My partner and I are in a pretty great spot for retirement now. We’ve invested smart and saved a lot and both have great jobs.
We are considering franchising a new hot brand in the food/drink space. It is viral and doesn’t have a lot of competition right now. Is this a smart move when we are in a good financial spot? Would you take the risk?
Posted by Solid-Lie-2822
5 Comments
Why? Are you bored? Putting together a franchise system, hiring a staff, finding and training franchisees, real estate issues (if applicable)…just to get started is a ton of work not to mention the initial investment required.
If it’s viral now without much competition, franchising is probably the last thing you want to do – you’d be handing over the best part of your moat to people who’ll compete with you for the same customers.
The timing risk here is real. Viral brands have a short window where they’re hot but not yet saturated with franchisees. If you’re one of the first 10-20 locations, you might capture that wave. If you’re location 500, you’re buying into yesterday’s trend.
The bigger question is operational complexity. Food/drink franchises live or die on consistency and supply chain. If this brand hasn’t proven they can maintain quality at scale, you’re essentially beta testing their systems with your retirement money. I’d want to see at least 2 years of multi-location performance data before committing.
One angle to consider: can you negotiate a smaller territory pilot first? Test one location for 12 months before committing to the full franchise agreement. Protects your downside while giving you real data on whether this thing has legs beyond the viral moment.
Are you planning to leave your jobs and run the business or be absentee owners and put your faith in someone else running it for you? If the former, sure, why not. If the latter, nope.
If it has No impact if you lose everything on it then go for it.
(Maybe even a minimal impact then okay)