Starting your own business is an exciting yet nerve-wrecking decision, especially when it comes to the restaurant industry. Fortunately, you have the option of investing in an independent business or a franchise. But how does one decide which of the two will suit your financial goals and personality best?
This age-old approach of making a list of the advantages and disadvantages is the safest way of coming to a conclusion.
We have made a list of the pros and cons of both options.
- Freedom: Independent business owners have a lot more freedom when it comes to changing products or services. In the case of a franchisee, the parent company decides, for example what goes on the menu, how the waiters must dress, what the décor must look like, and what the opening hours must be. If you are an independent restaurant owner all these things are up to you. Independent owners also don’t have the luxury of market research and tried and tested methods.
- Financial investment: If you want to buy your own little eatery, you would probably pay a bit more. The upfront costs of hiring shopfitters, interior decorators and graphic designers, and the ongoing investment of employing professional cooks and chefs, and training waiters will leave a hole in your pocket. However, if you don’t have the cash, you can delay expansion or alterations. Buying a franchise business will cost you a little less, but remember that you must pay royalties. Also, if the franchisors decide it is time for an upgrade you cannot refuse, whether you have enough money or not.
- Branding: If you buy a franchise your brand is automatically recognised and trusted. However, if the franchisor or franchisee does anything to damage the brand, you suffer too. Independent business owners must work hard at becoming a recognisable brand, but it is their own.
- Resources: If you don’t have much business experience, the franchise business is for you. Part and parcel of buying a franchise, is support from the parent company, a business system, a network of suppliers, as well as other services. You are left to your own devices if you decide to do your own thing.
Whether you invest in a franchise or independent business, do your homework. Also, talk to family, friends, and others business owners. But most of all, listen to your gut feel. Only you know what’s best for you, your lifestyle and personality.
Remember to also factor in the insurance cover that you will need for your restaurant.
Hospitality and Leisure provides specialised insurance cover for restaurants, franchised restaurants, coffee shops, delicatessen and catering services.
Call us today on 0861 726 526 for a competitive quote.