Most of you out there had thought of opening up a store that you have encountered some where around the world, some said, i talked to Cheese Factory, the other thought about a coffee chain in Germany. The truth is its not that simple, i had my share with different franchises and read many contracts, the things that people do not understand is the commitment required in such ventures. I’ll explain by giving different examples: if its a restaurant chain, most probably you have to setup a training location, then you may be asked to open a central kitchen, and may have to sign a paper promising that you’ll open 15 stores with the next 5 years. Other require you to buy food only from them, meaning that the meat has to come from their supplier in the states and most probably they own it too. Second Cup gets most of its drinks, coffee and sauces from Canada, this requires handling in Kuwait customs and Ministry of Health, these issues take long time to process. Some ask for high franchise fees, this fee goes strait for the franchiser and you get nothing for it, then you have the royalty fee’s that you pay monthly out of your sales! meaning even before taking you pay rent and other expenses. Then most franchises will not open in Kuwait unless you prove that you own property and large amount of cash, and have the man power to start the business, they wont except to open one store and communicate all the way from the states. Some even request a master franchise, this requires larger investment and a full time job. The master franchise is the one that resells small franchisees, this is very time consuming experience and need professional assistance. Most franchises do not show you how much they are making in different parts of the world, if they did you would be surprised. I’m saying all this because i wanted to open a franchise, and it took me a year in research and even traveled to the franchisers country. A minimum investment for franchising requires atleast 35,000kd and thats on for buying the right to open such a store in Kuwait, thats not even including the location in Kuwait (Avenue mall request about 70,000kd for a store), rent and employees. So when even thinking of such an investment keep in mind what i have said.

This entry was posted on Friday, April 27th, 2007 at 12:08 am and is filed under Franchise opportunity, Startups. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.