
smitcat
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Re: Franchise forums

Post by smitcat »

Chai123 wrote: Tue Apr 02, 2024 7:50 pm I actually came across this very interesting site that finally had what I was looking for - https://franchisenow.me/. They have an easy to navigate database of a good chunk of franchise systems (they claim +1,400) including the most recent FDDs. Plus you can filter the whole data base for industry, investment amounts, and royalty rates. To top it all off they even have a section where current franchisees leave reviews of their experiences working with their systems and folks can pay to schedule calls with them. Pretty neat collection of info.

FWIW - I find that site dated and error prone at best and misleading at its worst.
Chai123
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Re: Franchise forums [Where to find franchise opportunities?]

Post by Chai123 »

What was misleading about it? I think some of the FDDs might be from '22/'23 - I know a lot of the 2024 ones will be coming out this month. Thought the franchisee reviews were actually pretty insightful from an operator's POV. So curious what you thought was misleading? Don't want to base my search on faulty data
smitcat
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Re: Franchise forums [Where to find franchise opportunities?]

Post by smitcat »

Chai123 wrote: Wed Apr 03, 2024 11:01 pm What was misleading about it? I think some of the FDDs might be from '22/'23 - I know a lot of the 2024 ones will be coming out this month. Thought the franchisee reviews were actually pretty insightful from an operator's POV. So curious what you thought was misleading? Don't want to base my search on faulty data
What list of items are you trying to learn from that site?
FF, startup costs, E's in business, terms, reporting, etc were misleading .....

What do you want to know?
Chai123
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Re: Franchise forums [Where to find franchise opportunities?]

Post by Chai123 »

The fees, royalty rates, minimum investment needs, etc all match the corresponding FDDs lol. It's just nice to have a singular view of all these things and be able to filter on them while having ready access to each and every FDD. So again, if the data matches the government-approved FDD I'm not sure what's misleading. Plus the qualitative commentary from the Franchisee Reviews is not something I could find anywhere else on the internet.
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