Have you heard Island Red Cafe, like Old Town style restaurant? It is multi level marketing which recruiting more members to join then can get commission. You need to invest RM6000 then can enjoy 5% fixed guarantee return each month without recruiting any members. For me, it sounds like a pyramid scheme.
Why I Don’t Dare To Invest?
I took dinner with one of my friend at there last time, food is not very good, services also very bad, and there have a lot of market competition already, plus they do not have something special about their franchise. So, common sense, if food not tasty, for sure business will be affected, so will they still able to pay 5% as fixed guarantee return?
Good Payout Is Not Equal To Company Making Huge Profit
Franchise business can give individual the opportunity to start a business with an excellent chance of success at a minimum risk.
Lets take an example, McDonald, is a fast food restaurant and it becomes popular since many years ago. How does McDonald making money? By franchising, am I right?
Let’s take a very basic calculation:
One restaurant is selling 100 burgers per day and let’s assume the profit is MYR 1 per burger.
So, the retail profit is MYR 100 per day.
And assuming they have 100 branches, MYR 100 * 100 branches = MYR 10,000 per day.
Can you see the picture? It is a great idea that you are considering using franchising as a method of expanding your business.
As far as I known, Old Town and Secret Recipe are example of local franchisors so their fees are not as huge as McDonald and KFC. The cost of a franchise depends on the franchisor and the restaurant size, type and its location.
How Much Does A McDonald’s Franchise Cost ?
This business is labour intensive. But in Penang, it is normally run as self service way.
Many Dim Sum restaurant that hires foreign worker like Indonesian and Vietnamese and the services provided mostly are not good and many customers frustrated for not getting what they have ordered with immediate response.
If the food quality is good, I don’t think customer will have such fussy feeling and may be this will force them to even queue for seats during the peak time.
Sometimes factors like location and availability do affect people choice of restaurant.
I think the target age is from teenager to retiree. So it’s a very huge market.
I am wondering whether this kind of business can provide good side income or not.
Well, personally think that there is a bit of risk since you have to prepare a large capital first. Then, you have to look for a location to place the machine and rent the place from the owner and it can only give a good return if put on the right locations. You have to consider the maintenance cost as well.
The only winner I see from this business is the company that provides the machine.
Some of them are doing losing business as not enough revenue to cover the maintenance cost.
Although u can get the machine from china with low cost, can get it less than 10k.
Yet how much u can make?
1 litre only 20cents/10cents and with so many machines around lately…I dun think the owner will come out with the capital, pay the maintenance, utilities and the rental and pls do not forget the risk of vandalism, money get stolen and machines breakdown frequently.
Lets say 1 machine 10k. 1 litre 10cents is the most cheapest in the market…. sharing profit left 7cents, deduct maintain cost 4cents…profit only 3cents…
è 10k/3cents = 333 kilolitre…U need 3 year to get back your capital… Because 1 year u need to sell out 111 kilolitre, 1 month 9 kilolitre, 1 day 308 litre…
Above is my personal opinion for your reference purpose only. If u feel that this vending business can do, then go ahead !!!
The freedom to do what u want exactly when u want to. This is a great chance for you to say “No more 9-to-5 job. No more 40, 50, or 60 hour work weeks.” Haha…