The design team and recruitment team said i would receive 3 quotes to sign of on. No quotes at all. I only received invoices and the majority of these were received after I had been trading for about 3 weeks.
My Franchise Experience
- Thread starter Hysteria
- Start date
The design team and recruitment team said i would receive 3 quotes to sign of on. No quotes at all. I only received invoices and the majority of these were received after I had been trading for about 3 weeks.
Wow, these guys really are a pack of sharks. Really very disappointed they got you and the other franchisees. It's just plain wrong.
Those shop fitout costs were/are phenomenal.
They must very carefully craft their contracts to allow this type of gouging.
What is even more amazing is that even with this gouging, some of your franchise colleagues seem to be making money.
I do believe that what goes around comes around. I know not in what form, or by what force, it just does.
Those shop fitout costs were/are phenomenal.
They must very carefully craft their contracts to allow this type of gouging.
What is even more amazing is that even with this gouging, some of your franchise colleagues seem to be making money.
I do believe that what goes around comes around. I know not in what form, or by what force, it just does.
They gave me no option on what shopfitters to use. As soon as the aggreement was signed that was it. I was slammed with all these costs.
The thing is when you mention these high costs and you might look at litigation they come back with: " Yes we have had partners do this, but you have to understand we are a big company with a lot of money, and uno we will just string out this process to you have nothing"
This is straight from the national operational managers mouth.
Come on, you have us all wondering, what is the franchise?
Could be any franchise...they all have similar business models.
I guess it's probably time for me to put my 2c in.
Most of you will be aware I have two food franchises. I bought an existing one seven years ago (an outside store) and built one four years ago (Westfield).
It's been a pretty tough slog- although that is not because of the franchise system in the way other posters have mentioned, more just in the nature of the business. What I have experienced- the ups and downs- would have occurred in any similar hospitality business with a high turnover, franchise or not- but with the added downside of complete lack of previous business experience.
The store I bought had been run very badly by the standards of the brand, and I did not realise that when I took over. They inspect every store once every calendar month, and their standard is very high. We failed a lot of the early inspections, and I was at risk of losing the store.
When I bought that store, it was not the brand's policy to provide any hands on support to new franchisees. That has now changed. The takeover was especially difficult- we took over on Christmas Eve, and found out that most of the staff were off for the break. There were days that myself, my wife, and two daughters (then 14 and 11) were running the shop.
It had been my plan for me to take six weeks off my IT work to get the store running, and for my wife to run the store. I had vastly underestimated the amount of work involved, so I ended up having to give up my IT job.
We did get the store running much better, to the point where we were awarded the "Most Improved Store" award.
Three years after opening, we had the opportunity to build a new store in the nearby Westfield. While I didn't have anywhere near the bad experiences of the OP, the shopfitter recommended (but not obligatory) by the brand had high price tags but low quality.
Now both stores are in the process of being sold, and I will soon be out of the system.
The income while running the stores has been low- especially considering the number of hours I have been working and on call. But we are getting some of the rewards now. We bought the first store with 100% finance (supported partially by property and partially by the business itself). A lot of the earnings have gone into paying off the loans- so, along with some profit in the sales, a lot of the reward is coming now.
I think a lot of people- myself included at the start- see a franchise as an easy way into business. While it does provide advantages, it also has its problems. In the end, it's just a different way into business.
By the time we sell we will have done OK- enough to provide a solid part of our retirement. But we would have done a lot better if I had been better at business and at management.
Most of you will be aware I have two food franchises. I bought an existing one seven years ago (an outside store) and built one four years ago (Westfield).
It's been a pretty tough slog- although that is not because of the franchise system in the way other posters have mentioned, more just in the nature of the business. What I have experienced- the ups and downs- would have occurred in any similar hospitality business with a high turnover, franchise or not- but with the added downside of complete lack of previous business experience.
The store I bought had been run very badly by the standards of the brand, and I did not realise that when I took over. They inspect every store once every calendar month, and their standard is very high. We failed a lot of the early inspections, and I was at risk of losing the store.
When I bought that store, it was not the brand's policy to provide any hands on support to new franchisees. That has now changed. The takeover was especially difficult- we took over on Christmas Eve, and found out that most of the staff were off for the break. There were days that myself, my wife, and two daughters (then 14 and 11) were running the shop.
It had been my plan for me to take six weeks off my IT work to get the store running, and for my wife to run the store. I had vastly underestimated the amount of work involved, so I ended up having to give up my IT job.
We did get the store running much better, to the point where we were awarded the "Most Improved Store" award.
