Is it a good idea to invest money in franchises?

rippedoff11

Hi,
I had some savings. A few years ago I decided to invest my savings in a franchise (Papa John's Pizza). The Franchisor was saying they have a proven method which will enable franchisees to succeed in business :T. So I invested huge money to buy one of their franchises. I ran the business for a couple of years and I realised there is no money in their business. I contacted other franchisees and I found out thy too make no money for themselves. Apparently all monies were taken by franchisor (royalty fees, expensive food bills, ridiculous charges for computers…) :mad:. I recently found out franchisees have set up a page on facebook to improve general awareness about the danger of investing their monies in such businesses :eek::
facebook.com/pages/Papa-Johns-Lovers/609989372362515
It is always dangerous to invest money in franchises?

Gadfium

Looks like spam, smells like spam......

Lokolo

When I used to work at my local Dominos it was quite clear they were making money. The owner of my store also owned about 30 others, so I doubt he was losing money on them....

Radiantsoul

I suspect a franchise is lower risk, lower return than setting up a business on your own. And perhaps it is better to be in earlier in the rollout?

R_P_W

Sounds like you researched it all well before you invested thousands!

somethingcorporate

It's well known that you often have to own more than 1 to make any money in franchising.

Low risk = low return and franchise is often a very low risk option, even if the costs are tens if not hundreds of thousands to buy one.