Anyone Franchise Owner's here? I'm thinking about opening a ...

[ajtyeh]

Rita's Italian Ice

http://www.ritasice.com/

I have about 150k cash, and i see they require about 200-350k startup. (I understand i can get that through 3rd party loans)

I've read some information on some franchise websites, but i was wondering if anyone has any experience in buying a franchise, something like a mcdonalds, burger king, or anything of that sort.

Any ideas of what to expect in terms of income. I'm thinking about Montgomery County, maryland, (one of the top 20 richest counties in the US).

 

[glenn beck]

It is all about the location of it. You put it on Rockville Pike you will do well but pay a ridiculous leasing fee. But I think most of Montgomery County is not cheap for rental space. Maybe try to get it near a Metro stop

 

[MagnusTheBrewer]

Franchises come in many different flavors and I don't mean kinds of Italian Ice. I would recommend doing a business plan even if Rita's Italian Ice is a true turnkey. The business plan isn't for acquiring loans (although it helps) it's for educating yourself as to what to expect.

Do you have food service experience? Are you interested in food service? If you are looking at it as purely an investment, save your money. The ROI on ANY food service operation is less than almost any other kind of investment. The ONLY reason for investing in a food service operation is because you enjoy it.

If you envision stopping by occasionally to check on the elves while raking in the big bucks, you are in for a miserable experience and can kiss your investment good bye.

 

[rgwalt]

Franchises come in many different flavors and I don't mean kinds of Italian Ice. I would recommend doing a business plan even if Rita's Italian Ice is a true turnkey. The business plan isn't for acquiring loans (although it helps) it's for educating yourself as to what to expect.

Do you have food service experience? Are you interested in food service? If you are looking at it as purely an investment, save your money. The ROI on ANY food service operation is less than almost any other kind of investment. The ONLY reason for investing in a food service operation is because you enjoy it.

If you envision stopping by occasionally to check on the elves while raking in the big bucks, you are in for a miserable experience and can kiss your investment good bye.

Interesting... I was thinking of going in on a Rita's with some friends here in Texas. We predicted that it would make a mint down here in Houston, especially in the summer. Unfortunately someone beat us to the punch and is opening a store in the metro area as well as one in Galveston. I suppose it wouldn't stop us from opening our own, but we couldn't capitalize on the success of the first franchise in the area.

Didn't realize that the ROI was so low on food service. Does this include places like an ice cream shop (or an ice shop in this case)? I mean, I understand why it is tough to make money on traditional restaurants since you have to maintain a full kitchen.

 

[MagnusTheBrewer]

Interesting... I was thinking of going in on a Rita's with some friends here in Texas. We predicted that it would make a mint down here in Houston, especially in the summer. Unfortunately someone beat us to the punch and is opening a store in the metro area as well as one in Galveston. I suppose it wouldn't stop us from opening our own, but we couldn't capitalize on the success of the first franchise in the area.

Didn't realize that the ROI was so low on food service. Does this include places like an ice cream shop (or an ice shop in this case)? I mean, I understand why it is tough to make money on traditional restaurants since you have to maintain a full kitchen.

The number of details that impact ROI in food service are legion but, two of the biggies are the high cost of product in relation to selling price and the razor thin edge that you have to walk in regards to labor cost. Seriously, this is a much too complex a proposition to even begin to address in these forums. If you have no experience in the field, run away now. I have seen food service operations both franchise and self operated take people's life savings, home and, ruin marriages.

 

[Wonderful Pork]

you don't really make much money on a franchise unless you open more than one. I know people who own 1 Subway restaurant and work themselves to death, somebody else own like 5 and just sit back and take in the cash (though, it still not THAT much). Same with gas stations, etc.

I worked at both a Quiznos and Coldstone in college, the owners had a couple of shops and left all the day-to-day stuff to managers, so it was like passive income to them. But the margins were thin, I actually had my $100 paycheck bounce...

 

[Mike Gayner]

Listen to Mangus because everything he has said is 100% true. Foodservice, especially franchises, is not glamorous business - it's tough, it barely provides enough profit to live on and it's difficult to grow. I have seen this first hand.

 

[OutHouse]

you will buy yourself a full time min wage job.

