Forums: Discussions for entrepreneurs and small business.

Hello Mark,

What they are saying is partly true. They can`t tell you how much money you`re gonna make! It`s your job to do your due diligence and call or meet existing franchisees.

Here are a few questions you may ask franchisees:

¨ How long have you owned your franchise?
¨ Is your franchise profitable?
¨ In which month did you reach your breakeven point?
¨ Have you made approximately the same profit that was forecast
in the disclosure document?
¨ Were your opening costs consistent with the original projections
in the disclosure document?
¨ Are you satisfied with the franchisor?
¨ Are you satisfied with the product or service?
¨ Is the operations manual, clear, up-to-date and adequate?
¨ Are you satisfied with the marketing and promotional assistance
provided by the franchisor?
¨ Was the initial training and ongoing support sufficient for you
to operate your business?
¨ What was your background prior to buying your franchise and
was it beneficial to your success?
¨ Are deliveries of goods provided by the franchisor timely and
competitively priced?
¨ Is the franchisor fair and amicable to work with?
¨ Does the franchisor listen and help you with your concerns?
¨ Have you or other franchisees had any disputes with the
franchisor? What was their nature? Were they resolved fairly?
¨ Do you know of any disputes between the franchisor and the
government?
¨ Do you know of any disputes with competitors?
¨ Who are the major competitors?

Should you have any question about franchising, feel free to visit my website www.franchisebrief.com


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www.FranchiseBrief.com - Look for the best franchise opportunities and find the right business for you.

Thanks for your reply I really appreciate it.  These are just the type of questions I`ve been looking for.

The one area I still have some questions about is how much I could possible gross and net.  I need to be able to do sales projections for a business plan  and also in the end help me decide if this is the business for me.  If I ask how much they are making are they really going to tell me?

Thanks again.

hey; i`ve got lotsa tips for ewe. some of the worst mistakes i made, will be some of the best tips i can offer for you.
but the one big question i have for you is, do you absolutely have to go with a franchise?  they are nice for the start up costs etc. but then you are under their thumb forever and ever, not something i could have done being the crazy creative type. if i want to have a coconut mocha freeze on my menu (which by the way sells awesome) then i can do so; if i want to paint walls orange(good feng shui colour) then i do it.   anyhow, i used to work at a desk job, then started my own coffee bar, now have 1/2 doz or more staff and i love it. let me know if you have option of going it on your own.

Tips from real world experience...just what I`m looking for!

Going with a franchise is not a requirement. I`ve been in various parts of the food service business for about 29 years, but the only experience I have with coffee is pouring it. I thought going with a franchise would be the best way to obtain the knowledge I need all at once.

Thanks in advance for any info you can pas along. 

Outside of the good advice you got what would be a good idea is sit in front of the franchise for several hours at differant times of the day (during the week and weekend).Anyone can tell you anything but crowds dont lie and if there not busy then chances are you might want to go with a differant franchise.

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Thanks Todd Northern California Area Developer for Red Rock Chili Company (WWW.REDROCKCHILI.COM)

sorry i took sooo long to reply; trying to do letter of reference for staff trying to get a scholarship(yeah- lesson number one - make it clear to your interviewees that their term with you a simple coffee bar, albeit 3 months or 3 years can make a huge difference in their career path; this month alone 3 of my former staff (university students) have asked for letters of ref for a) 5 star hotel in whistler resort  b)i was intervieweed by police recruiter for a character reference for my former staff c) staff needed strong letter to prove her experience to challenge a university tourism course to save her big bucks and then today staff needs character ref letter to apply for scholarship.....so here in canada it is a huge challenge for me and other food service establishments to keep staff for any length of time and if so, they have good work ethics(can you trust them to run the joint when you`re at home after your 12 hour shift!)...the best book i can recommend to you to start out with that was an incredible help was TOM MATTSON(spelling?) HOW TO START AND RUN A COFFEE BAR.  I met the guy in person in vancouver, bc, at a seminar...his number one advertising suggestion then was "PEOPLE"; the number of people you see sitting at an establishment will speak volumes of what that place is about. check out the chains and even ones that aren`t for sale...eg. a funky coffee bar that you like in town??  ask to speak with owner..."if you ever decide to sell, here`s my number.." so  lots more to tell you, but gotta catch my canucks hockey game, playoffs continue...go vancouver!  

