Starting my own business: Franchisee

[AAAgent]

60K a year isn't bad for working literally 24/7 for an unknown period of years?

You're reaching here.... This scenario is literally if you don't have experience in either and are working yourself to death. I would guess you don't have either which is why you assumed an almost worst case scenario. I have a team already in place and likely will only be reviewing the P&L and potentially hanging out in the store. Already have a manager and part time staff ready and available. We'll likely need to scale up temporarily for grand opening. The misses will be doing most of the heavy lifting. We're also trying to partition out an office space within the leasing space to either lease out to another business or use as an office. Misses is super passionate about learning business and doing this as she really hasn't been working at all since the pandemic. If she somehow can't handle it, I can hire someone to take care of it and focus on additional locations to increase scale. Margins will be low in this instance but that's only if necessary, which I don't expect. Can still stomach low margins. Worst case scenario would be what you mentioned which is also acceptable in this scenario. Low margins for business but I would still earn pocket change salary from working. I think this is a positive part of having a business. Being able to pay yourself a salary and lowering your taxes.

My full time job still pays well (well into six figures) and we have 5 months free rent, and $15 reimbursement up to $33k for renovations.

Received returned LOI and signed.

 

[CAPSLOCK BANDIT]

The problem in Canada for example is we have government programs with stipulations, for example if an employer has a job posting up for like 6 months without any reasonable responses they can apply for an immigrant to be in the position who they can pay a much lower wage to which offers investors a better overall return which only serves to change the landscape of the market.

It's different times, one negative interaction online can totally change the perspective of your business, God forbid it goes viral

I feel like the day and age of the 40 year old mom and pop brand is over, a rebranding should almost mandatory in business planning and a business should be built with one in mind from the beginning

 

[AAAgent]

The problem in Canada for example is we have government programs with stipulations, for example if an employer has a job posting up for like 6 months without any reasonable responses they can apply for an immigrant to be in the position who they can pay a much lower wage to which offers investors a better overall return which only serves to change the landscape of the market.

It's different times, one negative interaction online can totally change the perspective of your business, God forbid it goes viral

I feel like the day and age of the 40 year old mom and pop brand is over, a rebranding should almost mandatory in business planning and a business should be built with one in mind from the beginning

We have friends from asia in the restaurant industry that also do want to come over and help as well. Will also be looking into this.

 

[AAAgent]

Spoke with some friends in China that explained the lifecycle of tea shop and other franchises in these mega cities.

- profitability happens early on when you have early mover advantage and or a new brand
- probability wanes as excitement declines
- good product is helpful (we have a strong product, strongest in market)
- over time, as you become more profitable, corporate will have more shops open to compete with you to drive down your market share but drive up their market share
- over time landlords will drive up your rent, lowering your profitability the more successful you become
- most people after the first few years 2-4 years sell the business to someone else or get an investor to recoup investment

 

[AAAgent]

We tried to submit our location in the internal system but we were missing some information such as specific pictures and video's of the location, height of the ceiling, electricity capacity, and a few more details. We just got them today and will resubmit soon.

 

[AAAgent]

Corporate from Asia came back and put a hold on my current leasing location and asked me to look into another location that I looked into previously. We are asking to contest their decision and solidify our current location but also are location at additional locations in the territory they requested.

we are also nearing the finish line with the landlord for the location we want. have finalized majority of the documents they need to produce a lease.

 

[BeTheChange]

Haven't posted in a while but started lurking again recently.

Congrats on the business! It truly is the best path to building real wealth.

Honestly though I'm surprised to see this thread. Didn't you make an absolute wedge from crypto?

I'm sure you were in balls deep since 2016/17. Could be mistaken and from what I remember you never mentioned hard numbers but you were making posts implying that you were generating / had made liquid millions. But now you've got a full time job and you're talking about buying a franchise to make $100k a year? What happened along the way? Did you lose it all on blackjack?

Anyway, back on the thread topic: it's worth looking into buying a business rather than a franchise. With all the boomers retiring there are a lot of opportunities in the US. I bought one a year or so ago and it literally changed my life both financially and professionally.