Three years after opening, we had the opportunity to build a new store in the nearby Westfield. While I didn't have anywhere near the bad experiences of the OP, the shopfitter recommended (but not obligatory) by the brand had high price tags but low quality.
Now both stores are in the process of being sold, and I will soon be out of the system.
The income while running the stores has been low- especially considering the number of hours I have been working and on call. But we are getting some of the rewards now. We bought the first store with 100% finance (supported partially by property and partially by the business itself). A lot of the earnings have gone into paying off the loans- so, along with some profit in the sales, a lot of the reward is coming now.
I think a lot of people- myself included at the start- see a franchise as an easy way into business. While it does provide advantages, it also has its problems. In the end, it's just a different way into business.
By the time we sell we will have done OK- enough to provide a solid part of our retirement. But we would have done a lot better if I had been better at business and at management.
If you knew what you know now would you have got into it?
My sister and brother in law are constantly looking into buying franchises. They always tell me how they can just buy one and appoint a manager to run it and easily put 100K in their pocket for doing little more than paying the outgoing...
As someone who has been in business for close to 10 years and employed lots of people over that period I just find this hillarious, especially for menial low paid work they actually think they will find someone who is going to really give a $hit about running their hands off business and still come out with a profit. They've already failed with 3 small time (less than 50k investment franchises) but they always tell me this time it's different.
When I tell them why don't you come up with your own idea for a business you can execute and drive yourself they tell me ohhh that's all to hard we haven't got time for that!
A lot of people always think they can run a successful business (be it franchise or not) that they've never dealt with and be very hands off and succeed. That's probably true for some people, but usually that's because they've had years of experience doing the same thing over and over again (be it food outlets, fashion stores or whatever).
Recently had some guy buy a store for a couple hundred k. Had no idea what he was doing. Was lazy. Thought he would just rake it in if he turned the place in to a students' "club/disco" on Friday's and Sat when it traditionally had a Aussie "pub" culture and clientelle and low-socio economic families looking for a cheap Aussie meal. Spent another 200k or so renovating. Lost the original clientelle. Never gained the new one.
Bumped in to him other day on the street yesterday. Tells me he's fitting it out for another $300k and completely transforming it in to a club by removing the bar area, the kitchen, changing the office areas to karaoke rooms etc. I looked at his fit out - which he's halfway through - seems more like a $500k based on my experience.
So after all that he would've blown $1m plus lost money in the mean time and lost rent. Reckons he'll make $1m in a year from his profits next year. If he's lucky he might make $150k. If he's unlucky he'd probably lose that much. In the mean time he could've bought this stock I was looking at not long ago and doubled his money. Strange how some people play this game in life.
Recently had some guy buy a store for a couple hundred k. Had no idea what he was doing. Was lazy. Thought he would just rake it in if he turned the place in to a students' "club/disco" on Friday's and Sat when it traditionally had a Aussie "pub" culture and clientelle and low-socio economic families looking for a cheap Aussie meal. Spent another 200k or so renovating. Lost the original clientelle. Never gained the new one.
Bumped in to him other day on the street yesterday. Tells me he's fitting it out for another $300k and completely transforming it in to a club by removing the bar area, the kitchen, changing the office areas to karaoke rooms etc. I looked at his fit out - which he's halfway through - seems more like a $500k based on my experience.
So after all that he would've blown $1m plus lost money in the mean time and lost rent. Reckons he'll make $1m in a year from his profits next year. If he's lucky he might make $150k. If he's unlucky he'd probably lose that much. In the mean time he could've bought this stock I was looking at not long ago and doubled his money. Strange how some people play this game in life.
Agree, some people are destined to lose before they even begin.
I remember talking to a commercial RE a few years ago, who said after spates of redundancies they got cashed up people with no business experience and no idea, coming in looking for businesses to buy, based on having 'always dreamed of running a dress/coffee/collectors/icecream shop', etc.
He said some would appear to not want advice outside of their preconcieved idealistic picture of business, and knew they were destined to fail. He said he even tried to steer them into businesses where they were more likely to succeed but these types would reject them.
That said, I think some franchises rely on deception, like in the case of this person I knew. A friend (who is clued up on business and commercial stuff) and myself calculated some of her figures (some projected because it was a new shop) based on what she told us, and what we figured to be more realisic figures, and her purchase raised alarm bells. The other concern was she had total faith in what they told her. Yikes.
Business went downhill from day one, and it was all over about 18 months later.
