i got a bad franchise wow it sucks!

**frankeyzee** · 11-20-2007 08:51 AM

I got a bad franchise that didn’t even have a system in place. I studied it the franchisors seem to have all the systems in place but they did not. Because of the bad service of the franchisors commissary and the high rent of the mall my debts are growing. I am planning to shut down before the year ends. Now I am seriously in debt to my dad and owe him almost a hundred thousand how do I bounce back? What do I do next?

**adkot** · 11-20-2007 09:57 AM

Well, my 2cents is this...

Since you already have a business in place that you control, let the better half of your entrepreneurial spirit kick in to pick up the slack. Your franchise is hopefully a viable business model in the first place.

Even though there may be no support and you're paying royalties for something you hate to, it may be in your best interest to invest in personal growth and figure out what you need to do to make your business better.

Your problem may lie in software support or supplier connections or wherever. Maybe they approved you for a higher rent place than is feasible. These are huge, but with a lot of work, you can rise above it. When you break-even in a year or so, then sell it and try again.

You're in a mall right? That's already fairly good traffic (if that's what you need). So you got one good thing going for you.

But, be more specific about your problem and we'll see what kind of answers we get.

adkot

**BusinessAdviser** · 11-20-2007 11:52 AM

What is the business? That might allow people to offer more targeted suggestions.

**frankeyzee** · 11-20-2007 07:13 PM

This is a food service business by the way. The franchise is fairly new

I also had been having problems with my crew members as I have been having several accounts of theft. I met with an accountant to review my financial statements and to see if hiring an external auditor would be possible, unfortunately I cannot afford one. I cannot be at my store the whole time to check the physical inventory and cash on hand all the time because I’m still a student.

As for my breakeven point it seems I will never get there with this business. Should I borrow more money from my dad and invest it in another more well planned and studied franchise or business? Or should I try and recoup my investment in this one by shutting down for a month or so and reevaluating the problems and fix the systems?

**ltressel** · 11-21-2007 10:47 AM

Wow-never leave your eye on the ball. Your business being unattended was reckless. Two problems existed that should have been nipped in the bud. Theft and bad staff.

Until you are ready to man your business and ready to give a commitment to it and give it a 110%, don't start another one.

Did you have any food service business prior to buying into this franchise?
Did your father? The reason I asked is that franchising a food chain always requires that someone within the ownership or partnership has to have some type of experience.

Even if the company has a fail proof system-a success of a franchise lies within the strength of the owners and their experiences. If you do decide to stay and continue the business, it might be best to bring in a qualified manager with background in restaurant chain operations.

By doing this you might have a way to salvage this business and be able to increase the resell value of the business and repay your father. But from my standpoint-there aren't any guarantees because I don't know the whole story to evaluate.

Good luck,

LT

**BROGUNHIL** · 11-26-2007 04:41 PM

I say, if the business is getting foot traffic, meaning a person is entering the door every 1-2 min, then it is viable, so the theif and poor staff may be the problem. Find a new manager and make it one with a history of performance. Otherwise, sell asap. recoupe as much as possible and pay off dad.

**frankeyzee** · 11-27-2007 12:11 AM

Originally Posted by ltressel

Wow-never leave your eye on the ball. Your business being unattended was reckless. Two problems existed that should have been nipped in the bud. Theft and bad staff.

LT

that is very true, i thought that my store could be very self sufficient and not need as much monitoring as i should have with regards to the inventory and cash on hand. i was planning on getting an external auditor once i broke even. but for the meantime i would be the one to monitor these. unfortunately i was balancing my studies and my new business so i could not be there every day. But for next year im taking a break off school and will borrow money again from my father and try to pay my debts off. Before that though I will try and sell the business to minimize losses. Why would anyone want to buy a business that is not going well tho?

With my next venture should i opt to look for investors so i don't lose all my fathers money again? i am a currently single proprietor. if i do get investors how much equity should i allot for my self?

**ltressel** · 12-06-2007 01:23 PM

Frankeyzee,

Not trying to be the downer here but-you're in a bad spot. Investors will not put their money down on you because of your current track record. You would have to prove that you have an experience, commitment, and successful business to gain the confidence of your investors.

Thinks of a big fortune 500 company and how the investors either put their money down when they know a new CEO is coming in. Think about how fast they pull their money out when the CEO has made a mess of things.

LT

**rogercbryan** · 12-06-2007 03:37 PM

Originally Posted by ltressel

Wow-never leave your eye on the ball. Your business being unattended was reckless. Two problems existed that should have been nipped in the bud. Theft and bad staff.

Until you are ready to man your business and ready to give a commitment to it and give it a 110%, don't start another one.

LT

I just wanted to say this was very well put!

**bzboy** · 12-06-2007 04:52 PM

I would never start a business and let others run it off the bat. That was the first mistake. As stated above, I would definitely do all you can to take control of this and use your knowledge and passion to turn it around. Obviously some changes need to be made. In regards to investors, you have to prove that you have the experience to make it work and also advise them you learned form your mistakes.

**BusinessAdviser** · 12-06-2007 06:09 PM

Why are you even running your own business? Did you think you could get rich quick? Did you think it would be easy money?

You don't seem to have the first clue on running a business. I would advise staying out of entrepreneurship until you can do it right.

The one good thing that came out of all this, is that I now know that if I have a business idea, don't feel like researching it, have no experience in the area, don't really want to be dedicated to it or even run it all the time, I can come to your dad and get $100K. Thanks.

**frankeyzee** · 12-08-2007 08:48 AM

Originally Posted by jmenq2

Why are you even running your own business? Did you think you could get rich quick? Did you think it would be easy money?

You don't seem to have the first clue on running a business. I would advise staying out of entrepreneurship until you can do it right.

Haha! Its seems that all you suggest is true! but i was very mislead and ignorant as to thinking that a franchised business would be easy to balance with my school work. my initial idea was that a franchised business did not need that much effort put into it as a start up business. But none the less thanks for the straightforward advice

**dfveteran** · 12-08-2007 02:02 PM

Originally Posted by frankeyzee

Haha! Its seems that all you suggest is true! but i was very mislead and ignorant as to thinking that a franchised business would be easy to balance with my school work. my initial idea was that a franchised business did not need that much effort put into it as a start up business. But none the less thanks for the straightforward advice

Your first mistake was, you thought running your own business was going to be easy. You can't be very business savy if you thought this. Owning any business is never easy.

You have to dedicate all your time in to a new business. I see you repeatedly saying this francise sucks. No offense, but it sounds like the ownership and management sucks.

You should never leave your business unattended if you have an untrustworthy staff. I would say, quit school to help manage your business the right way( fire everyone and have your dad and yourself run things until you find responsable staff). Or shut the business down.

But bottom line, you dont sound like you are ready to be running any business with attitude like yours.

**frankeyzee** · 12-09-2007 11:36 AM

i have learned painfully and hopfully this scar will be a reminder to have full focus on my next venture. thanks again for the advice guys!

**BusinessAdviser** · 12-09-2007 12:40 PM

Originally Posted by frankeyzee

i have learned painfully and hopfully this scar will be a reminder to have full focus on my next venture. thanks again for the advice guys!

At least you learned a very valuable lesson. Odds are you're likely to get out of it what you put in. It's hard work.

Also, I hope you learned to really do your research before heading into business.