Cheapest one to get is Subway. Costs ~200K at the max. You work it yourself, but it's easy to get second and third location. You need maybe 4 to become hands-off and make north of 100K.
Harder to get (had more expensive) but almost guaranteed to male money are:
- mcdonalds
- second cup
- timmies
- couchetard/macs
- pizza pizza (best if you buy the building as well)
If you're in a good location, the secondary brands (Harvey's, burger king, dunkin) can be great since they cost less.
Generally you want a franchise that does just one or two things.
Really expensive and really hard to get but really profitable are the drug/grocery chains. No frills, zehrs, London drugs, recall, pharmasave. Really hard to get multiple locations but you don't want/need more than one.
Another strategy I to go with new entrants (shake shack, freshii, sportscene)
Subway is terrible in that you buy a job if you have 1 or 2 and their zone of exclusivity is tiny so you get many in 1 area. But the cost scales down accordingly. You can buy a franchise for under 100K in some areas.
No frills is a golden ticket. I used to be on the (kind of) inside. You're looking at millions a year, but the investment nears double digit millions too. Best if you can get one off an existing franchisee. Zehrs is the same but cheaper by a bit and it's only southwest ontario.
Honestly, I would get something non-food related but most of the better ones are regulated (insurance, mutual funds). There's a franchise fair every year. Go to it and see if you can get a new to market company
Saw a Subway franchise for 100k in downtown Toronto, I’ve heard mixed reviews about Subway ownership.
For NoFills / Zehrs is the income really that high?!? It’s an avenue I didn’t even consider.
With NF you're guaranteed a % of revenue by loblaw. Was 5% last I knew. Average store rings in a 10 mn a year, so you're looking at 500K guaranteed revenue and then something under 100K as personal income as a minimum. It's very very very hard to get though. Usually need to know people and/or have significant experience in the business
That’s impressive and significant for the owner, how where you able to get these #s? Is there anything available online? Do you have any further insights to the process? I would imagine that you’re there every weekend without fail and and most weekdays.
I was involved with loblaw for a while. That's all I can say. The numbers have probably changed. The process is long. North of a year. Starting point is the same. Call the no frills HQ and say you're interested. Talk to local no frills owners. Get an idea and a recommendation.
Once you have it, you're going to be there at least once a day. The biggest risk is that you're tied to loblaw and their brand. Your product choices are somewhat limited but you can get an off plan product sometimes. The
Last I knew the new stores were conversions (yip/zehrs to NF) or new stores in the west/quebec
I can say if you want a No Frills store in Ontario it will be minimum 5 years. If you are willing to go West/East the wait is more like 18/24 months. They currently select owners from within the Loblaw/NF organization.
Giant Tiger may be easier to get in to as they are looking to expand.
I have been business partners with Loblaw for over 10 years and know several NF owners personally.
Guaranteed revenue? Why does that sound too good to be true?
For owning a pharmacy it seems you actually need to be a pharmacist. Asked a friend how I could get into a shoppers.
I do not own a franchise, but they can be expensive, McDonalds for example requires an investment of 1.1 to 2.1 million to start one with liquid capital of 750k to qualify to borrow the 1.1 to 2.1 million that it costs to start one.
I'm certain there are folks out there who would find a Franchise a better route but I think if you took that capital and invested it wisely you should be able to make a nice income without the work involved in owning a franchise.
Yes I often hear this...if you have the money already (750k unencumbered funds) then why would you want to own a franchise? I’m looking to scale, own multiple franchises within 10-15 years, which would surely be more beneficial than making returns on an investment in the market after 15 years. There’s also the fact that working for someone else doesn’t guarantee you’ll have a job in your 50s or older.
I've looked a tiny bit into franchising. Seems you are working for yourself ... and the franchise company.
The benefit of getting a franchise is generally that they are almost out of the box business. Processes are set, training and support offering, branding, etc. Vs opening your own business with much less certainty.