..sigh i got my hockey night mixed up..it`s tomorrow. so a bit more time for coffee gab. i have 2 gal friends who are also my age 40+, that decided to do a coffee bar with no previous experience and we`ve all done just fine..so will you. you can always ask the seller of a private business, as part of the purchase to stay on for an extra 2 weeks or a month, until you get the hang of it.  i can train a high school kid on a manual espresso machine, not the push button kind, but the kind where you use a grinder and then pack the espresso and you turn machine on for shots and off when done...by the way i also "time" every shot with a timer to ensure "quality"  yes i get the high school kids to do the same as the rest of us shots approx 21-23 seconds for one ounce...you`ll hear various takes on how long to run a shot...  most people gasp how in the world can you ever get a shot to go to one ounce in not under and not over 21-23 seconds..but it really is easier than it looks...trust me any good barista would be able to train most any person off the street in a solid day or two if the person had the interest in the business.  so don`t get intimidated by the "coffee snoots" out there; besides if you`ve been in food service/customer service for that many years; you`ll know the ins and outs of how to deal with customers when you`re on the learning curve. i started out with used equipment, easier on the wallet, and i purchased coffee equipment outright..some coffee suppliers say "brew equipment free! when you order beans regularily...guess what they are full of beans!! i got ripped off a few thousand dollars. i finally challenged my supplier and said, if i bought my own equip would my monthly bean bill do down?? he says...just a bit..i say wha`ts a bit?...he says well only 3 or 4 hundred a month..sorry buddy but to me and my lifestyle 3 or 4 hundred a month equals about 4 grand a year that would easily buy a complete set of brand new brew equipment!!  hey,, im new to this site, let me know if i`m taking up too much room with my comments, sorry about that. i just get passionate about the biz and compassionate for my fellow new owners and maybe i can save them some big cash  eg. same thing with smoothie products..get your own equipment as soon as possible, then you won`t be obligated to buy their high priced product! i started my coffee bar from a bare cement floor, i got input for design from the dealer that sold me espresso machine and another fellow that sold me grinders and lastly in tom mattson`s book he talks about layout. location, location, look for location then see if that space/bldg has coffee bar written on it. talk to ewe soon.

 

Hello mhleslie
Hi my name is Kanakdeep
I work at Aykya which is a new portal to help entrepreneurs succeed in their business.Aykya is an entrepreneur`s portal which provdes high quality ideas & tips to help you start & grow your business successfully.I got a article which can help you.
Funding a franchise: Will someone please show me the money?

So, you’ve finally signed up that long awaited franchise? Congratulations! Any thoughts on how you’re going to find the finances to grow this new business? Stupid question – the worry lines on your forehead say it all. Buying a franchise may bring several advantages, and give you a head start on many counts; but sadly, when it comes to arranging the funding, you’re faced with the same uphill task as with any other form of business.

Funding a franchise involves arranging resources at different levels and times. At the outset, you may have to pay a fee to the franchisor, which secures you the right to use their brand, sell their products in a certain territory and so on. The size of the franchise fee can vary significantly, and is usually directly proportional to the strength of the franchisor brand. Try to negotiate a staggered payment with the franchisor, mapping revenue inflows. Once you’ve handed over this check, it’s time to worry about another one. If you own the business premises from where you intend to operate the franchise, good for you! For those less fortunate, it’s time to find a suitable location and the money for making advance rental or security deposit payments. Not to mention, a broker fee. And we haven’t even talked about doing the interiors yet!

Costs of equipment and working capital make up a large part of funding a franchise. While there’s no getting around the expenditure, securing favorable terms of credit from suppliers can go a long way in easing the cash flow. Make sure you evaluate at least a few vendors to ensure that you’re not being ripped off. Also, look for opportunities to buy in bulk at discounted prices. Leasing, rather than buying equipment can work in some cases, but not all. Negotiating Business Equipment Leases by Richard M. Contino, under the Professional and Technical books category can give you a better perspective.

The strategies we discussed above will help some, but funding a franchise takes a lot more. Unless you already have the resources to support the venture for a year or two, there’s no alternative but to borrow. If you’re going to take a bank loan, be prepared to hand over a copy of a detailed business plan, along with plenty of other documents. Our previous write-ups on how to craft a business plan, and the   Ultimate Business Planner 4.0 from bptools could come in handy at this stage. Also, visit our Finance section to find out more on the procedures associated with a loan application. Your chances of securing the loan will depend enormously on the collateral you can provide, your previous credit history and your personal and business reputation. In any event, you will have to fork out about 25% of the requirement from your own resources.

If you’ve decided to take the equity route for funding a franchise, be prepared to answer some stiff questions from prospective investors. There’s more on this in our earlier piece titled Equity Financing.

A piece of advice – in general, you will find that funding a franchise becomes easier when you seek the help of the franchisor. A well established franchisor brand will usually have a system in place to help you along – this may include tie-ups with financing institutions. They will also help you build a business plan and financial forecasting model, based on the actual experiences of other franchisees, so you don’t have to plod your way through all by yourself. And last, but by no means least, projecting the strength of an established brand to prospective financiers will only help any quest for funding a franchise.

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Thanking You
Kanakdeep
Internet Research Analyst
www.aykya.com
"The Personal MBA" by Josh Kaufman
Click here to Download

yeah, the info as posted in the article is true enough; but don`t let the info get you too overwhelmed..  i did a business plan and had a local coffee bar owner review my numbers/projections and then went to several banks until i got what i needed.  i leased a couple of pieces of equipment and then went with used on the bigger coolers, etc. and was able to work out a payment plan with equipment supplier.  so it wasn`t as complicated as i thought, but do be prepared to ask for help from friends and family if you don`t have a good pot o`cash to start up with.

let me know if i can give you any specific info, or i tend to get blabby about any part of this biz