Have you / would you buy a franchise?

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Have you / would you buy a franchise?

Larry Flanagan
Investor · Midwest, USA · Member since 2012 · 204 posts · 33 votes

I'm looking at an established business to buy for my wife to run.  It is an existing business (not real estate related) and nets about $5000/mo with limited owner involvement.  However I'm a bit of a libertarian and like all franchise agreements there are so many rules...

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Jim Shepard
Investor · Edwardsville, IL · Member since 2015 · 432 posts · 481 votes
10y
I have been in the Subway system for 25 years. It has been very good financially for us but you will have to follow the franchisor's rules. Here's what I did before I bought my first store. I found a franchisee that I liked and made a deal with them. I worked a month for free and she taught me the business. This gave me the opportunity to see if I wanted to buy a franchise. You say "work for free? Are you nuts"? Think about it. Wouldn't it be a lot cheaper to give up a month than to go thru the hassles of buying a business only to find out you don't like it. Another benefit was the franchisee I worked for became my free consultant for a number of years. Also go talk to multiple franchisees to see what they think of the biz. My .02
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  • AJ Singh
    Rental Property Investor · Orange County, CA · Member since 2016 · 512 posts · 374 votes
    10y

    Larry Flanagan

    thats a great cash flow for limited owner involvement. But a franchise will keep the owner on his/her toes to follow their proven systems

    Good Luck!!

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  • Brian Mathews
    Contractor · Round Rock, TX · Member since 2013 · 767 posts · 389 votes
    10y

    I think it depends on the franchise.   I'm not sure I'd invest in one that has limited owner involvement.  Post the name of the franchise and maybe somebody on here has experience with it.  

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  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 537 votes
    10y
    Yes, depending on the franchise.
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  • Jim Shepard
    Investor · Edwardsville, IL · Member since 2015 · 432 posts · 481 votes
    10y
    I have been in the Subway system for 25 years. It has been very good financially for us but you will have to follow the franchisor's rules. Here's what I did before I bought my first store. I found a franchisee that I liked and made a deal with them. I worked a month for free and she taught me the business. This gave me the opportunity to see if I wanted to buy a franchise. You say "work for free? Are you nuts"? Think about it. Wouldn't it be a lot cheaper to give up a month than to go thru the hassles of buying a business only to find out you don't like it. Another benefit was the franchisee I worked for became my free consultant for a number of years. Also go talk to multiple franchisees to see what they think of the biz. My .02
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  • Jim Shepard
    Investor · Edwardsville, IL · Member since 2015 · 432 posts · 481 votes
    10y
    Something else I would highly recommend is having some college level accounting classes before you buy a business. This way the account ant/ CPA talks to you about your financials you'll have a better understanding what they are talking about.
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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    10y

    All depends on the franchise. I actually like the franchise model as opposed to starting up your own business. Ive considered purchasing a real estate brokerage franchise. There is no doubt in my mind that if I owned my own brokerage, that I would go the franchise model instead of starting my own.

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  • Chinmay J.
    Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes
    10y

    I am surprised to see the question here, since this is mostly real estate forum.  But currently I am planning on looking into Jimmy John's franchise. I love their product and have talked to couple of their franchise owners, who talk highly of their system and business model.  I tried Subway a few years ago, but the experience was awful. I personally think Subway has become saturated with in literally every single corner. Also the brand has taken somewhat of a beating with Jared Fogle's transgressions. 

    If anyone has any insight into Jimmy John's reach out to me via PM.

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