 

[Chow Mein]

Haven't posted in a while but started lurking again recently.

Congrats on the business! It truly is the best path to building real wealth.

Honestly though I'm surprised to see this thread. Didn't you make an absolute wedge from crypto?

I'm sure you were in balls deep since 2016/17. Could be mistaken and from what I remember you never mentioned hard numbers but you were making posts implying that you were generating / had made liquid millions. But now you've got a full time job and you're talking about buying a franchise to make $100k a year? What happened along the way? Did you lose it all on blackjack?

Anyway, back on the thread topic: it's worth looking into buying a business rather than a franchise. With all the boomers retiring there are a lot of opportunities in the US. I bought one a year or so ago and it literally changed my life both financially and professionally.

What business did you buy and could you share your experiences? Appreciated!

 

[AAAgent]

Haven't posted in a while but started lurking again recently.

Congrats on the business! It truly is the best path to building real wealth.

Honestly though I'm surprised to see this thread. Didn't you make an absolute wedge from crypto?

I'm sure you were in balls deep since 2016/17. Could be mistaken and from what I remember you never mentioned hard numbers but you were making posts implying that you were generating / had made liquid millions. But now you've got a full time job and you're talking about buying a franchise to make $100k a year? What happened along the way? Did you lose it all on blackjack?

Anyway, back on the thread topic: it's worth looking into buying a business rather than a franchise. With all the boomers retiring there are a lot of opportunities in the US. I bought one a year or so ago and it literally changed my life both financially and professionally.

I'm diversifying. Crypto isn't the only thing I follow. Bigger picture is what i've always been focused on, and crypto is only a part of it. Getting smaller and smaller. I actually just launched a crypto/tech start-up back in May. I didn't mention anything about it because its much more difficult and likely people on this forum wouldn't be able to resonate well with it. I shared this with @jaygreenb

Regarding going back to work. I took all of 2017 off and got really bored after I did well in crypto. Went back to work in 2018 for crypto start-up and we sold to Justin Sun in 2020. Was hired by big tech to launch a new division based on what I did from 2018-2020. Became a thought leader in the industry. I only went to work there because it is the biggest company in that segment in the world and also has a strong foothold in Asia which allows me to connect with my roots. Money is not the end all be all. Another reason for working is knowledge and experience. Too many crypto folks make money but are as intelligent as a doorknob. Have no real skillsets or ways to make money or add a positive impact to their lives, society, etc. Fortunately, my mindset is not that of a couch potato.

This business is mainly for my wife and to tie my family down to a particular location. I've been moving every few years to wherever I felt the pastures were greener or fit my lifestyle, but now i have a kid, i really want to settle down. This keeps my wife busy and happy, and gives her a salary, and tether's us to a location we can call home. I'm happy with $100k a year for the misses, plus she earns a salary. Franchise also is more methodical and imo, is like hand holding in terms of starting your own business. I think given how busy I am, this is more ideal for me.

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I agree on buying a business but honestly, none of them interested me. Bubble tea is something girls love. The misses loves it. Asian population in this hub grew from 2% to 10% from 2019 to 2023. Food/services haven't been able to keep up with that growth/demand. I don't want to do anything as difficult as actual food and service industry buy in is very high and i'm not interested in learning a new industry other than ones im already dabbling with.

 

[AAAgent]

What business did you buy and could you share your experiences? Appreciated!

Bought into the #1 bubble tea franchise in Asia.

--

Was a bit busy last month as I was launching another project and spent 2 months in Asia kicking it off. That was a lot of work but pretty exciting and still ongoing. Was still moving this (franchise) along though but didn't have the time/energy to update the journal at the time.

Back to the Journey with the franchise. Did make progress but not much. Spent the entire 2 months negotiating the lease and seeing if we could partition out a space within the location for a studio for the misses. That might not work but we will build out the space anyway, and turn it into an office if it doesn't work.

