Thinking about buying a franchise, ask a few questions:-
Etyres have been selling franchises for around 20 years, and on average appear to sell around 10 a year, so that’s around 200 they have sold. Yet they only have around 50 active franchises. However you do the maths it’s always poor.
So, please explain - Where have the other 150 gone, have they gone bust, just packed up, earnt so much money they walked away. The reality is that even if this is 30% wrong in the assumption, then that’s still a poor result.
On average they appear to have sold the franchises for around £20,000, that’s £4,000, 000 they have taken for franchisees that at best have a 25% success rate, but in real terms 100% have failed as no territory achieves the figures and profit they suggest.
So still tempted:-
Take the etyres declared turnover, available from companies house, divide this by the number of actual franchisees, (now at this time etyres need the number of franchisees to actually be quite low!) You now have the average turnover per franchisee, note you need to look at the actual number of areas a franchisee has, for example Luton 5, Manchester 2 etc.
So now you have your turnover per franchisee area. Note exclude out of area work as this is not a right and you can’t depend on this as Bowman could sell it at any time. Take around 20-30% off and this should give you a reliable figure for each franchisee. With this your are expected to pay all your costs, loans and a wage. The numbers won’t work for you.
Work out your sales margin per tyre:-
• Deduct the cost for old tyre disposal (say 75p)
• Deduct the amount for a new vale (say 7p)
• Deduct the amount for balance weights (say 10p)
• Deduct the cost of new tyre
• Deduct the etyres handling charge (5%)
• Deduct etyres management fees on your entire turnover (yes you pay twice) (6%)
You now have the margin per tyre.
Now think about the bills to pay:-
• Fuel for the van
• Insurance for the van and public liability
• Loan repayments for the van and equipment
• Mobile phone bill
And a few more bills will be sent from etyres
• Add words
• Leaflets
• Stationary
• Anything they feel like, Could be a promotion computer costs anything they want to at all
And a few more things:-
You will need somewhere to store scrap tyres, Bowman may say not but do you really want 2-300 scrap tyres at your home, are you even allowed to keep them a home they are a fire hazard and you live in a residential area.
You will need somewhere to have your deliveries, you need a place to accept deliveries as you can’t stay in all day waiting for your deliveries as you need to be out fitting tyres, and anyway 4+ deliveries a day from your suppliers in a residential area, will your neighbours complain.
So after all this still tempted, I hope not, but if you are ask etyres to guarantee levels of business you will receive, also note that needs to be part of your contract (not just an email saying its all wonderful) as etyres have some extremely strong non-reliance clauses in their agreement, in essence anything they say written or not won’t count!
So I hope this helps in making your decision not to buy a franchise from this lot.
0 comments