Following a franchise system is critical in this area of business, particularly. Restaurants are notoriously difficult businesses to run, especially when considering the perishable food ordering that must be done regularly. A would-be entrepreneur may have experience in the kitchen, but not know how to oversee the wait-staff or vice versa. Even the most experienced restaurant worker can have challenges keeping up with all the moving parts: food, customer service, business and marketing.
Why it works
Restaurant franchises not only provides a good general outline to help these entreprenuers manage this business, the industry offers plenty of variety. Some food franchises can be started for $10,000, especially if its a kiosk business, or an add-on to another (such as a coffee bar in a bookstore). Of course, restaurants can cha-ching up the old costs, too, with renovation, rents and various licenses. Some can cost upwards of $1 million to get going. The recurring costs can also be staggering since food needs to be kept fresh, no matter how much or little is being sold.
Why it may not
Despite its obvious benefits over opening a stand-alone restaurant, there are still some pitfalls.
Picking the wrong type of food can be a death knell. No matter what the entreprenuer loves to eat, there must be a demand in the market, too. This is especially critical in ethnic restaurants. Maybe there’s a local pizza place that’s an institution–perhaps best to consider going head-to-head with this monster unless its weaknesses have been well-studied.
Those who can’t boil water or don’t do well at juggling mutliple tasks should reconsider a food franchise if they’re thinking of doing all the cooking. Those who burn everything they touch can’t be saved by the best franchise system. Likewise, for those who believe they could be the next top chef may be constrained by a food franchise, what with its consistent menu. Frankly, few food franchises are managed by those who do the cooking themselves. Mostly, restaurant franchises look for business owners who can then hire out the cooking duties. (Of course, as with any business, it’s critical that the owner have a working knowledge of what goes on in the kitchen.)
Food franchises can be a great way into an exciting, thriving business for those so inclined. But for those who love to create in the kitchen, it can be a frustrating experience. Understand the motivations for selecting a food franchise and then get the capital together to make sure the business can stand on its own for a while. These are two of the most crucial ways to food success.