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Is this a good time to buy into a newsagent franchise?

  • 19-01-2009 8:55pm
    #1
    gnolan
    Registered Users, Registered Users 2 Posts: 1,501 ✭✭✭


    A friend of mine is thinking of buying into an O'Briens or Spar franchise. He is yet to purchase the retail property and is wondering whether it is a good idea at all. Is there any money to be made, or is the competition from the likes of Tesco and Dunnes too overpowering?


Comments

  • #2
    niceirishfella
    Closed Accounts Posts: 5,538 ✭✭✭niceirishfella


    Gezzzzzzz, hard to advise.
    need to know lots more and the 2 investments are so different.


  • #3
    gnolan
    Registered Users, Registered Users 2 Posts: 1,501 ✭✭✭gnolan


    Well its more-so O'Briens than Spar. What else do u need to know, cos i don't really know what to tell him. Think the property is between 250 - 300k, and located in rathfarnham or knocklyon or somewhere in that area.


  • #4
    DubTony
    Registered Users, Registered Users 2 Posts: 3,267 ✭✭✭DubTony


    What experience has he got? Is it an investment or will he be opertaing the business himself?


  • #5
    Burial
    Registered Users, Registered Users 2 Posts: 817 ✭✭✭Burial


    Why is he asking you is it a good idea?! Tell him to go do his market research first and then open up shop. He shouldn't be relying on us or you for this information.

    If you go into Spar you'll have to do that euro deal things they have, and from what I hear it's a good chunk of the overall business for pittence profit.

    As for the O'Briens, I can't really comment on that. I've only been into an O'Briens once.

    I have never owned a shop, so my opinion is probably invalid, but I still thought I'd like to add...


  • #6
    gnolan
    Registered Users, Registered Users 2 Posts: 1,501 ✭✭✭gnolan


    DubTony wrote: »
    What experience has he got? Is it an investment or will he be opertaing the business himself?

    As far as running a shop goes, he has no experience, but he has a lifetime of project management under his belt. He is planning on running the business himself. Personally i don't believe its a good idea, but having said that i don't know much about these types of investments and the money (if any) to be made.


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  • #7
    YellowSheep
    Registered Users, Registered Users 2 Posts: 384 ✭✭YellowSheep


    I dont have any advise on the Spar issue but plenty on the O'Brien one. If your friend is really thinking of running his/her own "O'Briens" please ask him to contact me. I would advise that he does a unit himself without paying over the odds on franchise fee and others. This concept is out dated. I would have a couple of ideas.
    Cheers Oliver


  • #8
    DubTony
    Registered Users, Registered Users 2 Posts: 3,267 ✭✭✭DubTony


    gnolan wrote: »
    As far as running a shop goes, he has no experience, but he has a lifetime of project management under his belt. He is planning on running the business himself. Personally i don't believe its a good idea, but having said that i don't know much about these types of investments and the money (if any) to be made.

    Well in that case I'd be inclined to leave the Spar idea alone. I don't think the convenience store business is something you can just walk into. There's no surer business to piss away a couple of hundred thousand with no guarantee of getting it back. Add credit crunch, recession and supermarkets performing a convenience role, and you have a business that was a lot tougher than ten years ago. I don't know that there are so many cash-rich / time poor (I hate that phrase) people out there any more. Another issue is location. I know that area very well and could offer some advice on it if you want to PM me.

    I learnt from the ground up in the c-store business, what I'd regard as the hard way. While the right people can be hired, an owner needs to keep his eye on it all the time. I hired a manager a few years ago who was so busy increasing turnover by 10% that he successfully reduced the margin from 24% to 19%. (Do the maths). I believe that an owner of a c-store needs to have more than his finger on the pulse, he needs his whole body on it. Thankless business really, definitely not for a newbie.

    Can't advise on O'Briens.

    edit: As for the money to be made. A friend owns a €40k a week store and takes €100,000 a year from it. He almost lives in the place.


  • #9
    niceirishfella
    Closed Accounts Posts: 5,538 ✭✭✭niceirishfella


    DubTony wrote: »
    As for the money to be made. A friend owns a €40k a week store and takes €100,000 a year from it. He almost lives in the place.


    Hmmmmmmmm, yeah, see, you gotta have a life too.
    To me what he's doing is just not worth it, 100k or no 100k.


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