steviedeluxe

These appear to be popping up all over, at least they are in Madrid. 100 Montaditos, Lizarran and those frozen yoghurt outlets. I've seen that Lizarran have reduced the cost of starting 1 to 50k. Are they not in danger of over saturating the market? I know that smaller operators are being hit hard as they complain they can't buy suplies as cheaply as the chains do. Or will smaller operators compete, the same way local pubs do against Wetherspons in the uk?

rachelk

I don't know anything about business or commerce but I always imagined that the idea of a franchise was that all the risk would fall on the person taking out that franchise.
When the govt is encouraging people to set up in business rather than to continue to weigh down the unemployment register, maybe a franchise looks like a good option to those who have no other avenue.

Málaga suddenly became awash with new ice-cream parlours & frozen yoghurt shops, most I imagine on franchise from big chains. I can't imagine how there can be business for them all -even on sunny afternons in Feria week when it was difficult to get in anywhere the ones we went to weren't very busy. A couple of the traditional, emblematic icecream cafes had to close in recent years.

It's sad but I suspect that most of these will disappear again as quickly as they appeared.

cricketman

Yes there are a few of these in Oviedo too. They wont be here in 2 years time. It is sad as often the 50k raised will come from family and friends as an investment into the franchise. I guess for the 50k, at least they get a couple of years of drawing a salary out of the business, which for 2-3 of them will probably be worthwhile

The economy is very different when there is no/very little safety net

A new designer shoe shop for children has opened near when we live. I walk past there twice every day. All shoes are around 100 euros and they are meant to be for 3-8 year olds

I have never seen anyone in there and the person on the till always looks so sad. But I do think, really.. you could have opened up any kind of shop in the middle of this crisis, and that is what you have chosen!

rachelk

I wonder how much these franchise type things contribute to the supposed 'recovery' that's taking place...

Chiclanagir

Can we have a Nandos here pretty please.

cricketman

Don't you have the chicken rotissary places down there? I know that they are a popular tradition in Andalucia and are at least as nice as Nandos

I love the way they season all the oil that runs of the chickens and then ladel it on top and into the container when they hand the chicken over. Mmmmm. Add a bit of ali oli and it is very cheap food that is fit for a king

Especially if you serve with cava, like my Catalan friend insists

sam54140

franchise are rip offs
it is structured in a way to give most of the profits towards the parent/brand company. even if it works, the franchisee doesnt make much money. it's structured theft. with exceptions.

beware. better open your own stuff after deep careful market "on site" analysis.
and fit your prices/products towards the real potential clients purchase power.

as there were way too many houses built, so were way too many "bars-restaurants" opened. there's about 1,000 to take over in the malaga region. tells you something. a glut, overload, excess.

cricketman

Well yes of course, but then the people who open a franchise arent capable of such in-depth thought and investment. Not everyone is a marketing expert and it isnt as easy as you make it seem

It seems to me that those people who open franchises in Spain are those people who wouldnt have a job otherwise. And for 50k you get everything, the shop built for you, the menus, the supplier details, everything i.e. an up and running business. It would take years to get there if you started from zero knowledge and a lot more than 50k

stuboy

I agree,

You also get a proven product/brand.
You get often national advertising/marketing.
You get the right size premises in the right location
You get the right equipment to do the job
You get the all the legal/technical information you need.
You get your supply chain in situ.
You get access to specialists (usually for an initial period)
You get the opportunity to expand without doing all the legwork.


Of course there are downsides but for many it has proved worthwhile.

sam54140

no most often the sum includes a big profit chunk to the brand. their know
of package the thing and make it appear as a bargain...
you can do it much cheaper yourself but of course then you have a build yr own brand and awareness.
take GNC for instance: each year 50% of their franchises close and of course are replaced by other franchisees. but n the process GNC makes goooood money.

Chiclanagir

Not the same as Nandos. I like chicken piri-piri as in Portugal. Hot, hot, hot.

jackytoo

So do I. They do vary though. Kids love it too. I also buy the Nandos sauces.

I don't think franchises are a good business idea in any country. They milk your profits.

Domino

50k is cheap for a franchise, many companies want 150k or more, IIRC MacD's is closer to the 200-250k (or if someone has looked recently - is it more ??).
OK that includes the financial backing to enable the business to "settle in" for the first 12 months before starting hit profit but the rent for a high footfall area is not cheap and you can't hope the name on the door will improve that.

To really make a franchise work it either has to be in a high footfall area or cover a certain niche market - I believe one or two Sign companies are doing well in Spain because although in industrial areas that is also their market and they give superfast response with the latest plastics moulding and printing technology - which isn't cheap.

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steviedeluxe

Positive piece on the first 100 Montaditos opening in New York

http://www.businessinsider.com/100-m...rk-city-2014-1

Fredbargate

And I have been planning a trip to New York