Have you thought about starting a food franchise? Does the idea of owning a restaurant business appeal to you? You are not alone! Food franchises are a favorite pick among entrepreneurs for many reasons- their success and popularity, the high demand and the added prestige of being a ‘restaurateur’ thrown in as a bonus. If you think you possess the requirements and skills necessary to be able to run a successful food franchise, then this may be just the thing for you. But before you decide, weigh your options and consider the pros and cons you will have to face as a franchisee.
The Good Side
This is a very lucrative business. Why? Food is a “need”. When you are hungry, away from home, in a hurry, have something to celebrate or just tired of eating at home, what do you think of? That’s right! The delicious food so widely advertised by popular food franchises. This is a wide and varied market- and that includes you and me. So what is it that draws us to these franchises?
• Brand Recognition- We see it everywhere. We’ve tried it, and we know it’s good. Others have recommended it too. This means the marketing has already been taken care of. So when the franchise manages to impress the target market, we look for them. We seek them out.
• Easier financing opportunities- banks and other investors have more confidence in food finances because of the higher revenues. Raising the capital to start a food franchise is much less complicated, so if you’ve got a well formulated business plan, finding financing is easy.
• High success rate- the number of successful food franchises is large, and growing. In fact, finding a restaurant that is not a franchise is relatively hard!
• You know how well a franchise is doing just by taking a look at their franchisees; you can even talk to them and discuss options with them to help you decide.
• Ease of operation- The equipment, training and support is provided by the franchiser and the work involved is streamlined- so there’s no guesswork involved.
• If the location you have in mind is suited to the type of food franchise you’re looking at, you have bagged a sustainable business.
The Bad Side
As with any business, food franchises has their own share of challenges. It is crucial to look into the disadvantages, in order to make an informed decision. To be able to run a thriving food business, you have to have special skills- an understanding of what “works”, and be able to make things work as efficiently as possible. The disadvantages include:
• Dedication to a sometimes demanding profession as most food outlets are open on weekends and into the night.
• High initial investment- In addition to procuring an ideally suited location and paying to own the franchise, the initial costs are quite high as you need equipment, staff, furnishing, interior décor and washroom facilities, adequate parking and more. The profits may also be small as the food market is price sensitive, and the real gain would come with a large sales volume.
• Labor issues- restaurants require low wage staff that is paid by the hour- a group consisting mostly of students and others with little or no experience. This means you have a somewhat unreliable and difficult to manage workforce. You have to increase the efficiency of your team, and think about hiring a manager to help maintain it in the long run.
• Food Issues- though it may be possible to make a fairly accurate estimate of the patrons, it is difficult to be exact and over production can lead to food spoilage and a great degree of waste, not to mention food being stolen as well.
Ponder on these points awhile before you make your decision. As you may have already guessed mere assumption about how a franchise is run based on being a diner and critic at popular food franchises, just won’t do. That said, all businesses come with challenges and it is up to you to overcome them.
Bio: Bizymoms has been helping women start work at home businesses for over 10 years. Now, with our Franchises for Moms section giving great home business ideas, women can start their own franchise business! |
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