My dad has a franchise of 5 months that is already starting to fail. He has 250k+ put into it, and thats with a shared business partner (500k+ total.) It is located in a great plaza of food and grocery, BUT there is another boba shop 2 minutes from it. I dont know why they chose to build one so close to it. By the end of the second month things started to go downhill and getting worse and worse, only making average of $100-170 dollars a day with $135 dollars needed to pay workers hours for that day. Is there really any way to save this business? Sell the business? Bankrupcy? Any advice helpful
Step one: Talk to a lawyer to understand what the implications of exiting the franchise are.
Some will have some strict language built into your franchise agreement about the amount you have to pay JUST TO CLOSE A FAILING BUSINESS. Usually, it comes down to paying a % of projected royalties as a lump sum. Sounds crazy but paying 50k to avoid losing 500k running a failing business is a good decision.
Good luck.
One more reason Franchises are scam businesses
I’ve determined that unless you’re buying a true brand name, and have at minimum $1MM to invest, they are either boom or bust. You might as well go to a casino and put 500K down on black.