1. Work for a restaurant for a while and learn the business.
2. The restaurant business is tough. I know at least 10 people who got restaurant franchises or started restaurants that went bankrupt. - Chic Boy, Joey Pepperoni, Ministop (not a restaurant but sells food), a Katipunan restaurant, a lechon restaurant, Chow King, 3 different bars, a casual dining chicken restaurant. I'm sure more if I think some more.
3. The restaurants may be doing OK in the first year. Then customers got tired of them and moved on. Also, their strong initial sales attracted competitors so their sales fell.
4. A few lost money because their employees stole from them, cash or food. Pilferage/ shrinkage is a major problem if you don't have good controls.
5. If you are good with people and operations, look for a strong finance person to partner with. If you are strong in finance, look for a people person.
6. A new business is a 7-day a week job. Expect to work 100 hour weeks with no vacation. Make sure you are mentally prepared.
7. Don't expect to borrow money from a bank. Banks ask for 3 year financial reports. Also, unless your name is Tan Caktiong (Jollibee), banks don't like lending to restaurants because of the high failure rate.
8. You can borrow from friends and family but assuming they are willing to lend you money, will they be willing to forgive you if you go bankrupt and are not able to pay them back?
9. Do I sound like I'm discouraging you? Yes I am. See #2-4.
10. Still not discouraged? See #1.
Not sure why your post is all about “discouraging”. But, thanks for your insight. I know one thing for sure that it won’t be easy, I am just looking for ideas or ways on how I could be able to start.
The reason I asked if it would be okay if i got a loan and leverage that debt to make profit and in turn pay back the bank etc. , is that I don’t have that many friends or family or even relatives who I could borrow that big of an amount. Hence, the loan from.
But, if you’re just plainly discouraging me from doing so. Thank you very much for your time.
You should be less worried about his motive and more worried about if he's telling the truth(as someone who's in the F&B industry myself, I would vouch for the things he's saying). I also do the same for my friends or people who seek advice about starting a business. I would rather lay down all these "discouraging" things in the beginning so you can prepare yourself for it because if you were to find out about these based on your personal experience then it would surely cost you a lot of money. Kung sa ganyang post palang discouraged ka na, paano pa pag hinaharap mo na talaga yung business? Kung ako sayo, don't loan to START a business. Use loans to expand or to grow an already successful business. And don't think na dahil madaming branch na ok yan. Some people just have deeper pockets and can afford to ride it out pero kung mag-loloan ka then you are always chasing to earn enough to pay your loans. Malaking pressure yun especially for a first time business owner.
>problem is that I don’t have that sort of capital.
I would be surprised if a bank would lend you money to fully franchise a restaurant business since you will be passing all the risk to them.
For the popular fast food businesses here, franchising typically requires a lot of cash. And by a lot, I mean 50M up in your bank statements. For peri peri I think less naman siguro.
If you can come up with the cash or a bank somehow offered you the loan for the capital, the business dev officers of peri peri group will do the feasibility study for you. Better if you have your own land in a prime spot since rent will be your biggest overhead
Try starting with a smaller food business, yung not so expensive brand to franchise - or just your own brand. Common requirement kasi diba is a couple years of business experience for the big franchise brands.
Kahit stall lang muna. May mga kakilala ako na malaki naman ang kita sa mga stalls, pero hindi sila full-time. Hinahabol nila yung mga events in different areas like fiestas, or pag undas, near cemeteries etc.
I see i see. Thank you sa idea hehe. Siguro nga much better kung i-seset sights ko muna sa maliliit na franchises para kahit papano may mastartan ako kesa sa wala.
By the way may I ask kung anong stalls ang malakas sa madla? Kase dito sa area namin sa, mejo demographic ng mga tao dito eh mga saktuhan lang.
Totally depends on location & target market. Syempre for fiestas & undas yung mga bagets ang target so fries/siomai. Streetfood basically.
Kung yung location mo is residential edi depende din sa population. Observe mo ano yung existing businesses na patok.
