Franchise: Chick-fil-A

So, the first one I wanted to go through is Chick-fil-A. You have 10,000-plus people applying to be a Chick-fil-A franchisee every year. You can invest as little as $10,000 and Chick-fil-A corporate, the franchisor, is going to invest $2 million-plus, the other capital required to open that Chick-fil-A location. Many Chick-fil-As are doing over half a million dollars in profit, and there’s a profit split between you, the franchisee, and Chick-fil-A corporate, the franchisor. Chick-fil-A does not compensate franchise brokers. So, a franchise broker is never going to evaluate Chick-fil-A to see if it’s a suitable business for you.

Franchise: IHOP

IHOP is another brand, International House of Pizza that’s been around for many years and is…IHOP, another brand, International House of Pancakes has been around for many years and is the top pancake and breakfast-focused franchise. We placed a client as a franchise consultant to open up 20 IHOP locations, of which we received no compensation from IHOP. And that’s fine. The client paid us an upfront fee. We were representing the client, but that’s an example, number two, of a franchisor that your franchise broker is not going to show you because they’re not paying the franchisor.

Franchise: McDonald’s

McDonald’s is another option. We looked at that for a client a year back and McDonald’s corporate, at the time, was really just expanding with existing franchisees of McDonald’s that already had one, two, three, five locations, and they wanted to open up more locations.

Franchise: Domino’s Pizza

Domino’s Pizza is an amazing franchise that it does not take outside… Domino’s Pizza is an amazing franchise, probably the most profitable pizza franchise, especially when you look at how much it costs to open up a Domino’s. But right now, they’re just taking in as franchisees current employees of Domino’s that have risen through the ranks and want to open up their own franchise of Domino’s.

The average franchisee, last we checked, had over five Dominos’ Pizza locations and should be doing over a million dollars of profit. So, not a bad way to make money. It’s starting at the bottom and earning your way up to open up, you know, five locations of the brand that you’re working for, and you started as an employee, and to start making a million dollars isn’t bad. So, your franchise broker is definitely not going to tell you about Domino’s, and they probably didn’t even know those facts.

Franchise: Subway

Subway is a franchise that I would not advise anyone to invest in right now. Last we checked, there were closing 1,400, 1,500 locations per year, while they were only opening up 400, 500 locations. So, this is going back to prior 2016, ’17, ’18, ’19, they were basically closing two times the amount of locations as they were opening. And Subway franchisees are cannibalizing each other, where Subway corporate did not do a good job of protecting the existing Subway locations from new locations that were opening up where a new location opens up and sales drop for the existing location. Last we checked, Subway does not compensate franchise brokers.

So, although we don’t think it’s a good business, and we wouldn’t recommend it for any of our clients, your franchise broker’s never going to recommend Subway as they’re not going to get paid for it.