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The priciest burger in the world costing a patron no more than $175 dollars can be bought at The Wall Street Burger Shoppe!! Despite the recent worries of an economic downturn, the proprietors of The Wall Street Burger Shoppe say sales for their whooping burger is consistent and in fact during times of economic trouble, patrons actually love to comfort eat, despite the price! Apparently there is always a market for luxury….

RICHARD NOUVEAU BURGER. $175
Prime Kobe beef, grilled and topped with aged gruyere, shaved
black truff les, foie gras and golden truff le mayonnaise

Source: Daily News

Credits: Mendez Mayita

What do you think of the fabulous gold-leaf burger for sale at $175? Would you buy it? Let me know and share your comments with the rest of us franchise bloggers out there!

Franchise Reporter

Franchising is a complex business and it is often difficult to know where to turn for reliable advice. Well, you can ask me to begin with! If there is any question you may have relating to the franchise industry- from understanding a particular franchise industry, to legal or financial terminology and much more- I will research the question for you and write back with a comprehensive answer to your query.

View the following franchisee question and reply…

Q. “Room for Negotiation?”
Is there any room for negotiation when it comes to the franchise asking price?

Josie Mellanby

A:
Hey Josie thanks for your question and it’s an interesting one too!

There is no reason why you should not feel free to raise the issue, but I believe you will find that franchisors generally tend to decline to bargain with regard to setting up costs, which will usually include the initial franchise fee.

Their argument is that if some franchisees were to pay less than others within the system, word would spread quickly throughout the franchise network and ill feeling would inevitably result.

However, sometimes there can be room for negotiation depending on individual circumstances and so on. For instance, if you were to consider becoming the first “pilot” franchisee of a newly-established network, you might find the franchisor willing to agree to a reduction in price. Alternatively, you may be able to negotiate deferred terms instead of being required to pay in full at the outset.

In regards to franchise re-sales, the opportunity to purchase an established business from an out-going franchisee is continuing to grow within the US. This means the supply of franchise re-sales is outweighing the demand to take over existing businesses, therefore if you were to buy an established business you could have room to haggle with the franchisor in question.

Whichever route you might consider taking in becoming a franchisee, do keep in mind that price should not be viewed in isolation. More important is the comprehensiveness of the franchise package/Agreement, which should provide for everything you need to operate the business efficiently.

Franchise Reporter

The Franchisee Q&A section on this blog will give potential franchisees like you the opportunity to ask any questions you want answered relating to the franchise industry. View this week’s Franchisee Q&A posted by a fellow franchisee blogger on establishing a 401(k) to purchase a franchise opportunity…Read the reply here and if you have a franchise question you would like answered, leave me a comment at the bottom of this blog post…

Q.

If you establish a 401(k) to purchase a franchise via company stock, do you have to allow employees to purchase company stock via their 401(k)s? Can one establish a 401(k) and then take out a loan against it for funding the business? Or is it too difficult to get the funds into the C Corp from the individual?

Claudia Robbins Blog Post: Franchise Financing – Using an IRA or Other Retirement Savings…

A:

As a general rule, you are required to extend the offer to purchase company stock to any employee who is employed at the time of the offer. However, if you are purchasing stock in a corporation that will finance the purchase of a new franchise, there may be no employees other than yourself and your spouse at the time of the offer, so it may not be an issue.

If you hire employees after the stock offering is completed, you will, however, be required to offer them participation in the 401(k) plan; this only means that they will be eligible to donate a portion of their salary into this savings vehicle. You will not be required to do any company matching, etc., but will have the option to do so should you wish to.

If you are purchasing an existing franchise from someone else, however, you are now dealing with some very complex federal securities laws and Internal Revenue Code requirements.

You may have to offer the stock – called “Qualified Employer Securities” in this type of transaction – to existing employees, depending on how you structure the purchase. This is why it is very important to work with an experienced company or competent tax and ERISA attorney to facilitate this type of transaction, regardless of the type of business you are purchasing.

Bottom Line: Work with a qualified, experienced company to facilitate this stock transaction to make sure you are dealing with any securities requirements correctly.

As to your second question: For some people, establishing a 401(k) for their business then taking a loan out of that 401(k) plan can make sense. However, the law limits the amount of the loan to 50% of the employee’s balance, or $50,000, whichever is smaller.

Consequently, you cannot raise nearly as much capital through a loan. In addition, since the term of such a 401(k) loan is typically five years, the monthly payments can be very high in comparison to other forms of financing.

You will also need to remain employed at this place of business until the loan is paid off; otherwise, you will have to pay it in full with any interest upon termination of employment — or face taxes and penalties on the unpaid balance.

To be clear, when investing retirement money into the stock of a business though a correctly structured plan, 100% of the retirement funds can be accessed and, as it is not a loan, there is no monthly payment associated with the investment.