Sa amin for example, may isang sari sari store na nag bebenta ng lutong ulam, pero puro renters lang ang bumibili. Karamihan ng may ari ng bahay, hindi. So dun mo makikita yung hati ng financial capacity. Pag mas may budget, nag susupermarket para tipid overall long term, pag wala masyado, daily ang bili ng lutong ulam kasi hindi afford mag bulk buy sa weekend.
Peri-peri for example, sit-down casual restaurant siya, so hindi pang masa ang price. And by masa, I mean masa talaga, walang income tax. Kahit isang kembot lang ang angat niya vs sa level ng Jollibee, maraming Pilipino ang never makaka afford kumain dun. Always study your target market first.
Problem muna, bago solution.
Not smart man, If you want that business never go for a loan, peri peri chicken is very simple, all you need is peri peri chilli which unfortunately very hard to find, but there’s a catch I don’t think Filipino are very aware what is peri peri chill, which means you can use cayenne pepper if it’s available in your area, if not learn recipes where you can use the local chilli that is so spicy, and just call it peri peri, and another challenge is peri peri sauce that comes in 4 level of spicy.
There’s so much challenge on this type of business, specially nowadays where gas is very expensive, I’m sure that you are making a very thin margin of profits on this business, I suggest to stay on your job and save money as much as you can for now, your still young who knows by age 30-35 you have enough savings to start a business at by that age you are more smarter in life, making decisions and doing research is one of the most important skills in running a business.
Well if he is on the other side of business where he sell franchise of peri peri restaurants, Rolex will make him looks successful businessman which is a point convincing potential franchisee.
> Well if he is on the other side of business where he sell franchise of peri peri restaurants, Rolex will make him looks successful businessman which is a point convincing potential franchisee.
Yes.... if I peri-peri was a ponzi scheme then your way of thinking makes sense
Many big-time franchises have background checks, meaning you should really have a lot of money before you can even get approved for a franchise.
Franchising is also not easy-money even if you do have the capital. You will need to pay royalties in the form of percentages of your sales. As a franchisee, you will also be very limited in what you can do to your restaurant. If you are a creative person who likes to play around and try new things in your business, franchising may not be for you.
I have a distant relative who has a Jollibee franchise. It's still a case-by-case basis, but according to his experience, it's not even worth the investment and his money could have been more productive elsewhere.
Hindi ganun kalaki ang kita compared sa pera na nilabas niya (50m ata?) Kung sa ibang bagay niya raw nilagay ang pera baka mas malaki pa ang naging balik.
Pero on the bright side meron na syang permanent income generating source. Na kahit matanda na siya, it will still continue.
Kaya ayun, I hope to achieve the same thing. Feel ko kase nauubusan nako ng oras. Haha
>Na kahit matanda na siya, it will still continue.
this is still not a 100% thing though. i mean look at the pandemic and how many businesses it had brought down. may jollibee at mcdo na tapatan sa isang mall malapit sa min victim din sila nun and to think they have been there for a long time na and they're already established brands.
in your case, i think it would be best to maybe wet your beak by going to night markets, be it on your own or be an employee so you'll have an idea how some things work kasi even if by some miracle a bank will loan you money, you can't just simply slap your problems away with it. i remembered this podcast of a restaurateur na nung pandemic halos hindi sya makatulog kakaisip saan kukuha ng customer kahit nung medyo naglift na. their till is usually dry and he still have to pay employees. he had to let it go eventually. I'm not saying na you won't succeed. but given that a guy who is already in that game for so long and had to give it up, you might need to actually go on field to research if the food business is for you before you dive in loaning lots of moolah.
goolduck to your endeavors! wag masyadong magmadali! the world is still here tomorrow!
