That's one problem about the chain. They saturated the areas where they saw one franchise make money. "If one SB is good....Two will be better!"
The El Lay area is choked with them.
Another thing that I noticed, but I do not know enough about the business rules they use when awarding franchises, is how much control the company has over each store. Have you ever seen a McDonald's go out if business?
If anything, they grow on the spot they started! Do they do a marketing study? Poll customers? Study traffic tendencies? The move towards putting a (name the business) on every corner has it drawbacks and I suspect that SB didn't do their homework!
I watched a 'drive thru' SB being built in the next town over. There were signs galore promising "Coming Soon-Starbucks!".It will be interesting to see if that one survives.
Krispy Kreme got totally racked up when they moved to the West, from what I understand it was a company that was started in the South- and people out here weren't familiar with that brand or style of product!
They opened two stores locally and the news programs were reporting about the wait for doughnuts. 20-30 cars in line....Later, when the media started to report about fats, health and all that is bad for you- the volume dropped and the store with all the people waiting in line, closed! I understand how the reports of fats, sugar and anything deep fried was bad for you had on the doughnut industry, but I figure a store that is printing money would be immune to the axe!
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Franchising any business if risky! I saw a news report about the widow of a Subway sandwich franchisee. The man committed suicide after the company literally priced the man to death. SW does not allow any franchise owner to purchase any supplies or food from anyone else outside the chain.
Produce, all the way down to the toilet paper and soap used in the store must be purchased from the Main Office. The owner, had more than one store and was slowly losing money-I seem to remember that he was making literally pennies on every sandwich- and since he had sunk all the family saving into the stores, he felt like there was no way out.
Very sad...
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