The odds of succeeding in the restaurant business are low, especially if you’ve never run a restaurant before. In fact, most estimates I’ve read say you’re more likely to fail than to succeed when it comes to opening a restaurant. However, there are things you can do to improve the odds. One of the easiest things you can do to improve your odds of success is to start a franchise instead of an independent restaurant.
Why? Well first off, let me emphasize that not all restaurant franchises are good – and the failure rate for restaurants is still high. There’s just no way around that fact. What a franchise does, though, is give you access to a team of people who know the market. In most cases, they’ve opened dozens, if not hundreds of the exact same restaurant concept, giving them a pretty good idea about what it takes to succeed. They can help you choose a market where you’re likely to do well, right down to the specific real estate you choose.
Beyond that, working with a restaurant franchise also gives you help in other areas. Instead of wondering how to market your restaurant, you get access to a team that can guide you. They also take a lot of the work out by having designers who have already created logos, and you may have a local mini-site on a larger corporate page.
Another related benefit is the fact that many franchise systems have multiple locations in a given market. Although it’s not necessarily efficient for a single restaurant to buy TV commercials or do direct mail in a metro area, it often becomes efficient when there are multiple restaurants in an area. You gain economies of scale without actually having to have scale all by yourself.
In some cases, restaurant franchises also benefit from better pricing and group discounts that have been negotiated by the franchisor. Every little bit helps when you’re trying to be profitable, so don’t overlook the benefits of discounts like that, even if they seem small.
If you’re considering a restaurant franchise, be sure to inquire about all of these things. Find out how much help the franchise offers, as it can vary widely from one company to another.