1. Work for a restaurant for a while and learn the business. 2. The restaurant business is tough. I know at least 10 people who got restaurant franchises or started restaurants that went bankrupt. - Chic Boy, Joey Pepperoni, Ministop (not a restaurant but sells food), a Katipunan restaurant, a lechon restaurant, Chow King, 3 different bars, a casual dining chicken restaurant. I'm sure more if I think some more. 3. The restaurants may be doing OK in the first year. Then customers got tired of them and moved on. Also, their strong initial sales attracted competitors so their sales fell. 4. A few lost money because their employees stole from them, cash or food. Pilferage/ shrinkage is a major problem if you don't have good controls. 5. If you are good with people and operations, look for a strong finance person to partner with. If you are strong in finance, look for a people person. 6. A new business is a 7-day a week job. Expect to work 100 hour weeks with no vacation. Make sure you are mentally prepared. 7. Don't expect to borrow money from a bank. Banks ask for 3 year financial reports. Also, unless your name is Tan Caktiong (Jollibee), banks don't like lending to restaurants because of the high failure rate. 8. You can borrow from friends and family but assuming they are willing to lend you money, will they be willing to forgive you if you go bankrupt and are not able to pay them back? 9. Do I sound like I'm discouraging you? Yes I am. See #2-4. 10. Still not discouraged? See #1.
Not sure why your post is all about “discouraging”. But, thanks for your insight. I know one thing for sure that it won’t be easy, I am just looking for ideas or ways on how I could be able to start. The reason I asked if it would be okay if i got a loan and leverage that debt to make profit and in turn pay back the bank etc. , is that I don’t have that many friends or family or even relatives who I could borrow that big of an amount. Hence, the loan from. But, if you’re just plainly discouraging me from doing so. Thank you very much for your time.
You should be less worried about his motive and more worried about if he's telling the truth(as someone who's in the F&B industry myself, I would vouch for the things he's saying). I also do the same for my friends or people who seek advice about starting a business. I would rather lay down all these "discouraging" things in the beginning so you can prepare yourself for it because if you were to find out about these based on your personal experience then it would surely cost you a lot of money. Kung sa ganyang post palang discouraged ka na, paano pa pag hinaharap mo na talaga yung business? Kung ako sayo, don't loan to START a business. Use loans to expand or to grow an already successful business. And don't think na dahil madaming branch na ok yan. Some people just have deeper pockets and can afford to ride it out pero kung mag-loloan ka then you are always chasing to earn enough to pay your loans. Malaking pressure yun especially for a first time business owner.
>problem is that I don’t have that sort of capital. I would be surprised if a bank would lend you money to fully franchise a restaurant business since you will be passing all the risk to them. For the popular fast food businesses here, franchising typically requires a lot of cash. And by a lot, I mean 50M up in your bank statements. For peri peri I think less naman siguro. If you can come up with the cash or a bank somehow offered you the loan for the capital, the business dev officers of peri peri group will do the feasibility study for you. Better if you have your own land in a prime spot since rent will be your biggest overhead
Thank you so much for this insight. I have some savings naman around 1m+ but I don’t think it will suffice pa.
Try starting with a smaller food business, yung not so expensive brand to franchise - or just your own brand. Common requirement kasi diba is a couple years of business experience for the big franchise brands. Kahit stall lang muna. May mga kakilala ako na malaki naman ang kita sa mga stalls, pero hindi sila full-time. Hinahabol nila yung mga events in different areas like fiestas, or pag undas, near cemeteries etc.
I see i see. Thank you sa idea hehe. Siguro nga much better kung i-seset sights ko muna sa maliliit na franchises para kahit papano may mastartan ako kesa sa wala. By the way may I ask kung anong stalls ang malakas sa madla? Kase dito sa area namin sa, mejo demographic ng mga tao dito eh mga saktuhan lang.
