RFG takes 8% or 10% out of total sales, which is not a big deal. The biggest overheads are rental and labour. Franchisees generally pay a lower price for ingredients than independent small businesses.
Those failed franchisees in the Failfax report lost $200k a year, how much sales did they make? 500k? out of which RFG took 50k, that still leaves a $150k hole. More likely they only had $300k sales, because $500k would have at least let them breakeven. This means the 10% cut by the franchisor is not the reason behind the failure. Not everyone is destined to succeed!
The RFG brand shops I visited had 4-6 employees, why would the owner hire extra employees if he/she can't turn a profit?
Do you think all the franchisees are dumber than you?
Visits to RFG franchises over the RFG, page-7
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