Can you make good money opening up a restaurant franchise?

[XMan]

My hometown is dying for a Quizno's . . .

 

[minendo]

The startup fees alone are terrible.

IIRC Amused owns a few sandwich shop franchises so he would probably be a good one to answer any questions.

 

[XMan]

Originally posted by: minendo
The startup fees alone are terrible.

Yeah, I noticed. :Q Time to start buying lottery tickets.

 

[UglyCasanova]

I believe you have to have some experience in the food industry before you can do it though.

 

[xyion]

you need some good luck on your side. Quiznos is really expensive, so not so many people eat there (ok, I live in a college town, but still, NOBODY eats here) Plus it takes a good bit of money to buy a franchise (or a license or whatever).

Buying food is also pretty expensive IIRC. If you have a good amount of capital then I would go for it. Dont make it your day job though. The owner of my Quiznos is a practicing lawyer.

 

[TheBoyBlunder]

Can you make good money opening up a restaurant franchise?

Yes, but probably not for years, and especially if it's your sole source of income.

 

[huey1124]

you can always open up a chinese restaurant. i hear you can recycle leftover rice and drinks, and use stray cats as source of meat.

 

[sygyzy]

If you are going to try to be racist, at least get the jokes right.

If you are just going to try to be stupid. Well congratulations.

 

[dolph]

try opening a "qwizno's"

 

[huey1124]

Originally posted by: sygyzy
If you are going to try to be racist, at least get the jokes right.

If you are just going to try to be stupid. Well congratulations.

uh, thanks? first of all, i'm an Asian but i guess i can be a racist against my own race?

about the rice, drinks, and the cats... i was referring to the other OT threads that talked about how Chinese restaurants were caught using recycling leftover rice, drinks, and using cats in their meat dishes. i'm not making any jokes, and i don't even know what jokes you're talking about. but i guess your parents own a chinese restaurant and you're really sensitive about it.

 

[ReiAyanami]

were caught using recycling

that's what health inspectors are for. slime in the ice machine

quizno's: fat man's subway

the real key is location, capital start up costs for just a mcdonalds is $750k to $1mil and a lot of those are losing money due to saturation, same goes for burger king. ur safer putting that money into a mutual fund

but business loans might be the cheapest about now

 

[gopunk]

Originally posted by: huey1124

Originally posted by: sygyzy
If you are going to try to be racist, at least get the jokes right.

If you are just going to try to be stupid. Well congratulations.

uh, thanks? first of all, i'm an Asian but i guess i can be a racist against my own race?

about the rice, drinks, and the cats... i was referring to the other OT threads that talked about how Chinese restaurants were caught using recycling leftover rice, drinks, and using cats in their meat dishes. i'm not making any jokes, and i don't even know what jokes you're talking about. but i guess your parents own a chinese restaurant and you're really sensitive about it.

first off, yes, you can be a racist against your own race.

secondly, if the chinese restaurants were *caught* recycling food, drinks, and using cats, then that would indicate that they are *not* allowed to do those things.

 

[jinduy]

open up a 24 hour dim sum restaurant... i hate how they close after 3pm

 

[Thegonagle]

If you really want to go big, you open up your own restaurant, and make a name for yourself. Then you make the bucks charging the fees. You can't make the big bucks when you're paying big for someone else's name. Of course, you need have to be dedicated, and you have to be good.

 

[conjur]

My cousin and her husband run several KFC/Papa John's franchises down in Houston.

They just built a $1million, 5000 sq. ft. home a year or two ago.

I'd say it can be lucrative

 

[NogginBoink]

Don't for a minute forget that running a restaurant is a LOT of work.

You don't get nights off. You don't get weekends off. You're the boss and the one who's responsible for the bottom line.

 

[Koing]

If its in a nice location or semi nice you'll make money.

Start a chinese restaurant. If you can cook or learn to cook you will good money..........

If you intend to work there its a 11hr day for 6 days a week, that is if you are closing on one day..........

 

[vi edit]

It depends A LOT on the specific franchise you are trying to get into.

Some requirements you may have to meet to gain the rights from corporate -

- Make sure it's an open region. Many regions may already be taken, and just not developed yet.

- Be made to sign a contract where you promise to open X amount of stores. This is a BIG problem for many people. Many people just don't have the capital on hand to put up 10 places in 5 years time.

- You may have to cough up a large sum of money to actually buy into the franchise.

- You may have to show competence to be awarded the franchise rights. By this, I mean you need to show corporate exactly what makes you special enough to put this store in. If they hand out the franchise rights to any schmuck with money that doesn't know the first thing about how to run a restaurant, the store will bomb. If the store bombs, it's a blight on the corporate name. YOU don't suck in the customers eyes, the FRANCHISE sucks.

There's many more, but those are the big ones that many people don't think about.

BTW - I work for a management company that runs 18 fast food franchise locations, 9 donut franchise locations, SOON to be 11 sit down restaurants, and I have connections with several owners of many other franchise restaurants as well. If you have any specific questions, PM me and I can try to get an answer for you.

