In past posts, we discussed the reasons to buy a franchise and why not to buy a franchise.
I understand that franchise sales are down across the board, but of the people that are interested in buying a franchise right now, many are people that have lost their jobs.
That brings us back to whether or not you are buying a business or buying a job. The ideal situation is for you to be a business owner, not self-employed. A business owner owns a business and the business goes on day after day whether the owner is around or not. If you are self-employed you are the number one guy and if you didn't show up for a month, the business would be down the drain or close to it.
Visiting franchisees, I see both business owners and self-employed people while visiting within the same corporate franchise. My business owners meet me for lunch, go to training days, stay up on business trends, budgets, vendor prices, and just spot checks that things are being done the right way. They go on vacation and enjoy their families.
The self-employed franchisee rarely has time to meet with me. They are always behind, tired from working long hours, always broke, cutting back on marketing and quality when times are tight. The self-employed person goes out of business 90% of the time in the first 5 years because they are under capitalized. Then 90% of those that made it the first 5 years, go out of business in the 6-10th years. This is due to being tired and completely worn out from all the work.
If you are thinking "I have always wanted to own my own business, and now that I don't have a job I think I might buy a franchise", please think about all this first. Buy a business, but don't buy yourself a job.
Saturday, February 21, 2009
Monday, February 16, 2009
Working at McDonalds In Your Underwear?
What has happened to McDonald's? I swear this story is true. It happened to me!
I know that I am more aware of franchises and how they are honoring their brand, but the Mc Donalds I was in the other day would have shocked anyone. I was so taken back, I wrote the company and I have never done that to any store in my life.
I went into a McDonald's in Louisiana at 7:30 am. The line was to the door, the cars were backed up out to the highway. People were coming in, waiting for a few minutes, then leaving. Cars were giving up.
Here's the best part. I could see the girl taking orders. She was very over weight and wearing a red T-shirt and crock type sandals. That's it. Was she in her underwear? Who knows. I know she had a dirty stained T-shirt on at 7:30 am, and looked like she just rolled out of bed. She could have had very short shorts on but her shirt only went mid-thigh, so they would have been shorter than that. I would like to think she had shorts on........I won't even consider that she didn't have anything on under the shirt.
When I got up to the cash register, the credit machine wasn't working so they only accepted cash, they only had very small coffee cups and didn't have any lids at all for that scalding cup of coffee. They had been to busy to fill forks, napkins, etc so they just had them laying out on the counter in a pile. The woman in front of me was watching her watch and announcing to the crowd that was staying that it had been 15....18...20 minutes since she walked in.
I had to make the decision to be late to my appointment or go without grabbing a sausage biscuit that I could eat on the way, knowing I wouldn't get to eat until late in the afternoon. I stayed because I was in shock over the girl working at McDonald's without pants!!! (Or socks, or regular shoes, or hat, etc)
In McDonald Inc's defense, I did get a call from someone at the state office apologizing, an email, and a letter from the owner thanking me for reporting this store.
I will be popping into this store in a couple of weeks just out of curiosity while I am in the area. I hope they have cleaned up their act.
This is a classic example of how one franchise location can give all the locations a bad name. McDonald's doesn't have the best burgers, but they have a great operating system and customers go there because it is dependable. This McDonald's in Louisiana was ruining the brand for hundreds or thousands of other McDonald's franchisees.
Fran-rep
I know that I am more aware of franchises and how they are honoring their brand, but the Mc Donalds I was in the other day would have shocked anyone. I was so taken back, I wrote the company and I have never done that to any store in my life.
I went into a McDonald's in Louisiana at 7:30 am. The line was to the door, the cars were backed up out to the highway. People were coming in, waiting for a few minutes, then leaving. Cars were giving up.
Here's the best part. I could see the girl taking orders. She was very over weight and wearing a red T-shirt and crock type sandals. That's it. Was she in her underwear? Who knows. I know she had a dirty stained T-shirt on at 7:30 am, and looked like she just rolled out of bed. She could have had very short shorts on but her shirt only went mid-thigh, so they would have been shorter than that. I would like to think she had shorts on........I won't even consider that she didn't have anything on under the shirt.
When I got up to the cash register, the credit machine wasn't working so they only accepted cash, they only had very small coffee cups and didn't have any lids at all for that scalding cup of coffee. They had been to busy to fill forks, napkins, etc so they just had them laying out on the counter in a pile. The woman in front of me was watching her watch and announcing to the crowd that was staying that it had been 15....18...20 minutes since she walked in.
I had to make the decision to be late to my appointment or go without grabbing a sausage biscuit that I could eat on the way, knowing I wouldn't get to eat until late in the afternoon. I stayed because I was in shock over the girl working at McDonald's without pants!!! (Or socks, or regular shoes, or hat, etc)
In McDonald Inc's defense, I did get a call from someone at the state office apologizing, an email, and a letter from the owner thanking me for reporting this store.
