Franchising

Been there, done it! My advice would be get a few corporate units going, find out if the public will support them(do they make money) figure out what you can offer people to make them want to become a franchisee(can you get them awesome locations,name recognition,advertising, save them big dollars on product cost, give them operations manuals that cover everything from hiring to making the products to ordering to doing p&l's etc.) After all this and you feel like you really have something, consult with a company that specializes in bringing new franchisors to the marketplace.You can count on spending around 125k to do this plus individual state registrations at around 1k each where needed.

 

I am not sure what you mean by opening them w/profits/loans but my advice would be open 2 or 3 stores in Prime locations and stick with them. I have had smoothie only stores that can gross over 500k per year and if you owner operate 3 stores that do anywhere near that you are making a great living. An owner operator that has a typical smoothie/drink type of a store that grosses 400k can take home 150 easy. The overhead is one of the lowest in the food industry.

 

You can go either way. Most franchises start out as all corporate stores and for one reason or another they become franchises. In our case, after about 15 stores things started getting out of my control and quality and operations suffered and our growth had to stop. Since we became a franchise, we typically have all owners run there own location and now, I own a couple of my own stores and can expand much faster and don't need to worry about each store operating correctly day to day. I collect royalties from each location and build new stores with the new franchisees money. You are only as good as your employees and in my business most of your employees are young part time people so owner operated stores make much more sense for us. In an Olive Garden type of situation they have much more money to spend on getting good management in each location so they can make it work. If we were willing to spend 100k per year for a good manager things might be a little different but then your numbers wouldn't work.

 

I agree 100% with what jeff said.