At the moment, franchise regulations leave it largely up to the franchisee to ensure they are not investing in a bad business. Here are a few steps operators can take to keep from falling into a Burgerim-like trap.
The franchisee takes most of the risk in the franchisor-franchisee relationship, and failure means you can lose your business and even your personal assets. Keep that in mind as you look for franchise opportunities.
Favor franchises that provide earnings claims in their franchise disclosure document (FDD). But don’t trust them. Talk with numerous franchisees and get their profit-and-loss statements. Ask them everything you can about the brand.
Simple Google searches of the brand can do wonders. Look up legal actions, Yelp scores, Facebook, Twitter and other social media accounts to see what people are saying about a brand. Talk with customers and visit multiple locations.
Just because a lot of people are opening locations doesn’t make a brand good. Look at the FDD and compare the number of franchises sold with the number of locations open. If a franchise has a lot of sold locations but not many open, that’s a massive potential red flag.
A group of the fast-food operator’s bondholders want the company’s CEO suspended after a stock sale involving Twin Peaks. They also questioned the executive’s control over the company.
The coffee shop giant has spent the past 18 months returning to its roots as a coffee shop where customers want to stay. Now the company plans to go on offense.
Tennessee-based Bluemont Group was throwing away millions of dollars' worth of unsold doughnuts a year. Enter Do’Cast, an AI camera system that is helping it match supply with demand.
The Week in Restaurants: This week’s episode of the weekly restaurant news discussion podcast looks at the fast-casual burrito chain’s tough year, Subway’s franchisee bankruptcy and Yum Brands.
