Franchises - Anyone ever made a success of one?

[Richtea1970]

Like plenty of others, I’m fairly disillusioned with my current role so scanning the current market for a change.

Came across a franchise which re-furbed small vans into campers which looks like a great job but dismissed it as it was a franchise. In my head I’ve always assumed that if a business makes that much money, why would they sell/tell their secrets/processes to anyone else. There are loads of franchise offers around which I generally place in the ‘snake oil’ pile.

So just interested if anyone has ever made a success of a franchise or is it just the franchise owners that profit?

[bitchstewie]

So far as I know many McDonalds and Domino Pizza are franchises.

I certainly wouldn't approach all franchises with the "snake oil" mindset but I'm sure it depends massively what the particular franchise is and how the agreement works.

Not to mention if there's actually money to be made in that line of business.

[mike74]

If you've already got the skills and tools to convert a van into a camper why on earth would you do it as a franchisee?


Cut out the middleman and do it yourself with a loan to get first one if you've no capital.

[red_slr]

Not a franchise I would consider. The only reason to do a franchise IMHO is to allow access to a main brand name which you wouldn't normally be able to access. McDonald's, Subway, Snap On, Pandora etc etc.

Bobs van conversions... not really a brand is it. So unless entry cost was very, very low and their level of support and perhaps access to materials and the like was above what you could do yourself then I would just start your own. The thing that sells this type of product is quality, features and warranty.

Thinking forward as a business for the long term, be careful. This whole "van life" thing is a bit of a flash in the pan IMHO.

Its gained momentum the last 3 years mostly down to vloggers who live in a van and travel to exotic destinations and that's pushed sales up but I think we are at a peak. I don't know the industry so I might be wrong.

[Richtea1970]

Just to clarify, I'm not looking to start converting vans. I just stumbled across that example, would probably enjoy it as a one off project, not a full time job.
My question is more generic to ask if anyone makes money out of franchises in general? We can quote McDonald's and they certainly always seem to be busy but has anyone bought one and is making money out of it, as I have my doubts.

[wolfracesonic]

I knew a Francis once, never had any success with him but then I’m not that way inclined. Good luck if you do make the leap though

[Eric Mc]

The only succesful Francis' I can think of are -

[Mikebentley]

Here we go again!,,

[greygoose]

Trevor Francis?

[greygoose]

Richtea1970 said:

Just to clarify, I'm not looking to start converting vans. I just stumbled across that example, would probably enjoy it as a one off project, not a full time job.
My question is more generic to ask if anyone makes money out of franchises in general? We can quote McDonald's and they certainly always seem to be busy but has anyone bought one and is making money out of it, as I have my doubts.

A friend knows the owner of a couple of McDonald’s restaurants and they are very profitable according to him, they are 24 hour ones though and busy with a lot of passing traffic so two lane drive through etc.

[Monkeylegend]

greygoose said:

Richtea1970 said:

Just to clarify, I'm not looking to start converting vans. I just stumbled across that example, would probably enjoy it as a one off project, not a full time job.
My question is more generic to ask if anyone makes money out of franchises in general? We can quote McDonald's and they certainly always seem to be busy but has anyone bought one and is making money out of it, as I have my doubts.

A friend knows the owner of a couple of McDonald’s restaurants and they are very profitable according to him, they are 24 hour ones though and busy with a lot of passing traffic so two lane drive through etc.

How deep are your pockets?

I would imagine you are talking maybe £500k for a profitable 24hr McDonalds Franchise or maybe more.

Seems to be money in a good Fish 'n Chip shop. We have a mobile van serving our village which seems to do quite well albeit a bit expensive.

[CrgT16]

A franchise can be profitable but depends on industry and agreement. One thing is guaranteed n a franchise situation is that the franchiser will make money!

[red_slr]

Richtea1970 said:

Just to clarify, I'm not looking to start converting vans. I just stumbled across that example, would probably enjoy it as a one off project, not a full time job.
My question is more generic to ask if anyone makes money out of franchises in general? We can quote McDonald's and they certainly always seem to be busy but has anyone bought one and is making money out of it, as I have my doubts.

I think you can make money, but you have to start with money in the first place which is a risk.

If I was a multimillionaire and had money to just try it then I would give it a go.

