And, the constant comments from Business Professors was that most were NOT worth the franchise costs. Now, the top franchise stores (Such as McDonald's) are worth the cost of obtaining a franchise. i.e. the costs you incur as being a franchisee is more then offset by the advantages you have by the assistance from the Franchise provider. On the other hand, in less known franchisees, the cost of being a franchise is not worth far exceed any benefit having the franchise provides the franchisee.
McDonald's is always the classic Franchise operations, they provide more support (including advertising) then the store operator could provide himself. Now, in the case of McDonald's, that include site selection, and time of operation selection (I have always suspected Wendy's site selection is to find out where the nearest McDonald's is and pick a site close by, that sounds like an attack on Wendy's but it is a very good way to pick a site for a competitor of McDonald's).
McDonald's and Wendy's are often given as good Franchise operations, they provide the support the actual store owner needs. Your other better known Franchisees provide similar services. If you want to be in a Mall, you are stuck with a Franchise, for most malls are 90% rented out before they are even built (thus you tend to see the same stores in every mall in the US, some variations but not many). Given that high rate of leases held by large corporations if want to be in a mall, you have to do what they want (in the three malls I have seen decline, you first see a slow withdraw of those nation wide stores and replacement by similar size local stores as the Mall tries to find tenants to replace the ones that have pulled out. This did NOT always help the mall survive, but it is a sign of a mall in trouble). For more on Malls I have seen fail, see the end note at the bottom of this page.
Whoever is providing you the franchise should be able to help you select a place for your business, in fact should insist on it, for if you are successful, so will they be and one of the most important assistance they should provide to you is finding a good location for your franchise.
On the other hand if the assistance is what you could do on your own, it is NOT worth it. In the 1990s "Bike line" wanted to moved into Western Pennsylvania. At that time I looked into a "Bike line" dealership, but the more I had dug into what they can provide the less I like the franchise. In fact the local stores that did open as Bike Line Franchisee have all dropped that franchise, and continued on their own. The support "Bike line" was able to give to dealers in Western Pennsylvania turned out to be less then what the people who owned those stores could do for themselves (Thus the dealers all dropped the Franchise).
http://bikeline.com/
Now, "Bike line" is doing well in Eastern Pennsylvania, maybe out East, they can give the support the franchise operators needed, but that clearly was NOT the case in Western Pennsylvania.
Just a comment about Franchises. Make sure you are getting something more then a Name when you buy a Franchise.
ENDNOTE: Malls I have see fail:
One comment, on the malls below that I have seen go into decline, one of the reason was the decline of the number of Department Stores in the Pittsburgh area. In the 1970s, there were three "Department" stores, each having a store in Downtown Pittsburgh and at least two of them in every mall in the area (Century III mall actually had all three, plus a Sear's and a JC Penney's). Today, all by one is gone (and the surviving one in now called "Macy" instead of the Traditional Pittsburgh Name of "Kaufmann's). This consolation of department stores, and the slow movement into Pittsburgh of other national chains put strains on the Local Malls and lead to the decline of two of these three malls
Another factor, is with the decline in income of working class people since Reagan's election in 1980. The move to upgrade what working class people purchased reversed. Prior to WWII, most working class people brought clothes in what was called "5 and dime" stores. They would occasionally go to a Department Stores, but they tended to go to Woolworth or other similar good but downscale stores. That changed in the post WWII era, as people wanted to upgrade themselves with the extra money most Americans were receiving in the post WWII era. People tend forget that from 1945 till 1980 is the only time in American History when the rich did NOT get richer and the poor did NOT get poorer. Instead more and more of the money went to the bottom 90% of the population.
Thus after WWII, more and more people had more and more money to buy nicer and nicer things. Thus the Malls were born in the 1960s to take advantage of this increase in income for the bottom 90% of the population. This reflected that given the increase income, most people owned cars after 1954 (1954 is the year more people purchased replacement cars then the first car owned in their family). This buying of cars, saw the decline of the Streetcars, but the expansion of the Automobile Suburbs.
