Ive looked at the numbers for some of the DC area stores and they for the most part still look strong-they have very deeply penetrated that market though-so there are some underperforming locations.

Thanks for the positive thoughts-

Yes it is from an outside contractor and we pay a monthly fee per location, a per transaction fee, and a fee for every new customer that picks one of our locations as their home store-the numbers are obscene

What are your thoughts on this post?

Thanks for making this thread.

I assume you work with a broker. Does FG have their own brokers in-house that negotiate on your behalf or can you select your own?

Aside from NW and liquidity requirements, what does FG look for in selecting a franchisee?

I see where you are going with this-and I agree that we would benefit from a program-It is my personal feeling that we are missing out on a huge opportunity not using Jerry, Janie, Jim, Matt, Chad, Tyler and Ben and making a heritage ad program-talk about what they did to build the brand-Also, I think our crews would make a super focus for a similar program. I'm not sure how much I want to spend to fund it though. (1% would hurt-but I think it would take at least this from us and a match from the family to be successful)

Also-while I agree with you on this-what I see from the family is that they are not convinced like the franchisees are that we would benefit-so if we see our transaction counts begin to suffer again (like they did in 12-the end of a 4 year buildout push that added around 600 stores to the system I think) I think that they MIGHT relent-

However this metric(transaction counts) has been moving in the right direction in most markets. This is due in no small part in my opinion to the fact that the buildout has slowed significantly in pace since 2012 numbers (the stores that have opened in the last 2 years are basically replacing underperforming stores that were closed. Total store count has grown this year by 40 or so and I think 15 of those are in the UK.)

You obviously have some insight to offer here, and I am interested to hear your thoughts-it also begs another question-how to convince the family of the value of this type of program?

I have a broker that I work with on most sites. We have signed deals that I managed myself also.

FG has a real estate department that includes commercial leasing professionals that work on site selection in every market. In the FGO markets they select and negotiate the leases. Franchisees work with the specialists to select sites and then we are responsible to negotiate our own lease terms.

FG does prefer food service background and while I and the other operating partner did not choose the hospitality industry for careers before this, we both have extensive industry experience (like many do) by working our way through high school and college in the field. Between us we had worked in every position(front and back of house) save ownership in the business- Also, we have extensive experience in the building trades and design.

Also I forgot the mention, we also came to the game with strong finance background.

OP:

Let's say I own a restaurant that does gross sales, say, $300,000 per year and makes $60,000 pre-tax. And I want to franchise this business.

Is there a kind of "franchise management company" out there that I can use to manage the entire franchise process for me?

Can you give specific names of companies? How do they work?

I'm asking this because a friend owns a restaurant that does similar to the sales and profit results described above and a company told him that they like his business model, and that they can help him get his business franchised. They say that they can get him 4.5% franchise royalties and somewhere between $50,000 to $100,000 franchise fee from potential franchisees.

Yes I'm sure there are several-I however don't know specifics about any of them-

really? that does seem obscene. my app vendor only charges a (large) % of loyalty/marketing spend.

Georgetown, DC one sold beer when I was in college (mid 2000s), though this may be owned by the founders. Ha nvm just looked on yelp and they no longer serve beer.

My anecdotal experience has been that they have been doing pretty well as far as lunch-time crowd etc. They did close the oldest (remaining) five guys recently, next to a checks cashed place and until a few years ago was cash only. Best of luck
http://www.fiveguys.com/contact-us/skyline.aspx

I have heard that they tried it with a location, but that it didn't work out for them

They should try it in a party college town like Warrensburg, Missouri.

Or Madison Wisconsin, where the beer flows like water-

How old are you? What is your background before getting into owning FG franchises? How did you get the starting capital necessary for your business?

50

I worked in the corporate world for a long time-mainly outside sales in the building industry-quit that grind and spent some time as a mid stakes grinder in Vegas-In the fall of 08 I decided it was time to look for a new revenue stream and by the spring of 09 we signed our deal with FG. Our first store opened in early 10.

I worked hard, have no kids, saved money and was willing to gamble everything to start my own business.

Congrats on your success, but is a franchise really your own business?

Given you are 50, are you going to play in the Seniors event at the WSOP?

If its not mine(and my partners)-who's would it be exactly?

maybe-I haven't played in any events for 5 years

The franchiser. Granted, you have more control than an employee at a traditional company, but it seems to me you are ultimately working for someone else. Not trying to be insulting but I have always had an issue with franchises I guess.

I do want to make it clear that I am sorry for jumping on you and want to publicly apologize for my post. It was wrong of me.

Let's start with something much smaller...



Why no branding on the packaging (bags,burger wrap & fry cup)? What is the family logic behind this? The paper costs are inconsequential at your volumes & unless there is a future plan to “own” the greasy brown bag, I just don't get it.

For the most part customers are not paying attention to us until they want something. If I am walking around, getting hungry & see people walking around with 5G bags in hand, I'm consciously or subconsciously make an immediate decision on adding 5G to my list of options or excluding it.

Doc-don't sweat it-you have a right to your opinion-I don't happen to share it-but I'm a big boy and my feelings are not hurt. A little busy today with the business of running the stores, so later tonight I will post a detailed response to the question of who really owns a franchised business-we can have a spirited discussion of the entire topic, from what you are paying for and what you get, what you give up and what is gained, etc. I know others share your opinion, and I think that apocalypse has strong feelings here as well-he may join us and share his knowledge

Actually, cost is the reason-everything goes into the product. As an industry pro I think you would agree, product is king. I can't speak for the family, but everything they say is this just another way to put every penny into a quality product, and holding the line on everything else-

Its important to know that I believe very strongly that if you cannot be passionate about whatever it is you are selling, then sell something else. its PRODUCT, PRODUCT, PRODUCT-everything else is second. If you sell crappy burgers, it is irrelevant how clean your place is, how nice and earnest the staff is, or how well put together your systems are, your still selling crap and eventually you will fail. An example: Smashburger, who is an excellent marketer, has really neat paper items, and nifty trendy buildouts- have come and gone (their first location opening shortly before ours)recently they closed all locations in this market-how could they have not blown us out of the water?

I understand how you feel about the branding strategy the Murrells have chosen, and that you would not follow the same path. I personally like that we am not forced to buy napkins and bags and wrappers etc that have FG all over them-I don't want to pay extra for this and don't think it will grow the brand-actually I think these items tend to backfire often when they become trash in the streets and foster resentment.

I agree with you that we would benefit from some more traditional marketing to encourage repeat business/remind consumers of our quality and heritage. However, I was aware of the strategy when I bought in to this, and all I can do is offer my opinion when asked.

I think the brown bag is good marketing anyway. In a world full of branding their strategy is novel and memorable.... Just the best fries and burger in a wrapper, cup, and bag. Quite brilliant