Pros & Cons of owning a Restaurant Franchise (Advantages and Disadvantages)

Restaurant Franchise

A Franchise is simply a brand that a Franchisee or an investor has bought the right to use, the operations and running of which have been established by the parent restaurant or the Franchisor.

In simple terms, a restaurant franchise is a contractual agreement between the Franchisor and the Franchisee. There are different types of restaurant franchise systems: –

Fast food or Quick service restaurants – Such restaurants do not provide table service, the food sold is already made, and once the customer has bought the food, they can choose to stay and eat it at the restaurant or take the food away with them.

Full Service – There is table service available, and a complete selection of food and drinks options is available for customers to eat and enjoy the dining experience.

Most of the Franchise business run on this model and have been very successful in their run.

Fast Casual – This type of restaurant is somewhat between the Quick Service and Full-service restaurant options and such restaurants are mostly in the form of cafes or takeout restaurants. There is limited table service and food options are less than a full-service restaurant.

There are different types of pros as well as cons of the various restaurant franchise models. Some of the pros that help in growing the business are:

  • There is less capital investment because a part of the investment is shared by the Franchise.
  • Franchisees are contractual business partners who will show greater loyalty than some random person because they are investors in it.
  • The established name of a well-known brand eases increasing the business.
  • Franchises are a more secure investment than a new business because they have the backing of a larger established corporation.

With pros come the cons as well, and they are: –

High employee turnover rate because a large number of employees are necessary to efficiently run the business, which often leads to inconsistent and unreliable employees.

Creativity is limited because the franchise is an already established brand, and one cannot make alterations or additions to the already established business plans.

Restaurant franchise generally comes with long working hours and more work has to be done during peak hours.

There is an increased risk of internal theft because the staff of the franchise may steal from the parent restaurant.

There are many food franchise opportunities, Gujarat but owning a restaurant franchise is a big decision when compared to creating your own business.

Your pros should outweigh the cons to allow you to take a franchise as compared to opening your own business.

Dhinal Baxi

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Dhinal Baxi is a founder of franchise Insider. As a founder, he has served hundreds of clients. His experience from the financial sector has helped them to achieve great success in the franchise world.