Chick-Fil-A and get 2 armored trucks to pick your money up.

If Subway offers a second franchise, you're almost forced to buy it or you will lose customers/money to another franchise owner.

Kharn

Posted Via AR15.Com Mobile

I don't know anything about franchises, but I will tell you that you should NEVER cash in your 401ks to finance a business venture. You're going to automatically lose a good chunk of it to taxes and penalties if you cash it out early. And if your business fails, then your nest egg is gone as well. You want to hold onto that money so that you have something to supplement you (if not completely support you) during retirement.

Save up some money to put cash down on your business, or try to finance as much as you can. Even if your business is a success, all you're going to do is create an income stream for when you retire while you continue to oversee your business. It's unlikely that your business will be profitable enough, long enough, to build another nest egg that lets you have cash on hand if needed.

Hey! Thanks for the insightful info!

Topic Moved

There are franchise business you can use with your 401k without the attendant penalties.

How much do you want to make and how much can you invest?

You can pretty much forget about a cash cow like McDonalds. I don't think they are even available to non-franchisees right now anyway. Chick-Fil-A gets tens of thousands of applicants for the few hundred they open each year.

If you want to make $75,000 a year, there are multiple options. If you want $400,000 a year, you won't do it without multiple locations.

Rather than start from the beginning, which it sounds like you are considering, have you looked into buying an existing business?

Talk to a business broker and see what they have. You can probably find something in an industry that interests you and their listings are already going concerns with employees, equipment and cash flow in place. You can find cash flow from $40k to $2million a year.

I've bought and sold a few. Look for businesses that look like a good concept, but aren't well run. You can use the low cash flow to get a better price, then use your business skills to bring the business up to speed and increase your cash flow without having to pay for it up front.

Some of these might be franchises, but the cost to transfer an existing franchise is usually far less than the initial franchise fee. Let someone else eat that cost.


Regarding the 401k - don't cash it out. I like graysonp's comment that it's nice to have something to fall back on if things go south, but if you really want to tap the equity, there are ways for the 401k to buy stock in your new company and you don't throw away 30-40% of your savings away down the tax drain.


Franchises will provide you a support structure, marketing and a stable supplier for you. They provide a regional, or national well known brand name (think Fred's Motel vs. Holiday Inn - I _know_ what I'm going to get at Holiday Inn, but never been to Fred's, so Fred's is a riskier choice for me, so I avoid the place, no matter how nice it is, unless I get a personal referral). Don't discount the value of a well known name.

Franchisors (the guys who sell you the franchise) will want a cut of your sales every month, maybe 7-10%. They can also force you to spend money on remodeling, upgrades, menu changes to fit the new national brand look. If you don't comply, they can take your franchise away.

You can find very basic information on various franchises at http://www.thefranchisemall.com

This will give you an idea for the investment size needed for each type of business.

Good luck in your search!