four-tips-franchising-your-restaurant_0

Restaurant Franchising vs. Starting Your Own Independent Restaurant

Opening a restaurant is one of the most popular business ideas today. If managed properly, a restaurant is very profitable, as evidenced by many success stories reported by the media. Starting your own independent restaurant is not the only option you have, since there are restaurant franchising opportunities that you can choose from, many of which are from internationally known brands.

Food-and-Beverage-Franchises

Overview

Before making the final choice between starting an independent restaurant or opting for a franchise, you need to have a clear understanding of both options:

Independent – This is typically one or a few restaurants owned by a person or a group of people. These people are in charge of everything, from financing, to inventing the menu, to marketing. Most of them have already worked in the industry before they decided to put up their own business. There is a declining number of independent restaurants in the country, however, there are reasons for it, and it doesn’t necessarily have anything to do with profitability.

Franchise – These are your McDonalds, KFCs, Pizza Huts, and Subways. When a restaurant becomes successful and the owner wants to expand, he or she will open the business for franchising. This will allow other individuals or groups to purchase the rights to operate an outlet. The franchisee will pay a certain fee and receive training and marketing materials, among other benefits from the franchisor (owner).

Challenges and Benefits

Funds – To be able to open a franchise, a person will need to have readily-available cash (the amount varies). He or she will need to provide proof that the business can stay afloat for at least a few months. Aside from submitting financial documents, the franchise applicant will undergo a rigid set of interviews. On the other hand, an independent restaurant owner will also need considerable funds. However, they are free to seek financing from banks and other lenders, unlike with franchising wherein you need to show proof that you have enough money for capital in the bank.

Responsibilities and Control – The independent owner will have to build everything from scratch, including building or leasing the property, hiring staff, developing processes (i.e. food storage, customer service, etc.), and others. The owner will have full creative control of the business and bring it to success the way he or she knows how to do it.

The franchisee will already be provided with a tried and tested operating process, which is great because it minimizes the number of mistakes you will make. However, franchisees do not have complete control of many aspects of the business such as choosing the menu, advertising, etc.

ExperienceSome franchisors will require their applicants to have a background in the restaurant business. However, they will still provide coaching and trainings. For an independent owner, a solid experience in the industry is also required because they’ll need to run the business on their own.

There are a lot of entrepreneurs who get a franchise first before opening their own independent café or diner. This way, they will gain the necessary experience to increase the chances of success of their future endeavors.

Leave a Reply