I will be popping into this store in a couple of weeks just out of curiosity while I am in the area. I hope they have cleaned up their act.
This is a classic example of how one franchise location can give all the locations a bad name. McDonald's doesn't have the best burgers, but they have a great operating system and customers go there because it is dependable. This McDonald's in Louisiana was ruining the brand for hundreds or thousands of other McDonald's franchisees.
Fran-rep
Sunday, February 1, 2009
Franchise Ownership in a Bad Economy
Do you already own a franchise and your seeing your sales go down? This is common whether you are selling goods or services. Consumers are cutting back on purchases, eating out, and taking a hard look at everything in the budget.
There are a few things you can do to help yourself in this economy. First, it has been proven that you have to keep marketing. This will at least replace customers you loose and keep you even.
Just like consumers, don't buy anything you don't absolutely need. If you can rent equipment, instead of purchasing, do it. Anything you can do to conserve your money to hold on another year, do it. Also if you have any extra equipment, sell it. You can use the extra cash if it is paid for or help the budget if it isn't.
Keep up the quality of whatever you do or sell so when things are better, the business will come back. I have been in several resturants lately that were so short handed the service was terrible. I have been told I would have to wait for weeks to get an estimate on services since staff had been cut. I will move on to another company and never look back at these businesses.
Fran rep
There are a few things you can do to help yourself in this economy. First, it has been proven that you have to keep marketing. This will at least replace customers you loose and keep you even.
Just like consumers, don't buy anything you don't absolutely need. If you can rent equipment, instead of purchasing, do it. Anything you can do to conserve your money to hold on another year, do it. Also if you have any extra equipment, sell it. You can use the extra cash if it is paid for or help the budget if it isn't.
Keep up the quality of whatever you do or sell so when things are better, the business will come back. I have been in several resturants lately that were so short handed the service was terrible. I have been told I would have to wait for weeks to get an estimate on services since staff had been cut. I will move on to another company and never look back at these businesses.
Fran rep
Monday, October 20, 2008
Starting a franchise?Better have a lot of capital backing.
All,
Working with franchisees can be very time consuming. I apologize for the long time between posts.
We all know the economy is tanking and it will probably be 5-10 years before it is completely back to where it was. Tough times brings both opportunity and risk. Warren Buffet says "Be greedy when others are fearful, and fearful when others are greedy." Are you in a position to be greedy? There are plenty that are fearful.
As far as franchising, I think that being under capitalized is one of the biggest mistakes I see and hear about. When someone is looking at buying a franchise, they are told that they need at least a year of income set aside because it will take time to see a profit. I would make them have two years of income put away. Two years plus enough money to market through both the first and second years.
If you tell the person that is trying to sell you a franchise that you do have a years worth of money to fall back on, is that sitting in an account ready or would you have to sell a house or cash in a 401K? What if you suddenly you are up-side-down on your house like 50% of the people in America? What if your 401K is suddenly worth 40% less? THIS JUST HAPPENED!!!!! To lots of people.
Please don't tell me that you borrowed on the equity of your 401K to buy your business or to live on, and now that is gone.
Be very careful if you are thinking about starting a business. I would definately look at buying a failing business that has been running for awhile, but has been mismanaged or the people have to leave for personal reasons. A brand new business or brand new location - no way. Everyone is hanging on to their money tight and buying few new things.
Fran Rep
Working with franchisees can be very time consuming. I apologize for the long time between posts.
We all know the economy is tanking and it will probably be 5-10 years before it is completely back to where it was. Tough times brings both opportunity and risk. Warren Buffet says "Be greedy when others are fearful, and fearful when others are greedy." Are you in a position to be greedy? There are plenty that are fearful.
As far as franchising, I think that being under capitalized is one of the biggest mistakes I see and hear about. When someone is looking at buying a franchise, they are told that they need at least a year of income set aside because it will take time to see a profit. I would make them have two years of income put away. Two years plus enough money to market through both the first and second years.
If you tell the person that is trying to sell you a franchise that you do have a years worth of money to fall back on, is that sitting in an account ready or would you have to sell a house or cash in a 401K? What if you suddenly you are up-side-down on your house like 50% of the people in America? What if your 401K is suddenly worth 40% less? THIS JUST HAPPENED!!!!! To lots of people.
Please don't tell me that you borrowed on the equity of your 401K to buy your business or to live on, and now that is gone.
Be very careful if you are thinking about starting a business. I would definately look at buying a failing business that has been running for awhile, but has been mismanaged or the people have to leave for personal reasons. A brand new business or brand new location - no way. Everyone is hanging on to their money tight and buying few new things.
Fran Rep
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