Author: Roscoe

Should I Start A Franchised Business?

Should I start a franchised business? This is what I was asked recently. So I received a communication from my favorite online business broker today. To my surprise this had to do mostly with franchises. They were pushing a California startup Mexican restaurant franchise group. This was quite enlightening since I had just been communicating with a bunch of my students regarding franchises. In fact one of my students asked me whether or not it was a good idea. Now I assumed, and he concurred, that he was starting a brand new business and the theory was that he would buy into the franchise program and pay the startup costs. This involves spending a lot of money that you may not have. Indeed you can buy an existing business with a franchise such as a McDonald’s or Wendy’s or Dunkin Doughnuts. This also involves spending lots more money you may not have. But we will just talk now of doing the startup. So here are my comments to my students that were interested in starting a franchise business. Generally speaking, I do not like franchises, for a variety of reasons. Most of the reasons have to do with the amount of startup money that is necessary. Then beyond that, there is the matter of the ongoing franchise fees. Then beyond that there’s the inherent risk in a startup. Then...

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