With countries around the world lifting remaining Covid-19 restrictions, people are finally putting the “new normal” aside, and getting back to the good old days of dining out with friends and family. For entrepreneurs in particular, this return to normalcy represents entirely new opportunities that have remained under lock and key since 2020.
The question is whether these would-be business people should try their luck at starting an independent restaurant, or invest in a franchise location. Believe it or not, a few things have changed since before the pandemic altered our daily lives, and they may play a pivotal role in your decision to get involved in the restaurant business.
FREEDOM VS. PROFIT – IS IT REALLY SO SIMPLE?
Many would-be restaurateurs agonize over the decision to adopt the franchise model, or go it alone, and start a restaurant from scratch. There is no right or wrong answer here – merely an honest self-examination of what you yourself want to achieve. If your dream is to open up a fine dining restaurant in a posh part of town and start grinding away for those coveted Michelin Stars, then you’ve doubtlessly made up your mind. However, such an endeavor takes years to achieve, with no guarantee of success. In fact, most restaurants fold in less than a year, and that number may increase, hot on the heels of a waning pandemic and a still-nervous populace.
Franchise restaurants, by comparison, bypass a lot of the trial and error normally associated with starting a restaurant from scratch. Franchisees have access to a business model that has been rigorously tested – and continuously refined – for years on end, which takes a lot of the financial guesswork out of the equation. The caveat is that franchisees must adhere to the rules and standards laid down by the franchisor that they are licensing from. If the head office decides to change the menu, update the brand image, or pursue a particular marketing initiative that you don’t like, you won’t have the freedom to veto the decision.
Once again, there is no right or wrong answer here. Franchise restaurants merely have an established pedigree and reputation which act as a boost when you make it out of the gate. Plus, they’re able to weather economic storms far greater than conventional restaurants, as the pandemic years clearly demonstrated. According to recession predictions from Franchising.com, most franchisors expect to increase their growth anywhere from 5% to 11% throughout 2023 alone.
THE NAME IS THE GAME
Franchise restaurants will always hold an advantage over a new startup restaurant in the form of brand recognition. The most popular franchises have spanned the globe, and continue to break ground to serve entirely new generations of customers. If the franchise in question has a solid track record, positive brand awareness and a delicious menu backed by great service, word will get around in short order. There will always be a spot for traditional independent restaurants to serve patrons looking for something special, but if we’re talking about sheer brand reach among the populace, franchise restaurants can’t be beat. Choosing to become a franchisee for a well-known and established restaurant chain is like getting free advertising without even having to contemplate your marketing budget. Plus, it’s the gift that keeps on giving, the whole year ‘round.
FINANCIAL BACKING THAT MATTERS
Franchisors are just as determined to see a new location thrive as the franchisee who is licensed to operate it. It’s a two-way partnership whereby both parties invest time and capital into making it work. Many franchisors have access to funding resources that you simply won’t have if you’re attempting to start your own restaurant on your own. For instance, franchisors have connections and a good rapport with many different lenders who can provide initial funding assistance.
In addition, they’re adept at sourcing the best spots for new franchise locations that will attract eyeballs and foot traffic. The formula has already been worked out, and franchisors will be able to spot prime opportunities to cut ground in just the right places, leading to a quicker startup and break-in period, followed by profit. This is vital for attracting patrons who may still be wary about venturing outdoors after the pandemic scare.
THE TECH FACTOR
Both independent and franchise restaurants have a bevy of technological goodies to take advantage of, and this can help speed up the ordering process, keep the kitchen staff organized, and lead to a greater level of service. However, franchises are often keen to adopt models that have been proven to work across the country…or several, whereas an independent restaurant may have to work out the bugs and refine the system over time.
If you’re a franchisee, you’ll want to hit the ground running with a technological system in place that can fast track your dine-in tickets, online orders and deliveries on day one, without hiccups. Plus, franchisors will constantly reinvest in new technologies over time in order to optimize and streamline the business model. The quicker and better the service is, the more profit there is for both franchisor and franchisee.
CONCLUSION
Nothing ventured, nothing gained, as they always say. Choosing whether to open an independent restaurant, or opt for a franchise license is merely a matter of what you personally want for yourself as an entrepreneur. If you’re leaning more towards owning your own restaurant, keep in mind that it doesn’t need to happen right away. Many people choose to open one, or several franchise locations, and grow their portfolio for a few years before amassing enough capital to cut ground for their very own restaurant.
If, however, you’re more attracted to the efficiency and versatility of the franchise model, perhaps it’s time you talked to us. St. Louis Bar & Grill is breaking new ground in the United States, following the opening of our very first franchise location in the state of Florida, but we’re just getting started! Are you interested in becoming a restaurant franchisee in 2023? The future looks bright when it comes to growth and opportunity, so don’t hesitate! Let’s talk, and see where your entrepreneurial future is heading.