I remember talking to a commercial RE a few years ago, who said after spates of redundancies they got cashed up people with no business experience and no idea, coming in looking for businesses to buy, based on having 'always dreamed of running a dress/coffee/collectors/icecream shop', etc.
He said some would appear to not want advice outside of their preconcieved idealistic picture of business, and knew they were destined to fail. He said he even tried to steer them into businesses where they were more likely to succeed but these types would reject them.
That said, I think some franchises rely on deception, like in the case of this person I knew. A friend (who is clued up on business and commercial stuff) and myself calculated some of her figures (some projected because it was a new shop) based on what she told us, and what we figured to be more realisic figures, and her purchase raised alarm bells. The other concern was she had total faith in what they told her. Yikes.
Business went downhill from day one, and it was all over about 18 months later.
Having been in SMEs for years I find this all very sad, I often walk past a new business just opened and inwardly feel sad for the poor person who has put all their idealistic dreams into the place and is simply no hope of succeeding.
Don't they run it past an accountant, don't they talk to experienced people ?
This is why people buy franchises IMO, they see the bright and shiny image, read the blurb and get full of hope and then often get smashed.
I know of one guy who bought a mixed business in a suburb, he decided to surcharge everyone 20% on the weekend because he was entitled to overtime rates for working weekend. That lasted about an hour .........
I'm not sure an accountant would be much help as they are very risk averse by nature. Everyone just hopes to be the exception to the '80% of small businesses fail in the first 2 years' rule.
I agree Aaron, but if you are new at business then you should be risk averse too.
It is only if you have enough experience to explain how it is all going to work and can show the accountant numbers that stick that a business venture should go ahead.
With experience we can work out the accounting numbers ourselves but if you can't read a P&L then you shouldn't be starting up a business.
You could start a hobby that develops into a business but to jump in at the deep end not knowing enough to explain it to an accountant or a bank means you don't know enough to begin with.
We have two blocks of shops up the street. It has been interesting to watch two particular businesses.
One was a successful cafe for several years. Plenty of locals and school mums did coffee and lunch there. It was sold and has had (I think) four different cafe or restaurants set up since. All failures. Initially the prices went up by a quarter overnight. That was enough for me to stop going there regularly. Then each time it was refitted and re-opened we would give it another try. Only once. They just never got it right.
Right now this place is an asian restaurant, white cloths, fancy. There sometimes is one table of patrons, whilst three shops away is another asian restaurant and take-away that is impossible to get a seat unless you book. The line up for collecting take-away is often 6 deep. It is good value for money, nice atmosphere, nothing fancy (no white tablecloths) but fancy enough to take friends to.
The other story involves an ex-city restauranteur who set up a coffee shop. It was the only nice one in the immediate area so was popular with the school mother set. But the people didn't split bills, didn't like children or prams and had a sign on a large cake in the corner along the lines of "if your child knocks this cake over, you must pay for it". Their attitude rubbed everybody I knew the wrong way, but it was that local place... or drive to another place.
They were offering the wrong atmosphere for the area, and were a bit snotty into the bargain. Everyone I know stopped going there as soon as there was an alternative (or even before that).
Right next door is a fantastic upmarket coffee shop, also a ex-city restauranteur, super friendly, chats to the patrons, polar opposite of the one next door. Only open brekky and lunch, not dinner. Don't try to get a table for brekky on the weekend unless you like to queue. Through the week, we go for brekky once a week or fortnight. Yesterday there were two tables left for us to choose from. Often it is chocka block and the original snotty place next door might have one or two tables. They clearly benefit from the overflow from the successful one.
I've never understood why they cannot see what they are doing wrong, or why they don't change their stuffy attitude, be friendly and outgoing, even (shock, horror) ASK some of the people who end up in their cafe when the queue is too long next door WHY they prefer the cafe next door.
I used to feel sorry for them, with two people in their cafe whilst the one next door is buzzing. But if they cannot or WILL NOT find out what they are doing wrong, and change to suit the clientele, they deserve all they (don't) get.
One was a successful cafe for several years. Plenty of locals and school mums did coffee and lunch there. It was sold and has had (I think) four different cafe or restaurants set up since. All failures. Initially the prices went up by a quarter overnight. That was enough for me to stop going there regularly. Then each time it was refitted and re-opened we would give it another try. Only once. They just never got it right.
Right now this place is an asian restaurant, white cloths, fancy. There sometimes is one table of patrons, whilst three shops away is another asian restaurant and take-away that is impossible to get a seat unless you book. The line up for collecting take-away is often 6 deep. It is good value for money, nice atmosphere, nothing fancy (no white tablecloths) but fancy enough to take friends to.
