Investment in Franchise Costa/Starbucks or Shell

ladylouise62

I would say that a sandwich shop relies more up on location and what they offer (quality &/or price) rather than the name. I hear the people in the office who complain about the quality of local places but still go to them as they are the nearest (and yet we are no more than 8 mins walk from most places in the town).

Thrugelmir

zayf wrote: »

Hi,

I am interested in investing in a decent franchise, which have a decent return, Are there any kind souls here who already have these franchises and willing to share their experience.

Can you raise a £100k plus. If not then most likely not for you.

SailorSam

Petrol stations are like pubs and thousands are closing all over the Country. I knew someone who bought a very profitable garage and then 5yrs later a Tesco opened nearby and he'd gone bust within a year.

sabretoothtigger

Retail is a tough business in UK right now. Neither appeals to me and you know whats going to happen with petrol prices, people are stupidly going to blame the actual petrol station as it just gets more expensive.

I think its best to be involved with a product people really want and are happy to pay a premium for. Dont go into something getting squeezed in same way, like the Game computer shop fails as alot of sales occur online, ditto HMV etc

Does that apply to Coffee, Im not sure. A big mover in USA has been home 'premium' type convenience coffee, instead of a daily visit to a shop buy your own machine. This might be a future dynamic increasing here, I dont know, I dont even like coffee

Cash-Cow_3

Costa are not releasing franchises at the moment. IIRC the cash required was £250,000 with another £250,000 ready to go for a second store.

LeafGreen

If I was looking at going into the sandwich selling business, I would not go the franchise route. There is a Subway near me (one of quite a few in the town) which has closed down and re-opened several times over the last few years.

Rather, I'd get myself one of those little refridgerated vans, and go round local businesses selling from the van. You could employ someone to do the driving/selling for you but as one of the other posters suggested, I don't think you'll get rich with this kind of venture without getting more involved yourself in the beginning.

gfplux

I have a feeling the original poster has no idea how much money you have to have to fund the type of franchise he mentioned

marathonic

gfplux wrote: »

I have a feeling the original poster has no idea how much money you have to have to fund the type of franchise he mentioned

Agreed! Considering the initial capital requirements (I know Subway was £75,000 about 5 years ago - so probably higher now), I think that, if you had that money available, you'd have a much clearer idea of how you want to invest it by now.

sabretoothtigger

75k sounds like nothing to me to get a proper highstreet business up and returning money back every week.
5k a week revenue, would make it super cheap. I bet the margins are like 50%
So thats like 75k to get back 125k, obviously the franchise operation must suck up alot of the profits but still if it works that would be alot less hassle and risk then making your own

marathonic

sabretoothtigger wrote: »

75k sounds like nothing to me to get a proper highstreet business up and returning money back every week.
5k a week revenue, would make it super cheap. I bet the margins are like 50%
So thats like 75k to get back 125k, obviously the franchise operation must suck up alot of the profits but still if it works that would be alot less hassle and risk then making your own

As far as I can see from the internet, owning a single Subway store isn't a £2.5k profit per week operation.

Some owners of multiple stores report margins of 20% for the busier stores but an average closer to 10-15%.

I would guess that, if you approached a bank with a business plan, you'd have difficulty if your forecasts were based on anything over a 10% margin.

Based on a £3 sub/1400 subs per week (which is one every 5 minutes of a 10 hour day/7 day week), your weekly profit would be £420, rising to £630 if you achieve a 15% margin.

Not exactly the route to riches you might expect!!!! There are enough Subway stores closing to confirm this!

Basically, owners anectodals suggest that owning a single store is more akin to buying yourself a job whilst owning multiple then becomes a business.