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Steve
11-25-2007, 10:49 PM
Franchises can be a great concept for some but there is always a risk. Nothing is guaranteed to make money.

This article talks about a few business owners who started a Ben & Jerry's ice cream store and found themselves in big financial troubles.

One entrepreneur had started the store with $220,000 she was lent from her elderly parents retirement fund! Ouch!

Sometimes you want to jump into a fully functional turn key operation and you figure if you buy into a franchise with $220,000 you will no doubt make a profit. It doesn't always work out that way.

Think about all the mistakes you have made with your business right now. Think about how much those mistakes cost you. But when you go and bet the ranch on a business and you have never run a business before, Yikes! Look out. Things can get pretty ugly.

What's your take on all this?

Ben & Jerry’s Bitter Crunch (http://www.newsweek.com/id/72016) - Alan Sherman and his wife, Shannon, are among the unsuccessful ones. The couple opened their shop in Blacksburg, Va., in 2004. They say they built their business plan based on information in a 2004 Ben & Jerry's franchising circular, a disclosure document sent to prospective new owners. The circular stated that the average Ben & Jerry's store would bring in $364,892 in gross sales. But the Shermans soon realized their shop wouldn't ring up nearly that amount. They say they've already lost a half-million dollars, and will likely lose thousands more as they continue pumping cash into the business to avoid defaulting on loans.

http://www.newsweek.com/media/48/071122_BZ01benjerrys_vl-vertical.jpg

StartALawnCareBusiness
11-26-2007, 06:22 PM
When I think of franchises, I think of things like the above store or Subway or McDonalds. *The franchisee is running his own business but the franchiser is basically in control of the method in which the store functions.

The franchiser controls:
Name
Logos
Store Layout
Products offered
Uniforms
Accounting practices
etc.

It would be neat if a franchise offered more of a lienient atmosphere. *Maybe the franchisee could pick and choose ala-carte from a menu of corporate support services and product offerings.

Will you more likely buy into the franchise philosophy if this becomes the case?

Keith

Steve
11-26-2007, 06:30 PM
That is a very good question.

Here is my thought on it.

People buy into a franchise because the system works more often than it doesn't. They want a system that is a no brainer. They want a turn key operation.

When franchises are new, they tend to allow for more experimentation from their franchisees. There is a lot that can be learned from such experimentation.

But then on the flip side, as you grow and get more established, you want your franchisees to really fall into line because this is what the customer expects. The customer visits a franchise because they know the sandwich they are buying in FL is the same they buy in TX. Etc. The customer becomes accustomed to the franchise feel and they want that comfort when they walk in the door.

After saying all that can you say for the purposes of this discussion, if you were to open a franchise tomorrow, what would it be and what would you want to experiment with?