Franchise finances can be surprisingly opaque. For Jemima McEvoy and I, it took dozens of sources to get a sense of how to best evaluate them. We've spared you the effort. Forbes examined four high-growth restaurant brands and estimated which ones give franchisees the most bang for their buck.
Check it out here:
https://lnkd.in/eb2nBB85
Farm Raised Work Ethic | Profit is the byproduct of doing everything right! | Hustle every day! | ❤️ Sales | 304-964-3950 | [email protected] | My reputation is my business card
Imagine receiving $115 million per year for the rest of your life.
In 1954 Illinois-born milk shake mixer salesman Ray Kroc sold eight mixers to a small San Bernardino burger shop to the McDonald’s Brothers.
The limited menu only featured hamburgers, potato chips, drinks, and pie.
The McDonald brothers also developed a simple, efficient format that they named the “Speedee Service System.”
It was a first-of-its-kind model.
Ray Kroc, was intrigued, so he decided to visit them in person.
When he arrived, he was captivated by their concept.
Immediately realizing the giant opportunity, Kroc became a franchise agent for the brothers.
In April 1955 Kroc launched McDonald’s Systems, Inc.
Kroc became frustrated with the McDonald brothers' desire to maintain a small number of restaurants.
In 1961, after a few disputes, Ray Kroc decided to buy them out for $2.7 Million.
Each brother got 1 million after taxes.
Here is the best part, they made a handshake deal.
Kroc promised the McDonald brothers a 1/2 a percent royalty on all future McDonald's proceeds.
He didn’t want to put it in the contract, simply making the promise with a handshake. The brothers agreed.
That is $115 million a year. (based on today’s McDonald's sales).
The family says Kroc never paid them a cent.
Takeaways from this post:
✅ Put everything in writing, and I mean, everything.
✅ Attention to detail matters.
✅ Simplify what you can.
✅ Take risks. Might be worth it. Kroc's wife Ethel was upset by a visit from the bank since his mortgage was three months late and she did not know Kroc had mortgaged their house.
McDonald's in 2022 did 23.18 billion in sales in 2022 with 40,275 restaurant locations worldwide.
Starting in Jan 2024 McDonald’s receives a 5% franchise fee royalty up from 4%.
Sources: The Founder, Wikipedia
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Buca di Beppo Files for Chapter 11
As a franchise attorney focused on the restaurant industry, Buca di Beppo's move to file for Chapter 11 bankruptcy comes as no shock. This is the latest in a troubling series of bankruptcies that signal deeper issues within the restaurant franchise sector.
Key Facts:
- Closed Locations: 13 out of 57 locations shut down, leaving just 44.
- Financial Strain: Assets and liabilities between $10M and $50M.
- Sales Dip: A 5% drop in sales this year alone.
But Buca di Beppo is not alone. The entire sector is grappling with:
- Post-COVID Recovery: Many are still reeling from the pandemic.
- Rising Costs: Labor and supply costs are squeezing margins.
- Consumer Shifts: A move towards takeout, delivery, and healthier options.
Historical Context
Founded in 1993, Buca di Beppo quickly became a beloved brand but faced a downfall with an SEC scandal in 2005. Acquired by Planet Hollywood International in 2008, it has since struggled to adapt to modern market demands.
CEO Rich Saultz calls the Chapter 11 filing a strategic step towards a strong future, with plans to reorganize finances, streamline operations, and possibly find a buyer within 75 days.
Industry Trends
Our firm has seen a significant drop in Restaurant Franchise Disclosure Document (FDD) reviews this year, indicating:
1. Investor Skepticism: A growing reluctance to invest in the unstable restaurant space.
2. Consumer Hesitancy: Declining confidence in traditional dine-in restaurants.
The Road Ahead
The next 75 days are critical for Buca di Beppo. Goals include:
- Finding buyers or strategic partners.
- Restructuring financial obligations.
- Implementing changes to boost profitability.
While leadership remains hopeful, the industry’s challenges call for serious contemplation.
Key Takeaway for Franchisees and Investors
Now more than ever, due diligence is crucial. Potential investments in the restaurant industry must be evaluated with a sharp focus on both current realities and long-term prospects.
Our firm remains dedicated to offering up-to-date information and expert guidance during these turbulent times.
#franchise#franchisee
Exciting Franchise Opportunity: Jefferson Fry Co Revolutionizing Fast Casual Dining
We recently came across an insightful interview with Emmet Moore, Founder and CEO of Jefferson Fry Co Franchise, and we’re excited to share some key takeaways with our network. You can read the interview here: https://lnkd.in/e-KcBAJG
About Jefferson Fry Co:
* Founded by Emmet Moore, who was born into the food industry (his parents owned a food truck!)
* Innovating the fast casual space by reimagining how Americans enjoy French fries
* Combining global flavors with quality burgers, hot chicken, and more
What sets their franchise model apart:
1. Comprehensive training: 2 weeks of in-store training for franchisees and managers
2. Ongoing support: Including marketing, supply chain, and operational assistance
3. Hands-on guidance: Direct involvement from the founder himself
Jefferson Fry Co is actively seeking dedicated leaders who are passionate about delivering excellent food and customer experiences. Their ideal franchisee embodies their culture of fun, high-energy, and guest-centric service.
