Any perspective on becoming a franchisee of a national chain (i.e. Wendy's, Wingstop etc) in lieu of a more traditional search...+ anyone have experience leveraging brokers such as National Franchise Sales?
More on Searchfunder
Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
- No franchise worth doing will come from a franchise broker. Maybe there's an exception but I haven't seen it.
-It's possible to acquire an existing franchise location from a business broker, but usually existing franchisees have first dibs. So if none of the highly skilled operators with direct concept experience have acquired the unit(s) you have to ask why.
- It's a very hands on business until you have massive scale...then you can rely more on a management team
- Fully loaded investment can be $1.5M-$3.0M directionally depending upon concept and location. Maybe more maybe less. Obviously it varies widely (Panera outparcel vs. Subway/Dunkin). The point is though, if it costs you $2M to build a Wendy's, at $2M revenue, you might get EBITDA of $500K at run rate with very limited growth potential since you're beholden to the location. You invested at 4X EBITDA but it takes you###-###-#### months to open your first location after being approved by the franchisor, finding a suitable site, building the restaurant, and opening.
- Despite all the negatives I just laid out, there are some concepts that are as good as gold: MCD, Wendy's, Chik-Fil-A, Panera. Different hurdles/profiles for each, and you're typically required to have operated multiple units of another concept before they'll look your way - but if you can get into one of those you're in good shape.