I appreciate your passion. He CAN'T raise the
Post# of 3935
(Total Views: 1022)
Posted On: 01/15/2018 6:47:12 AM
Re: Honeycomb777 #3835
I appreciate your passion.
He CAN'T raise the pps. He doesn't have the capital or collateral to expand the business. The stores are losing money.
So no money for expansion and losing money. That's where he's at. He'll throw some Hail Marys (offering) and see what happens. If he tries to open more than one location it will most likely not happen.
It's that simple. I know you have posted about how easy it would be for someone to throw millions of dollars at GIGL but no matter how wealthy someone is, they don't throw good money at bad money.
It's a slam dunk in your mind. But to an objective investor, it's far from it.
I think that is the part you are stuck on. Personal bias.
I do know that money was offered to GIGL and it was turned down.
If I were brought in to turn this around, I would bring in an equity investor to fund one new location and give them an option on ownership in a set territory or number of new locations with a funding amount attached to each new store.
Then we'd build one new store at a time (increase them from 2500 sq ft to 3,500-5,000 sq ft each--Increasing the store size would help the bottom line a lot) and once that was operational, start with the next new one. I would build a few more in the LA/Orange County before looking elsewhere. The early growth will need more day to day babysitting and GIGL doesn't have the manpower to spread out around the US yet.
I would build one at a time and hammer away at making the chain profitable.
Once they are profitable, then you can explore franchising. I would guess, without crunching numbers, it would take 5-15 locations to get some economy of scale profitability.
You don't try to franchise a money losing business. You franchise a profitable one. Just like you don't go to a new car dealer to buy a restoration project, you go to a dealer to buy a new car that works.
He CAN'T raise the pps. He doesn't have the capital or collateral to expand the business. The stores are losing money.
So no money for expansion and losing money. That's where he's at. He'll throw some Hail Marys (offering) and see what happens. If he tries to open more than one location it will most likely not happen.
It's that simple. I know you have posted about how easy it would be for someone to throw millions of dollars at GIGL but no matter how wealthy someone is, they don't throw good money at bad money.
It's a slam dunk in your mind. But to an objective investor, it's far from it.
I think that is the part you are stuck on. Personal bias.
I do know that money was offered to GIGL and it was turned down.
If I were brought in to turn this around, I would bring in an equity investor to fund one new location and give them an option on ownership in a set territory or number of new locations with a funding amount attached to each new store.
Then we'd build one new store at a time (increase them from 2500 sq ft to 3,500-5,000 sq ft each--Increasing the store size would help the bottom line a lot) and once that was operational, start with the next new one. I would build a few more in the LA/Orange County before looking elsewhere. The early growth will need more day to day babysitting and GIGL doesn't have the manpower to spread out around the US yet.
I would build one at a time and hammer away at making the chain profitable.
Once they are profitable, then you can explore franchising. I would guess, without crunching numbers, it would take 5-15 locations to get some economy of scale profitability.
You don't try to franchise a money losing business. You franchise a profitable one. Just like you don't go to a new car dealer to buy a restoration project, you go to a dealer to buy a new car that works.
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