Khalid's advice, if you were going into the biz, is to buy the poorest run business and turn that around. He said that the location he bought was one of the best run places and there wasn't really much he can do to make it even better. A guy came into his store once and said that he was thinking about buying one of these Subways and he was willing to work for minimum wage just to learn about the business. The guy worked for Khalid for a couple of months and then found a Subway of his own and bought the place for a third of what Khalid paid for his Subway. He turned the place around and made money on the location and then two years later, sold the place for a profit.
Khalid says that this is a good strategy: look for the ugliest, rat-infested, poorly run location and turn it around, instead of the newer looking, not so hot performing location. Although his caveat was that he would never go into the food service biz ever again. He said that as an owner, you should never be in the store. You should be out promoting it and paying somebody to be in the store. The promotion is worth more money than the money you save by working yourself.
Khalid also said that since he bought an existing store, he did not have to have a franchise lawyer. He said that there was no negotiating with franchisors. I want to take this with a grain of salt, because possibly, he was in a unique situation where the franchise was already existing and therefore, no negotiations were forthcoming. In a new franchise situation, there may be more wiggle room. Regardless to say, I am now thinking, rather than rushing into a new franchise, I would work for a franchise a little while before I start it. However, so that I wouldn't lose unemployment benefits, I probably cannot work more than a certain number of hours a week.
Mood | Anxious
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