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When I left my job as manager of a popular restaurant in Las Vegas for our move to Denver, my dream was to open my own restaurant. We were lucky and received on the housing market before it collapsed and was eager to be my own boss. I started to investigate all possible scenarios for the right opportunity. The possibilities seem endless and our optimism was high that he can finally fulfill the dream of financial freedom in the future.

Independent or a franchise?

My search began in earnest in what was the best fit to start. I had been in the industry long enough to know that restaurants are generally face an uphill battle to survive. However, if more than 10 years in the industry and knew a thing or two, or so I thought.

My research was on what I buy an existing independent from scratch or “best bet” to explore franchise opportunities. Even if I knew how to manage an existing restaurant has not had the experience of starting from scratch. I had no knowledge of negotiating a lease, hire a contractor, find funding, etc. quickly began to make inquiries and discovered that there was a world of knowledge which must be obtained.

After several months, my attention turned to the opening of a franchise. There was a well-known sandwich chain that had purchased relatively low cost. The initial fee is $ 25,000 and the total dollar depending on whether you purchased an existing store or create your own. We opted to go and build our own. Well, now, things would be good. Our own workshop and a place we choose (from a list of sites provided by the franchisor). The franchise took a lot of trial and error process. He provided a list of subcontractors and confidence he has used before. provided information on obtaining permits, to be used for payroll, supplier of food and so on. As promised, the Franchisor is guesswork out of him and showed how to begin.

The rub

The usual problems arose during construction, we opened six months later than planned, but we knew there would be bumps on the road. Our opening was a disaster, bad weather, road construction and customer appreciation slow. The costs are high, rent, opening costs, borrowing costs, food costs abnormally high (the food retailer owned franchisor) and franchise fees last but not least. When we opened our franchise fees were relatively high at 9%. That’s huge in a very tight margin business. However, the franchisor has increased the rate of 11% shortly after opening. They had that right in the franchise and the reason was to increase advertising!

Beginning of the End

I quickly discovered they were the true owners. We thank you for the franchisor and we are bleeding cash. I tried to sell after the first year of operation, but we could not taker, at any price. We had to close the doors and realize a loss of approximately $ 250,000. The franchise was a “program” to help struggling franchise, but all requests for assistance, the temporary reduction in franchise fees or assistance to find a buyer, fell into deaf ears.

In conclusion, we have chosen the wrong concept of location or time to open the restaurant. I think the franchise can be a viable option, but as always, buyer beware.

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1. Discovering The Franchise Opportunities