For those interested in the fast casual restaurant space or looking for a unique franchise opportunity, I highly recommend checking out Jefferson Fry Co's website: https://lnkd.in/e2xRT4tS
As the food service industry continues to evolve, it's exciting to see innovative concepts like Jefferson Fry Co emerge. I'd love to hear your thoughts:
* Have you experienced a Jefferson Fry Co restaurant? What was your impression?
* What trends do you see shaping the future of fast casual dining?
* For our connections in the franchise world, what factors do you consider most important when evaluating a franchise opportunity?
Let's discuss in the comments below!
#FranchiseOpportunity#FastCasualDining#RestaurantIndustry#Entrepreneurship#FoodInnovation
Your "Know~the~Facts, Do~the~Math"® Financial Professional I help people implement Powerful, Strategic, Life/Retirement/Business Plans: Including Life Insurance, Annuities,& LTC! Live & Retire HAPPY!
VERY Insightful example.
Emphasis on put/get EVERYTHING in writing, and don't sign or even verbally agree (in some cases, in *today's world, verbal agreements *can be legally binding) to arrangements/contracts you don't fully understand.
Naturally, Simplifying is a Fundamental Core part of #SimplyIntelligentFinanciaPositioning®️!
*For informational purposes only and not to be taken as legal advice. Only your individual attorney can provide assurances that the information – and your interpretation of it – is applicable or appropriate to your particular situation.*
Live AND Retire Happy!
*Be the Difference!
"Every Financial Decision We make in Life ...Dances Together, 💃🕺and they are loyal dance partners, they always will!"
~Tawni Bennett
#FinancialLiteracy#InsightfulExample#FinancialDecisions#FinancialPlanning#TheMoreYouKnow#BeTheDifference
Farm Raised Work Ethic | Profit is the byproduct of doing everything right! | Hustle every day! | ❤️ Sales | 304-964-3950 | [email protected] | My reputation is my business card
Imagine receiving $115 million per year for the rest of your life.
In 1954 Illinois-born milk shake mixer salesman Ray Kroc sold eight mixers to a small San Bernardino burger shop to the McDonald’s Brothers.
The limited menu only featured hamburgers, potato chips, drinks, and pie.
The McDonald brothers also developed a simple, efficient format that they named the “Speedee Service System.”
It was a first-of-its-kind model.
Ray Kroc, was intrigued, so he decided to visit them in person.
When he arrived, he was captivated by their concept.
Immediately realizing the giant opportunity, Kroc became a franchise agent for the brothers.
In April 1955 Kroc launched McDonald’s Systems, Inc.
Kroc became frustrated with the McDonald brothers' desire to maintain a small number of restaurants.
In 1961, after a few disputes, Ray Kroc decided to buy them out for $2.7 Million.
Each brother got 1 million after taxes.
Here is the best part, they made a handshake deal.
Kroc promised the McDonald brothers a 1/2 a percent royalty on all future McDonald's proceeds.
He didn’t want to put it in the contract, simply making the promise with a handshake. The brothers agreed.
That is $115 million a year. (based on today’s McDonald's sales).
The family says Kroc never paid them a cent.
Takeaways from this post:
✅ Put everything in writing, and I mean, everything.
✅ Attention to detail matters.
✅ Simplify what you can.
✅ Take risks. Might be worth it. Kroc's wife Ethel was upset by a visit from the bank since his mortgage was three months late and she did not know Kroc had mortgaged their house.
McDonald's in 2022 did 23.18 billion in sales in 2022 with 40,275 restaurant locations worldwide.
Starting in Jan 2024 McDonald’s receives a 5% franchise fee royalty up from 4%.
Sources: The Founder, Wikipedia
🔺MYTH: The perception headlines like this fuels is a belief that it costs millions to get into a franchise.
🟢 FACT: Most franchises run between 75k to 285k all in to get into the business.
Visit YourFirstFranchise.com today to explore your options and take the first step towards franchise ownership.
#yourfirstfranchisehttps://lnkd.in/gCAUHy8j
Over 1,500.
That's the number of inquiries we've received, asking to franchise with Pepper Lunch Restaurants in the last 12 months.
Many of them were capitalized.
Experienced.
Raving fans of the brand.
And very nice people.
But only 35 units were awarded in 2023.
10 units in Arizona
10 units in parts of Florida
5 units in Utah
10 units in Hawaii
35 is no small number on its own. But 4 franchise groups is low for the amount of interest we get.
Why is this?
Pepper Lunch has spent 30 years building a global brand that customers love and trust.
We've been around long enough, opened enough stores (513, as of today), and generate enough cash flow - to be immune to hype cycles or short-term thinking.
What matters more to us are:
• Multiunit franchisees who see themselves as profitable stewards. And
• Being here for a very long time.
If you or someone you know fit this description, comment below or send me a DM.
Discover the secrets behind the success of large franchise chains. 🌐 Learn how transparency and careful documentation can lead to limitless growth in the catering industry. 🍔🍟
Discover the secrets behind the success of large franchise chains. 🌐 Learn how transparency and careful documentation can lead to limitless growth in the catering industry. 🍔🍟
Broker/Partner at Commercial Property Group
1moDrove by the new Lake Geneva location on Sunday. Looked great, and it was very busy.