What are peoples experiences with optical franchises? some of them would tell you that a store has never closed and every franchisee was making a handsome profit. all advice appreciated.
What are peoples experiences with optical franchises? some of them would tell you that a store has never closed and every franchisee was making a handsome profit. all advice appreciated.
Hi Pete - well your message gave me all kinds of feelings as I needed the same answers as you once.
Here in th UK the situation is this:
maybe the odd franchise has closed down - but the franchisors try very hard to stop that happening and if the franchisee is failing they tend to take the store of him/ her ( and his/ her money as well) and run it them selves.
They are not all very profitable - but if you get in early then perhaps you can make money. I think some of the more recent franchise openings are some where in between failure and success ie: a treadmill.
I suppose if you classified the franchises available in the uk - they would fall into 3 groups - those that cater for the lwer end, those 'quasi doctor' technical end and those that cater for the top end. It is the later that make the money I think - although if you are hard working and perhaps ruthless enough - then you can turn round a failing store and make it profitable at any end.
Here in the uk - it would be interesting to turn yor existing store into a franchise. But to start one from cold would be difficult. I have known 3 franchisees go under ( although this has been hushed up by the franchisors). THe worst scenario is the treadmill - where all you get for your investment is the extra responsibility, it would be difficult to sell a treadmill !
I never did get my franchise - because the franchisor would not introduce me to other people who had a franchise. He tried to sell the deal of his fantasy profit projection - which I would not believe. Also - I would never sign any lease that I was not involved in negotiations over.
In conclusion - be cynical, stay sharp, do your own market research, ask difficult questions, be known as dificult - and you may just pull it off. Don't forget that the optical world is quickly changing - so don't get locked into anything that could become a dinasaur! Every dog has its day .. need I say more. Oh - one bit more of wisdom - from my accountant - stress under 30 is good - it pushes you to achieve - after 30 it can kill you.
"...stress under 30 is good - it pushes you to achieve - after 30 it can kill you."
I'd say you should change the 30 to 60. Thirty years old is still way young, especially when the population routinely lives until 80+ !
I don't have any experience with franchises, so take my advice for what it's worth, but I would take the franchise representative's sales talk with a big grain of salt. I agree with Palfi, do your own independent research on their financials and talk to other franchisees. If the franchise representative won't give you names of other franchisees or discourages you from talking with them or doing your own research, run away as fast as you can.
The (only?) advantage of a franchise is that it allows you to be up and running with procedures and marketing in place, and it brings in people right away who are familiar with the name. It gets rid of the trial and error, and slow build-up, of starting your own business from scratch. But the same thing can be accomplished by buying a well-run business from a retiring optician, or buying into an expanding business.
My 2 cents.
Yea Paw - my accountant was a busy sixy year old at the time - so I may have heard him wrong! Personally, knowing the little abt US optomety that I do - I would plump for indi practice every time. Buy out an old timer or take on a share of an existing practice. It must be frustrating for a professional optom having to take his business direction from a far away head office - staffed by people who know nothing about optics and his practice in particular. I'd find a little town - and build the practice with the community and enjoy the difference!
I've never talked to a franchisor, so I can only go by some hearsay, but I hve heard that the franchise fee for a well know chain is many thousand of dollars up front, then 18% of the stores gross sales, to cover the marketing and use of the name; so basically, your franchisor will be making way more than you will. the more your sales go up, the more they make, and you get to pay for all the overhead, cost of goods and breakage, not to mention payroll, etc; i.e. you've got this %18 overhead gorilla!
To lead the conversation on here is the stories of the failed franchises.
My friend took a franchise to open in a historic townnear here. BUT the franchisors did not do their homework and did not realise that the town was flooded with optical outlets. Also they saddled my friend with large flashy and expensive premises in the town centre. He worked really hard - but could never get enough customers and slowly sank into debt. After 18 months - the franchisors sent in a balliff who threw my friend out and changed the locks. Result - the franchisor got a shop for free , mostly built up. My friend lost everything - including his hair in worry.
