for parent companies, this is the best investment model, in my opinion. people taking on debt to run/remodel restaurants is not a sustainable model. id love to pay higher wages, give more insurance, vacation time, etc. however the business model doesn't work in our favor. THIS business model does allow for creativity and attracting better restaurant talent.
The idea is not a bad one but will not work in their system as it is today.
1. Steak N Shake is one of the worst franchises you can own from corporate pricing control standpoint they control their franchisees pricing worse than McDonald's even if you thought that was not impossible.
2. If the new O/O's have no capital investment into the business, the issue is they do not have this massive debt re-payment thus putting these new style O/O's against the existing franchisee network which the existing franchisees might find hard to do and unprofitable promotions the company & Sardar Biglari come up with.
3. So the model is ok just will not work in a mixed system, you are always going to have some corporate person telling the franchisee who has 100's thousand in debt Operator X can do it down the street and it is bringing in customers why can't you do or why are you complaining.
2 comments:
for parent companies, this is the best investment model, in my opinion. people taking on debt to run/remodel restaurants is not a sustainable model. id love to pay higher wages, give more insurance, vacation time, etc. however the business model doesn't work in our favor. THIS business model does allow for creativity and attracting better restaurant talent.
The idea is not a bad one but will not work in their system as it is today.
1. Steak N Shake is one of the worst franchises you can own from corporate pricing control standpoint they control their franchisees pricing worse than McDonald's even if you thought that was not impossible.
2. If the new O/O's have no capital investment into the business, the issue is they do not have this massive debt re-payment thus putting these new style O/O's against the existing franchisee network which the existing franchisees might find hard to do and unprofitable promotions the company & Sardar Biglari come up with.
3. So the model is ok just will not work in a mixed system, you are always going to have some corporate person telling the franchisee who has 100's thousand in debt Operator X can do it down the street and it is bringing in customers why can't you do or why are you complaining.
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