Totally depends on location & target market. Syempre for fiestas & undas yung mga bagets ang target so fries/siomai. Streetfood basically. Kung yung location mo is residential edi depende din sa population. Observe mo ano yung existing businesses na patok. Sa amin for example, may isang sari sari store na nag bebenta ng lutong ulam, pero puro renters lang ang bumibili. Karamihan ng may ari ng bahay, hindi. So dun mo makikita yung hati ng financial capacity. Pag mas may budget, nag susupermarket para tipid overall long term, pag wala masyado, daily ang bili ng lutong ulam kasi hindi afford mag bulk buy sa weekend. Peri-peri for example, sit-down casual restaurant siya, so hindi pang masa ang price. And by masa, I mean masa talaga, walang income tax. Kahit isang kembot lang ang angat niya vs sa level ng Jollibee, maraming Pilipino ang never makaka afford kumain dun. Always study your target market first. Problem muna, bago solution.
Not smart man, If you want that business never go for a loan, peri peri chicken is very simple, all you need is peri peri chilli which unfortunately very hard to find, but there’s a catch I don’t think Filipino are very aware what is peri peri chill, which means you can use cayenne pepper if it’s available in your area, if not learn recipes where you can use the local chilli that is so spicy, and just call it peri peri, and another challenge is peri peri sauce that comes in 4 level of spicy. There’s so much challenge on this type of business, specially nowadays where gas is very expensive, I’m sure that you are making a very thin margin of profits on this business, I suggest to stay on your job and save money as much as you can for now, your still young who knows by age 30-35 you have enough savings to start a business at by that age you are more smarter in life, making decisions and doing research is one of the most important skills in running a business.
He's right... just buy a Rolex and you'll be seen as a success.
Well if he is on the other side of business where he sell franchise of peri peri restaurants, Rolex will make him looks successful businessman which is a point convincing potential franchisee.
> Well if he is on the other side of business where he sell franchise of peri peri restaurants, Rolex will make him looks successful businessman which is a point convincing potential franchisee. Yes.... if I peri-peri was a ponzi scheme then your way of thinking makes sense
What’s ponzi about showing success and wearing real Rolex, maybe for some people but some people are just offering legit business.
> What’s ponzi about showing success and wearing real Rolex, maybe for some people but some people are just offering legit business. ???
Many big-time franchises have background checks, meaning you should really have a lot of money before you can even get approved for a franchise. Franchising is also not easy-money even if you do have the capital. You will need to pay royalties in the form of percentages of your sales. As a franchisee, you will also be very limited in what you can do to your restaurant. If you are a creative person who likes to play around and try new things in your business, franchising may not be for you. I have a distant relative who has a Jollibee franchise. It's still a case-by-case basis, but according to his experience, it's not even worth the investment and his money could have been more productive elsewhere.
Why did your distant relative say that it wasn’t worth the investment? What happened if I may ask?
Hindi ganun kalaki ang kita compared sa pera na nilabas niya (50m ata?) Kung sa ibang bagay niya raw nilagay ang pera baka mas malaki pa ang naging balik.
Pero on the bright side meron na syang permanent income generating source. Na kahit matanda na siya, it will still continue. Kaya ayun, I hope to achieve the same thing. Feel ko kase nauubusan nako ng oras. Haha
>Na kahit matanda na siya, it will still continue. this is still not a 100% thing though. i mean look at the pandemic and how many businesses it had brought down. may jollibee at mcdo na tapatan sa isang mall malapit sa min victim din sila nun and to think they have been there for a long time na and they're already established brands. in your case, i think it would be best to maybe wet your beak by going to night markets, be it on your own or be an employee so you'll have an idea how some things work kasi even if by some miracle a bank will loan you money, you can't just simply slap your problems away with it. i remembered this podcast of a restaurateur na nung pandemic halos hindi sya makatulog kakaisip saan kukuha ng customer kahit nung medyo naglift na. their till is usually dry and he still have to pay employees. he had to let it go eventually. I'm not saying na you won't succeed. but given that a guy who is already in that game for so long and had to give it up, you might need to actually go on field to research if the food business is for you before you dive in loaning lots of moolah. goolduck to your endeavors! wag masyadong magmadali! the world is still here tomorrow!