NEW AGE WAR
THE NEW AGE WAR-
Franchise restaurant vs independent/standalone restaurant.
Going into business for yourself is a major life decision. One path is to start your own business or buy an existing one. Another is to choose the franchising model and buy into a proven system with a known brand name. Each path has its own promise, as well as perils. Once the choice is made, the question becomes what type of business to choose.
Weighing the benefits and costs of franchising against those a traditional (non-franchised) business should begin with a self-assessment. Are you able to follow a prescribed system, or do you need the freedom to innovate and experiment? Do you need total independence in every aspect, or can you follow a ready-made system 100 percent?
In terms of "cost/benefit," there is a price to pay for buying into a franchise system. But there also is a price to pay in starting your own business. These main pros and cons, detailed below, must be weighed against the benefits, in terms of both investment and personal values and goals.
Brand awareness If you walk into any of the 30,000 Subways or McDonald's around the world, you're guaranteed your meal will be the same (or nearly) no matter where you are. That's the franchise proposition of uniformity and replicability. Customers know this and seek out the reliability and familiarity of their favourite brands, which have been established over years or decades.
Control/autonomy When you start your own business, you're in control over every detail, large and small. With a franchise business, you sign an agreement to follow the rules laid out by the franchisor. Yes, you control your franchise unit in terms of the culture and values you set, and who you hire and fire, but you must follow the franchisor's operating system.
Operating system Would you rather invent the wheel, or buy one ready-made? If you're the creative, innovative type, starting your own business is the way to go. A franchised business provides a complete, out-of-the-box business, ready to "plug and play." You have to follow the operating manual. If you can't, fly solo.
Equipment and supplies Outfitting your new business with everything you need to succeed means researching what equipment to buy, finding suppliers, and negotiating deals. You may buy a pizza oven that's too big or buy more fresh food than you need; or you may buy one that's too small and run short on capacity as your business grows, or run short on pepperoni on a busy evening or weekend. Franchisors can provide invaluable help in knowing both what and how much to buy - often at reduced prices.
Financing Starting your own business can cost less than buying a franchise, and many entrepreneurs have started on a shoestring budget and succeeded. But most new businesses require startup capital, especially for retail space and equipment.
Speed to market You can build the most beautiful retail store or buy the perfect van for your mobile business and fill both with the most expensive equipment. That takes time, as well as money. Or you can sign up with a franchisor who's done this hundreds of times and be handed a shopping list of exactly what you need to set up shop, allowing you to open for business more quickly than if you had to research it all on your own.
Summary
Running an Independent restaurant:-
Pros:-
Entire control is in the hands of the owner
Low investment
Steep learning curve
All profits are pocketed by owner
Cons:-
High risk of failure
Effort and time consuming
Less efficiency due to lack of standard rules and policies
Running an Franchise restaurant:-
Pros:-
Easy to operate and run for new entrepreneurs
Fewer risk
Franchisor providing help to the franchiser in staffing, supplies, equipment, marketing, etc.
Cons:-
High cost with weekly or monthly Royalty fee
The owner has little control over the restaurant
Lack of creativity and decision making power