3 ms·

Owning a franchise is good for already-rich people whose skills lie in hiring competent worker bees. You assemble the workforce, secure the capital, and they f

Owning a franchise is good for already-rich people whose skills lie in hiring competent worker bees. You assemble the workforce, secure the capital, and they follow the franchise manuals. You are not very involved in the day-to-day business of running the place, but rather more interested with the regional strategic plan for the brand. A person who wants to actually operate a restaurant would probably be best served by managing a franchised or chain restaurant, to gain food service management experience, then going it alone from a single small, low-rent location or food truck. Bootstrap that up to multiple locations. Then shut it all down before you go bankrupt, because you're trying to run a food service business, like an insane person. A restaurant has thin enough margins as it is, and the franchise usually takes more out of that than it gives back. I can't imagine why anyone would invest in an actual restaurant, rather than a real estate management and restaurant supply business, like McDonald's. The economics just seem nightmarish. You almost need to work out a Producers-like scheme where you can make more money if the restaurant fails.

greedo 9y ago
"You are not very involved in the day-to-day business of running the place, but rather more interested with the regional strategic plan for the brand." Nothing could be further from the truth for a franchise of a name brand QSR. Joe Operator with his first McDonald's store is busting his hump for 60 hours a week. And the idea that a franchisee has significant involvement for branding is just as out of touch.
- logfromblammo 9y ago
  I was describing the ideal situation where franchising is actually worthwhile. If actual franchising is not that--and it isn't--no one should realistically be buying franchises. No one should own-operate just one McDonald's restaurant. If you're going to bust your hump for 60 hours a week, do it as Worthless Brand Burgershack, and put all the benefit of your extra work into your own pocket instead of faceless shareholders. But when you can own ten restaurants, then yes, franchising McDonald's is a great idea. If you have ever seen Coming to America, the "McDowell's" restaurant is a hyperbole take on how to do it. Run your place exactly like McDonald's, but don't use any of the land, brands, patents, or trademarks.
  - greedo 9y ago
    Franchising isn't horrible, especially if you're not creatively inclined, but still a hard worker. It requires a lot of capital, and the willingness to work hard for a long time, as well as following the dictates of the franchisee. I can't agree that starting your own "Burgershack" is a good idea; the mortality rate for restaurants is just too high. And most franchisees can't afford to dive in and purchase 10 restaurants. The upfront capitol contribution is too high, and most franchisors don't like to see failure (it hurts their brand) so they want to make sure you can walk before you run.

greedo 9y ago

"You are not very involved in the day-to-day business of running the place, but rather more interested with the regional strategic plan for the brand." Nothing could be further from the truth for a franchise of a name brand QSR. Joe Operator with his first McDonald's store is busting his hump for 60 hours a week. And the idea that a franchisee has significant involvement for branding is just as out of touch.

logfromblammo 9y ago
I was describing the ideal situation where franchising is actually worthwhile. If actual franchising is not that--and it isn't--no one should realistically be buying franchises. No one should own-operate just one McDonald's restaurant. If you're going to bust your hump for 60 hours a week, do it as Worthless Brand Burgershack, and put all the benefit of your extra work into your own pocket instead of faceless shareholders. But when you can own ten restaurants, then yes, franchising McDonald's is a great idea. If you have ever seen Coming to America, the "McDowell's" restaurant is a hyperbole take on how to do it. Run your place exactly like McDonald's, but don't use any of the land, brands, patents, or trademarks.
- greedo 9y ago
  Franchising isn't horrible, especially if you're not creatively inclined, but still a hard worker. It requires a lot of capital, and the willingness to work hard for a long time, as well as following the dictates of the franchisee. I can't agree that starting your own "Burgershack" is a good idea; the mortality rate for restaurants is just too high. And most franchisees can't afford to dive in and purchase 10 restaurants. The upfront capitol contribution is too high, and most franchisors don't like to see failure (it hurts their brand) so they want to make sure you can walk before you run.