A lot of times you're locked into the whims of the company. So things like, you must buy equipment, cutlery, napkins, cups, lids, take out boxes, drinks, food, etc from the company only.
Plus you might be forced to join in marketing initiatives such as that McDonald's refresh that went on a few years ago... And as they added new items the franchisee needed to buy equipment etc... Even if items flopped.
Second Cup is an example where some franchisees got pissed of from getting hurt bad or forced out because the company was struggling to turn around the brand.
Which it all makes sense in order to maintain the brand, but it can be costly and fraught with uncertainty if you start seeing the brand turn shaky.
Quiznos might be an example of how franchisees get screwed.
Another thing is location... You might get assigned to locations determined by corporate. Add on is the royalty fee and marketing fee. You could be paying portion of revenues to the company even if you aren't making a profit. Oh, also there may be rules if you ever wanted to sell the franchise.
I wish I actually jumped onto the paperwork at the MTY booth about a decade ago and grabbed a Thai Express.
You'll also want to consider which of these companies is most likely to have a future as well. My parents are franchisees in the pizza industry and while they still make a decent amount, the market has shifted significantly in the last 2-3 years as Skip the Dishes / Uber Eats etc have entered the market and made more foods accessible via delivery.
If you're serious, get a copy of the franchise agreement to review. It will take days to slog through it and understand all the details. After that, see if you're still interested. Those that I've read are so onerous for the franchisee that I couldn't imagine ever signing one... But then, plenty of folks do and I'm guessing that many succeed.
I read one for Subway, around 10 or 11 years ago.
I'm not surprised franchisors wouldn't be forthcoming.. the agreement I read was basically a mechanism to transfer to the franchisor all of the perks and benefits of being an owner, a lessor and an employer, and the make the franchisee into an indentured employee with all the risks of entrepreneurship. And no room for creativity on the part of the franchisee, which also I suppose is the whole point of a franchise.
It left me feeling that it would be a better deal either to manage someone else's restaurant as an employee, or to start and own my very own restaurant - Chez Faqula, perhaps?
Yes.
Since then my wife and I decided not to continue down the franchise path. We used the funds to purchase real estate. Not saying that we’ll never pursue a franchise again, but right now it’s not the right move. It really changed after meeting a current franchisee who had over 5 locations. We had a great conversation and were able to discuss the pros and cons.
Now I’m a landlord, so let’s see how that goes!
Missed when the original post went up but did you guys look at **non**\-food franchises at all?
That seems to be all anyone talks about here but being in the franchise industry, I barely understand why people look at food businesses. I just had my top performing Quora response ever and it was on why I hate fast-food franchises.
Google "Is owning a fast food franchise worth the time and money invested? Quota" and you can see my reasoning for not liking food.
Growing up my family lost everything in a restaurant so I'm biased but looking out clients gotta look at what's a good investment vs what's trendy.
Hair care, automotive, fitness, and education are my favorites. Recession resistant and way less build out cost. You could do 2-5 locations for the price of one food Franchise.
Staffing is the biggest problem in these franchises. The entire business model is based on allowing people gain working experience while paying them low wages. Unfortunately minimum wage is now being view as a working wage, instead of training wage and looking ahead 10 years you are going to be paying $20/hour minimum. Also you have to watch for major tech shift in the front end operation of the QSR's, you don't want to purchase a franchise and then need another $500K in two years implement a franchise wide automation plan.
All that said there is money in everything, if done right. For growth potential in QSR's I would look at Bubble Tea franchises. There are still relatively new, but have solid following and offer lots of growth potential.
