Anyone have a Franchise?

33 Replies

I know BP is mostly for RE, but does anyone here also invest in any franchises?  Seems like it could be as profitable if not more as a Re investment.  Also, could be a good way to diversify your investments and not put all of your eggs into one basket to say.    

The more I learn, the more I realize there are so many great ways to generate income and build wealth. I've ran the numbers on a few franchises, and I agree that you can get a great return. I suppose it just comes down to the pros and cons you are more comfortable with. I'm following this to see how others respond, very interested.

@Ryan Ingram For sure!  I also think it would create a new adventure for people who have been doing Re for a long time and are looking for something new.  This could also apply to RE investors who invest in other businesses to like startups, companies expanding etc.    

I’ve been thinking about a franchise for a while.  Following to see where this convo goes. 

My interest started in stocks. After analyzing and investing in stocks based off fundamentals for quite some time, I then learned of dividend stock investing. From there, I familiarized myself with investing for cash flow. Naturally, that has led me here to REI.

I am currently analyzing a few different franchises here in Ohio with an investor pal. You're definitely spot on with the usage of the word adventure. Definitely getting me out of my comfort zone.

@Ryan Ingram   Nice.  Stocks are good.

Anything with risk can come with a big reward.  The question is, how do you get that big reward?  

I’m a franchise of HomeVestors of America, Inc the “We Buy Ugly Houses “ guys.  Obviously that is RE Investment based, but many other HomeVestors franchisees diversify their business with other opportunities like Great Clips, Liberty Tax Prep, etc.

I’ve actually been on the look To add something in lately, so this topic was appropriate.  Wife says stay away from food service, thoughts?

I agree with your wife @Jeffrey Hotz , not from experience but at the thought of inventory spoiling or rotting prior to fulfilling its mission to return my capital :) 

How long have you been with HomeVestors? And I'm happy to see this has a good OH presence.

This is the Ohio investors page!  Ha!  Could you tell us alittle more about how the HomeVestors of America franchise works, what you get from it and what they provide to you?

@Ryan Ingram yea and general health regulation.  I’ve been with HomeVestors 5 years now, you going to OREIA Convention this weekend?

@Jeffrey Hotz I see your wife's point about the food franchise but then I look at a franchise like MCD and I wonder if most of them have a good return?  

@Mike Bereck  Hey Mike,  started HomeVestors in CLE, was the first franchise back after the crash.  We’re 15 Strong now in CLE!  I’ll PM you as there’s a few event stuff coming up, Our Deal Maker Session (off market properties presented) on Nov 15th and a Discover Day (Learn how to Buy From is or Buy Like is) on the 17th in Cleveland.

We’re also having Discovery Day event every night at the OREIA this weekend, Monday In Cincinnati and Tuesday’s in Columbus.

Discoverydaycolumbus.com

Only have a site for CBUS, which is where I am now.

Originally posted by @Jeffrey Hotz :

I’m a franchise of HomeVestors of America, Inc the “We Buy Ugly Houses “ guys.  Obviously that is RE Investment based, but many other HomeVestors franchisees diversify their business with other opportunities like Great Clips, Liberty Tax Prep, etc.

I’ve actually been on the look To add something in lately, so this topic was appropriate.  Wife says stay away from food service, thoughts?

 I have seen both good and bad outcomes with food service industry franchise. Some of the low entry price, low net worth franchises will gouge you on food prices, required equipment purchases, marketing spend, etc. When they run national giveaways and the owner is struggling to make ends meet.

On the positive side, super strong franchisees like McDs or Chik Fil A are a veritable gold mine if you can pass the application test.

I googled McD before and found these numbers:

$2 million investment

Return: $100k yearly NOI , which is about 5% return.

It the numbers I got online are correct, I don’t want to do it.

Hi there! My husband and I purchased a carpet cleaning franchise, Oxi Fresh, last year. We are growing with lots of networking and good old fashioned hard work. We are very happy with our decision to go into business for ourselves. Good luck with whatever you decide! - Jessica, Oxi Fresh of Central NJ

I've looked at 4 different food service franchises. All of them had a 40 hour requirement for the owner to work on the business. This didn't necessarily mean in store, but rather reconciling the books, marketing, etc. They all had a 3-4 week training period you had to attend as well. From talking to owners of these 4 franchises I found that they were netting somewhere around 60k - 75k per year after all expenses, franchise fees, payroll, and taxes. This was pretty standard regardless of the name on the building. The only way to make real money is to own multiple locations, all bringing a similar return. At the end of the day I didn't feel it was the right investment for me in my situation.

Seems like it isn't worth the amount of money you have to put up to start and then the return.  RE gives better return unless you have a lot of the same buildings that all make about the same each year.  

@Ronald Rohde   Yeah.  It seems like the big companies you can do well but I know they are hard to get into.

I spent a combined 20 years in food services - as an investor, I would not touch a food related franchise. Primarily because of the number of employees & inventory required.

A service business is another story - no/minimal inventory, can be "regular" hours - build a book of business that feeds itself via referrals. Pest control, alarm, and various inspections come to mind.

As with all investments, due diligence is critical. "Don't believe the hype" and make a business decision based on your skill set, interests, and goals.

@Lucius Carroll Good point.  I saw that you said you invested in food related franchises so would you or are you still investing in them but not owning them?  

Originally posted by @Lucius Carroll :

I spent a combined 20 years in food services - as an investor, I would not touch a food related franchise. Primarily because of the number of employees & inventory required.

A service business is another story - no/minimal inventory, can be "regular" hours - build a book of business that feeds itself via referrals. Pest control, alarm, and various inspections come to mind.

As with all investments, due diligence is critical. "Don't believe the hype" and make a business decision based on your skill set, interests, and goals.

 I have worked with food service franchises on the brokerage side. I have heard that operating a new location for the first couple of years is grueling.

@Mike Bereck my cousins both have owned franchises and done pretty well.

They started a chain of little Caesars restaurants and sold those. They both moved on to the budget blinds franchises in different parts of the country after that.

I can put you in touch with them if you’d like.

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