franchised clubs

[monkee28]

I was wondering if its worthwhile to buy a franchised club? What do the offer? I know there have been a few clubs worldwide that have not been successful. Brands that i know are that are franchises.
All Star Cafe opened and closed in Australia
Pacha there is some many clubs around the world.Ibiza, Spain, Brazil etc..
Ministry Of Sound. A few locations around the world
HOME - Was meant to be huge. But unsucessful franchises in London, Ibiza. I believe Australia was the only successful and got sold.

From the experts on this site? What are your thoughts on this business model?

[ministry]

are any of these avaliable ? why pay someone 50-100k just to use there name and then pay them 5-10% a month to stay open ? why not do your own thing ? all of those clubs were new at one time.

[Michael Black]

Don't confuse a private group expanding and branding with a franchise expanding and branding further- they are two different things. If you were going to go in as an investor/partner in the expansion of a branded megaclub, maybe. But, just to make them money paying a franchise fee then I would say no. You still would need very deep pockets beyond this and I doubt a great branded megaclub would risk ruining its name if a franchisee could not operate it at their established standards. Just because you have the name and basic design and marketing concepts they used, does not mean it would be successful. Do you have the management experience to run a club that size? There are too many variables, most of all the exact market you are attempting to duplicate it in may greatly affect its success verses the original location. You could have a slightly different market and a different competitive environment, etc..

We are not talking McDonalds or Subway here with relatively simple training and exact control measures. And, a typical franchise is bought for a widely established branded name and concept with a proven service or product in many markets. It is almost always a mainstream business accepted by the masses. Also, they are long term while top clubs often have a very short life cycle targeted to a much more limited market. The problem is by the time they get to say the 4th or 5th club, the first ones may have ended their lifecyle which hurts the branding and expansion. And the risk and entry money level required is well beyond 99.99% of the potential franchisees. Some customers may see the 4th or 5th new club as part of the old club that's been around for years. People want new when it comes to the next trendy club.

It just doesn't make sense. The only exception I can think of, would be a neighborhood bar and grill or perhaps an added gaming concept bar,restaurant, and entertainment complex aimed at a much wider market. I could see franchising something like that, or even a small concept bar, but not a megaclub.

Good Luck!,

Mike

[crystal]

Pacha is definitely very very big and present in numerous locations around the world, but as Michael says I wouldn't consider it guaranteed success to go for a famous name... You will need to know how to run it and make it work yourself plus big famous clubs as you mention have ended up closing down as well.