 

[vi edit]

you don't really make much money on a franchise unless you open more than one. I know people who own 1 Subway restaurant and work themselves to death, somebody else own like 5 and just sit back and take in the cash (though, it still not THAT much). Same with gas stations, etc.

I worked at both a Quiznos and Coldstone in college, the owners had a couple of shops and left all the day-to-day stuff to managers, so it was like passive income to them. But the margins were thin, I actually had my $100 paycheck bounce...

There is a lot of truth to this. If you are owner/proprieter then you are looking at 60 hour weeks for not a large amount of money. You can't spread out costs across multiple revenue producers. You really aren't going to bring in reasonable profits untile you have multiple stores...and that assumes you can make it through the opening and sucess of the first one.

 

[OutHouse]

I'm thinking about Montgomery County, maryland, (one of the top 20 richest counties in the US).

you really need to study this for at least a year. all you are seeing in $$$$ signs and hate to burst your bubble but that isnt going to happen.

 

[Wonderful Pork]

There is a lot of truth to this. If you are owner/proprieter then you are looking at 60 hour weeks for not a large amount of money. You can't spread out costs across multiple revenue producers. You really aren't going to bring in reasonable profits untile you have multiple stores...and that assumes you can make it through the opening and sucess of the first one.

I also know from first hand experience. A close family friend (engineer) lost his job about 15 yrs back and thought it would be easier to open up a gas station and run it. He was working 60-80 hour weeks cause he couldn't find good help, plus robberies, etc (and this wasn't a bad part of town). He ended up dying a few years ago of a heart attack which may not be directly related, but the stress sure aged him like 10 years in a short amount of time.

Its a shame, he worked with my dad and seemed to be a bright guy (to my 10 year old self) but eventually all the working and revenue problems took its toll.

 

[OutHouse]

I also know from first hand experience. A close family friend (engineer) lost his job about 15 yrs back and thought it would be easier to open up a gas station and run it. He was working 60-80 hour weeks cause he couldn't find good help, plus robberies, etc (and this wasn't a bad part of town). He ended up dying a few years ago of a heart attack which may not be directly related, but the stress sure aged him like 10 years in a short amount of time.

Its a shame, he worked with my dad and seemed to be a bright guy (to my 10 year old self) but eventually all the working and revenue problems took its toll.

i seriously looked into buying a phillips 66 from a friend of mine. its in a great location and he has contracts with the school district and police/city fleet for accounts along with a few smaller oil drilling companies. i had all his books and even spent time at the station. I came to my senses and dropped that idea. profits are razor thin and if you are late just one time paying for your gas delivery you will be COD forever. he also has a 5 bay car wash that does pretty well. since all of that is cash it supplements greatly his income when gas sales are low. he makes about 1.5 cents profit per gallon of gas.

 

[Miramonti]

Franchisers make money by selling franchises to franchisees. Franchisees make money by selling crack in their spare time when they're not working 80 hours a week for less than minimum wage.

And if you happen to make more than that, they'll open another one down the road that cannibalizes your sales.

 

[lokiju]

Unless you have a huge mall that's always packed that you could put this in, I think the winter months would be hard to make any money with.

 

[Regs]

I would get to know what the potential customer wants and needs are before opening up. Also, make sure they school district has high attendance for after-school events, sports, and other activities.

 

[Kelvrick]

As bad as I feel, some friends of mine are opening up one of those frozen yogurt places where you fill up a cup, choose your own toppings and pay by the ounce shops. I don't know how they came to the decision, but I think it happened after the husband lost his job. I think its opening up in a month and I'm wondering how long it will be until they lose all their money.

It doesn't sound like you're that serious yet though, so I'd do a lot more research, and not just on atot before committing.

 

[vi edit]

Franchisers make money by selling franchises to franchisees. Franchisees make money by selling crack in their spare time when they're not working 80 hours a week for less than minimum wage.

And if you happen to make more than that, they'll open another one down the road that cannibalizes your sales.

I could the say the relationship is the same between day traders and their brokers. There's obviously some guys out there that make a very plump living off of it, but it takes a ton of work, money, stress, and a bit of luck. And then theres' the rest that squander away their nest egg and live for years trying to play catch up.

