Owning a franchise vs. starting from scratch

As a reader and follower of the Hundred Acre Consulting blogs, you or someone close to you has probably been knocking around the idea of owning a business. That’s great!

Now, you just have to decide on what business, and SO many other questions that need to be asked Aside from deciding what kind of business to open, the next big question is whether to start the business from scratch or invest in a franchise. Franchises have fees or royalties paid which may be a deterrent to those who do not understand the value of what a franchise provides for its franchisees. Let’s make that today’s topic.

Restaurants are a great case study for this comparison because it is probably the first thought that comes to mind with the concept of a franchise. So – let’s open a restaurant!

1. Location, location, LOCATION!

You need a location that is available, for one, but this effort is more than finding a space for rent that you can afford. You also want to know the area surrounding this location. What other restaurants are nearby? What are the favorites and why? What does the weekend traffic look like? How about evening traffic?

Starting a business from scratch

You may team up with a realtor to find available properties in your price range. You might also start walking down Main Street to the different businesses at different times of the day to see first-hand what to expect and what potential traffic could make its way to you.

With a franchise

A franchise may get their research team engaged or even have a demographic report already prepared for key areas favorable for a new franchise location with resources to locate land or spaces available.

2. Outfitting the interior

From decorating the dining area to stocking the kitchen with the right equipment, this can be a very time-consuming step when it comes to opening a restaurant.

Starting a business from scratch

As a new restauranteur, it can be so overwhelming that it is sometimes hard to know where to start. You can just buy whatever equipment you need, but which brand is best, what equipment works best for the items you wish to make and what can have dual purpose will be a mystery for a short (or long) time. You may even swap equipment later down the road as you learn that you don’t need something nearly as badly as you thought you did, and your kitchen is too small to make it worthwhile to sacrifice that space.  Once you get into the middle of that – who has time for decorating the dining room?

With a franchise

A franchise knows exactly what is needed in the kitchen and where each piece should be placed to optimize efficiency. They may even have a decorating team to come into the front of the house and make it deliciously inviting with all the branding details in place.

3. We almost forgot about the food

Actually, we didn’t, but we couldn’t put the cart before the horse now, could we? You need a location and a working kitchen before you can prepare anything for your customers.

Starting a business from scratch

Planning a menu starts with a few big ideas. Then comes the compromising. Food cost is a perfect reason for the first compromises, and you soon find yourself arguing with your chef that YES, you can use half and half instead of whipping cream for that chicken tortilla soup, and it will still be delicious! That is not your only consideration, though. There is also preparation time, proper holding while keeping it hot, and timing of equipment needed for multiple dishes or items. It’s almost like cooking a holiday dinner for a large family in a small kitchen because your kitchen that felt so huge at first might as well be a broom closet!

With a franchise

The franchise has all of the details worked out, from where to buy the food (many have their own distribution arrangements for you), how to prepare the food, and how to coordinate preparation while maximizing efficiency in the kitchen. These proven processes will help make sure that nobody in the dining room is going hungry, and everything is done to perfection each and every time. The franchise brings in a crew to train the kitchen team on how each piece of equipment works, how to prepare each recipe and even how to expedite and place food on the plate for the perfect presentation. They teach the kitchen team how to operate efficiently and maximize their timing of every task in the kitchen.

And there’s more!

Those first three topics are the immediate ones that most think of, but there are even more valuable details that a franchise contributes to the success of the restaurant. They provide all of the branding items and resources. They teach their franchisees all of the business details from payroll to accounting. They literally take this franchisee under their wing and teach them how to model their franchise to be just as successful as what made the brand famous in the first place. THAT is the true value of being part of a franchise.

One benefit worth mentioning is the involvement of a consultant like Hundred Acre Consulting. Our services are provided by the franchise to assist the aspiring franchisee to successfully navigate those details of starting the franchise relationship. We represent over 500 different franchise organizations including and beyond restaurants.

What interests you? Contact us to explore your possibilities!