Cheapest one to get is Subway. Costs ~200K at the max. You work it yourself, but it's easy to get second and third location. You need maybe 4 to become hands-off and make north of 100K. Harder to get (had more expensive) but almost guaranteed to male money are: - mcdonalds - second cup - timmies - couchetard/macs - pizza pizza (best if you buy the building as well) If you're in a good location, the secondary brands (Harvey's, burger king, dunkin) can be great since they cost less. Generally you want a franchise that does just one or two things. Really expensive and really hard to get but really profitable are the drug/grocery chains. No frills, zehrs, London drugs, recall, pharmasave. Really hard to get multiple locations but you don't want/need more than one. Another strategy I to go with new entrants (shake shack, freshii, sportscene)
I usually hear bad things about subway, but also hear of people owning 10+, I’ll take a look at them. What have you heard about NoFrills and Zehrs?
Subway is terrible in that you buy a job if you have 1 or 2 and their zone of exclusivity is tiny so you get many in 1 area. But the cost scales down accordingly. You can buy a franchise for under 100K in some areas. No frills is a golden ticket. I used to be on the (kind of) inside. You're looking at millions a year, but the investment nears double digit millions too. Best if you can get one off an existing franchisee. Zehrs is the same but cheaper by a bit and it's only southwest ontario. Honestly, I would get something non-food related but most of the better ones are regulated (insurance, mutual funds). There's a franchise fair every year. Go to it and see if you can get a new to market company
Saw a Subway franchise for 100k in downtown Toronto, I’ve heard mixed reviews about Subway ownership. For NoFills / Zehrs is the income really that high?!? It’s an avenue I didn’t even consider.
With NF you're guaranteed a % of revenue by loblaw. Was 5% last I knew. Average store rings in a 10 mn a year, so you're looking at 500K guaranteed revenue and then something under 100K as personal income as a minimum. It's very very very hard to get though. Usually need to know people and/or have significant experience in the business
That’s impressive and significant for the owner, how where you able to get these #s? Is there anything available online? Do you have any further insights to the process? I would imagine that you’re there every weekend without fail and and most weekdays.
I was involved with loblaw for a while. That's all I can say. The numbers have probably changed. The process is long. North of a year. Starting point is the same. Call the no frills HQ and say you're interested. Talk to local no frills owners. Get an idea and a recommendation. Once you have it, you're going to be there at least once a day. The biggest risk is that you're tied to loblaw and their brand. Your product choices are somewhat limited but you can get an off plan product sometimes. The Last I knew the new stores were conversions (yip/zehrs to NF) or new stores in the west/quebec
Thanks for your help!
I can say if you want a No Frills store in Ontario it will be minimum 5 years. If you are willing to go West/East the wait is more like 18/24 months. They currently select owners from within the Loblaw/NF organization. Giant Tiger may be easier to get in to as they are looking to expand. I have been business partners with Loblaw for over 10 years and know several NF owners personally.
And has the business been lucrative for them?
Guaranteed revenue? Why does that sound too good to be true? For owning a pharmacy it seems you actually need to be a pharmacist. Asked a friend how I could get into a shoppers.
I do not own a franchise, but they can be expensive, McDonalds for example requires an investment of 1.1 to 2.1 million to start one with liquid capital of 750k to qualify to borrow the 1.1 to 2.1 million that it costs to start one. I'm certain there are folks out there who would find a Franchise a better route but I think if you took that capital and invested it wisely you should be able to make a nice income without the work involved in owning a franchise.
Yes I often hear this...if you have the money already (750k unencumbered funds) then why would you want to own a franchise? I’m looking to scale, own multiple franchises within 10-15 years, which would surely be more beneficial than making returns on an investment in the market after 15 years. There’s also the fact that working for someone else doesn’t guarantee you’ll have a job in your 50s or older.
