The most popular question that we often get from aspiring restaurateurs or even current restaurant owners is if it’s better to start your own standalone restaurant or acquire a Franchise of a leading Food Chain. For the first time restaurant owners it can get quite confusing; which is easier to operate, which one will give better returns, has minimal risk, etc.
Running an Independent Restaurant
In a Standalone Restaurant, you have the liberty of doing everything. You can choose a location that you like, decide the concept by yourself, serve what you want. You can implement any changes in your menu or theme all by yourself without any restrictions. The initial responsibility, however, is exponential.
- Entire control is in the hands of the owner.
- Low investments are needed.
- Steep learning curve, especially for new restaurateurs.
- All profits are pocketed by the owner.
- There is a high failure risk, especially for first-time restaurateurs.
- The business and operations can be consuming in terms of time and effort.
- There is usually lesser operational efficiency due to lack of standard rules and policies.
Running a Franchise Restaurant
In a Franchise Outlet, you are running someone else’s Brand. Everything is pre-decided, and you have to stick to the Brand rules. A Franchise Outlet is highly controlled, and most of the decisions are already made. You get a lot of help from the Franchisor in terms of employment training, supplies, etc. However, make no mistakes. Running a Franchise Outlet also requires a lot of efforts and management skills. There is a lot of demand from the main Brand to deliver consistent results. Regular audits are conducted to ensure that all the standards are met by the Outlet so as to keep up with the Brand image.
- Franchise outlets are easier to run for new and inexperienced restaurateurs as well.
- Fewer risks are involved as the concept has already been tried and tested.
- The Franchisor usually provides help to the Franchise in terms of staff training, supplies, equipment, marketing, etc.
- The cost of acquiring the Franchise is high, and there is also a weekly or monthly Royalty fee.
- The owner has little control over the restaurant. Lack of creative freedom and decision-making power can be frustrating.
Differences between a Franchise Restaurant and an Independent Restaurant.
Many experts believe that people who are from the Hospitality background such as the Chefs, Restaurant Managers, Hotel Management students, etc, are more suited for running their independent venture, while first-time restaurant owners should go for the Franchise way. However, there are several examples of people from different backgrounds running their own restaurant pretty well.
Ultimately it boils to the question why you want to open a restaurant. If you are a great cook or have always dreamed of opening your own restaurant then Franchise is probably not the way to go for you. If you consider running a restaurant as an investment and treat it like just any other business, then running a Franchise is a great idea.