Lease required lots of back and forth and pushing both brokers.

bullet points below on what has been done

- secured letter of intent
- secured lawyer to review lease
- secured lease (needs to be signed likely by end of week or early next week)
- setup business bank account
- reviewing contractors for renovation
- secured renovation/design plans from corporate

Next steps

- lock down contractor
- pay lease deposit $5k
- pay franchise agreement and services fee $40k
- submit to city for renovation designs (30 day leighway time)
- work on food licenses
- lock down training schedule/travel plans
- pay contractor deposit

Even though i'm planning on having the misses manage the business, she's not very good at getting all of this stuff done. I've tried handing over lease details to her, but i end up having to do all the negotiations/discussions/reviews. Let her deal with onboarding contractors, but after 2 months, we still don't have a contractor ready to go. I've pushing her hard on this and stalling on signing the lease to give us more time to select a contractor. We have 5 months of free rent which begins the day we sign the lease and we still need 30 days to hear back from the city once we submit for renovations. essentially we may lose an entire month here which sucks, but i'm trying to minimize it as much as possible.

 

[AAAgent]

Just negotiated an additional week to the lease to have it start on 8/1. This buys me more time to get a contractor prepared. Not much but every day counts.

 

[AAAgent]

signed the lease. Now I'm renting a commercial property for 7.5 years

Noticed that the broker kept pushing and pushing for us to sign. notice some minor details wrong with the contract that I had to push him to fix. He's been a bit unresponsive since we signed yesterday. Still waiting on the keys as we have a contractor showing tomorrow. Okay he just responded now. Also, working on the franchise agreement details as they require a bunch of things we need to submit like void check, lease, etc.


- 5 months of free rent but no clarity on whether or not we were responsible for $5.50 op-ex expenses incurred by the entire center. I pushed him to clarify asap but he was telling me that it's fine. He did eventually get it in writing.

- 5 additional months were added back onto the lease. I asked why this was the case, and he mentioned most tenants would like contracts to be for the entire duration of the contract for operating purposes and since we got 5 months of renovation time free, he added back 5 more months so we got back our operating time. Don't really know if this is a pro or con as it can go both ways so just left the 5 additional months in.

 

[CAPSLOCK BANDIT]

All a lease means is he's gotta wait before trying to phuk you

 

[AAAgent]

Even though i'm planning on having the misses manage the business, she's not very good at getting all of this stuff done. I've tried handing over lease details to her, but i end up having to do all the negotiations/discussions/reviews. Let her deal with onboarding contractors, but after 2 months, we still don't have a contractor ready to go. I've pushing her hard on this and stalling on signing the lease to give us more time to select a contractor. We have 5 months of free rent which begins the day we sign the lease and we still need 30 days to hear back from the city once we submit for renovations. essentially we may lose an entire month here which sucks, but i'm trying to minimize it as much as possible.

Following-up on this, I've met with 2/4 contractors so far. #1 seems to have his act together but he's waiting on our design plans from the franchise.

#2 is a wannabe contractor. Handyman that doesn't speak english and doesn't have a team capable of handling contracting. He still wants the job but definitely not going with him.

Quote from contract 1 - $180k, includes all labor and permits/demolition. This doesn't include materials or franchise equipment.
--

Back to the misses. Previously asked her to get to work on the contractor and the design plans. The contractor issues, she was supposed to get moving on but after 2 months, nothing happened until I followed up and realized she didn't know what she was doing. I'm now driving the contractor part.

Next is the design plans. As the franchise HQ only operates in her native language, I let her manage the design plan process and made sure to tell her to provide everything HQ needs from us to get the designs done. Turns out, she also didn't do that. HQ requires elevation plan, ceiling layout, along with a few other details. Misses also had 1 month to prepare all of these details and until Thursday, i thought we were on track to get our designs and turns out design team doesn't have anything that they need because misses didn't know what she was doing. Even after I realized we were missing these details, I immediately asked her what was needed infront of contractor 1, and she said elevation plan. She totally forgot to mention we needed a few other details. I immediately messaged the landlord/broker for an elevation plan and if it wasn't available, what would next steps be. Next steps would be we would need to hire a floor plan company to scale the whole place and get us the designs we needed. this would take a week or two and cost about $2k.

