Kimbodia

Hi,

Does anyone have any experience of buying any type of franchise in Oz?

We are moving to the Sunshine Coast, hopefully by the end of the year. My work prospects there are limited (Mechanical CAD Drafter), so I am exploring other ideas

We have the option of releasing equity or selling our UK property for funds for this

Any advice at all would be appreciated, which are the most profitable? which to avoid? etc etc

Thanks

GarryP

Worthwhile noting that there are more one man band shops in Australia, and that rents on properties are frankly silly.

Not sure I'd be looking in this area at all, but if I were, I'd be looking at mobile solutions if possible. Not sure how those mobile dog washing services make money, but they seem to survive.

robo43

Hi Kimbodia
We live in Perth and took on a fast food franchise in 2009. From our own experience i would not touch one with a barge pole in hindsight. We found that all the franchisor was really interested in was increasing your sales, so they get a greater income, we had to pay a 6% advertising fee and 6% franchise fee, this was on gross sales before GST (VAT) was calculated (another little con). We felt that they were not at all concerned whether it was profitable business for you. We stuck at it for just over 3 years, they give you the patter that you go in and set the business up, then put a manager in to run things, but that was unsustainable so my wife would end up working 60+ hours a week, while i carried on my job as a sparkie and working any spare time i had. As i said after 3+ years of no holidays or social life we got out for the sake of our sanity and relationship, accepting a loss of over a 100k. Again compounded by the fact that the franchisor is entitled to 10% of the selling price. Once we were in the shop we got to know many other franchisees in the shopping center, and a vast number were having the same issues as ourselves. As a side-note the shop we opened has now closed down center management closing due to non payment of rent. What i would say is think very very carefully about going the franchise way, they do not really have a good reputation. That 12% we were paying them was the difference between us keeping our heads just above water and making a decent profit.
Rob

Stuck in Auckland

Why swap employment for unpaid employment.

Franchising is not getting into business for yourself

Its not choosing your own hours
Its not getting what you put into it


Your better to research existing stand alone businesses for sale using a registered broker. Look for a business you can add value both from a revenue and capital point of view.

Amazulu

Australia is one of the most franchised countries in the world

There are some good franchise operations and there are a lot of crap ones

We know someone who owns 9 Dominos Pizza franchises and is doing very well (he is one of the best franchisees for Dominos internationally) but many of their other franchisees really struggle (maybe a majority). Someone else we know had a home maintenance franchise and nearly lost his house

Be careful and go into it with your eyes wide open. Get expert advise

Good luck

moneypenny20

If you're looking at Shingle Inns, don't. Avoid like the plague.

Dorothy

Shingle Inn is crap. If I was to consider a coffee franchise (and I wouldn't) it would be a Dome.

Stuck in Auckland

Shingle Inn offers you a comprehensive franchise package including:

1.securing an appropriate location for your café
You get tied to a lease the previous franchise was trying to avoid
If you cant select and use a solicitor to help with lease agreements?
Review foot traffic (you can get stats for this or do it yourself)

2.comprehensive, hands-on pre-opening training
Is post training for what they forget to tell you?

3.arranging relevant information technology and training that will help you efficiently run your business
Refer 5 Here is all you need:

• Xero (Accounting - link to your bank account and code transactions - keep it simple close to cash accounting)
• Unleashed (inventory mngt)
• Multitude of time and attendance systems and payroll - Flexi time for example
• Vend for POS (point of sale)

4.assisting you to plan your opening promotional activities and training you in identifying and executing local area marketing opportunities
There are better equipment marketing partners that can do this

5.providing systems and procedures to support your business success
Yes on top of your franchise fee we charge you thousands for cloud based systems you can get better and cheaper

6.supplying ongoing support and training once you’ve opened your store
Prefer training before opening thank you

7.providing an ongoing network marketing program including the tools implement to the programs in store
What the F@@K?

8.the opportunity to grow your business and build a saleable asset
Ahh isn't that with any business?

moneypenny20

9. We will shaft you at any given time with no prior notice.
10. If you don't make what we say you will make you wil have to give us our cut regardless. Enjoy bankruptcy bitches!

Paraphrasing obviously.

Stuck in Auckland

GarryP

Yeah, I've never really understood a franchise for something like a coffeehouse. All they really seem to be offering is the simple business method, and that can be ripped off (if it has any value anyway). In return you lose flexibility and get to pay them silly amounts of money that they skim off the top.

Great for the franchisor, cr*p for the franchisee.

Dorothy

Not sure why you thought I wanted to know any of that considering I said "if I was to consider a coffee franchise (and I wouldn't)" i have 0 interest in buying a franchise of any sort. If I were to open a coffee shop it would be serving my baking in the location I choose with the opening hours I want.

Stuck in Auckland

It wasn't for you personally, it was generic response to what Shingles offer

Amazulu

It was a bizarre reply

I agree. Coffee is one of those things where a franchise is not needed - the woman from Iowa is a perfect example

There's a Dome in Kalamunda (which I'm assuming is a franchise) that does good business but the very nice fitout (old police station) would have cost a fortune and their ongoing costs would be huge. Also not really relevant but their food is shit and totally overpriced

Dorothy

It is overpriced shit but they all seem to be busy. Coffees are ok though. As a curiosity when I was looking at opening a cafe I looked at how much it was to buy a Dome. IIRC it's in the $250k range.