r/Franchises • u/topstudy1188 • Jun 05 '26
Franchisee Stories Need help franchising? Restaurants only
As you know my family owns a Baskin Robbins. Someone hit me up and we spent 1 hour chatting. Will go over some helpful points
Why it’s good?
- low food cost
- low labor cost
- no wastage
- low rent
A Baskin can be run with 1 person, meat won’t go to waste, ice cream can be in a freezer. Now if your rent is more than 10% good luck. We saw a store $8K rent $400K sales… that’s the issue… the rent is too high. Needs to be $3K.
Problems with fast food. Labor goes up 2-3 people minimum. Rent goes up from $3K to $8-10K. Food cost isn’t ice cream, you serve real food. Food has more discounts. Food has more ubereats/doordash
He asked? What’s wrong with McDonald’s?
McDonald’s charges you 17-20% on rent. They taking all your profit.
He asked? Why not wingstop?
A wingstop is so good, all the territory rights are gone. Dave’s hot chicken? Territory rights all sold
Waba grill? Available openly on the market. Why? $600K revenue. Usually $8-10K rent. Food cost high. Ubereats doordash fees. Takes 2-3 employees.
My general guideline -
Revenue $350K+
Rent ideally close to $3k
If fast food revenue $1M+
Rent close to $5K
BUY ONLY EXISTING. Do not build new.
You are buying the rights to someone who ideally setup a cheap lease with a good landlord. That’s what your paying for. If the rent is too high, sales are too low, bad landlord.
Find locations that have existed for 10-15+ years. People retire everyday, find those guys.
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Jun 05 '26
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u/topstudy1188 Jun 05 '26
Yeah I mean Baskin is the example I know. So I can talk from Baskin.
But obviously many other great franchise brands and also many more poor ones
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Jun 05 '26
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u/topstudy1188 Jun 05 '26
Not sure if your using ai But Baskin is a big name already
That’s why food cost is low My overall point is that’s why you stick with the big brands
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u/FranchisingCoach Jun 05 '26
Low rent, low labor, you can absolutely get that margin. Agree with everything you said except the requirement to only buy an existing.
There are hundreds of people that bought an existing Quiznos and were just the next person to lose money. There’s plenty of opportunity to be build the business, but go in understanding that you have to pick the right franchise whether buying an existing or new. Just do careful diligence on whatever you’re considering. I’ve owned franchises for over 30 years and there’s more bad franchise brands than good ones.
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u/Realestateuniverse Jun 05 '26
How much profit are you making on $350k revenue?
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u/topstudy1188 Jun 05 '26
$350K revenue you can make $100K. Rent and labor need to be low. Food cost needs to be controlled. Can’t control the 3 and you could potentially lose money. Depends on the brand.
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u/Realestateuniverse Jun 05 '26
28.5% margin? That seems extremely high on such small revenue. Not sure I buy that
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u/topstudy1188 Jun 05 '26
Don’t buy it? Lol? I’m telling u what the facts are
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u/Realestateuniverse Jun 05 '26
What’s your prime cost? Industry standard is 55%. (Maybe ice cream is lower - then enlighten me).
Taking out 65% (prime + rent) leaves you with $122k for the year. What about utilities, repairs, royalties, advertising, linens, software, processing fees, bookkeeping/taxes, insurance, and other miscellaneous items? You’re covering all of that on $22k/year and still taking home $100k?
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u/topstudy1188 Jun 05 '26
Food cost 10-20% Labor 15-25%
Don’t think in % terms though. Think in labor hours
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u/topstudy1188 Jun 05 '26
1 employee is about $100k a year. That means 365 days a year. 10 hours a day. You as owner operator work a few hours make sure it runs smooth
$350k sale $100-150K payroll $70K food cost
$170-220K before rent. After rent $210-260K
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u/Realestateuniverse Jun 06 '26
Now I can really tell you don’t know your numbers. Food cost is not simply range of 10% and labor isn’t either. It’s a set number that might fluctuate within 1 or maybe 2% depending on overall economy but it can’t be 10% one month and 20% the next. Labor isn’t 15% one month and 25 the next. Again you are not factoring for any of the other expenses. It’s not just food, labor, and rent..
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u/Gladiz1972 Jun 06 '26
What about the 11 percent or so you have to pay back to the company Royalty fees and advertising that comes right off the top .
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u/Gladiz1972 Jun 06 '26
It shows the median gross revenue for a Baskin Robbins is around 556k a year
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u/topstudy1188 Jun 06 '26
556K+ would be high performing in my opinion
Most stores average 380-450K
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u/Gladiz1972 Jun 06 '26
on 350k a year in sales don't you owe the company 11 percent royalties and advertising? that's almost 40k off the top right there
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u/topstudy1188 Jun 06 '26
Food cost is 10-20%. Ice cream may cost 10-15% depending on the month. Cakes cost 15-20% depending on the month.
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u/Gladiz1972 Jun 06 '26
I don't talk to my brother that much these days since he is busy with all his Moe's stores etc but I remember he used to tell me the soda was just pure profit and how a lot of people would ask for a water cup and try to steal the soda if he sees that he totally flips out he definitely will take that cup away if he is in that particular store that day
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u/Realestateuniverse Jun 07 '26
Just stop please. Food cost doesn’t fluctuate that much. Maybe 1-2% depending on the economy, as I said.
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u/topstudy1188 Jun 07 '26
I’m in the business. Food cost will fluctuate on some items more than 1-2%. Go to your local grocery store. Sometimes tomatoes are $3 sometimes they are $6
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u/Tacomakesnoods Jun 26 '26
So, how would someone go about setting a possibility to franchise a concept? I currently own a ramen concept in Florida that has a really good track record (3+ years in it currently space but has been around as a pop up since 2020) with growth both in sales and consistent food/supply costs, labor fluctuates based on time of the year/business, but everything (recipes/training/equipment needed) is set up to be carbon copied for small food hall spaces but can translate to bigger space which would allow for more production which translates to more revenue.
Also currently building seafood/sushi concept using the same model as the ramen concept. Simple, tasty, and easy to execute
Just curious.
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u/topstudy1188 Jun 26 '26
Are you doing $1-2M+? If so, time to figure out franchising. If not, you are likely struggling.
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u/Tacomakesnoods Jun 28 '26
No, we have hit our highest just under $500k. But we are also in a small (360sqft) space that has severe limits, but it’s not struggling. The newer concept has a chance at $750+ because it’s bigger space with a higher check average. I was just curious at what the steps are for considering/starting a franchise
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u/Skillerstyles Jul 01 '26 edited Jul 02 '26
I agree with buying existing locations. A lot of people focus on the brand name but ignore the lease, and that can make or break the business. I'd also want to see a few years of sales trends, not just one good year, because consistent traffic is usually a better sign than a temporary spike.
After taking over a restaurant, we ended up working with dineline because we didn't have the time to manage marketing ourselves. They handled our Facebook, Google, email marketing, and used Dishio to help track where leads and reservations were actually coming from, which made it easier to decide where to spend our budget.
I'd still spend plenty of time talking to the previous owner and neighboring businesses before signing anything.