About Guidant Financial Group…

Guidant is the leading provider of self-directed IRA’s and business-funding solutions through IRAs and 401(k)s. For more information on self-directed IRAs or Business financing please contact Guidant Financial Group. You can contact Guidant by clicking on the links provided through there website or by visiting their profile on this website.

If you have any franchise legal or financial based questions you would like answered by the Guidant Financial Group team, please post your comments here…

Franchise Reporter

Coffee is the second largest commodity consumed in the U.S. On average consumers drink 400 billion cups of coffee every year, and this is only an approximate value! View my top ten fun coffee facts and be informed about what makes the coffee franchise industry as profitable as it is…

Coffee is well established as the nation’s favorite hot beverage, but did you know about the history of coffee or how many cups of coffee consumers drink on average every year?

1.

According to the Brazil Information Center “80% of adults in the U.S. drink coffee on a regular basis, and over half drink coffee every day, at a rate of 18.6 gallons per capita per year”! (2002)

2.

The “Boston Tea Party” in 1773 was the historical event that began the phenomenon in coffee drinking in the US.

During this time, the heavy tax imposed by the British on American colonies decreased the popularity of tea and increased the popularity of coffee making it the Number 1 beverage in a number of years!

3.

Coffee is the most popular beverage in the world, with more than 400 billion cups consumed per year. The U.S. is responsible for consuming 35% of the 400 billion cups consumed every year!

4.

Coffee is the second largest commodity in the U.S., with annual sales exceeding $18 billion – 75 percent of the caffeine consumed in the U.S. is from coffee.

5.

Total U.S. retail sales (coffee house and cafes) increased “from $3.5 billion in 1998 to $6.9 billion in 2003“. (Mintel International, 2004)

6.

The Latte originated in Italy; if you asked for a latte in Italy and you were expecting coffee, think again! It’s made entirely of hot milk. Yet if you ask for a café latte you will get the American version of the hot beverage…

7.

Coffee drinkers average about 3.1 cups of coffee per day.

Currently there are approximately 12,000 coffee shops in the U.S., and that number is expected to increase to 50,000+ by 2010 to meet the ever-growing demand for a cup of Joe.

8.

The popular phrase for a cup of coffee- “a cup of Joe”- originated during WWII where popular comic character “G.I. Joe” became synonymous with enlisted army men drinking their favorite cup of coffee!

9.

Many consumers consider the espresso to be the strongest coffee. However it only contains 1/3 of the strength of a regular brewed coffee!

10.

On average, the “live expectancy of a properly cared for coffee plant is 40 to 50 years, with some plants living as long as 100 years”. (Gourmet Coffee Zone)

Interesting stuff!

Franchise Reporter

I decided to compile a list of my top 5 wackiest franchise concepts that are making big bucks in the franchise industry. Customers are buying products and services that are different, unique and downright wacky and some very clever franchisors are capitalizing on consumer’s needs for individual products and services.

View the following list of “wacky franchises”:

1. If Hooters were a barber shop then you would have Knockouts!

Description:

“Customers wait in the comfortable ring side seats and watch sport on TV and drink a complimentary beer or soda, and then are called for services ranging from scalp massage, facials and of course men’s hair-cuts.”

Wacky-credentials:

The combination of hairdressing, “hooters” stylists and beer makes this wacky franchise No.1!

2. Think Olives- just olives and that’s it!

Description:

“WeOlive is an on-line retail franchise operation promoting and selling…yes, you’ve guessed it…olives! Customers can buy olive oil, olive vinaigrettes, olive oil t-shirts and olive oil gift baskets, the list goes on.”

Wacky-credentials:

I think this franchise has taken the “olive” concept a little bit too far, bordering on the insane!

3. Take a photo, print it and frame it- there’s a unique franchise idea!

Description: Photography Franchise

“The Great Frame Up provides customers with personalized frames for personal and business photos, pictures and all art work- where picture framing has become an art.”

Wacky-credentials:

Not much to say here, its all about getting the “frame” right!

4. Cream Puffs have never tasted so good!

Description:

“Beard Papa’s cream filled pastries are a hit across the US. Originating from Japan, Beard Papa’s No.1 filled pastry is pursuing world domination in serving up the “World’s Best Cream Puffs”.

Wacky-credentials:

Cream Puffs from Japan! This franchise certainly takes the biscuit…

5. Peanut Butter makes the world go around…

Description:

P.B. Loco food franchise- everything with peanut butter please!

Wacky-credentials:

Curry spice peanut butter sandwich; PB Gone Banannas- banannas, granola, yoghurt and peanut butter; Smoothies- smoothies made with, ah, peanut butter! Need I say more?

Please let me know of any weird and wonderful franchise or business concepts you have come across…or tell me what you think of these “wacky” franchise concepts…

Franchise Reporter