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Author: afocals Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 14983  
Subject: Help in buying a Franchise Date: 7/5/2010 6:41 PM
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Hi there,
I am thinking of buying a franchise of 'Orange Leaf' (frozen yogurt) and wondering if anyone can help me (or knows someone who can) decide if this is a good idea or not?

Your help will be really appreciated :-)



Thanks,
AH
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Author: desertdaveataol Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14388 of 14983
Subject: Re: Help in buying a Franchise Date: 7/5/2010 11:20 PM
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I am thinking of buying a franchise of 'Orange Leaf' (frozen yogurt) and wondering if anyone can help me (or knows someone who can) decide if this is a good idea or not?

First ask yourself what you'll be getting from them (aside from an iron clad contract to buy all your frozen yogurt (and maybe supplies too) from them.

Then ask yourself how much it would cost you to do it yourself without them. The difference between your home grown start up costs and their franchise cost is the cost of doing business with them. You'll have to decide if they're worth that much money. I've never heard of 'Orange Leaf' so you can't be buying much in the "name recognition" department.

Have you sat in an Orange Leaf franchise for a day to see how they do business?
Have you sat outside an Orange Leaf franchise to see how much business they do?

Have you talked to any Orange Leaf franchise owners; first 'undercover' as a curious customer and then as a potential competitor?

Who picks the store location? What's their track record? McDonald's has a good track record for picking locations. Others not so good.

McDonald's and some other franchises send new owners to their "university" for weeks of training. What about Orange Leaf?

Do you think you'll be able to put up with some out of town clown telling you how to run your business? (That'll be in addition to the Health Department and the Fire Department.)

Oh! And most importantly, why do you think you're gunn'a love selling yogurt?

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Author: psuasskicker6 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14389 of 14983
Subject: Re: Help in buying a Franchise Date: 7/6/2010 11:16 AM
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Agree with everything Dave said. Speaking from experience, I believe that if you're not buying a name brand, you shouldn't bother buying a franchise. The costs are simply too high to justify it.

One additional benefit to think about for doing it on your own. You do it yourself, you have the opportunity to start a franchise of your own, which can reap HUGE financial benefits down the line.

- C -

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Author: Dwdonhoff Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14390 of 14983
Subject: Re: Help in buying a Franchise Date: 7/6/2010 12:35 PM
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Hi AH,

I am thinking of buying a franchise of 'Orange Leaf' (frozen yogurt) and wondering if anyone can help me (or knows someone who can) decide if this is a good idea or not?

Ditto the above, plus a couple more thoughts;

With a franchise, you're *NOT* really buying a business as an asset (something you could legitimately hope to build equity in and then sell at a significant profit.) This is because if you did, you would be in direct competition with the franchisor (the people who's business it is not to sell yogurt, but rather to sell the idea of shops that sell yogurt.)

If you're not really buying yourself the ability to build up a profitable asset to resell, what remains? You are "buying" yourself a job... only not as nice as a regular job, this is a job where you ALSO carry most of the overhead risks as well.

The "franchise" concept is GREAT... if you are a franchisOR. From virtually every angle of being a Franchisee, there are a myriad of better ways to get the business benefits you are being pitched by the franchisor.

In many ways buying a business franchise is like buying a vacation timeshare. It is pitched with scientifically honed and emotionally precise methods... but when you know the math, and you've been around the block, there are better ways (generally... but very close to 100% of the time) to get what you want.

Luck!
Dave

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14391 of 14983
Subject: Re: Help in buying a Franchise Date: 7/6/2010 12:55 PM
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http://www.orangeleafyogurt.com/about.php?no=6

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Author: Goofyhoofy Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 14392 of 14983
Subject: Re: Help in buying a Franchise Date: 7/6/2010 8:16 PM
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While I agree with much of this, there's a lot on the positive side that's omitted.

[I know virtually notning about "orange leaf" so this may all be flapjacks]

Presumably they offer signage, which is to say "logo design", which is time and expertise you may not have. They will have some idea of how the business should run, they will have people who will help you design the storefront and help you avoid costly mistakes in siting and layout.

I would guess they have some kind of preference for cash registers - and clout with the vendor so if something goes wrong you are not calling some 800 number begging for help. Ditto business software. And newspaper ad layouts, should you have enough to go that route.

You will be joining a fraternity of other franchisees, who will tell you which promotions were successful at bringing in customers and which were duds, and you will get the combined help of that group in devising new flavors, techniques, and models to push the business forward.

I disagree with the comment upthread that you are not building a business for the future. Indeed, I know many franchisees who have become wealthy beyond measure by getting with a franchisor and building their business over time. And then selling it, in some cases back to the company, in some cases to other franchisees, in some cases to people who have come up through the organization and who are vetted and approved by the franchise company.

Two examples: I knew the guy who invented the Big Mac; he was an early McDonald's franchisee. He had 3 or 4 locations when I knew him in Pittsburgh 30 years ago. Last I heard he had over 30 and was one of the standout leaders of the organization.

Another: a fellow up the street from me started a little carney stand at the Knoxville World's Fair in 1982. It was called Petro's, and offered chips in a cup with some chili and sour cream on top. He now has about a dozen locations, some of which he owns, some of which are franchised. He just moved out of the neighborhood to a bigger, fancier house, so presumably he's doing OK.

There are many franchises which are poorly managed, but then there are many businesses which are poorly managed. You get lucky, you get with one that's going places, you do well and they encourage you to open more locations within a given territory, and your efficiencies go up and your profits rise. You get unlucky, you buy a stinker and you lose your investment.

I agree with those who say do A LOT of due diligence, more than just reading their glossy brochure. Sit in a location. Talk to the help. Talk to the owner. Sit outside the location. Talk to the business guy next door. Surveil their competition and then analyze your own. Frozen yogurt in Alaska? Maybe not such a good idea. Then again, several of the nationally known chains for ice cream started in Massachusetts and/or New England" Howard Johnson's, Ben & Jerry's, Friendly's, and others made it in cold climes; maybe frozen yogurt would do well anywhere, too?

Personally, I'd send an e-mail to spl241 and ask his advice, too. He chose to go the other way, and he might have some insights as to why.

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