While at my regular watering hole (actually a coffee shop), I got a chance to talk to the young owner of a long-established food cart franchise and here are some of his concerns:
1. The franchisees feel that they are not being looked after well enough by the franchisor. Some concerns are late delivery of goods and pricing issues;
2. Franchisees are advised only 2 - 3 days before a price change;
3. SRPs went up but product margin and product size remain the same;
4. When they paid for the franchise which included the food cart, the franchisee still had to purchase some ancillary items such as trays and other containers from the franchisor which tend to increase the capital outlay;
5. He tried to get a second outlet at a well-known grocery chain but quit after a couple of weeks when he felt sales were so low that it was doubtful he would meet his rent;
6. Rent is now at the P30,000 plus level for a food cart and some locations are asking for a percentage of sales just like permanent tenants
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