I was really dead set on Mickey D's, as I have enough capital to make a down payment on a loan; but it seems to be alot more work than I thought. Then again, I'm sure any business is.
Yes, the food is gross, but I don't care; I'm not going to eat it myself. If people want to eat slop, that's their choice.
Interesting stuff. It was some decades ago now that my parents got into that game (and some years since they got out), so it's interesting how things have changed. However I think you miss a few aspects of the franchise operations: the new stores were always corporate owned and run - they fly in, set them up, get them up to speed, and then find a franchisee to farm them out to. The ones that continue under corporate operation tend to be ones where they can't find a franchisee (typically, locations that some accountant in a corporate office somewhere thought looked great on paper, but are obvious losers to anyone on the actual ground there, but also sometimes ones in bizarre locations like on riverboats). So you're correct in saying that the only way to get a new store is to buy a whole district's worth, and so the only real way in is an existing store. Those break down into two categories: unsound stores (as described above) that eat franchisees for breakfast, and basically-sound stores that are being run poorly. You want the latter. And those do exist - even really good owner/operators burn out, have marital problems, become alcoholics, etc. And of course a few bums always manage to sneak through the corporate quality-control (much as is made of all the various demands and standards for getting into the game, they become considerably laxer when it comes to locations with very little interest from franchisees - everybody wants to run the Hollywood stores but Bumfuck, Idaho is a different story). The kicker is that the odds of such an opportunity cropping up in any particular location are nil: there's going to be - maybe - 2 or 3 such locations in a beginner's price range, in the entire country, at any given time. So unless you're prepared to drop everything and move to (potentially) some tiny shitstain town on the other end of the continent, do not even consider buying a McDonald's. Also you will need like 1+ years of experience managing an actual McDonald's, so unless you are buddies with an owner/operator that wants to hook you up, again, don't bother. Also there are limits on the terms of the loans you can get to purchase your franchise, typically requiring full-repayment in like 7 years' time. Which is sort of good, on the one hand, since you don't end up paying so much interest over the lifetime of the loan. But it also means that your profits will be anemic for the first 7 years (and, as has been noted, after that you will have considerable, regular remodelling and upgrading expenses). A well-run store in a good location still provides a solid income (especially after the initial loan is payed off), but it's a lot less than many people tend to assume, and is hardly a life of luxury. And the inspection standards are absolutely crazy. They do things like open up a random cheeseburger and check whether the pickles are touching eachother. If they are, you lose 1 point. Which doesn't sound like much, except that it's on a 3-point scale, so 1 point is the difference between "excellent" and "satisfactory" or "satisfactory" and "make this mistake again and you will be forced out by corporate."
Well I thought you were a left-winger. Maybe I was mistaken. Yes, you do seem to know what you are talking about with Mickey D's.
The main low-effort competitor to chains like McDonald's is food trucks and stands. It varies according to local laws and regulations, but typically such businesses have it much easier than their competitors since they are not required to provide a bathroom or a parking lot, are often taxed at a lower rate, and can move around to chase business. Staffing is a lot easier, there's no dining area/bathrooms/playground/parking lot to clean, etc. and so the overhead is much smaller. You then pass that on to the customers as a lower price, and you have a huge competitive advantage. The hard part is coming up with good food offerings, finding good spots and times (plenty of competition for those) and overcoming the lack of big advertizing that chain restaurants can rely on. Also, you gotta find a few reliable hands to operate the thing, since you aren't going to want to be sitting in a hot taco truck at 2AM to serve the bar crowds every night.
Yah but you think by becoming a vehicle for an unethical practice to operate through in no way makes you, at least a little bit, unethical?
It is. From experience. Not in the hospitality industry, but a pretty large business started from scratch - when I sold out there were 2,000+ employees. It's an enormous amount of work - many, many 60-80 hour weeks. I would imagine this would be irrespective of the industry. The only advice I have is do it now, while you are young. It takes a lot of stamina, and I lost much of my wealth during the .com death, then again with the real-estate collapse. Trying to recoup several million at my current age is one hell of a lot harder than when I was twenty. I have no idea what the relative ROI is on McD's vs Sub shops, but I thought one (or more) of them might be viable alternatives... Anyway, good luck...
What's the "unethical" practice? If you are referring to animal rights, then just shove it, because I really don't care.
I'm not a business newbie. I have dabbled in real estate; but, I haven't done anything major yet, and thats' what I want to do.
To say nothing of animal treatment, the raw food materials that McDonalds buys are heavily subsidized which allows them to price their food as low as they do. Not very ethical or free market, ay?
Last comment - getting too close to home... Check out direct marketing - do a comparative ROI analysis on infomercials, direct mail, telemarketing, email blasts, etc. In other words, a whole lot of small ($500.00 or less) transactions with a whole lot of consumers. Say, one per employee hour x 40 hours per week x 100 employees x 2 shifts, etc. And this at a 40-45% gross margin. You run the numbers... This should be major enough for you and only requires a couple hundred thousand dollars investment... So once again - good luck!
Yes. The categories I mentioned are merely examples of methods of direct marketing. Ideally, you would find your own product or service (say, Ginsu knives, for example) an market that. However, you can make substantial money being a "gun for hire" and farming out your services to other companies. Unfortunately, the trick here is to know what you are doing. So, if you were a newbie in this industry, you would have to pay some substantial salaries to your top executives. Once you learn the business yourself, of course... Well, keep those employees you need. If you believe in straight capitalism. If not, offer Golden Parachutes to assuage your conscience... Please Register or Log in to view the hidden image!
Yah but once you get involved in advertising, don't you also have to polishing Satan's pitchfork? http://www.youtube.com/watch?v=gDW_Hj2K0wo
Yes, but usually with $100.00 bills... Please Register or Log in to view the hidden image! Actually, your statement applies to all capitalism - which is definitely a valid topic, but probably beyond the scope of this thread...
It doesn't necessarily. I mean it could apply for sure but I didn't intend it that way. I think advertising is just evil but don't have a problem with capitalism.
Well, honestly, to an extent I agree there is merit in your statement. However, most professions often get the same treatment... Let's take lawyers - no, on the other hand, you take them... Please Register or Log in to view the hidden image! In some defense of advertising though, how would you learn about a new product that was actually beneficial? The most efficient way is mass advertising - 'course, we can always go the opposite direction - your friend tells you, you tell someone else, etc... This is still advertising, we call that vehicle "word of mouth". While corruption may exist in advertising, so does worth. Think about it....
