Investing in local franchises? Subway? Quizno's? Anyone tried? (IRAs, cash, 401k)
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hi,
with paying off the mortgage, i'm trying to think of ways to use the cash flow to build some wealth.....i figure that if i invest in something like a franchise, i might have more 'control' on the success of it, than if i just park it in the market (which was the original plan).
Have any of you gone the subway/quizno's/franchise route? My initial estimates/research showed a 70-80k profit/returns for a subway in a good location.....although that may be optimistic. any thoughts?
Have any of you gone the subway/quizno's/franchise route? My initial estimates/research showed a 70-80k profit/returns for a subway in a good location.....although that may be optimistic. any thoughts?
Most want you to be owner/operator. Which means they don't want investors they want people who will own the store and work there all day everyday. You need to first ask them if they accept investors.
As far as the profit/returns go. You can just sit near one of them and count the number of customers in a day. Then go in and see what it costs for you to get a nice sized meal. Multiply the number of customers per day by what it cost you for your meal and you'll have a fair daily sales amount. It won't be perfect but it works I've done it before.
You cannot get a good idea of the profitability of a franchise business by watching it. You know nothing of the cost or the franchise royalty infrastructure. Most economic rents go to the franchisor, less to the franchisee.
Question to OP: What is your aversion to the stock market?
Your recent posts make it seem like you're desperately trying everything you can to avoid it. Paying the house off, high priced wine at Costco, esoteric tax strategies, a franchise...
Not trying to be a jerk here, but the best option is staring you right in the face.
You cannot get a good idea of the profitability of a franchise business by watching it. You know nothing of the cost or the franchise royalty infrastructure. Most economic rents go to the franchisor, less to the franchisee.
Question to OP: What is your aversion to the stock market?
Your recent posts make it seem like you're desperately trying everything you can to avoid it. Paying the house off, high priced wine at Costco, esoteric tax strategies, a franchise...
Not trying to be a jerk here, but the best option is staring you right in the face.
I agree given the downside risk in running food service equities seem much easier
You cannot get a good idea of the profitability of a franchise business by watching it. You know nothing of the cost or the franchise royalty infrastructure. Most economic rents go to the franchisor, less to the franchisee.
Question to OP: What is your aversion to the stock market?
Your recent posts make it seem like you're desperately trying everything you can to avoid it. Paying the house off, high priced wine at Costco, esoteric tax strategies, a franchise...
Not trying to be a jerk here, but the best option is staring you right in the face.
haha stalker!!!!!
just kidding.
no, it's just that i think i'm enough in the market. I mean 17500 a year in 401k money, and 11000 between my wife an i in IRAs. that's a healthy portion in the market i'd say....and i just want to diversify. additionally we have another 60k in the market with another 30k in reserves/standby ready to "BUY" if/when the market goes down significantly.
i just want to make sure i don't have all my money in one basket. hope that helps clarify why i'm knocking on different doors.
just kidding.
no, it's just that i think i'm enough in the market. I mean 17500 a year in 401k money, and 11000 between my wife an i in IRAs. that's a healthy portion in the market i'd say....and i just want to diversify. additionally we have another 60k in the market with another 30k in reserves/standby ready to "BUY" if/when the market goes down significantly.
i just want to make sure i don't have all my money in one basket. hope that helps clarify why i'm knocking on different doors.
Getting involved in one of these deals would hurt your diversification greatly due to the amount of the investment and concentration within one specific business
There is no such thing as having enough in the equity market -- the sheer magnitude of it assures that. Maybe when you hit the Forbes list we can talk... but the amounts you mentioned are insignificant, and without a mortgage it is far more likely you are underweight equities.
Quiznos is going downhill if it isn't already bankrupt. There's just too many overly priced sandwhich shops around. For a while they were a cool fad like starbucks but have fallen off. I used to like Panera but recently went there with my mom and gf, got a couple half sandwhich and soups and was over $30 for 3 of us. thats insane i could eat a decent sitdown dinner of hot food for that. subway is a littl diff. they are always busy but most people dont get meals as your paying $8 for the meal most just get a $5 sub which is a loss leader almost. i noticed tey also recently raised the prices of their sandwhichs. i loved their subs at $5 but if I'm paying $7 or $8 for a sub ill go somewhere else for a steak sub over subway. also most of these franchises like subway and dunkin donuts dont let you buy one store you have to buy like 5-8 stores or buyup a whole region.
Quizno's had a bad reputation for overcharging its franchisees for food and supplies.
Google the dozens of Subway and Quizno franchise owner sites.
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