While the restaurant industry can be difficult to succeed in, the numbers that are out there are just a bit misleading. Yes more restaurants fail than succeed, but that is more because the people that are opening up restaurants have no idea what they are doing. How many times have we heard about movie stars that open a hot spot and it goes belly up less than 2 years later? Today, it is even more competitive and knowing the benefits of restaurant franchise can give a future restaurant owner a leg up on the competition.
Known Brands – for just about any concept that is out there, there is also a franchise that is available. Salad Works, McDonald’s and Outback are all perfect examples of brand names for restaurants that are filled all the time. Normally, when people have an option, they will go with a proven brand versus risking spending their money at a place that is a risk.
National Advertising – when a restaurant owner decides to step out on their own, everything that they do to promote the restaurant falls into their lap. A franchise operator has the benefit of national advertising that is taken right out of the franchise fees. This gets the restaurant name in the spotlight and keeps it there.
Success – there are far fewer franchise failures than there are Mom and Pop failures. There is an enormous amount of research that goes into deciding the right locations for restaurants and very few times will a place like McDonald’s open a location in a bad spot. The owner is the one that benefits from all of their corporations hard work.
Knowledge – this may be the number one reason that most restaurants fail. People think that they can have a snappy concept and it will work and they know nothing about ordering, labor percentages, product yields and shelf life. Franchises educate their owners and some go as far to have their own universities that must be graduated from.
Money, Money, Money – getting a loan from a bank is almost impossible for a restaurant owner unless they can prove without a doubt that their concept has a chance of working. When dealing with a franchise, the model for success is already in place and this promotes confidence in the lending institutions. Some companies will also work out financing themselves and in essence, back their own restaurants.
Product Quality – the independent restaurant owner is literally at the mercy of their suppliers. You get what they give you and unless you are a major account, there is little bargaining power. A franchise has the power of every restaurant across the country behind it and because they will often have an approved vendor list that all restaurants must buy from, the prices are much cheaper and the product is much better.
Yes, the restaurant industry is a tough one to succeed in, but it is far from impossible. Even if a restaurant owner wants to eventually open their own concept, it would be a smart move to open a franchise first and see how restaurants are meant to be run. It may not be the ideal concept for someone, but the knowledge gained will pay of tenfold down the road.
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