Same thing with franchises. There are some out there that have made very good money by going with wise decisions and the capital, experience and labor to make them work. There are countless others that took their nesteggs and put it into a dream only to see it get wiped out because they didn't know what they were getting into.

 

[Cal166]

As bad as I feel, some friends of mine are opening up one of those frozen yogurt places where you fill up a cup, choose your own toppings and pay by the ounce shops. I don't know how they came to the decision, but I think it happened after the husband lost his job. I think its opening up in a month and I'm wondering how long it will be until they lose all their money.

It doesn't sound like you're that serious yet though, so I'd do a lot more research, and not just on atot before committing.

If it's in Manhattan, it will work really well. There are few of them in the city and it's always pack during the warmer days. I think it was like .39cents an ounce and it adds up with the toppings.

 

[vi edit]

If it's in Manhattan, it will work really well. There are few of them in the city and it's always pack during the warmer days. I think it was like .39cents an ounce and it adds up with the toppings.

So it works fine in the summer...what happens when the weather starts getting cold?

 

[lxskllr]

I don't know anything about the food business, but you might do better with a privately owned snowball stand. You have a lot of the same hassles, but at least there's 1 less person getting a cut of what you make. Around here, snowball stands do pretty well in the summer.

 

[slayer202]

rita's italian ice? never heard of it. unless you are opening a mcdonalds or something high profile like that, personally, I would just start something myself and save the money, though it would be harder

 

[vi edit]

rita's italian ice? never heard of it. unless you are opening a mcdonalds or something high profile like that, personally, I would just start something myself and save the money, though it would be harder

That's the give/take part of a franchise. For the franchise fee you don't just get a name, but you also get marketing support (all your ads are done for you), instant access to menu/ingredients, weeks of training at corporate owned stores prior to starting yours, and onsite support when you do open your store.

 

[SpatiallyAware]

You will not make enough money to feed your family unless you're planning on opening 15+ or funneling drug cash through it.

 

[SpatiallyAware]

It is all about the location of it. You put it on Rockville Pike you will do well but pay a ridiculous leasing fee. But I think most of Montgomery County is not cheap for rental space. Maybe try to get it near a Metro stop

Is there really an ideal location?

Anywhere near a beach is heavily seasonal. How will he sustain himself during the 3-4 month minimum off season?

Anywhere that's always hot (Atlanta, Texas) it's a novelty. It's like dippin dots, yeah they're sorta cool but nowadays having flavored corn syrup poured over ice is... Out. Not to mention you'd have to sell a TON to make any sort of profit.




IMO you'd be better off opening a sub shop or something. Around here it's popular to see 'breakfast grills' next to starbucks that openly let people bring their SB coffee inside. You can buy a sausage egg and cheese bagel.. 3-4 have popped up in my area and seem to fit a 'niche' with people already paying $4 for coffee.


Either way, good luck man.. Also keep in mind any decent bank is going to require for you to have a solid business plan including realistic monthly predictions.

 

[Miramonti]

I could the say the relationship is the same between day traders and their brokers. There's obviously some guys out there that make a very plump living off of it, but it takes a ton of work, money, stress, and a bit of luck. And then theres' the rest that squander away their nest egg and live for years trying to play catch up.

Same thing with franchises. There are some out there that have made very good money by going with wise decisions and the capital, experience and labor to make them work. There are countless others that took their nesteggs and put it into a dream only to see it get wiped out because they didn't know what they were getting into.

I agree. The brokerage's shoes are much more advantageous to be in.

A major difference might be that franchisees are extremely dependent on the corporate office of the franchiser to be successful (particularly for b&m franchises, as opposed to push carts, etc.)

Corporate controls the cost of food, packaging, and various other expenses that the franchisee pays for. If the franchiser doesn't stand behind the franchises, like much of what's been talked about with Quizno's the past few years, the franchisee can be up sh!t creek w/o a paddle...little to nothing they can do about it.

Some examples are inadequate marketing, food and packaging costs too expensive, non-profitable product lines, 2-for-1 coupons shoved down the franchisees throat, saturating the market with additional franchises, and so on.