Top Advantages And Disadvantages Of Restaurant Franchise
A restaurant franchise is a contractual agreement between the franchiser, who is the restaurant’s corporate owner and the franchisee who is the current operator. The franchisee is responsible for managing the daily activities of the restaurant, whereas the franchiser offers support, helps in marketing and also provides training to the new franchisees. There are many franchise opportunities and you can opt for any type of restaurant franchises like:
- Fast food
The fast-food services are those services which do not provide table services, but they allow customers to buy food that is already made, and they also allow the customers to take their food away with them.
These are services which include cafes and other takeout restaurants where customers get access to a larger menu as compared to a fast-food restaurant
- Full service
These restaurants offer table services with a variety of food and drink options. Also, in this type of franchise, the customers are allowed to pay for their meal at the end of their dining experience.
ADVANTAGES OF OWNING A RESTAURANT FRANCHISE
- When you own a restaurant franchise, you get a well-established name. This way they get to benefit from instant brand recognition which will in turn help in gaining the trust of the consumers. With the help of a restaurant franchise, you do not need to start from scratch and you will get a customer base due to the familiarity and recognition of the franchise. It will be easier for the new franchise owners to get immediate customer following since the franchiser has already taken up the risks to form a base
- Franchising with a recognized brand will also make it easier for you to get loans from the bank. This is because getting loans from lenders these days has become very difficult and they want to finance a business that is reputed in the market. Hence, if your franchise with a well-known brand, the banks will easily give you loans and also the franchiser will take care of other supplies and equipment like furniture. So, you can always grab the new franchise opportunity and make your finance process much easier
- The amount of training and support will prove beneficial in the long run. The franchisees will receive extensive training where they will learn the key steps before actually launching their restaurants. The franchisers will use their knowledge from past experiences and will thereby give you a better understanding of the different procedures and techniques in order to own and operate a profitable business. Therefore, you should be ready for the training process when you own the franchise business.
DISADVANTAGES OF OWNING A RESTAURANT FRANCHISE
- The first disadvantage is that the initial investment is high as the franchisers expect an upfront payment for the kitchen equipment, building maintenance and many more. Other costs may also include royalty payments and marketing costs. So, it is necessary that you ask thoroughly about the costs before you invest in a franchise
- Another disadvantage is that there will be limited independence, and the franchise owners will not have the freedom to come up with new innovations and creativity to run a franchise. Although, the franchise owners will own the restaurant they are not the owner of the brand and so they have to operate by the methods and procedures of the brand. So, whenever you opt for franchise opportunities in Gujarat, you should be aware of this factor
- Also, it might be difficult to expand your business due to the restrictions of the parent company. There is less competition as the parent companies do not want many franchises competing with each other and this leads to the limited growth of the franchise
- Going against the brand’s standards will immediately make you lose the restaurant franchise. Also, it is up to the franchisers to decide the renewal of your contract, and at the end of the contract it is up to them to change the terms and conditions as well
Stepping into the best franchise opportunities in India can be exciting and challenging at the same time. So, research properly and decide for yourself keeping in mind the advantages and disadvantages.