Bargain Off Licence Franchise

[ymwoods]

Hopefully someone has experience of owning a Bargain Off License franchise?

I currently have the oppertunity to take over a XX as a franchise owner for 50k + stock costs. the store turns over roughly 762k a year and then of that makes around 14% profit (after all costs). The ROI seems to good to be true!

I am looking at the accounts later this week but from looking at paperwork at the store (from a walk around visit) it does seem to marry up with their own sales targets, staffing costs etc

I am actually rather impressed by two of the staff there, they treat it like their baby, come in doing extra shifts for free when the other, younger, staff dont turn up or need support and they do this to keep the staffing costs down to hit targets (owned by XX corporate atm) The sad thing is all they asked for was a microwave for the break room so they could eat when having a break...this got refused. Obviously if I took over the business un-payed work would stop (they would be payed for what they have worked) and on my first day I would walk in with a microwave. At Christmas, they all recieved £5 bonus, more than some I know but if it was me I would have rather got nothing than £5 extra for my years hard work...I would have viewed it as a kick in the teeth. How those two staff have loyalty still, confuses me. The younger staff just see it as a job.

After seeing how tight XX is with its staff I am questioning how profitable the franchise may be. I am guessing most people will know which Bargain off Licence I am talking about so I was wondering if there are any suprises I should know about, fees that they will not be telling me about etc. I realise that "Read the Franchise agreement" will be the first answer and I will be when it arrives, but just trying to do a bit of due dilligence beforehand from people that may have experience.

I didnt want to name directly due to saying the above about them!

Thanks for any help!

[singlecoil]

They are selling a business that turns over £760K with a net profit of 14% for £50K + SAV?

Yes, that does indeed seem to good to be true. How many hours a week does the current franchisee put in?

[jurbie]

A friend has done very well out of this and has a number of shops and is now getting into Subway franchises. Most notably he bought the former Woolworths building in a town and has converted it so one half sells sandwiches and the other half sells booze. I think the key is to aim to get several shops rather then relying on one.

Hardest part I believe is finding suitable shops either to buy outright as going concerns which is how he started before setting up brand new outlets.

[anonymous-user]

what is the breakdown of profit would be my first question?

[Wacky Racer]

Is the property leasehold? I expect it is.

Is a rent review due anytime soon?...an important consideration.

In my experience, if something seems to good to be true it usually is...

Read the small print in the contract with a magnifying glass.

Good luck.

[greygoose]

A true capitalist wouldn't treat the loyal workers too well, Christ they deserve it though! I would pay them for every minute they work as they are the ones keeping the business going, perhaps see if they have any relatives who are looking for work as they may share the same work ethic. I would also look around the local area to see if there is any competition opening up before buying in.

[uber]

The issue with allowing staff to run this kind of business is when they decide to give away a bottle or two because they think the store can afford it. What happens if they both chuck it in, who is going to run it ?