June 30, 2004
If you wanted to be a franchisee ...
Posted by Gordon Smith

Which franchise would you choose? Having watched people choose franchises, I am always impressed at the power of the moment to overwhelm good business sense. Especially in fast food, where fads are plentiful. Starting and maintaining a food franchise that is successful over the long term is no small feat. Even a brand as established as Krispy Kreme, with roots dating back almost 70 years, has hits some speed bumps lately.

My hunch -- completely uninformed by data -- is that food franchises with a full menu (the various burger restaurants, for example) are more likely to have staying power than food franchises with a specialty product (pastries, juices, ice cream, etc.). It's also pretty clear that the oldest food franchises, like McDonald's, have lost a lot of their appeal. They still get a lot of business, but I wonder if purchasing such a franchise is still a great value proposition.

Which leads me to Gandolfo's Deli. Yesterday, while perusing a BYU sports board, I found an entry with the heading, "GANDOLFO'S COMING TO VEGAS!!!" This was followed by a response: "GANDOLPHO'S TO NORTH CAROLINA TOO." The caps belong to the writers. I had never heard of Gandolfo's, but that sort of excitement catches my eye. From the website (linked immediately above), this appears to be a company in heavy growth mode. The front page proclaims: "Start your own franchise and experience success." The focus here is on potential franchisees, not customers.

My initial response is to wonder whether the world needs another deli. Actually, Madison could use one, but still. Is this likely to be a long-term success? The nice thing about delis is that their menus have some room for play. And sandwiches are not going out of style anytime soon. This is a franchise that might be worth exploring.

Speaking of good franchises, a burger place that I still like is Culver's. They are now celebrating their 25th anniversary, so this is not a flash in the pan. They have a broad menu (considering the format) and high-quality food. Everything there is better than anything at McDonald's.

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