The other story involves an ex-city restauranteur who set up a coffee shop. It was the only nice one in the immediate area so was popular with the school mother set. But the people didn't split bills, didn't like children or prams and had a sign on a large cake in the corner along the lines of "if your child knocks this cake over, you must pay for it". Their attitude rubbed everybody I knew the wrong way, but it was that local place... or drive to another place.
They were offering the wrong atmosphere for the area, and were a bit snotty into the bargain. Everyone I know stopped going there as soon as there was an alternative (or even before that).
Right next door is a fantastic upmarket coffee shop, also a ex-city restauranteur, super friendly, chats to the patrons, polar opposite of the one next door. Only open brekky and lunch, not dinner. Don't try to get a table for brekky on the weekend unless you like to queue. Through the week, we go for brekky once a week or fortnight. Yesterday there were two tables left for us to choose from. Often it is chocka block and the original snotty place next door might have one or two tables. They clearly benefit from the overflow from the successful one.
I've never understood why they cannot see what they are doing wrong, or why they don't change their stuffy attitude, be friendly and outgoing, even (shock, horror) ASK some of the people who end up in their cafe when the queue is too long next door WHY they prefer the cafe next door.
I used to feel sorry for them, with two people in their cafe whilst the one next door is buzzing. But if they cannot or WILL NOT find out what they are doing wrong, and change to suit the clientele, they deserve all they (don't) get.
Agreed Macca - lots of people fail to do a proper feasibility study which ultimately leads to their downfall. I guess the only fallback is to on-sell the business to a bigger (mainland Chinese) idiot - seen that happen plenty of times in Melbourne. In fact some people actually set up businesses for the sole purpose of on-selling it to a Chinese investor desperate for business migration...
wylie, that's because businesspeople are stubborn by nature. It's what makes them succeed (keep doing something people say is crazy/stupid but ends up huge) or fail (in the case of the shops you have talked about). The other extreme is like the case that Deltaberry was talking about the guy changing his shop every few months to 'get it right'. He's obviously an idiot even though he is trying to respond to something in order to increase his takings. Sometimes the answer is not always so obvious.
wylie, that's because businesspeople are stubborn by nature. It's what makes them succeed (keep doing something people say is crazy/stupid but ends up huge) or fail (in the case of the shops you have talked about). The other extreme is like the case that Deltaberry was talking about the guy changing his shop every few months to 'get it right'. He's obviously an idiot even though he is trying to respond to something in order to increase his takings. Sometimes the answer is not always so obvious.
yep agree,
I get a chuckle from whenever I hear "hey mate you've had a business or two before, I'm getting sick of my PAYG job, and am going to start my own business! not sure what but yeah, I want to be my own boss, I heard franchises are pretty easy. I want to work 4 days a week for about 4 hours per day"
The best small business i have seen in the last six weeks was a small ex sex shop right next too a high volume outer Brisbane railway station that was re-fitted out as a small 12 seat coffee-homemade cupcakes shop all second hand deco style tables and artwork-2 young ladies working flat out very very clean and fast ,i sat there for about 30 minutes and just by watching the numbers that went through the door and all cash and only open 6 days a week from 6 in the morning,that one was a serious money spinner,and from what one of the Ladies told me less then 13k with all insurance and lease in place to setup,, prior too the first early morning workers walking past to get on the trains,even better when the trains don't run as the do in QLD under Labor
..
I feel that's because they are wanting to give the experience "they" would like, if they were patrons, rather than what the paying public actually wants ... huge difference.
what a lot of people dont understand that,
business acumen, hard work, knowledge and skills still is not enough for guaranteed success
its not a case of just doing it, you have to be prepared to fail, you may have the best product, but sometimes you need that element of luck, good fortune and coincidences all have to your way,
frankly I think starting a huge company would be easier because if you are willing and able to setup and hire an entire office building, you are most likely extremely cashed up, very experienced, and have the right connection
I once heard someone say, "if you are looking to setup a restaurant/cafe and are intending to give people the experience of lifetime, one that you would like, then you may as well go to the casino and put it on black"
Ive never understood 100% as to why, but I agree with it
Oh this guy definitely thinks it's cool to be a club owner instead of being an operator of a lower socio economic dodgy lunch place for Aussie bogans that actually broke even when he bought it.
Too bad because Aaron and I wanted to sell more things to him but we suspect he'd be tied up for a while.
