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So this weekend I wrote about I Heart Mac & Cheese, which is signing up operators at breakneck speed, even though many of its early stores closed and is facing lawsuits. But this isn& #39;t the only franchise problem. There are lots of them. https://www.restaurantbusinessonline.com/financing/i-heart-mac-cheese-growth-isnt-what-it-appears">https://www.restaurantbusinessonline.com/financing...
There is, for instance, Quiznos. It& #39;s easy to forget but at one point Q had nearly 5k locations. Its owners took $800M in debt. Then the system collapsed. Most of those operators walked away with nothing. Some lost everything.
https://www.restaurantbusinessonline.com/financing/brief-history-quiznos-collapse">https://www.restaurantbusinessonline.com/financing...
https://www.restaurantbusinessonline.com/financing/brief-history-quiznos-collapse">https://www.restaurantbusinessonline.com/financing...
Just last week we wrote about Tim Hortons in the U.S., which is taking action against a vocal franchisee -- something it& #39;s done before. Operators here are suing the chain, which has been in decline south of the Canadian border for some time. https://www.restaurantbusinessonline.com/financing/tim-hortons-takes-aim-again-one-its-prominent-franchisees">https://www.restaurantbusinessonline.com/financing...
Earlier this year we told you about Burgerim, one of the worst franchise failures I& #39;ve ever seen. Signed up hundreds upon hundreds of franchisees, most of whom never opened a restaurant. Those that did usually ended up closing in a few months. https://www.restaurantbusinessonline.com/emerging-brands/burgerim-disaster">https://www.restaurantbusinessonline.com/emerging-...
To get a good idea of what can happen to franchisees that invest in one of these, check out this story about Burgerim franchisees. https://www.restaurantbusinessonline.com/emerging-brands/burgerim-franchisees-pick-pieces">https://www.restaurantbusinessonline.com/emerging-...
One thing franchisors get to do: Collect rebates from vendors. Franchisors can collect rebates from vendors, who then increase charges to franchisees. Excessive vendor rebates come up in these situations time and time again. https://www.restaurantbusinessonline.com/financing/recent-disputes-highlight-franchisors-use-vendor-rebates">https://www.restaurantbusinessonline.com/financing...
Franchising is fantastic. But it is loaded with bad actors and problems. And when a franchise system fails, it can leave a lot of people in personal financial ruin.
Anyway, pardon the late afternoon tweet thread.
Anyway, pardon the late afternoon tweet thread.