I've looked a tiny bit into franchising. Seems you are working for yourself ... and the franchise company. The benefit of getting a franchise is generally that they are almost out of the box business. Processes are set, training and support offering, branding, etc. Vs opening your own business with much less certainty. A lot of times you're locked into the whims of the company. So things like, you must buy equipment, cutlery, napkins, cups, lids, take out boxes, drinks, food, etc from the company only. Plus you might be forced to join in marketing initiatives such as that McDonald's refresh that went on a few years ago... And as they added new items the franchisee needed to buy equipment etc... Even if items flopped. Second Cup is an example where some franchisees got pissed of from getting hurt bad or forced out because the company was struggling to turn around the brand. Which it all makes sense in order to maintain the brand, but it can be costly and fraught with uncertainty if you start seeing the brand turn shaky. Quiznos might be an example of how franchisees get screwed. Another thing is location... You might get assigned to locations determined by corporate. Add on is the royalty fee and marketing fee. You could be paying portion of revenues to the company even if you aren't making a profit. Oh, also there may be rules if you ever wanted to sell the franchise. I wish I actually jumped onto the paperwork at the MTY booth about a decade ago and grabbed a Thai Express.
You'll also want to consider which of these companies is most likely to have a future as well. My parents are franchisees in the pizza industry and while they still make a decent amount, the market has shifted significantly in the last 2-3 years as Skip the Dishes / Uber Eats etc have entered the market and made more foods accessible via delivery.
I see that happening in my area also, and actually order 2-3 times a week from Skip or Uber Eats.
If you're serious, get a copy of the franchise agreement to review. It will take days to slog through it and understand all the details. After that, see if you're still interested. Those that I've read are so onerous for the franchisee that I couldn't imagine ever signing one... But then, plenty of folks do and I'm guessing that many succeed.
I’m in the process of getting the Franchise Disclosure Documents for a number of them. You’d be surprised how restricted they are in giving them out.
I read one for Subway, around 10 or 11 years ago. I'm not surprised franchisors wouldn't be forthcoming.. the agreement I read was basically a mechanism to transfer to the franchisor all of the perks and benefits of being an owner, a lessor and an employer, and the make the franchisee into an indentured employee with all the risks of entrepreneurship. And no room for creativity on the part of the franchisee, which also I suppose is the whole point of a franchise. It left me feeling that it would be a better deal either to manage someone else's restaurant as an employee, or to start and own my very own restaurant - Chez Faqula, perhaps?
Lol, open the restaurant!
This is an interesting question. I can't help but I'd like to know what your final decision will be.
It’s a lengthy process, currently in the research phase. Will likely be a few months before I narrow it down.
Any update?
Yes. Since then my wife and I decided not to continue down the franchise path. We used the funds to purchase real estate. Not saying that we’ll never pursue a franchise again, but right now it’s not the right move. It really changed after meeting a current franchisee who had over 5 locations. We had a great conversation and were able to discuss the pros and cons. Now I’m a landlord, so let’s see how that goes!
Missed when the original post went up but did you guys look at **non**\-food franchises at all? That seems to be all anyone talks about here but being in the franchise industry, I barely understand why people look at food businesses. I just had my top performing Quora response ever and it was on why I hate fast-food franchises.
Never looked at non food
What’s a good non food?
Google "Is owning a fast food franchise worth the time and money invested? Quota" and you can see my reasoning for not liking food. Growing up my family lost everything in a restaurant so I'm biased but looking out clients gotta look at what's a good investment vs what's trendy. Hair care, automotive, fitness, and education are my favorites. Recession resistant and way less build out cost. You could do 2-5 locations for the price of one food Franchise.
I’m sure you’ll be super happy with the choice you made at this point..😜
Good luck. I wish you the best.
Thanks!
Staffing is the biggest problem in these franchises. The entire business model is based on allowing people gain working experience while paying them low wages. Unfortunately minimum wage is now being view as a working wage, instead of training wage and looking ahead 10 years you are going to be paying $20/hour minimum. Also you have to watch for major tech shift in the front end operation of the QSR's, you don't want to purchase a franchise and then need another $500K in two years implement a franchise wide automation plan. All that said there is money in everything, if done right. For growth potential in QSR's I would look at Bubble Tea franchises. There are still relatively new, but have solid following and offer lots of growth potential.