Like any business opportunity, with franchises there are many franchise opportunities that could lead you to becoming a successful franchise owner. However, there are some franchise investments that could ultimately lead to failure and the loss of hundreds of thousands of dollars. With any business opportunity, there will always be good and bad options. But just because they are not a desirable opportunity does not mean they will present themselves that way in the beginning – even the worst of franchises can look tempting and profitable in the beginning. Fortunately for you, the Forbes Worst Franchise List (scroll to the middle of the page on the Forbes Worst Franchise list to see the listed franchises) lays out some of those franchise opportunities that might look tempting, but are ones that you should stay as far away from as possible – such as a Quiznos franchise.
Quiznos is well-known for selling toasted sub sandwiches. Just like several other sandwich places, they are a quick stop for a sandwich that isn’t just the average turkey and cheddar sandwich you are going to make at home. However, even if you enjoy their food, their business model might not be ideal for you. With a total of 667 units, the 5-year growth rate for a Quiznos franchise is -23%. That number pretty much says it all – your 5-year growth rate should not be a negative number.
Another negative aspect of the Quiznos franchise that continues to hurt their franchising opportunity is the odd franchising structure they practice. Typically, a restaurant franchise will negotiate with vendors on behalf of their franchisees. Then, the franchisor will buy items such as bread, meat, and other commodities from a third party. However, Quiznos buys their commodities from vendors and sells their food at a markup to the franchisees. In turn, this just adds to the poor profits – the franchisees are left paying more for their commodities than they should be and are being ripped off by their own franchisor. This structure quickly eats away at profits and can leave a new business owner struggling to establish their franchise business.
In addition to having a poor franchise structure, Quiznos just simply is not original. Subway has already dominated the market of freshly made sandwiches, and when they added toasting ovens to their stores in 2004 – they sealed the deal. However, Quiznos still offers a seemingly identical product. But, many customers already have their sights set on Subway. This is yet another factor that contributes to poor profits and crumbling businesses.
Becoming a franchise owner is a great opportunity and a way to become your own boss without having to build a business from the ground up. However, a successful franchise begins with selecting the right opportunity for you. The most successful Entrepreneurs know how to either do the due diligence required or hire a professional to do that due diligence on their behalf so that they can steer clear of the bad franchise options. Before making a decision, research the franchise you are interested in to ensure it is all it is cracked up to be.
La Mancha Sims is Managing Director and Founding Partner of Triton Business Group, Inc., a business funding consulting firm located in Decatur, Georgia. La Mancha is a former Naval Officer who has over fifteen years of experience in franchise and commercial finance, specializing in assisting entrepreneurs who want to enter the franchise industry as owners or consultants/advisors. You can reach La Mancha at 770-249-2357.