This a line from the owner of SureSlim. See the full article here: Big Losers in SureSlim row head to court
What’s wrong with this picture?
The franchise started in Australia (it is now in receivorship).
They moved to New Zealand and started selling franchises there, now 17 of 21 franchises they sold have failed.
How about a “royalty and marketing fee” of 29%!!!! Let’s do the math. Assuming one’s business is at the top of the food chain and one of high profit, say 50% markup before payroll, overhead and taxes. You make $50.00 USD. It costs you $50 to deliver the goods and services (this is way over the top folks!). Now you pay your royalty fee of $29.00 to corporate? You have yet to pay taxes! Are the people that bought these pink elephants really that stupid! (I’m not letting the owners off the hook here, but for all the promises in the world, I’m not giving some gypsy who sells snake oil a 29% gross profit for the rest of my days!) So, even if you’re a genius and you’re making 50 cents on the dollar, that only leaves you with a Net Profit before taxes of 21%! No accountant in their right mind would ever approve a business model like that! After suffering through a year of that, I’d make the franchisor put up my family, feed my kids until he let me out of the contract. If that’s a cult, then so be it!
The governments of the US, Australia, New Zealand, the UK, Canda and others cannot and will not be bothered to keep this from happening! They don’t want to hear about it, which is why the FTC took over the reins in the 80s during the Reagan administration. Now it just goes to arbitration. The rich and the scheming are all in bed together. They will fleece you, piece you and hang you in the rafters if you are so naive to believe the gypsies and con men who call themselves “franchisors”. And when their best friends are bankers, mortgage criminals from Fannie Mae & Freddie Mac, would you expect anything less? Who do you think funds these stupid ventures? Securitizing franchising loans is a hot investment area now that real estate is worthless.
A word to those who are entertaining any type of franchise: Ask two lawyers, an accountant, your wife and anybody else who has a brain at least three times whether buying a franchise is a good thing. And don’t do it unless you have a 100% majority “YES!”. In essence, stay the hell away from franchising. Stop the bleeding.
Bloody
Bloody Franchise 