Find all School-related info fast with the new School-Specific MBA Forum

It is currently 20 Aug 2014, 01:28

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Why did I even bother applying to B School?

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
Manager
Manager
User avatar
Joined: 21 Feb 2009
Posts: 76
Followers: 0

Kudos [?]: 7 [0], given: 0

Re: Why did I even bother applying to B School? [#permalink] New post 24 Mar 2009, 17:18
Jerz wrote:
mbafwi - you may want to check out sites like http://franchisepundit.com/

I don't think McDonalds and other 'non-glamorous' franchises net all that much money, and often the financial projections assume the franchisee is also the manager.


http://www.bizben.com/listings/140124.php

I'm not sure if the adjusted net includes an adjustment for managers. However, let's just say conservatively, worst case scenario, that you need 1 manager at each. They'd get paid $35,000 * 9 = $315,000. $1 million net.

This is an interesting one, as they have a package deal of 9 of them. They are commanding a 5.7x EBITDA multiple. Generally, businesses in this range go for 4-5x cash flow.

Ex: https://www.businessbroker.net/Business ... 51161.aspx

Obviously, this is a lot easier said than done. The financial modeling is the easy part -- actually operating them effectively is the challenge. You need a certain personality type to succeed at this -- that's why McDonalds requires their people to start at the bottom. I couldn't do food service personally, but congrats to those who can.

Truthfully, I think the reason that MBA's dont bother with ownership of these businesses/franchises is because they tend to own/create bigger things. If you have an MBA from a top 7 school and a solid general management track record, you could conceivably lead an investor-backed leveraged buyout of a much larger business and still hold a sizable equity stake.

The kind of people that buy a McDonald's franchise are generally not smart enough (or connected enough) to lead a PE-backed buyout of a $100M or $500M business and grow it -- this requires a lot of the financial and management expertise that they teach you in business school.
Current Student
User avatar
Joined: 23 Jan 2009
Posts: 117
Schools: Fuqua
Followers: 2

Kudos [?]: 39 [0], given: 0

Re: Why did I even bother applying to B School? [#permalink] New post 25 Mar 2009, 11:52
DK wrote:
The kind of people that buy a McDonald's franchise are generally not smart enough (or connected enough) to lead a PE-backed buyout of a $100M or $500M business and grow it -- this requires a lot of the financial and management expertise that they teach you in business school.


Ouch.

Having had an extensive career in food service in high school and college, I'd like to posit here that most of the owners and managers of restaurants - particularly the flourishing ones - are *at least* AS smart as any MBA. They usually work harder, too. The idea that MBAs are any smarter than other successful businessmen out there is as popular in B-schools as it is wrong... we just happen to be folks with the information and resources to actually consider taking on $100k or more of debt with a straight face.

Owning a chain of franchised fast food restaurants won't make you rich fast, and nor is it a minimal investment in time. And nor is it beneath anyone here... I hope.
Current Student
User avatar
Joined: 09 Nov 2008
Posts: 216
Location: Evanston, IL
Schools: Kellogg '11 (MMM)
Followers: 1

Kudos [?]: 28 [0], given: 2

GMAT Tests User
Re: Why did I even bother applying to B School? [#permalink] New post 25 Mar 2009, 12:32
This thread is going downhill... and fast.
Director
Director
User avatar
Joined: 10 Jun 2006
Posts: 624
Followers: 4

Kudos [?]: 51 [0], given: 0

GMAT Tests User
Re: Why did I even bother applying to B School? [#permalink] New post 25 Mar 2009, 12:33
DK wrote:
If you have an MBA from a top 7 school and a solid general management track record, you could conceivably lead an investor-backed leveraged buyout of a much larger business and still hold a sizable equity stake.

The kind of people that buy a McDonald's franchise are generally not smart enough (or connected enough) to lead a PE-backed buyout of a $100M or $500M business and grow it -- this requires a lot of the financial and management expertise that they teach you in business school.


I would argue that the overwhelming majority of MBAs would not have the wherewithal to put this together either.
Re: Why did I even bother applying to B School?   [#permalink] 25 Mar 2009, 12:33
    Similar topics Author Replies Last post
Similar
Topics:
1 Experts publish their posts in the topic Should I even bother to consider the Top 10 schools? ninetwosix 2 28 Apr 2010, 20:50
Should I even bother? macandal 4 15 Dec 2009, 14:29
Should I even bother? jetblack1000 4 13 Jun 2009, 18:47
Should I bother applying the better schools? coolfish1103 9 04 Dec 2008, 12:53
Display posts from previous: Sort by

Why did I even bother applying to B School?

  Question banks Downloads My Bookmarks Reviews Important topics  

Go to page   Previous    1   2   3   4   [ 64 posts ] 



cron

GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.