All: I have an opportunity to go into a partnership with a successful owner of several GNC’s in a major metropolitan area, in a very good location (wealthy area, high traffic). In fact, the location is so good, that there was a little scable over which local owner would get the store. Anyway, the business arrangement is a 50/50 split of profits and a livable base salary for me in exchange of being “the man” at the store and putting my “sweat equity” into capturing a customer base. So, instead of having to come up with the start-up capital, I bring my years of training and supplement experience (and sales & business experience), taking the risk of spending my time on building a potential high income without actually gaining ownership; While my partner would put up the building and franchise cost, be there every step of the way (I have not run a retail store before), and take the risk that the store will not break even Q3 or Q4. Thank you all up front for your opinions on whether or not this is a good business arrangement, and if anyone has experience in contract lingo I would welcome your advice.
Just be prepare to spend long hours in the store. That is the downside of running your own business.
But if your not spending any captial, I say go for it.
I would also make sure to get a lawyer to look at your partnership agreement also. Since, he is putting up the capital and not you…
Thanks fitone, long hours are not problem and I plan to have an attourney look at the paperwork. Even though I trust this person, would it be better to ask for a regular commission in addition to the 50/50? Because in the end, it is my effort, and he isn’t really in touch with others like me that can be a “nutritional guide” like some GNC staff aren’t, and yet he could let me go without future benefit (plus that would bolster my salary a bit).
I would just stick w/ getting 50/50 and livable base salary.
One thing is to remember when someone offers you something like this don’t get to gready no matter how good you think you are.
He already putting up capital for the site. And then letting be partners w/o you putting any capital at all is already generous… No matter how much knowledge you have in weight training and nutrition.
Also don’t get to greedy. Some times getting into a business w/ a friend might ruin a freindship.Other times freindships grows…
In my opinion don’t ask for too much… He’s already putting a lot on the table.
Also remember to get a lawyer to look over the documents before you sign anything…
Good luck
Talk to other GNC franchisees!!! I spoke to a couple a few months ago. They ripped the parent company apart. It seems that the company doesn’t see the franchisees as partners anymore, they just see them as a way to make more money (off the franchisee). They just want to make as much money as possible. One franchisee was showing me products that GNC advertises on sale. The franchisee loses money on the sale items. Their cost is the same as the sale price. Then they pay GNC a royalty fee of 6%. He loses money when he makes a sale!!! They get killed on the sports nutrition products. Profits are good on vitamins and herbs, that’s where they make their $$. Don’t get stuck working your ass off for minimal $. One franchisee showed me a website for franchisees. There was a question posted about buying or selling a franchise right now. ALL replies were offering to sell. Needless to say (but I will anyway) I was thoroughly dissappointed and threw away the info that GNC mailed me that week.
Miko, so what has been said is that GNC Corp. is trying to sell off over stock without reducing distribution prices? Wow, and many frans are getting out? Did you talk to anyone who was doing well? It would be nice to hear about a good experience, but I know that most T-maggers are anti GNC (which I can understand- and will make my store better because I feel I can really help people, and hopefully make them want to come back). There is a good question: What would make people want to come back and get their supplements at any one GNC?
to mpomm:
Good customer service and good products… Will make a customer come back for more and more. And location. location, location!
Hey well I hope to be in your same situation after this semester. I’m the sales leader at a midwest franchise store. If you no your shit you can make great money, I no every in and out of our products and my body is a testiment to hard work and supports what I say about products(I actually believe in what I sell MAG-10, 1-ad stack). These two qualities are what can make or break a GNC worker or owner. After I graduate, I will move to a bigger city were another guy has a store that does huge volume I hope to make salary and a good chunk of sales. Let me now how it goes and shoot me any question you have. I have worked for a GNC for over 2 1/2 years.