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Thread: Small business/Franchise?????????????

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    Small business/Franchise?????????????

    Just joined your forum simply because i desparately need your genious opinions,

    Im currently running a bridal shop, but i wanna invest in something else, because it's good but seasonal, im looking at meat/chicken outlet my first choice, but don't know if its necessary for me to buy a franchise or just get a good supplier and start my name, I have identified the area, and made research about my target market.

    My second choise of business is Vending Machines, still busy with its research

    Need your knowledge...

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    Platinum Member sterne.law@gmail.com's Avatar
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    From my perspective, and having some involvement in restaurants and franchises, the BIGGEST advantage is the name and the power of joint advertising. The theory is also that a franchise brings a complete operating system, proven track record etc to the table. This is debatable, other than the big guns.
    If you can put together a concept that is simple enough tehre should be no reason taht you cannot do your own thing with some guidance. By this i mean that the average franchise will charge you R70 - R125 000 for the original name. With that kind of money you can hire some pretty good people or consultants to help set up and tehn have change for marketing. Add in the monthly franchise fees of 7% or so and you must do the maths as to if you will get your money worth. However if you are going to get a big name eg KFC, Nandos, SPUR etc - the value of taht advertising budget is well worth it. So although your setup fee and franchis efee will be expensive and you do not neccessarily get that return directly, teh fact is that name has value and you will never be able to do the advertising equivalent on your own.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    I think the franchise will be good as most of the things are already there and setup. That is what you are really paying for. On the other hand you will have to go through all the ups and downs of the start-ups if you are going on your own.

    I think the vending machine business is good. You only need to get a very good and secure place, also the demand in the place.

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    Shining Star, first of all, I do not believe in the concept of buying a franchise. Yes, it does give you support, and you do have the power of advertising behind you. But, not only will you have to pay an upfront deposit or maybe even the whole purchase price, but in most instances you will end up paying monthly royalties and other fees to the franchisor. The other disadvantage is that you have to buy your stock through their preferred suppliers, and then you will have to charge the prices they recommend.

    Starting your own business is risky, we all know that. But if you have done your research, like how many competitors you have, the prices they charge, who your suppliers will be, how many staff you require, how big is the shop, is the shop ideally situated, what is the capital you have available, etc, then you should start your own thing. I want to re-iterate - please do your research!!!

    How much knowledge do you have of the meat/chicken industry? If you do not have any knowledge or experience in that industry, then I will re-think staring such a venture. However, if you have someone very very reliable who will be willing to start the business for you, then it can work. But then you have to ensure that you give that person enough incentives to help you.

    Best of luck!!

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    Diamond Member wynn's Avatar
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    I've always fancied to compete with the 'Colnel' with my "Nkuku Fried Chicken" with its African theme 'pap n sous' instead of mash and gravy, quarter loaf instead of buns, roast potatoes instead of chips and what about "Red Hot, shu! shu! Walkie Talkies"?


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    I've seen more than enough well known franchise brands go through a few owners with a new store site. I'm sure the franchisor's experience might help some, but ultimately it's all at the franchisee's risk if it goes wrong. And launching a new site will always be a calculated guess.

    On the flip side, any venture that involves perishable foods does take a lot more technical knowledge and detailed food-handling systems than most people think. It's not just advertising that has people buying at franchised food outlets; it's the assurance that you stand less chance of getting some form of food poisoning.
    The trouble with opportunity is it normally comes dressed up as work.

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    I do see a lot of horror stories about about small franchise brands- but the big ones, IMO, are pretty good for guys going in blind. They will set you up with a well laid out store, brillent (if often overpriced) equipment, and then expect thier pound of flesh at the end. They will also give you great, branded items and a name that people know and trust- priceless. All in all, a safer investment than going in with Tannie Marie's baseting sauce with ideas of taking on the market.

    Of course, you will need at least a mil - anything less and would go it alone, auctions are a wonderfull place to start.

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    Better Rental/position

    Quote Originally Posted by Pap_sak View Post
    I do see a lot of horror stories about about small franchise brands- but the big ones, IMO, are pretty good for guys going in blind. They will set you up with a well laid out store, brillent (if often overpriced) equipment, and then expect thier pound of flesh at the end. They will also give you great, branded items and a name that people know and trust- priceless. All in all, a safer investment than going in with Tannie Marie's baseting sauce with ideas of taking on the market.

    Of course, you will need at least a mil - anything less and would go it alone, auctions are a wonderfull place to start.
    I have also found that most landlords are far more interested in leasing new premises to a known brand name and the rentals for the store will be better.

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