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Offline adam01


  • Joined: Nov 2009

  • Location:
  • Drives:
vehicle dealership any good? (unfortunately not exotics)



Offline jim501

  • Idiot Seeking Village

  • Joined: Apr 2006

  • Location: Brisbane
  • Name: Cam
if not in an australian context, shoot it through. know a few people mate!

Unfortunately again, no good, easier to limit it somewhere. But thanks!



Offline fivesix


  • Joined: Jun 2007

  • Location: TMBA / BNE / MEL
Unfortunately again, no good, easier to limit it somewhere. But thanks!

:(

:P



Offline jim501

  • Idiot Seeking Village

  • Joined: Apr 2006

  • Location: Brisbane
  • Name: Cam
vehicle dealership any good? (unfortunately not exotics)

If its a franchise arrangement then its good!



Offline Markis


  • Joined: Jul 2010

  • Drives: Yes
vehicle dealership any good? (unfortunately not exotics)

Is it more rewarding (money wise) than a fast food franchise? Weighing up some options! PM sent



Offline mondi

  • Resident Bogan
  • Moderator

  • Joined: Jul 2008

  • Location:
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The thing I've heard over and over is that for most instances it's basically just buying yourself an 80hr/wk job.


+1


Ex Bro-in-law had a "Muffin Break" and "Leonards Chicken"


I didn't think it was possible to work more hours in a week than there are actual hours????    :confused:  :p



Offline j15


  • Joined: Oct 2006

  • Location: Sydney
The family business was an enormous Mobil franchise that peaked at about 20-something servos across NSW.

Things that I observed in the time I spent in a management role there in my late teen years were:

1. Massive entry cost, so you'd have to bring some wealth, you can't start it from scratch.

2. Hands in your pockets - The formulas for franchise fees were, in my opinion, too complicated and there will be a constant power struggle to keep the franchisor out of your pockets when they want to audit, play with numbers, renegotiate, etc. I think that this was especially bad in the servo industry where there would two agreements running in parrallel - shop and petrol volume.

3. Conforming - Constant, pointless evaluation to ensure the place looked clean, which always resulted in useless negotiation about branding and entitlements. As you may recall, when Mobil introduced synergy (8000 98 octane etc), it was only supplied to certain sites that could comply with a "criteria" which meant some were left behind and today look in a state of some decay.

4. You are at the whim of the franchisor - If they cock it up, then it will hurt you. Woolworths originally approached Mobil to set up the discounting regime and for some reason they declined. You may own a business, you may operate it, but don't think that you will ever truly run it and give it direction, someone else is steering that ship. If you wanted a particular site, they would only give it to you on the condition of taking on another loss making site.

My final thoughts from my experience are that if you are going to enter into a franchise agreement, you have to do it on a large scale to be successful (i.e. as many sites as you can). Servos were a commission based game, so it was all about pushing volume which meant going big on picking up franchises. Getting in to just one of any franchise is difficult because its likely that there is someone who is building a web of their own in an area. If you have the resources to do it on a large scale, then you will be successful, if you don't, then I think that it will be a struggle.

As someone has already said, its much better for your happiness and wealth to be a franchisor.



Offline app


  • Joined: Sep 2008

  • Location: Adelaide
One reason franchisees grow unhappy is they realize that if they had been braver, they would have their own business rather than their own franchise agreement. But it is easy to be brave afterwards.

from the few people i know that are unhappy due to franchise agreements it is because of the amount of revenue they have to give to the franchisor each year regardless of whether they make a profit or not.

also the reason they entered it in the first place as opposed to starting their own was because getting into an established brand-name would buy customers...



Offline Wattens

  • Free Mustache Rides
  • The only wrong decision is Regret

  • Joined: Jan 2010

  • Drives: Cars
  • Location: Earth
  • Name: Knob Head

+1


Ex Bro-in-law had a "Muffin Break" and "Leonards Chicken"


I didn't think it was possible to work more hours in a week than there are actual hours????    :confused:  :p

That is why you use international students to work.....

Leaonards chicken has too much comp not only with red lea and other chicken selling operations, but woolworths/safeway will actively go out and price compete with the smaller guys around the place. Woolworths can operate their deli section at a loss to drive out the competition who rely on selling that one style of product.

Not all Maccas franchises work, 10 years ago Maccas in Australia was on the way out. Their new style menus saved the company, new image, new proceedures, new advertising.... but generally they are a safeish bet for now(except now there are so many). Would a private owner operator have brought maccas back from the dead by themselves????

Franchises can easily go either way, but they come with a name/brand, things are usually automised for efficiency, you are taught how to do things, shared advertising costs.... have to pay a lot of profits back to franchise depending on agreement.

You can do it yourself but you need extremely deep pockets if you were to do it at the same level as a franchise. Profits are yours, have to do everything from scratch by yourself, can you afford to do decent advertising, have to create your own brand ect.....

Depends on industry, depends on financial climate, depends on trends, depend on franchise agreements....


Are franchises good or bad????? it's like asking how long is a piece of string?
You can say I'm wrong, but my garage doesn't agree with that statement!!!



Offline AshSimmonds

  • Geekitecht

  • Joined: Feb 2006

  • Drives: GF's shitbox :(
  • Location: Adelayed
  • Name: Humble Narrator
  • www: AshSimmonds.com



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