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Is a fast food restaurant a good investment?
Posted on 6/1/12 at 11:26 pm
Posted on 6/1/12 at 11:26 pm
Like BK, Sonic, or McDs? I've never met anyone that owns one and was wondering what they make? The investment is pretty high to get in.
9
Posted on 6/1/12 at 11:44 pm to Zukitiger
don't do Subway is all I've been told
Posted on 6/1/12 at 11:56 pm to Alabama Slim
quote:
don't do Subway
Yeah there's a Subway on every corner.
Posted on 6/2/12 at 12:51 am to Zukitiger
Could be a very good result, or a very poor one. Or anywhere in between. Execution is everything with these businesses, a good brand can help but nothing beats extremely solid execution.
Posted on 6/2/12 at 1:37 am to Zukitiger
quote:
Like BK, Sonic, or McDs?
Owning a single franchise, other than Chick fil a, is very risky. I know a guy (PE group) that owns the second most taco bells in the world. Is he loaded, hell yeah, but it is because of the way he manages these franchises not just because he owns a bunch of them.
Posted on 6/2/12 at 3:32 am to reb13
You don't just go get instant access to Chick-fil-a like you can for others.
I don't think there is this inherent "risk" you speak of by only owning one location. As a previous poster said, it is all about execution.
I don't think there is this inherent "risk" you speak of by only owning one location. As a previous poster said, it is all about execution.
Posted on 6/2/12 at 7:53 am to Zukitiger
i know several people with fast food restaurants but they own 10+, i don't think you can own just one and make a lot. and if you can get a subway franchise they print money. doesn't matter if ones on every corner
Posted on 6/2/12 at 7:58 am to Zukitiger
i saw a family from KY lose about $5M investing in a fazolis in LC once (i'm sure they recouped some of that when they sold the property later, but still)
Posted on 6/2/12 at 8:15 am to SlowFlowPro
It depends on which franchise. If you've got enough $$ to open a McDonalds, it will make you money. McD isn't going to put up a restaurant unless they know it will make money. I've got a friend that opened a Quizno's and he couldn't make it. He actually had to shell out alot more money and buy another, well producing store, just to cover the rent at the one that wasn't producing. He had signed a 3 yr lease and kept it open for the 3 yrs and then close it. He's doing ok, but by no means is he living comfortably. He's been all in for 6-7 yrs now.
Posted on 6/2/12 at 8:16 am to SlowFlowPro
Fazoli's sank quickly here.
Posted on 6/2/12 at 8:31 am to guttata
quote:
I've got a friend that opened a Quizno's and he couldn't make it.
One opened here but it only lasted a few months. I don't think something like that works well in small towns unless in a gas station. The normal ones like Mcds, Taco Bell, and Sonic are full all the time. I think we have room for another.
Posted on 6/2/12 at 9:29 am to Zukitiger
I know Sonic has a 2 store minimum and you're shelling out a cool Million at least.
Posted on 6/2/12 at 9:58 am to Zukitiger
My uncle owned ONE McDonalds for a while when I was younger....He did OK, but certainly not wealthy.
If I had to guess (and this is purely a guess based on their lifestyle/home/etc), he was probably pulling in $150k or so while he was the owner. That said, it must not have been doing too exceptionally well or he wouldn't have sold it.
Not a whole lot of money in the food business unless you own multiple properties.
If I had to guess (and this is purely a guess based on their lifestyle/home/etc), he was probably pulling in $150k or so while he was the owner. That said, it must not have been doing too exceptionally well or he wouldn't have sold it.
Not a whole lot of money in the food business unless you own multiple properties.
This post was edited on 6/2/12 at 9:59 am
Posted on 6/2/12 at 10:02 am to txtiger21
minimum of $5 mil liquid to jump in on a new McDonalds
Posted on 6/2/12 at 11:03 am to SlowFlowPro
quote:
i saw a family from KY lose about $5M investing in a fazolis in LC once (i'm sure they recouped some of that when they sold the property later, but still)
usually a developer builds the building and a franchisee leases it back. so they probably didn't get any money from the buildings.
Posted on 6/2/12 at 11:11 am to trillhog
I like what Tropical Smoothie Cafe has to offer. I have no interest in going into the QSR business, but I looked into the cost of opening a TSC and it was about $400k to get everything started.
The reason it appears to be an opportunity to me is the food is great (smoothies are way better than any other place I have been and the flatbreads/wraps are good as well), but the service almost ALWAYS sucks. If service was better, then I have no doubt that business would increase significantly (at least at the location I go to).
The reason it appears to be an opportunity to me is the food is great (smoothies are way better than any other place I have been and the flatbreads/wraps are good as well), but the service almost ALWAYS sucks. If service was better, then I have no doubt that business would increase significantly (at least at the location I go to).
Posted on 6/2/12 at 11:20 am to lynxcat
Google SBA most failed franchises and this will give you a good idea of which ones to stay away from. Quizno's was way up there I believe.
The brand isn't going to make it for you, it's the execution and management as the profit margins are extremely thin especially if you're not serving alcohol (which presents a whole new risk reward scenario).
It boils down to hiring the right people (ever had to do that at $5.50 an hour? Not easy) and being theren24/7 to make sure they aren't stealing you blind.
In restaurants with small profit margins, it literally boils down to having your employees only put minimal condiments on sandwiches, making sure burgers are prepared to exact measurements (1 pd means 1 pound, not 1.1 pds because the employee is nice) and everything else similar.
I'd stay away, but I'm pretty risk averse and have seen plenty of restaurants close up shop, even the big boys.
The brand isn't going to make it for you, it's the execution and management as the profit margins are extremely thin especially if you're not serving alcohol (which presents a whole new risk reward scenario).
It boils down to hiring the right people (ever had to do that at $5.50 an hour? Not easy) and being theren24/7 to make sure they aren't stealing you blind.
In restaurants with small profit margins, it literally boils down to having your employees only put minimal condiments on sandwiches, making sure burgers are prepared to exact measurements (1 pd means 1 pound, not 1.1 pds because the employee is nice) and everything else similar.
I'd stay away, but I'm pretty risk averse and have seen plenty of restaurants close up shop, even the big boys.
Posted on 6/2/12 at 12:14 pm to Zukitiger
As a former Ops Manager for a franchisee who owned 6 McD's profit per store is between 100 and 300K depending on volume. Most in the 120K range. So it makes a lot of sense to get 3-5. Easier on training/hiring/promoting from within. McD corp owns everything...real estate etc..you just lease and give them 6% off the top and buy all their equipment, advertising, food etc. A good gig because the corporate support is second to none. But as the old saying goes...gotta have money to make money with that system.
Posted on 6/2/12 at 11:42 pm to cuyahoga tiger
We already have a McDs, Sonic, Popeyes, TacoHell/KFC and Subway. I can't afford Buger King and I think it would be a risk. I'm thinking of maybe a DQ they are around $750K total investment and you own everything.
Posted on 6/3/12 at 12:10 am to Zukitiger
I think the saying 95% of new start up businesses fail is fairly accurate.
With such a big investment, one bankrupt business could set you back for life.
With such a big investment, one bankrupt business could set you back for life.
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