Is buying a franchise a good idea or a bad one?

[LIG]

Just throwing around ideas. Thinking of maybe opening a Pizza place in my small town. should I buy a franchise such as domino's or little caesars? Is it a good idea to buy a franchise? or should I just go with my own name? do franchises increase sales? is owing a franchise a liability in the long run? Thanks =)

[Freelancier]

It just depends on whether you want the help of a "franchise system" to start your business. And that's also going to be based on how good the franchise system really is. Some franchise systems are insufficient for new franchise owners and others are awesome and until you get into it with the franchiser, you won't know whether they provide enough support for the money they want. Or you do it all on your own and create your own brand to market.

[LIG]

are they required to support the person who buys the franchise? or do they just sell u the name n let you set out on your own coarse? by "Franchise system" are you referring to the "start up" packages that usually come with some franchises? Is it worth the "free" advertisement?

[Freelancier]

Depends on the franchiser. The franchise system is everything provided by the franchiser to make you successful. McDonalds has put a HUGE amount of effort into this. Other franchisers just sell you the name and equipment and hope you succeed. Nothing is free, what you're buying with the franchise fees is the branding, the processes, and any national advertising; other advertising you likely pay for out of your own pocket.

[billbenson]

In the case of a pizza place are you a chef or do you have experience in the restaurant industry? If you don't, I think the probability of failure would be pretty high if you don't go with a franchise.

A friend had a pizza franchise a number of years ago. He said all the cheese they used was some fake cheese product. Real cheese was far to expensive. I think the franchise pizza places are targeting a particular market niche though.

I live in a grown up farm town of about 50k people. I'm sure the average income is fairly low. There is a pizza place fairly near to me. I'm sure the owner is from New York. A medium supreme pizza is $20. That's fairly expensive for a medium pizza. It's a great pizza though. I'm sure it's all quality ingredients. The place is always full.

I really just view them as two different business models.

Subway is the most consistently successful franchise by the way. By that I mean they have the fewest stores fail of all franchises according to an article I read recently. I forget where McDonalds was on the list. You would think they would be pretty high as well. I don't remember where they placed.

One last thing to note. We used to have a franchise section on this forum. It never got any posts. Either most franchisee's go to some franchise forum, or most successful small businesses aren't franchises?

[LIG]

Thanks for the great Info!

[JC]

Just throwing around ideas. Thinking of maybe opening a Pizza place in my small town. should I buy a franchise such as domino's or little caesars? Is it a good idea to buy a franchise? or should I just go with my own name? do franchises increase sales? is owing a franchise a liability in the long run? Thanks =)

I spoke with a former Papa Romano's pizza restaurant owner today and he said it was profitable at first, but then more franchises were sold in the area and the profits shrank until he finally sold it. He also said the hours were extremely long as it was hard to find reliable help for the amount he could afford to pay.

[LIG]

great info JC thanks! im in a really small town that I doubt any new franchises would pop up but hey never know.

[billbenson]

great info JC thanks! im in a really small town that I doubt any new franchises would pop up but hey never know.

I'll just go back to my statement about the successful pizza place near me. It's pretty easy to buy a franchise, but to run your own niche business is less likely to have the competition pop up. Probably to a great deal because you really need to know how to run that type of business or restaurant to succeed. I can think of plenty of small restaurants here that are very successful - Sushi, quality Asian cuisines, even quality hamburger joints.

[CreativeSolutionsTogether]

Always look to what the corporation or company you would franchise from offers and requires of their franchisee. Do they offer support for new franchise owners and to what extent? Some offer certain support past their standard for a time frame. What do they require and how does this come into play with your area, if any do. What are the start up costs and what requirements are there regarding purchasing items for franchise through them. Reach out to franchise owners of the company and ask their experience. How was the company to work with? What causes them to make it or struggle?

Then you get into analyzing the pizza place in your area in the last five years, at least. Which ones made it and which ones crashed? Why? We're they franchises or independent named places? Does your community like branding to their food places or do they like the independent names? This is important.

One business journey can be much different then another. Some get into the business, franchise or independent, with more knowledge or help then others.

Hope some of this helps....

"We are the secret weapon behind the Small Business Owner's success"

[JonaB]

As everyone said here, it depends on the franchiser. Before taking up on any opportunity you must make sure that you are not taking any risks by associating with them. Also the location of the franchise is an important factor. My BIL has taken up a home service franchise in Toronto (http://www.garageliving.ca/franchise-opportunities/) and he is doing well with the business. The franchiser are really helpful and supportive and he is now planning to take up another one from the same people.
So whether buying a franchise is a good idea or not will depend on the franchiser and other factors.

[East Africa]

I always believe that its better to come up your own ideas

[Business U Consulting]

Just throwing around ideas. Thinking of maybe opening a Pizza place in my small town. should I buy a franchise such as domino's or little caesars? Is it a good idea to buy a franchise? or should I just go with my own name? do franchises increase sales? is owing a franchise a liability in the long run? Thanks =)

It is not always a good idea to buy a franchise, because you will find yourself working for the company you are franchising from, and not having much to show for it. It is better to produce a better product, and provide better customer service.

[Davidl]

Some franchises don't care about the product or outcome of the business, most aren't like this but you have to be careful . As long as someone buys the businesses the franchisor will keep making a profit.

You can't change the menu readily and once the company goes bad theres no way to change anything as easily as you could if you owned it yourself.

[0maha]

A franchise worth having will give you a proven system, management support, and national advertising exposure.

A franchise not worth having will be a dead partner who just takes their vig and leaves you feeling like you aren't getting any value for the check you write each month.

A good friend owns a small chain of a national brand (Godfathers, if it matters) of pizza stores in the Pacific NW. He's done quite well. A friend of a friend tried getting into a carry-out only operation here locally (lesser known national brand) and struggled for 18 months before bailing.

Like about anything, pizza can be a great business, or a terrible business. Mostly, it comes down to you.

[checkmate]

Omaha is right - it mostly comes down to you, your experience and your goals.

A franchise can be a great option for someone that has never owned a business before. I would make sure you thoroughly vet them to make sure what you pay in has a high probability of paying you back.

Like anything in business, the franchise fees and associated costs are an investment. You invest in their brand and systems with the expectation of making your money back.

However, I have seen lots of smaller franchises that charge incredibly high fees and deliver very little in return. In this case, the franchise owner is making their money from the franchise fees upfront, eventually it fizzles out and the franchisees have nothing to show for it.