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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: rolliefingers on August 08, 2013, 11:37:13 AM

Title: Anyone own a Franchise? Should I buy one or take my SWR??
Post by: rolliefingers on August 08, 2013, 11:37:13 AM
I am currently turning over the idea of buying a Dairy Queen or perhaps a Pet Supplies Plus.  My fear is that this may simply turn out to be "buying a job" with the $700k or so required.  I do not have the net profit numbers on either just yet, so this may be off base.  Conversely, I may seek to take a SWR of 3% or so on a portfolio of 1.3MM.  My FireCalc tells me that we are 98% safe with this approach, given our spending approach, for the next 50 years or so.  At 41 I guess I am still fearing being without work, as crazy as that sounds.

As I do my due diligence, I thought I would see if anyone here can weigh in on the direction I am pointing?  The corporate gig, while it pays well, has convinced me I need to run my own show and escape the world of conference calls and "thinking outside the box," while clearly selling one's soul inside a box.  Thanks in advance for any sage advice.
Title: Re: Anyone own a Franchise? Should I buy one or take my SWR??
Post by: arebelspy on August 08, 2013, 04:00:40 PM
In that case, you are purchasing a job.

A business can be an investment, but it's not simply passive.

I'd look at NNN real estate before a franchise, but it really depends on the person and what they're trying to accomplish.

You should try the Get-A-Life tree (in Zelinski's books) to start thinking about what you may want to do with your time.
Title: Re: Anyone own a Franchise? Should I buy one or take my SWR??
Post by: footenote on August 08, 2013, 06:21:49 PM
If you have been successful enough to RE at 41, you are successful enough to consult if you want to stay busy and engaged. Don't tie yourself to a "purchased job."
Title: Re: Anyone own a Franchise? Should I buy one or take my SWR??
Post by: smedleyb on August 08, 2013, 07:22:29 PM
I ran some preliminary numbers on a DQ/Orange Julius treat center (stand alone concept, on a busy commercial lot but subject to 4 seasons).  700K was about the number I came up with (land is paid off).   You're probably looking at some kind of strip mall DQ/OJ concept, correct? 
Title: Re: Anyone own a Franchise? Should I buy one or take my SWR??
Post by: .22guy on August 08, 2013, 08:30:25 PM
I'm not a business person by any stretch of the imagination, but this sounds like a terrible idea to me.  Way too much possible downside: business fails, stress, having to be involved in a business every day or often.

Just my 2 cents, keep the change. :)
Title: Re: Anyone own a Franchise? Should I buy one or take my SWR??
Post by: brewer12345 on August 08, 2013, 09:07:28 PM
I have looked at a franchise or two, and the returns do not justify the concentrated risk, IMO.  I am turning 40 this year and have the same size portfolio.  I don't think I have quite enough money for full comfort, so we are planning more of an ESR than a full ER.  DW has developed a part time business that will bring in about 2k a month and I will find something to do (consulting, contract work, small business, etc.) that generates 15k or better.  I don't want the headaches and financial commitment of a franchise or anything else that requires a lot of capital.  If all else fails I can call up a temp agency and do whatever to make a few bucks.  If the next few years are reasonably kind, it won't be an issue.