How to start a frozen yogurt business

0:00When I was 21 years old, I wanted to be an entrepreneur. So, I did an extensive amount of research on how to open a frozen yogurt store. They on average make between $750,000 a year. And I thought, "$800,000 a year? That means I make $800,000 a year. I'm going to be rich." Doesn't really work that way. The average store that we're talking about does $2,000 plus a day. They run margins between 10 and 15%. The average Menchie's owner, for context, makes $93,000 a year take home. Most franchises have 6% ish of top line that goes straight to them. That may not sound like much, but if you're running 10% margin, that's 60% of your take home. And what most people don't know is that franchises will structure their fees so you make just enough that you can keep going and maybe if you're a good operator open another location, but not so much that you're going to get rich on it. So, they're only looking to optimize to beat the return on capital of the stock market by a decent amount.

0:50If the stock market gets you 10, they're going to try and get 20 to 25, and they're going to squeeze off the top and take the rest because of how good their model is.