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Hold Off on Restraunt Franchises

dollarMost restaurants are experiencing a decline in sales and customer traffic.  Unless you can obtain a 40% off lease deal, I would recommend holding off on restraurant related franchises until your targeted customer group spending escalates.  The cost of the franchise will likely be the same now as it would be in upcoming years when hopefully the economy is better, so I would wait on investing in a restaurant franchise until the consumer spending trends are more positive.  Remember, the trend is your friend!

About Ryan Knoll

Attorney and advisor with an interest in franchising. Feel free to email me comments and questions on the "Contact Us" page.

5 comments

  1. be greedy when others are fearful. Rents are lower, franchises are begging for new owners(suckers). If well capitalized, now might be the best time to open a restaraunt, especially one offering superior service, convenience, and especially value.

  2. [quote comment=”476835″]be greedy when others are fearful. Rents are lower, franchises are begging for new owners(suckers). If well capitalized, now might be the best time to open a restaraunt, especially one offering superior service, convenience, and especially value.[/quote]
    I don’t think now is the best time to open a restaurant. You may get a better deal on rent, but if your sales are depressed then you are setting yourself up for failure especially in startup phase.

  3. notice the phrase “If well capitalized.” Be greedy when others are fearful!

  4. “If well capitalized” means you will lose more of your money because you will take longer to shut down.

  5. If well capitalized” means you will lose more of your money because you will take longer to shut down.

    Isn’t that what happens to many franchisees during “good” or “strong” economic cycles anyway, especially if you coun’t those “lucky” few who were able to sell out before closing, I would venture that most fail, not because of the general economy but for other reasons, in spite of the general economy. Hence, assuming you are a superior businessman, as all prospective franchise investors think, why not invest when the general fearful environment cheapens the price of investment. If you can afford a McDonalds, now is the best environment.

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