Thoughts on franchises?

by a searcher from Boston College - Wallace E. Carroll School of Management

1 month ago

Morning all,

I am new to the ETA space.  I wanted to get the community's thoughts on franchises.  I don't think I want to pursue franchisee model over the long term (reasons include inability to scale - territory driven; and royalty model), but was thinking that it can be a jump off point.  Appreciate your thoughts.

1. I am speaking with an assisted living placement (for seniors) franchise in Virginia - seems like the revenue model is based on taking a commission on placement center's first month rent.  Very small & flexible model.  Thinking that this can be a jump off point for ETA.

2. Also, was speaking to a bakery franchise.  Royalties based on gross sales and marketing.  Really long operating hours###-###-#### hours).  I have seen successes in certain markets, but the average franchisee would be akin to taking a salary/benefits working for a company.  This would be a big investment, and longer duration.

How painful is the the resale process for franchisee businesses?

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29 comments

searcher from University of Maryland at College Park

^Searchfunder member‌, good meeting you at SEETA! Are you talking acquiring existing franchises, as opposed to zero to one?

Also check out this episode: https://www.youtube.com/watch?v=S7AI82OYPvQ

Let's connect on LinkedIn

2 weeks ago | like reply | 0 likes

professional from University of Akron

Nothing is set in stone usually, but given the choice between acquiring an existing business and a franchise, I would hard pressed to choose a franchise. The major benefit of an acquisition is that you have the goodwill, the systems, the brand, the history, etc., which, in general, eliminates the benefits of a franchise. However, you are stuck without freedom in the franchise system and incur the extra royalty costs as well.

For a start up, sure there are some benefits. But, eta vs. franchise to me there is no comparison.

3 weeks ago | like reply | 0 likes

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