| When I talk about running a franchise business, | | | | determine how successful or not they are. You |
| most people automatically assume I'm talking | | | | can see if they have a record of success along |
| restaurant franchises. That's because most | | | | with where and what demographics are the most |
| franchises in the food industry are wildly | | | | successful. With this type of information available, |
| successful and in turn growing in numbers and | | | | you can make a well-informed decision before |
| popularity. You'll be hard pressed to find | | | | making an investment. |
| independent restaurants at all anymore due to the | | | | - Prestige - Depending on who you speak to, |
| success of food franchises. | | | | people often think that all restaurant owners are |
| The best part is that despite the growing number | | | | people of high society that also comes with a |
| of food franchises, buying a restaurant franchise | | | | touch of glamor. There are a lot of franchise |
| is still one of the few close to being a guarantee | | | | owners that get into the restaurant business for |
| opportunity in the world of business today. It's | | | | this reason alone. |
| true that there are number of difficult issues that | | | | Disadvantages |
| come with owning a restaurant franchise, but | | | | - Labor - I'm sure you've noticed that most food |
| that's true with any business. Here are both sides | | | | businesses need a lot of employees to function |
| of owning a food franchise showing both the | | | | properly and smoothly with the majority of those |
| advantages and disadvantages of them: | | | | workers being low-paid. That leads to a |
| Advantages | | | | workforce of unreliable employees with a high |
| - Built-in demand - For years upon years, people | | | | turnover rate. Finding and keeping qualified |
| have been hardwired to grab something to eat at | | | | employees is a major challenge for a food |
| a franchise food chain when they are hungry and | | | | franchise. |
| away from home. This is a major advantage for | | | | - Low margins - The food industry is very price |
| any start up company. It's years of marketing | | | | sensitive, more so in the world of fast food |
| already done for you. The only thing you need to | | | | chains. This leaves you with a very fine line to |
| consider is the future of your product and will | | | | walk with cost of goods and labor and making a |
| there be a demand for it in your local geographical | | | | profit. It's true that food franchises often see high |
| area. | | | | revenues but the net margins are often |
| - Financing - You can choose a number of | | | | overlooked. You are also susceptible to food |
| different outlets to find financing. When it comes | | | | spoilage and theft along with other issues only |
| to finding funding for a food operation business, | | | | found in the food industry. |
| the process is extremely easy and not as | | | | - Expensive initial investment - A food franchise |
| complicated. The reason is because banks typically | | | | will require a substantial investment from you in |
| know what is involved with opening a restaurant | | | | order to get started. You need to pay for many |
| and feel more comfortable approving the loans. | | | | items up front in order to run the business. Not |
| The high revenue generated by some of the | | | | only do you need to pay for the food and labor |
| food franchises doesn't hurt, either. | | | | but also ovens, grease disposal, venting, furniture, |
| - Track record of success - Since a typical food | | | | and maintenance among many other expenses. |
| franchise has multiple franchisees, it is easy to | | | | |