I don't see any data to support your assertion that franchisees are all perpetually in debt, presumably receiving no return on their investment.
http://blog.wallstreetsurvivor.com/2015/10/08/mcdonalds-beyond-the-burger/ http://digg.com/video/mcdonalds-makes-most-of-its-money-from-rent-not-food http://seekingalpha.com/article/73533-mcdonalds-is-a-real-estate-company
So these are about franchisers. Where is the data showing franchisees typically don't make a return (or even get their investment back)? Go ahead, crush my dream of opening a Subway.
Ricter, why do you think most restaurants fail? From making too much money? Come on dude, give it up. Walk into any bank in America and ask to speak to a small business loan officer and inquire about getting a loan to open a restaurant. In fact, if you think it's so easy, why don't you do it. God knows you don't trade for a living. So why not? Or better yet, walk into your local courthouse to take a gander at the local bankruptcy announcements. I mean are you just trying to be dense. I never thought in a million years anyone would believe the restaurant business was good business model. There are thousands of books on this stuff. Terabytes of data out there. Come on man.
Ya, that's it. Seems the key is to have a bunch of shops. Restaurant franchises are a very common small business people get involved with. Tim Hortons always do well up here. Its such an old and ubiquitous franchise its been sort of tied into our national identity as 'being Canadian'. The Pizza Nova owner told me never to buy a franchise since they basically own the store and there's no autonomy. Then again, maybe he's just trying to scare away competition. Sounds like you owned a restaurant or two?
I thought we were talking about franchises, which you mentioned initially. From what I can see there are more of these than ever around, despite min wage increases.
I got a buddy who owns 10 bar/restaraunts, basically to make about 300k in a bar he has to do over 3 million in sales, if you have 20 fulltime staffers at a bar, and maybe 10 part timers (Which would be even less than a place like mcdonalds), and you raised minimum wage by six or seven bucks an hour they are out of business, or barely holding on by a thread, essentially if you raise minimum wage by six bucks an hour you can count on the cost of everything you pay for at a restaraunt doubling as well. Also in the example i gave because those are roughly the numbers he has given too me, it doesnt factor in that bars get trashed and need to sink in about a half a million dollars in renovations every 4-5 years just to keep the place looking fresh, and keep it from looking like a total shit hole, so the 300k per year net on 3 million ends up being even less, probably only about 200k per year on 3 million in sales. Keep in mind this is a guy who knows what hes doing, who owns 10 bars, and has had numerous bars fail, so he would be at the top end of bar owners, on the lower end most are hanging on by a thread.