Franchise or Independent?

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Restaurant

For
many entrepreneurs interested in the food service industry, the hardest decision
is whether they want to buy into a franchise of go it alone.
Both options have advantages and
disadvantages.
Let’s look at a few of
each so you have some idea of what is in store down each path.

Franchise
Finesse

When
you purchase a franchise you are purchasing a preset package. The value lies in
purchasing power, established branding, proven managerial approaches and built
in support. How much value you get
varies a great deal between franchises, but that is where you must do your
“homework.”

Consider
the advantage of buying your supplies in bulk. Large franchises typically save their franchisers as much as 3-4% on
food costs. That’s huge over the course
of the year. Existing branding means you
don’t have to spend the money to build a web presence. You won’t need to
develop advertising or generate interest in your menu because you are a known
commodity.

Perhaps
the biggest advantage for those new to the industry is the “out of the box”
convenience of having everything ready to go once the money is handed
over. No research, no searching for
suppliers, no learning from mistakes. Furthermore, you are likely to see a faster return on your investment.

On
the down side, you don’t have as much autonomy. You have to follow the rules determined by the franchise owner. That means they pick your restaurant dining
furniture, your uniforms, your menu, and everything else. You will have to pay
annual franchise fees for the privilege of being told what to do. You also don’t get to try new and innovative
ideas; at least not until you get approval from corporate.

Independent
Inspiration

Not
everyone is made for following orders and preset patterns. If you can’t stand to be told how to do
things, then chances are you will be irritated by the limitations inherent in a
franchise. When you open your own place,
you get to put your name on the door, and you get to follow your own vision,
from the menu to the furniture. If you want to decorate your place with green
bar tables and accessorize them with purple seating, it is your decision to
make.

The
one place where you can really shine as an independent is food. Small, successful restaurants are almost
always owned independently. With a good
chef you can quickly develop a reputation for excellence and creativity as you
are not locked into the mediocre recipes espoused by franchises.

The
catch is that all the risk is yours, as is the total expense, and financing can
be hard to find. You will have to build
relationships with suppliers while missing out on bulk discounts, and it will
take time to design and manage your inventory and create training. Furthermore, you will have to do that while
building your reputation, handling advertising and every other aspect that
comes with starting up a new business.

So,
which appeals to you more: independence or franchise? Only you can make the final call.