I was asked by another friend to go into a 'high tech' franchise starting from cold in another town. I declined - but he went ahead. The first year was tumultuous - but during the second year he discovered (far too late) that someone was stealing money from the store. THis started him getting depressed and he felt very tied up to the practice. THis all made him lose interest and in the end he sold out at a loss - just happy to rid himself of all the problems of practice.
I know of two other people who ( really) trusted the franchisors sales pitch and landed themselves with practices that just keep their noses above water - with them working 24/7. They are nerous of having days off and their emotions ride the profit/loss. Can't employ more staff as it would cost too much. They have to plough bak a large share of their profits into advertising and 'admin'. Just a hard slogging treadmill! Can't sell up - who would buy it!
Gloomy isn't it! Mind you I did work biefly for a couple who 'got in early' and did well and have happy staff and a flourishing optical store. So it can be done.
Did some research on franchises (all kinds, not just opt) a couple years ago. My recollection is that fees are 2 to 12 %, 18% seems unreasonable to me?, and that in return you get marketing, purchasing, sops, accounting etc. Best thing about it is the relative ease versus starting your own shop. Would take a hard look at market penetration/saturation of the franchise, this is where a lot of McD franchisees got burned. There are a couple of franchise orgs, could find on the internet, think it would be interesting to look at their publications, see what it piques in yr head. Also look at the local associations/cooperation within yr market for the franchise you are considering--can make a world of difference if you're able to combine resources on a local leverl.
Where are u?
I'd put my money on starting cold on my own anyday.
With a franchise you have aname , w/ someone else's reputation attatched to it. (Just because it's well-know doesn't mean it's good.
-A lot of research goes into franchises ---And you will be the rat !
-Many people want to own their own business for the freedom, franchising is like having a mortgage that never gets paid off.
-Starting a business is not brain surgery (unless you're a brain surgeon), but a franchise company will try to lead you to believe that you can't do it on your own. You can, and be out of debt in much less time.
Well Pete - everybody is agreed = you don't go there! Sorry!!
Hey - why don't you start your own franchise empire - then you will have people paying you !!!
= good luck Palfi!
chm, the 18% was a real situation, truly; and it's really not any particualr problem starting your own shop; a franchise is not your own business; you're just in charge of someone else's branch office, thme getting the profits; you taking all the risks, so, be an original! it's not as hard as you think..
If you were asking on your own behalf, Pete, you have too much knowledge and understanding to go there.palfi said:
Well Pete - everybody is agreed = you don't go there! Sorry!!
I think it is a way for people to try to buy job security. The problem is, it is usually only a marginally paid management position.
Now, If you you are talking about buying the franchise rights for a certain area and you would have two or three or more facilities to oversee, not manage, that might be a different story - - - - as well as a different investment level.
People !
You are verrry intresting People!
I am just wondering where and when i saw a report about Private/Franchise portions of optical bussines.
Who makes the most money, who sells the highest $ ammount per patient, highest grosses?
Can someone find this article?
In our area People are stupid. They do go to big franchise stores and spend 20-50% more on their glasses.
I was looking at a lot of stores for sale from Sterling and Cohens.
The first problem with those stores is that to breake even you have to gross anywhere between $700,000 to $800,000!!!
So if the store just does that you got NOTHING.
The last problen is if the store does over 1M it is either not for sale or they want a lot of money 90-95 cents per $ grooss.
Usualy without financing.
Homer - you wise bird - yea - you said it all - its all to do with job security. But as you point out - nothing is secure what ever you do. So you may as well do your own thing and just watch your outgoings. What ever people do in the optical market - over the next few years it will change again and again. Who knows! Certainly in my career - if thats what you can call it - the only security I have had is knowing that I have saved enough not to be in debt too much and to learn that there is beauty in the World and friendship, fun, happiness and love are more certain signs of security that ambition.
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