If you look at the track record of a lot of McDonalds franchisees they are almost always ex-corporate at director level. You don't tend to get someone who was, for example, a teacher becoming a McDonalds owner. They are business people through and through often being senior managers in the company before hand too I might add, and I suspect a lot of them invest their pensions into their store. Its a simple way to fund the £500-£1m required and probably quite tax efficient too.

The biggest franchise local to me has 10 stores, currently have debts of c.£7m with assets of £2.5m...

[Richtea1970]

Monkeylegend said:

How deep are your pockets?

I would imagine you are talking maybe £500k for a profitable 24hr McDonalds Franchise or maybe more.

Seems to be money in a good Fish 'n Chip shop. We have a mobile van serving our village which seems to do quite well albeit a bit expensive.

Minimum £100k investment 😲

[ZOLLAR]

Richtea1970 said:

Like plenty of others, I’m fairly disillusioned with my current role so scanning the current market for a change.

Came across a franchise which re-furbed small vans into campers which looks like a great job but dismissed it as it was a franchise. In my head I’ve always assumed that if a business makes that much money, why would they sell/tell their secrets/processes to anyone else. There are loads of franchise offers around which I generally place in the ‘snake oil’ pile.

So just interested if anyone has ever made a success of a franchise or is it just the franchise owners that profit?

Dominoes Pizza I've heard is a good one, there's a local lad to me (friends know of him sort of thing) who got into it and has made a healthy stack based on the cars he now drives.

My city also had the UK's first Denny's, that's a franchise and is growing (one in Glasgow I believe now).
I don't particularly like it however it seems quite busy.

[red_slr]

Richtea1970 said:

Monkeylegend said:

How deep are your pockets?

I would imagine you are talking maybe £500k for a profitable 24hr McDonalds Franchise or maybe more.

Seems to be money in a good Fish 'n Chip shop. We have a mobile van serving our village which seems to do quite well albeit a bit expensive.

Minimum £100k investment ??

IIRC that's the working capital you have to put up for the branch to ensure wages are paid etc during the start up. The actual franchise cost for the licence is £30k (again IIRC and not sure if that's PA) then the property has to be purchased from McDonalds which is usually at the very least £500k, generally a lot more though. This is why, IMHO, there has been a swing to retail units as the upfront property cost is less. Your traditional drive through on a retail park or corner of an industrial estate is not as easy to come by these days.

I think McDonalds require you to refit the place too every n years, I think its 10. The cost of that is probably eyewatering.

I am not saying people don't make money from it, because they clearly do, but with McDonalds in particular I see it as a means to an end to keep the wheels turning. Get some super keen ex-corporate guy in and promise him riches, but in reality working 7 days a week, all hours, for a modest sum is perhaps under selling themselves but it helps keep the brand going and going..... they do like to talk about growth at McDonalds.

[PSB1]

Eric Mc said:

The only succesful Francis' I can think of are -

They’re all lightweights.

[anonymous-user]

Richtea1970 said:

Just to clarify, I'm not looking to start converting vans. I just stumbled across that example, would probably enjoy it as a one off project, not a full time job.
My question is more generic to ask if anyone makes money out of franchises in general? We can quote McDonald's and they certainly always seem to be busy but has anyone bought one and is making money out of it, as I have my doubts.

If you read EVO magazine back in the day, there used to be a guy who posted countless stories in the Our Rides section - not sure if it's called that and can't be bothered to check to be honest - about hi sorange Lamborghini Murciealago. I believe he and his business partner own about half a dozen Subways up in that part of Yorkshire and do very well out of it by all accounts.

[technodup]

ZOLLAR said:

Dominoes Pizza I've heard is a good one, there's a local lad to me (friends know of him sort of thing) who got into it and has made a healthy stack based on the cars he now drives.

I know a guy who is into double figures of Dominos units. He also has a double figure number of rental properties. I think he does OK.

My big issue with franchises is the lack of control. If McD's in London serve up labrador meat and it hits the papers your franchise in Edinburgh is likely fked, at least for a while. There's any number of potential scandals from horse meat to the KFC chicken shortage to the Subway paedo guy in America ready to undo your hard work.

[GOATever]

A lot of the big name franchises almost expect any prospective franchisee to have more than one. You could get one to work, as long as you get your location right. Look at the competition locally, and whether whatever it is you choose, has a market where you want to set it up. If you get it right, it can give you a nice investment income, if you get it wrong, the franchise heads won’t like it. It’s not just a case of if you pay your fees, they don’t care, most do care about the performance and image you’re portraying.