Starting Your Restaurant Franchise

restaurant mistakes

Starting Up Your Franchise

When we talk about running a franchise as a business, the majority of people automatically assume we’re talking restaurant franchises. That’s because most franchises in the food industry are wildly successful and in turn grow in numbers and popularity easily. While independent restaurants have their place, many new business owners prefer opening a franchise.

Pros and Cons

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 of business success 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. It’s important to be wary when starting a new business. You need to do research regarding finances, training, health codes and more. Starting a franchise resolves many of these issues for you. Here are both sides of owning a food franchise showing both the advantages and disadvantages of them.

The Best Parts About Franchising

Built-in demand – For decades now, people have been hardwired to grab something to eat at a franchise food chain when they are hungry and away from home. This is pariticularly true for fast food. 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. Be sure to take advantage of delivery and order to pick up processes too. This will increase your demand.

The food service industry is always changing
The food service industry is always changing

Performance history of success – Since a typical restaurant chain 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. It also helps you as a business owner as the reputation is already established for you!

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. Saying you own a franchise can be a real source of pride and confidence, and you may end up owning more than one! There are a lot of franchise owners that get into the restaurant business for this reason alone.

Disadvantages of Franchising

Labor – 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. High turnover costs you money!
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.

Media – As we have seen in the news with large franchises, if one restaurant has a problem or people get sick, people will likely avoid yours! No matter how hard you work to keep your restaurant franchise run as smoothly and perfectly, it can be affected by the reputation of other restaurants. Before purchasing a franchise, make sure the company has solid and positive reputation to increase your chances of success. Also, have a backup plan if the franchise attracts negative attention.