Aug
In 2005, my husband and I bought a food cart franchise for 200,000 pesos and paid 150,000 for a space in a mall for nine months. We shelled out some more for additional equipment and supplies, increasing our total investment to almost 400,000.
Our franchise lasted for only two years, and we never recovered our investment. It’s painful going back to where we lost a lot of money, but I hope this can help others, and heal some of my hurt as well.
Some of our mistakes were:
1. We chose a franchise that was only 11 months old. We were also blinded by the fact that the franchise had attracted almost 50 franchises in just a few months, including some celebrities. Today, I no longer see the ones in the malls and the ones along my way to work.
2. We failed to see that the franchise used ingredients prone to big price increases.
3. We didn’t evaluate the electric consumption of the main cooking device. The electric bill became our biggest monthly expense.
4. Early on, we targeted only malls. We failed to see that there were locations outside the malls with the targeted traffic and lower rents. When we found out one, we could no longer get out of our mall contract without forfeiting our big deposit. What makes me feel bad is when I pass by the non-mall location I previously inquired about and see people lining up to buy from the one who inquired after I passed up.
5. We made wrong assumptions about mall traffic. Before signing the mall contract, we should have returned to the mall on different days and checked whether people were coming in and what people were buying for snacks or meals.
6. We made our exit too late. We could have cut our losses had we not held on to false hopes and not renewed our contract with the mall.
I didn’t name our franchise to protect those lucky ones who are still operating and those who are still trying to recoup their losses.
Tags: failure, franchise, Franchising, investment, mistake