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  • #979121
    Satyr
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    Just wondering if you guys could shed some light on something I’m thinking about. I’m considering putting $200k into a convenience store franchise. Is this a good idea in this economic climate? I figure people are still going to need everyday items and I’m not trying to open a jeans boutique or something ridiculous like that. My $200k is completely debt free but $200k will have to be borrowed. Any insight would be greatly appreciated!

    #1112050
    Paul B.
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    Anything can be a good investment of the numbers ad up. Being a franchise you would expect some comprehensive bookkeeping that can demonstrate the incomings and outgoings.

    A word of caution: I have had several friends invest in franchises and all of them have been worked to the bone. From observing their experiences, It takes some time before you start to see the benefits from the investment.

    #1112051
    Anonymous
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    Hi Satyr,

    Welcome to the forum, and thank you for joining us.

    This is a complex question, and you’re most likely going to need to engage an accountant to help you with the finer details of the due diligence. That said, I’m sure there are quite a few people around here whose insights will be valuable for you to take into consideration.

    None of us know your individual situation or the specific details of the business you’re looking at though, so if there are any more targeted questions you could ask us to help you get the most helpful advice, please feel free to do so.

    Good luck with it all!
    Jayne

    #1112052
    Satyr
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    Thanks for the responses guys. Currently it has been doing $32 k weeks, it improves during the summer months. The owners don’t work in the store and have it managed and run independently by staff. At present there is enough to pay loan repayments and have a $17k profit each year. I will not be running it as the current owners are and will be putting in a lot of time in the store. I have had a thorough due dilligence report generated by an accountant and the main concern was wages that need to be reduced. Apparently it’s a lot bettern than other business’s they have analysed which has given me some comfort.

    #1112054
    Chris – Marketing
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    When a person Buys a franchise they normally buy a Job. Depending on the franchise this job should have good support with bulk buying, business and marketing Plans. I have yet to see a Franchisee do more than generate an income which they could have earnt without investing money.

    Wages being cut means you have to get in and do the work.
    Perhaps 200k invested elswhere would give you a better yield.

    Chris Poulios
    http://www.satisfaction-marketing.com.au
    http://www.webthreads.com.au

    #1112055
    Steve – Adoria Photo
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    It is a gamble. In your business plan, factor in the risk of a Coles or woolworths moving in on your territory.
    They will think nothing of doing to you what they do to every other independent store or service station.
    Good Luck – Steve

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