That increase in income for the bottom 90% stopped in 1980 and wages have been STAGNATED since that date, even well the total income for the Country has almost doubled (i.e. the rich are getting rich again). In the recent recession, we have even seen a decline in income for the lower 90% of the population.
This change hit Pittsburgh hard, for Pittsburgh was known for decades as having the highest income and lowest prices in the Nation. Companies would only move into Pittsburgh once the rest of the Country was covered first, for Pittsburgh had very low profit margins compared to the rest of the Country. While prices have stayed low, the problem is wages have DECLINED since 1980 in Western Pennsylvania (Pittsburgh is in the center of Western Pennsylvania).
With that drop in income, you saw less and less people buying less and less things in the Department Stores and more and more people going to discount places to buy things. They was some resistance to accepting a decline in quality (For example Walmart fruits just do NOT compare to fruits one can get, even out of season, elsewhere in Pittsburgh) but even in Pittsburgh you have seen a slow decline in quality as people try to stay within their budget. Thus you have seen less and less people, spending less and less time in the malls, and more and more people, spending the money they do have at Walmart of other similar discounters.
Yes, a long story about why Pittsburgh had only one Department Store today, when in the 1970s it still had three. I go into it so you understand that the above in what is happening nationally not just in Western Pennsylvania. Whatever franchise you are buying make sure it can provide what people want and can afford. If you make a mistake as to the market, you will go bankrupt no matter how good a businessmen you are, Just a comment on making sure you know what you are getting into and that you have the support you need from whoever is providing the Franchise.
Some of the Malls I have seen go into decline:
http://en.wikipedia.org/wiki/Century_III_Mall
Century III biggest problem is it was built in that part of Suburban Pittsburgh that was an outgrowth of the old Steel Mills along the Monongahela Valley. It was an ideal location, till the Mills closed down in the early 1980s and with it the wealth of the population is that part of Allegheny County Pennsylvania. The local roads were built to transport people from these suburbs to the Monongahela Valley NOT to Pittsburgh. The two roads to Pittsburgh (PA 51 and Brownsville Road) ran more or less parallel to each other and had traffic lights every 100-200 feet. Thus was NOT a high speed highway, and any proposals to make it a high speed highway died in the 1950s (mostly from opposition from local governments in the area around Century Three Mall, for they did not want to become a "Suburb" of Pittsburgh). Bad roads, hard to get to, no real plan to upgrade the roads. The opening of a strip mall with many of the Stores in a Typical indoor mall, on the site of old Homestead Works, made people along the Monongahela rive stay in the valley and anyone crossing the Monongahela river stopping at that mall instead of going to Century three (and this included a lot of people from the City of Pittsburgh itself).
http://deadmalls.com/malls/allegheny_center_mall.html
Allegheny Center, died as a mall for it was to near Downtown Pittsburgh and its remaining stores, but did not have the easy access by automobile most people expect when it comes to a modern mall. It started well, but then as the stores did not match the income similar stores did out in the suburbs, the stores slowly pull out. By the 1990s it was closed down and converted to offices, do to the fact is it within walking distance of Downtown Pittsburgh.
http://en.wikipedia.org/wiki/Parkway_Center_Mall
Parkway Center Mall opened in 1980. It boomed as many of the smaller stores that had stayed in downtown Pittsburgh moved out to it. The problem was it was a small mall whose smaller stores all closed down when the stores around the Airport were made in the 1990s. The stores that had moved from Downtown Pittsburgh to Parkway Center, then moved to the new malls around the Airport.
The smart money today is that the Mall will be torn down and replaced with something like a Home Depot. A Home Depot was planned, but some locals opposed that plan for it required the City of Pittsburgh to rule the area "Blighted" (and it is do to the decline of the Mall).
I bring these up, for on paper these should still be "Hot" properties for a retail store. They are not and are either dead (Parkway center), dying (Century Three) or long dead but rebuilt as something else (Allegheny Center). Whoever is providing you the franchise should be able to help you select a place for your business, in fact should insist on it, for if you are successful, so will they be.
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hands.
