Starting Your Franchise
When I discuss about running a franchise business, the majority of people automatically assume I’m talking restaurant franchises. That’s because most franchises in the food industry are wildly successful and in turn growing in numbers and popularity. You’ll be hard pressed to find independent restaurants at all anymore as a result of the success of food franchises.
The Best Parts About Franchising
The best part is that despite the growing amount of food franchises, buying a restaurant franchise is still among the few close to being a guarantee opportunity on earth of business today. It’s true that there are range of difficult issues that come along with owning a restaurant franchise, but that’s true with any business. Here are both sides of owning a food franchise showing both the advantages and disadvantages of them:
Built-in demand – For years upon years, people have been hardwired to grab something to eat at a franchise food chain when they are hungry and away from home. The only thing you need to consider is the future of your product and will there be a demand for it in your local geographical area.
When it comes to finding funding for a food operation business, the process is extremely easy and not as complicated. The high revenue generated by some of the food franchises doesn’t hurt, either.
Performance history of success – Since a typical food franchise has multiple franchisees, it is easy to determine how successful or not they are. You can see if they have a record of success in addition to where and what demographics are one of the most successful. Using this kind of information available, you can make a well-informed decision before making an investment.
Prestige – Depending on who you talk to, people often think that all restaurant owners are people of high society that also includes a touch of glamor. There are a lot of franchise owners that get into the restaurant business for this reason alone.
Disadvantages of Franchising
Labor – I’m sure you’ve noticed that most food businesses need a great deal of employees to function properly and smoothly with many of those workers being low-paid. That results in a workforce of unreliable employees with a high turnover rate. Finding and keeping qualified employees is a major challenge for a food franchise.
It’s true that food franchises often see high revenues but the net margins are often overlooked. You are also susceptible to food spoilage and theft along with other issues only found in the food industry.
Expensive initial investment – A food franchise will require a substantial investment from you to get started. You need to purchase many items in advance if you want to run the business. Not only do you need to pay for the food and labor but also ovens, grease disposal, venting, furniture, and maintenance among many other expenses.