Franchisee's experience

N

Neuken

Registered User
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Hi

I have been comtemplating the last while about investing in a Franchise. I have been surfing the web and have found a lot of information both for and against.

Is there anybody who has any personal experience of owning/running a franchise that can advise? Has it been a worthwhile experience financially? Has it been better/worse than actually going out on your own? or anything else that may help?

Any franchisee's feedback would be greatly appreciated........

Thanks
Neuken
 
I don't have experience running one but I worked in one for a number of years and it can have its ups and downs (like anything). Some companies give you a lot of control over your business (eg: shop fittings/design or layout) but a lot will be very rigid (even down to who you hire). One of the biggest problems I've seen is when a company has franchises but also owns a number of theirs stores. It's currently happening in the city centre with one company, that have opened their own store just a few yards from a franchisee. The store they opened is under a different brand name as the company owns a number of brands but the franchisee carrys them all and is now in direct competition with the company (incidently the brand is his biggest earner). Double edged sword really.

The other thing I'd think long and hard about is where you intend on opening said store. A friend of mine lost big time from opening a store in a shopping centre that just didn't appeal to the locals. The store bombed to the surprise of everyone (due to the brands strong name and the fact the shopping centre is one of the biggest in Ireland's) because despite the great location etc. it turned out that shopping centre only attracts a certain type of customer.
 
I know of one exhibitor ( who small remain nameless ) who had a stand at the Franchise show in Dublin in November 2004 ; about 14 poor suckers from around Ireland bought equipment and "exclusive areas" from the exhibitor at the Franchise show ; but none of the 14 people - all of whom invested a considerable five figure amount - were able to make a full time living from the business. Some are part time, some have disposed of the business at a loss or just do not bother to use the equipment. The sad thing is the organisers of the show allowed the same UK firm back to exhibit at the Franchise show in Dublin a few months ago, and the same UK firm was offering systems to anyone anywhere. Oh, and telling everyone their operator in England made stg £ 90,000 a year from the business !
 
Hi there

I have worked in a Senior role with a Successful Franchise in Dublin and i am opening the Belfast Operation in the Summer.

A lot are Cowboys, visit at least 5 current Owners and on your own if you can, they will tell you more when the master is not in the room. If you get a good one with a Proven Business and Sales Model you could make a huge amount of Money but be very careful.

Best of Luck
 
Hi There,
I currently own a Franchise and would totally agree with the above comment. If you like the look of a Franchise contact as many Franchisees as possible. Don't rely on the master Franchisor, his business includes selling as many liciences as possible to get back the return he/she has invested. Some master Franchisors have the opinion 'well if I don't take the money somebody else would, all fair in love and business'.
I've spoken to alot of other Franchisees from other businesses outside of my own and at least 50% are unhappy. There are good ones and it is a great way to learn about business just don't get caught with a bad one.
 
Shmee said:
There are good ones ....
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Trouble is, its sometimes hard finding out who the good ones are. If you had a disappointing or poorly performing franchise, and you were hoping to perhaps sell it at some stage in the future to at least recoup some of your investment, would you tell people the truth - or would you put a brave face on it and a positive outlook ? Or at least be vague ? After all, who wants to do business with a loser ?
 
rabbit said:
Trouble is, its sometimes hard finding out who the good ones are. If you had a disappointing or poorly performing franchise, and you were hoping to perhaps sell it at some stage in the future to at least recoup some of your investment, would you tell people the truth - or would you put a brave face on it and a positive outlook ? Or at least be vague ? After all, who wants to do business with a loser ?
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Like anything else in life, there are good and bad franchisors.

You have to be a certain type of person to be a 'franchisee' in the first place.

Franchisors with true brand credibility are few and far between. There are more benefits than disadvantages in the franchise model, provided you've done your homework
 
Culchie said:
Like anything else in life, there are good and bad franchisors.

You have to be a certain type of person to be a 'franchisee' in the first place.

Franchisors with true brand credibility are few and far between. There are more benefits than disadvantages in the franchise model, provided you've done your homework
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Sure there are good and bad franchisors. However, with hundreds of franchisors in existance, most of whom the average person in the street may not have heard of, it is not easy to do the homework on them all. I read somewhere that 90% of franchisors internationally are not in existance after ten years. Also bear in mind when a franchisor is giving a success rate for their franchisees, they do not include resales as failures. Often franchisee businesses change hands three or four times.
 
