Are Franchises A Bad Thing?


#1

Kinda discussed this in several other threads, but wanted to make a dedicated thread to it. Over the years I have worked for several major franchises, be it fast food, restaurants, or miscellaneous. I still have many friends who work at various head offices, so I have a little insight into how some of them do business.

So what I wanted to know, is your guys opinions on whether franchises are a good thing or a bad thing. In North America, you see FAR more franchises than in other parts of the world. Sure, when you go to France and find a McDonalds, you pretty much know the menu before you even step into the store. But what other good do they do?

It used to be that fast food meant lower prices (I realized this was untrue the other day when I went to a little family run restaurant in my neighbourhood and treated myself to a fantastically huge burger and fries for far less than any fast food restaurant charges).

Franchises have the problem that when they earn money (or even if they DONT earn money), they still have to pay their corporate offices for the rights to continue being a franchise. They HAVE to buy specific objects from them (if you wanna buy a spatula, it has to be a Wendy’s/McDonalds/etc spatula, etc). Franchises also buy things in such large supply that they completely fuck up supply and demand. Wendy’s is bad for this…the reason they have to sell their specialty burgers such as the fish sandwich or mushroom melt, is because they could deplete all available sources of the mushrooms or fish in their region if they sold all year long.

How about some non food examples? Take a look at the business practices of Blockbuster, Future Shop, etc etc etc.


#2

They are too powerful and make it harder other food places to compete, so when shit like a recession hits, they only get more profits as other businesses crumble.

But a franchise is the natural progression of any business given our communication technology. Corporations are weird because they are relatively new, only with the inventions of phones and the internet and television are corporations now possible and normal. Especially with TV with it’s brainwashing ability to imprint brand names into our minds from a young age.

eyuup.


#3

corporations existed way before TV or the internet…or even radio.

a lot of false premises in the OG post.


#4

Ya corps have been around for a long time but TV and internet brought that home and into the minds of children on a level never seen in human history. It wasn’t til then that babies grew up with their second parent, the television set, with McDonalds kids meals on their minds and dreams of being as happy as the kid in the skip-it commercial.


#5

But the very best thing of all…

There’s a counter on this ball. Skip it.


#6

such as?

the way I see it, a franchisee pays fee’s that go towards things like advertising, and so on. Look how much money some of the big franchises spend on advertising. A franchise should be popular like any other restaurant or store…by word of mouth and quality product, not 100 million dollars worth of superbowl ads and shit like that.


#7

why?
if they have 100mill to blow on advertising they must be doing something right.

There are pros and cons of franchises, but overall they are better economically. They also naturally occur in an open market when a business becomes successful. So there’s no point to get butthurt about them.


#8

Not all franchises are massive and have stores on every street corner.

Popularity leads to success; it’s business - if you don’t have money, you lose: it doesn’t matter if you’re KFC, Coca-Cola or some new local electronics franchise.


#9

No, it means that the corporate head office has no problem pissing away money. There are SOOO many better ways to spend that money, like giving the employees at the franchises more pay, rather than more franchise fee’s to the corporation. I could name a few franchises that are instructed by head office to never give max pay raises, or any at all. Yet they keep pulling in money.

Also, whether your franchise is successful or not (ie if you make money or are losing money) you still end up paying corporate. So if business is bad for a month or two, you can get seriously fucked.

first of all coke isn’t a franchise, it’s a national product. Seriously, if KFC wants people to eat their chicken, sell it to grocery stores. You don’t see Coca-Cola opening Coke Stores where you can only purchase Coke there. Same with McDonalds and so on.

I look at it as people who don’t have an idea how to run a business. They just have some money, and decide to buy a store and sell what somebody else already made popular.


#10

What about Martial Arts franchises? I guess the cons would be that they need to bring as many people in and do children classes to cover the franchise cost.


#11

you got it backwards, pissing away money happens when you pay employees more even though they are willing to work for less. Sure they might get better employee turn-over and maybe better performance, but if they think it’s wiser to invest in advertisement, so what?
Advertising isn’t just pissed away money, they advertise in order to make more profit, if they didn’t expect any returns from advertising they wouldn’t do it.

Good for them.

That’s the price you pay for being subservient to a big franchise and using their products, etc…No biggie.


#12

Try and match your very best score
see if you can jump a whole lot more!
Skip it, skip it
Do run, do jump, do hop-ho-whoa!! trips, busts ass
Damn passive-aggressive death-trap toy…but not as bad as lawn darts. Wtf WERE they thinking?!


#13

For one thing you dont have to pay to advertise yourself lol… I have never heard of a mcdonalds franchise paying to advertise mcdonalds… that’s a huge cost right there that you don’t have to worry about…


#14

This. They started out as small businesses, did well and expanded. That’s pretty much the whole point of a business, isn’t it?


#15

idealistic drivel


#16

We Have a Winner !!!
everything sounds bad in a idealist point of view there is just no winning


#17

-such as the idea that wendy’s only limited promo deals so they don’t deplete food sources and not bcuz making some limited increases demand and spurs sales (eg the mcrib, chicken cordon bleu sandwich, uh-oreo’s, etc…)
-stores that generally are in position to subjugate their suppliers aren’t franchises out but centrally own (eg walmart, target, starbucks)
-franchises are just as, if not more ubiquitous in asia, namely korea and japan where just about everything is a chain or franchise
-on average fast food still is cheaper than a mom & pop store
-the business practices of blockbuster led them out of business and once again, blockbuster doesn’t sell franchises, same goes for most supermarkets and big box retail type of stores


#18

I dunno, in my experience its still generally true that fast food is cheaper than non franchised places.