 

[EXman]

Yes you can but as people said it depends alot on what you open. Friend at my church owns/operates 2 Chick-Fil-A's and earns about 400K a year he gives out a percentage to employees (%25 profit sharing) so his goal is to give out $100K in bonuses. He Deligates almost everything too. Drives A 40K F350 Dually with Cow marks on it gets to write it off and overall does quite well for himself.

Granted you won't pull down that kinda loot with a Quizno's but I know the family in my town that owns the subways have done quite well but. Also Larry Ivy (university of Kentucky ex-athletic director he was a crook) bought the rights to a HUGE chunk of Papa John's Franchises in RUSSIA and will be developing that soon. He is a very smart guy so I guess he'll do quite well as multi owners of PJ's can drag down some Loot.

Lastly Franchises have nearly twice the chance of surviving the first year of business than a new ground up start up. I'd say go for it. I actually am thinking about it too.

 

[Davegod]

Depends, as said already. You can get some ridiculous extra costs and overhead like:
- Huge initial fee just for the name liscence
- Huge yearly fee, revenue or (sometimes AND!) profit cut for the liscence
- Excessive equipment costs to conform to the liscence, even if its not appropriate to your area. Also may force you to use specific equipment suppliers (that the franchise owner has a stake in or receives a cut of).
- Excessive materials costs (i.e. non-dayfresh foods) as again liscence forcing you to use "approved" supplies because they have a stake/deal with the suppliers.
- Franchise going down the pan can be a big risk for you, depending on how the contract is.

Of course, some times those can go the other way as franchise gets a good bulk deal on equipment and materials, and companies with 90% of their revenues from one franchise are more afraid of scamming you. You might also get protection in terms of all the lawyers you might possibly need, training, possibly financial backing (banks often prefer a proven franchise name to a 100% startup, franchise might have scemes aswell). OF course the #1 bonus is the brand and marketing is done for you on a huge scale

The long and short of it is - dont get bummed in the contract, only go for a franchise if the brand/marketing and support is worth the huge costs, as that is probably about all you're getting for your money (dont take that in any way to mean it isnt worth it, only that it depends).

 

[Amused]

If you do, you either need to work in the store full time, or have another job.

And you really need to open more than one. One Subway or Quiznos is not enough to live off of until the store is paid off

BTW, it would require in the range of $250,000 - $500,000 to start one outside a major city. In a major city, double or triple that. You need a business plan, good credit and 20% down to get a small business loan.

 

[austin316]

Last year in college, one of our semesters was spent on writing a business plan on a store we would like to open. Even with a team of 4 people, you have no idea how much work is involved. Plus, for us, there wasn't even real money on the line, I couldn't imagine the time to do it for real. And unless you can finance the money yourself, your gonna need a loan, which means your gonna need to make a business plan, which are real long. Ours was around a 100 pages, and wasn't even considered to be that good. The only thing I can say, is if you are going to open a franchise, study the demographics of where you are going to open and survey as many people as possible in the area. Just because YOU want a Quiznos, doesn't mean anyone else does. BTW, we opened a Tim Hortons, which for all the research we did, we couldn't find anything negative about them. You might wanna check that out.

 

[CTrain]

Originally posted by: EXman
Yes you can but as people said it depends alot on what you open. Friend at my church owns/operates 2 Chick-Fil-A's and earns about 400K a year he gives out a percentage to employees (%25 profit sharing) so his goal is to give out $100K in bonuses. He Deligates almost everything too. Drives A 40K F350 Dually with Cow marks on it gets to write it off and overall does quite well for himself.

Granted you won't pull down that kinda loot with a Quizno's but I know the family in my town that owns the subways have done quite well but. Also Larry Ivy (university of Kentucky ex-athletic director he was a crook) bought the rights to a HUGE chunk of Papa John's Franchises in RUSSIA and will be developing that soon. He is a very smart guy so I guess he'll do quite well as multi owners of PJ's can drag down some Loot.

Lastly Franchises have nearly twice the chance of surviving the first year of business than a new ground up start up. I'd say go for it. I actually am thinking about it too.

Not to dispute how much that guy makes, but earning $400K on 2 Chick-Fil-A is an aweful lot.
The profit margin for fast food restaurants is the lowest among all restaurants.

I'm a store manager for a McDonalds Franchise with 19 stores(3 of them inside Walmart).
We're located in the tourist area of Orlando so most of the stores are busier than the average McDonalds.

Lets pick the middle of the pack McDonalds in out company which does about $1.7 mil a year.
At the rate we're doing for this year, if we make $120,000 for that particular restaurant, we'd be estatic.

So if those 2 Chick-fil-a are stand alone(ie not mall) restaurant does lets say 1.4 mil sales(which would be extremely generous), thats a 14.2% profit margin.
I might be wrong but with my experience in the fast food industry, that type of profit margin is unheard of.