Quick! I say ‘franchise’, you say…McDonald’s? Well, despite the vast array of franchise possibilities out there, it is nonetheless true that when most people hear the word franchise, they think of food. That is thanks in large part to the amazing success that many fast food giants have had in growing by franchising. And, despite the increase in franchising throughout many different industries, buying a restaurant franchise still remains one of the most promising opportunities out there today.
According to a study by PricewaterhouseCoopers, a total of $1.53 trillion was generated along with 18 million jobs in America as a result of the over 760,000 franchised businesses throughout the country in 2001. That means that franchises represent roughly 10 percent of the private sector economy in the U.S. And, among the 75 different industry groups, restaurants represent by far the largest percentage of that growth. So, whether you’re interested in buying into one, or expanding your own business, the opportunity in the food industry is most definitely there.
For those of you interested in getting yourself a food franchise, there are a number of things you need to be aware of. First of all, the advantages are obvious: from being familiar establishments to the traditional lending sources to having a record of proven success and typically high demand, food establishments can offer much promise for the future.
However, the pitfalls of owning a restaurant franchise are not to be overlooked. In most cases, setting up shop requires a large initial investment from the franchisee, not to mention the costs involved in meeting government zoning and code regulations. High staff turnover rates and low margins are also factors to take into consideration before making your purchase.
If you’re one of the ones that are looking into franchising your own restaurant, whether due to lack of money, time, or people, you will have a number of obstacles in your way. Capital and time are two of the most major ones. After all, expanding your business does not happen overnight. It takes time to do everything from finding a site for your outlet, to finding sufficient financing, to hiring and training your staff.
You also need to make sure that your restaurant is of the kind that can be franchised. Is it unique and professional enough that people will want to become a part of your team? Can that uniqueness in your design and process be replicated? And, will you be able to generate an adequate return on your investment to make all of the time and hard work worthwhile? All that being said, if you are willing to put in that time and energy, it can be done!
Develop a growth plan for your restaurant franchise that takes into account such things as how fast and where you want to expand, and what kind of support you’ll provide. Next, draw up a franchise contract and create whatever manuals or training plans will be needed. Then, go out and find your future business partners! Market, get your new franchise out there, and generate interest among your prospects. And, last but not least, enjoy the ride!
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