I posted on this topic before and I think it bears repeating. Less than 37/1600 franchises have over 100 units and been in business for over 7 years. Check out . It's an American site which gives the low down on franchisees/franchisors and the experience of many franchisees, some of it is just plain scary. You can get copies of the UFOC of many franchises from

Hope this helps.
 
Has anyone any positive recomendations of franchises which DO work ? I would imagine that the big brand name franchisees in the fast food sector for example are profitable - even though they can be very expensive.

I am sure there must be lots of people in Ireland by now who put smaller money eg 20 or 30 k in to a franchise few have heard off, and which was unsuccessful ?
 
I was at a CPD conference before christmas on start ups and the representative from one of the major banks made the point that they would always view a franchise more positively than a stand alone start up - all other things being equal.
 
Really ? I know another official in a financial institution who are wary of franchise businesses, everything else being equal. Its the bad and unethical franchisors who give the industry a bad name. The fact so many franchisees do not survive does not help.
 
rabbit said:
I know of one exhibitor ( who small remain nameless ) who had a stand at the Franchise show in Dublin in November 2004 ; about 14 poor suckers from around Ireland bought equipment and "exclusive areas" from the exhibitor at the Franchise show ; but none of the 14 people - all of whom invested a considerable five figure amount - were able to make a full time living from the business. Some are part time, some have disposed of the business at a loss or just do not bother to use the equipment. The sad thing is the organisers of the show allowed the same UK firm back to exhibit at the Franchise show in Dublin a few months ago, and the same UK firm was offering systems to anyone anywhere. Oh, and telling everyone their operator in England made stg £ 90,000 a year from the business !
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Hi Rabbit

Sorry to post this very late reply to your comment, but we are about to invest a considerable five figure sum to purchase a franchise from a UK based franchisor! Established approx 2004 and with apparently no other franchisor in Ireland yet. Can you please name the franchisor you are referring to, or at least give an indication of the business type.

That would be appreciated, we are nervous enough already!

Thanks
BBob
 
rabbit said:
Really ? I know another official in a financial institution who are wary of franchise businesses, everything else being equal. Its the bad and unethical franchisors who give the industry a bad name. The fact so many franchisees do not survive does not help.
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Rabbit, where is this source of negativity towards franchising?
Any research I have done on this, and obtained from Financial Institutions, a franchised business has a far better chance of being in existence aftyer 10 years than a stand alone. I believe the figure is approx 90% for a franchise, 12% for a stand alone.

Ulster Bank sponsor and indeed champion the Franchise Awards every year. e.g [broken link removed]

I am a franchisee by the way, a year in business and to be honest, very happy.

Of course there are bad franchisors, same as there are bad builders, carpenters etc... but if you do the research on your franchisor and their track record, talk to existing franchisees etc....you reduce the risk.

The better Franchisors won't franchise their business to unsuitable candidates, there has to be a match.

Some people are just not cut out for business, and the good franchisor will turn these people away, the 'cowboy' franchisor will just take the franchise signing on fee.
 
Culchie said:
Rabbit, where is this source of negativity towards franchising?
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I am not totally negative. I wrote for example "I would imagine that the big brand name franchisees in the fast food sector for example are profitable - even though they can be very expensive"

What I do know only too well by now is the experience of about 15 people I know, each of whom invested a considerable five figure sum of money follwing the Franchise show in Dublin a few years ago. It would be interesting to look at the list of exhibitors from, say, the 2004 Franchise show at the RDS in Dublin, and see the case histories of those who may have bought in to them. I guarantee a lot of the exhibitors you would not have heard of now, never mind those who invested money with them. Sure there are good franchisors.... But there are also a lot of firms who are not. Bear in mind when a franchisor is giving a success rate for their franchisees, they do not include resales as failures. Often franchisee businesses change hands three or four times.
I would guess that half the firms that exhibited at say, the Irish Franchise show at the RDS in 2004 or 2006 are unable or unwilling to give a success rate for their franchises in Ireland. The more research you do, its scary.
 
cole said:
I posted on this topic before and I think it bears repeating. Less than 37/1600 franchises have over 100 units and been in business for over 7 years. Check out . It's an American site which gives the low down on franchisees/franchisors and the experience of many franchisees, some of it is just plain scary.
Click to expand...

I agree...I remember last year coming across another website dedicated to the the experiences of franchisees. It was extremely detailed and had hundreds if not thousands of contributers, mainly in the US, but I cannot remember its name / find it now.
 
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