I’m interested as well.
OK, I created a folder for the webinar video on the Google Drive account, made y’all editors, and still Google will likely require me to give you, one-by-one, access to the drive because Google is stupid.
One thing about my recording - I use Prezi which has a viewer for the presenter (which is hidden from the presentation). The viewer contains presentation notes - additional information which I can add to the presentation so I’m just not reading the screen. Unfortunately, what you will see is that viewer overlaying the presentation. But since I linked to the presentation above, you can listen to the Webinar while, in a separate tab, following along with the presentation. Or you can just watch the video, see my notes, etc.
In short: You Have Options.
I suspect military personnel coming right out of service aren’t that well off financially. If you can’t afford to pay and you are not making a profit, what recourse do they have to make you pay?
I know this is a common belief, but recently separated military personnel are quite likely to be doing better financially than the average worker. You can get a lifetime retirement pension with only 20 years of service, and people who are involuntarily separated are eligible for some fairly generous separation pay in lieu of retirement if they do not have enough time in service for a pension.
(The rest get to choose whether to separate or not, and presumably would not voluntarily leave unless they had something else lined up.)
That’s actually why these franchises prey on recently separated military personnel. Because they often have funds available to invest, and by definition are in a transition period career-wise.
Ah, OK. That makes sense. I wasn’t thinking of 20 year vets, I was thinking about your in and out types, 4 to 8 years.
To close out the year, here are two stories that kind of tie in together…
Someone asked the question on a FB Franchising group “What are the most important qualities of a successful franchisee?”
The 2nd-most liked response had literal bullshit saying “Financial Runway, Grit, Respond Well to Systems”. (GRIT? What the fuck?). All three people who liked this response were franchise sales people.
The most-liked response… 4 responses, all of them actual franchisees… was “The desire to turn $3,000,000 into $1,000,000.”
I’ll give y’all one guess as to which response was mine.
Story the 2nd…
Inna and I have an accounting firm. We have had a great year this year, tripling our revenues. We just (like, today) landed a new client, the new owner of Bombshells, a military-themed restaurant that hires young ladies to serve.
Anyway, this one is/was a franchise. The system isn’t doing all that great, they have just a few franchised locations, and here are the numbers:
- Initial Investment: $3.5 million
- Median restaurant revenues: $5.7 million (not a lot of data points here, but the range was $3.7 to $6.1 million)
- For that median restaurant, the franchisor took out a minimum of $500,000. Not the worse I’ve seen.
OK, so our new client bought this from the original franchisee.
For $275,000. $250k for the business, $25k for the fixtures.
He also told the franchisor he wasn’t paying royalties or minimum advertising or whatever. So all he’s paying the franchisor is a flat $25,000/year for brand licensing. That’s it - not $500k/year, just $25k/year.
Like I said, the desire to turn $3,000,000 into $1,000,000… or just $275k… is the single most desired quality a franchise salesman can find in a franchisee.
Congratulations! Ending the year on a high note!
Looking up their website, they’re down to ten locations, all in Texas, the odd one out being in Denver.
Didn’t realize they weren’t more widespread. I guess most of them must be in the Houston area, including the one down the road from here they opened up next to a Hooters. That alone I question - how can any area really support such density of breastaurants, especially out in the family oriented ‘burbs? Haven’t ever been myself, but I’m guessing I’m not missing out on any great culinary experiences.
I have another Webinar this upcoming Thursday @ 10am (Central Time, US)!
The topic is slightly different - how to read FDD’s to calculate potential return on investment, so if you caught the first one, this is (mostly) new material.
Register here:
If you have trouble registering, it’s because you need a Zoom account (free), as explained in this post from @Atamasama :
See you there!
1 hour away! Hope to see y’all there!
While it was never my favorite, I used to stop by Dickey’s once in a while for a turkey po’boy and some fries back in the late 1990s. I moved out of Dallas and when I went to visit in the early 2000s the quality of Dickey’s had taken a nosedive. When they finally moved got one in my area back in 2018 or so, they quality hadn’t improved. It was horrible. Sometimes I’m confused about how downhill a restaurant chain can go.
I have a new webinar coming up in a week - this time, I take on Tropical Smoothie Cafe, ranked #14 by Entrepreneur Magazine in their “Best Franchises” list.
Tuesday, April 28th, 1pm Central (US) time.
Please register here!
Here is the zoom link to the webinar, later today @ 2pm Eastern, 1pm Central.
I’m the guy who commented on the robber-baron take-away at the end. I loved the analysis and will be sending for the spreadsheet. Note that I’m not in the market. 1) I’m 76 and 2) I don’t have nearly enough cash on hand to pay any sort of a franchise start-up.
I thought 6 attendees was kind of small. Was there any kind of publicity at UTSA?
Yes, but in their defense, this is a pretty niche subject.
Glad you enjoyed the presentation! Anything I could have done better, @DesertDog?
Not for a one-hour presentation. Things were gone through quickly but were sufficient to highlight what to look for at a more leisurely pace.
It is interesting comparing the view from the franchisee’s POV vs. Company Man on YT where a business with half-dozen storefronts did well, then decided to go the franchise route. So many of them have some years of fantastic growth then a sudden collapse, kind of like a bunny population when the predators are eliminated.
I didn’t know franchises were a closed-end proposition with a definite period and can see how that changes the attitude from entrepreneur to robber baron. I naively figured the franchisor would like to see their franchisees succeed if only so they can be pointed to to attract others. Just checked and found Arizona is not an FDD state.
Looking over your spreadsheet I was struck by a comment in row 12:
Gain @ X%. This assumes you can sell your franchise for the amount you put into it ($Y).
Is this selling the franchise at the end of the agreement or while the agreement is still running? If the franchise is hitting the goals you want why sell it? If it is not who will buy it?
You may want to sell a ‘goal-hitting’ franchise for a variety of reasons. Health, retirement, boredom, exhaustion, etc.
The problem with selling a franchise is that you’re competing with the franchisor. Sure it would be nice to sell a top-grossing franchise for a million dollars, but why would I pay you a million when I can buy one for $385k?
(Dollars made up because I’m about to go to bed.)
Presumably, because you’d be selling a known winner (good location, reliable customer base, current employee staff dependable) that the purchaser would need only to not screw up.