Time lost so far on letting the misses handle things.

design plans likely will need 3 weeks.
contractor will need 1 week to turn around our design plans into a plan that our city can accept
contractor needs 1 more week to provide a quote
contractor will submit building permits to city which will take 1 month

total time lost due to me handing things off to the misses = 9 weeks

 

[Divorced w 3]

What’s the expected IRR?

 

[BackInTheGame78]

Following-up on this, I've met with 2/4 contractors so far. #1 seems to have his act together but he's waiting on our design plans from the franchise.

#2 is a wannabe contractor. Handyman that doesn't speak english and doesn't have a team capable of handling contracting. He still wants the job but definitely not going with him.

Quote from contract 1 - $180k, includes all labor and permits/demolition. This doesn't include materials or franchise equipment.
--

Back to the misses. Previously asked her to get to work on the contractor and the design plans. The contractor issues, she was supposed to get moving on but after 2 months, nothing happened until I followed up and realized she didn't know what she was doing. I'm now driving the contractor part.

Next is the design plans. As the franchise HQ only operates in her native language, I let her manage the design plan process and made sure to tell her to provide everything HQ needs from us to get the designs done. Turns out, she also didn't do that. HQ requires elevation plan, ceiling layout, along with a few other details. Misses also had 1 month to prepare all of these details and until Thursday, i thought we were on track to get our designs and turns out design team doesn't have anything that they need because misses didn't know what she was doing. Even after I realized we were missing these details, I immediately asked her what was needed infront of contractor 1, and she said elevation plan. She totally forgot to mention we needed a few other details. I immediately messaged the landlord/broker for an elevation plan and if it wasn't available, what would next steps be. Next steps would be we would need to hire a floor plan company to scale the whole place and get us the designs we needed. this would take a week or two and cost about $2k.

Time lost so far on letting the misses handle things.

design plans likely will need 3 weeks.
contractor will need 1 week to turn around our design plans into a plan that our city can accept
contractor needs 1 more week to provide a quote
contractor will submit building permits to city which will take 1 month

total time lost due to me handing things off to the misses = 9 weeks

As my Regional Director used to preach to us "Inspect what you expect".

 

[AAAgent]

What’s the expected IRR?

Rough Estimate - 20% to 30%.

Breakeven would be 3-5 years really depending on performance.

I believe the location is good, but our space is very big. If possible, carved out a space within our location as an office/studio that can be rented out to lower the rent.

 

[Divorced w 3]

Rough Estimate - 20% to 30%.

Breakeven would be 3-5 years really depending on performance.

I believe the location is good, but our space is very big. If possible, carved out a space within our location as an office/studio that can be rented out to lower the rent.

Looks good on the face of it and 3-5 years sounds normal for a private business , I don’t know enough about your alternative options but needless to say you need to evaluate this against other similar options.

 

[AAAgent]

Looks good on the face of it and 3-5 years sounds normal for a private business , I don’t know enough about your alternative options but needless to say you need to evaluate this against other similar options.

Took a look at many of the other options we were interested in. This one is likely the least heavy lifting work/headache wise. Franchise is also more hand holding than building up from scratch and i prefer the handholding for myself and the misses due to my other projects.

Right now the misses only makes <$2k/m so this will be a huge step up for her earnings wise even if we make very little profit. She wanted to open her own salon but the money she would make from that and time needed to ramp up as she has very few customers who would follow her, is too small. This is still something she's interested in.

 

[Divorced w 3]

Took a look at many of the other options we were interested in. This one is likely the least heavy lifting work/headache wise. Franchise is also more hand holding than building up from scratch and i prefer the handholding for myself and the misses due to my other projects.

Right now the misses only makes <$2k/m so this will be a huge step up for her earnings wise even if we make very little profit. She wanted to open her own salon but the money she would make from that and time needed to ramp up as she has very few customers who would follow her, is too small. This is still something she's interested in.

I wish you all the success possible!