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Posts Tagged ‘Restaurant Franchising’

Buy a Franchise? Or Start Your Own?

Monday, June 28th, 2010


Starting your own business can be a difficult and long drawn out process, full of pitfalls and traps for the novice entrepreneur and unfortunately a significant number of businesses never reach the break-even stage.

To buy a franchise business allows you to shorten the learning curve considerably. Not only will you instantly be trading under an established name – which has most likely taken years, if not decades, of nurturing and promoting to establish – but you will also have access to the business know-how and experience which has made the franchise a success. The person who founded the business into which you may buy a franchise would have possessed a whole lot of sheer bloody-mindedness and extraordinary drive to not only have created the business concept in the first place, but to steer it to where is now – a (hopefully) successful franchise. If you do buy a franchise opportunity, you will be buying into, and be able to benefit from, the same culture of success.

So what are the reasons to NOT buy a franchise? The two main reasons are cost and restrictions.

Starting a franchise will often cost more upfront than starting an original business concept. This is because you will have to pay a franchise fee which covers the franchise development costs, franchise marketing expenses and the franchise training program. There will the be additional costs of a franchise royalty and usually you will need to contribute to the franchise advertising fund. Additionally the franchisor may insist on a minimum amount of working capital to be available.

Whilst these expenses may seem high, they will normally be realistic and help ensure that your new business is successful. On the other hand starting your own business may be possible on a shoe-string budget, but it will be a lot tougher to get to the break-even point.

Some of the restrictions that the franchise agreement imposes on their franchisees are there for a good reason: The franchise business model has been finely honed, possibly over decades, and one of the constant battles a franchisor has is resisting the implementation of every new bright idea that franchisors want to try. Uniformity is important in the franchise world. Every customer who is familiar with the franchise chain expects to see the same products, the same branding and the same “look and feel”. It is one of the aspects of franchising that appeals to customers.

Another restriction that may apply is one of territory. Although this is becoming less prevalent these days, many franchises still make it a requirement to define a territory in which the franchise may operate. Such a practise may have the effect of reducing competition in a particular territory and so give a new franchise a better chance of success. On the other hand owning a franchise territory may place heavy burdens on the franchisee who may be expected to develop the territory and reach certain milestones within a given period.

So there are many factors to consider when making the decision whether to buy a franchise or start a brand new business concept, but for many, the discipline and guidance from the franchisor will make buying a franchise a wiser choice.

Restaurant Franchising Opportunities

Thursday, June 3rd, 2010

Long gone are the days when restaurant franchising was purely synonymous with fast food burger joints and pizza parlours. The industry has now branched out and restaurant franchises include not only themed food from countries all across the globe, but also internet cafes, coffee stalls, tea shops, sandwich bars and cookie outlets.

Many involve several food and drink types, combining coffee, smoothies, juice and other drinks with muffins, bagels, baguettes and wraps. One of the newest restaurant franchising opportunities in the UK focuses on the health trend, with all menu items having some health benefit. Healthy eating venues emphasise their use of fresh, quality nutritionally balanced, high-flavour ingredients and pride themselves on their “green” credentials, their aim being to run a responsible and sustainable business.

Until recently, healthy eating in the UK had a (possibly deserved) reputation for bland and boring food, bound to leave you still feeling hungry. However, limp lettuce leaves and dry crackers have been consigned to the past, according to one new healthy eating restaurant franchise which is planning to expand across London and the south east and hopes to revolutionise the healthy eating market.

To create an exciting new healthy food experience for the UK market, the new business has a large salad and wrap bar with a choice of fifteen house combinations, or customers can create their own. It also has a range of healthy sandwiches and wraps, with full nutritional and calorific content displayed. Their breakfast menu includes a range of toasted granary bread, lean bacon rolls on low GI granary bread, yoghurts and granola as well as fresh juices and fair-trade, organic coffee. In the winter months they plan to serve hot salads and soups, handmade chillies and stews, Scottish porridge and jacket potatoes.

Prices at restaurants and cafes specialising in healthy food tend to be higher than those at fast food outlets and are therefore usually found in affluent areas, or where consumers are more likely to be health or image conscious, such as health clubs, gyms, leisure centres and private clinics or hospitals.