Confused about how to start your own restaurant business? here’s a detailed comparison between buying a restaurant franchise and starting from scratch.
Once you have decided to go into the restaurant business as a business, you need to make an important decision; that all other decisions will be based on, and that is a decision to buy a food service franchise or start your own restaurant business from scratch.
Like everything else in life, both business models have their pros and cons, and there are a number of things that you will need to consider when making a decision, such as your personal vision for the business, your goals to long term and the capital that is at your disposal.
Let me give you a simple example to illustrate the two business models. We all love food, right? Especially when it’s delicious and served in a tantalizing way. But there are two ways to get food: either you walk into the kitchen and cook it yourself, or you get pre-cooked food from other sources, which can include buying or consuming. at restaurants or parties, or maybe hiring a chef to cook that wonderful meal for you. code-block code-block-8 ai-viewport-2 ai-viewport-3 ‘style =’ margin: 8px 0; clarify both; ‘>
But whether you’re in a restaurant, hiring a chef, or cooking your own meals, you are taking a significant and very significant risk. How do you know that you won’t develop a stomach infection or food poisoning after eating at this restaurant?
What if any of the ingredients used in the preparation of the dish were contaminated and misused, or if something you are allergic to was used as an ingredient in the preparation of the food and you ignore it completely? ?
Now, I’m not trying to scare you, I’m just trying to explain the risks associated with consuming other people’s food. Buying a franchise is like buying food prepared by someone else. And even if the food was prepared by you, you are still in danger because you probably didn’t make all of the ingredients that you will use to prepare the food yourself. What if there was latent bacterial contamination in the meat. Lol. Enough about food poisoning; Back to basics.
S Buy a restaurant franchise or start your own, which is better ? Well, you should be able to decide for yourself after reading this article. I will do my best to reiterate the pros and cons of both options to help you make the perfect decision.
Starting a restaurant business vs. buying a franchise: which is better?
5 benefits of buying a restaurant franchise
1. Existing customers
Believe me; get clients to patronize new businesses cheap … you would have to do a lot of publicity, persuasion, conversation and when you do end up having clients your job will be half done because you will have to struggle to keep them.
This is one thing that buying a catering franchise on a golden platter affords you. Chances are, the business has existing customers who will continue to patronize you even if the business is taken over by you, so your customer sourcing work is not completely eliminated but reduced.
2. Positive brand awareness
Note that I said POSITIVE about brand awareness, if the business is already known to people and has a good reputation, you shouldn’t have a problem because the goodwill is automatically transferred to your business when you buy one. franchise. However, it is your responsibility to continue to maintain and develop this reputation.
3. Cash flow -: When you buy a restaurant franchise, cash flow will not be an issue when starting your business, as you will have customers ready to take care of you immediately, so cash flow will not be an issue.
4. Staff training -. Most restaurant businesses offering franchise opportunities already have staff training programs that you might find helpful. This means that you don’t have to worry about how to train your staff, because the franchisor will do it for you.
5. Advertising and marketing -: and you are in luck here because, like staff training, most franchisors provide promotional material and advertisements to help promote the brand and make the business more successful.
There are many other benefits to buying a restaurant franchise, but let’s stop here for now. I need you to know that the grass isn’t an evergreen on the other side. There are also drawbacks to buying a restaurant franchise, some of which include
4 Disadvantages of Buying a Restaurant Franchise
Yes, capital. The capital is Numberro uno a challenge for people looking to purchase an existing foodservice franchise as it means you’ll need more money than most when you start from scratch. Some franchisors insist that you must have at least 50% of the required capital and that it must come from non-borrowed sources. If you started your own business, you could also start 100% with leverage, who will ask you why?
b. Bad commercial reputation -. If the restaurant business you are buying is already having reputation issues, then your business is down on arrival, as such a negative reputation will most likely affect your own business.
of. Limited control -. When you buy an existing business, you have limited control over how your business is run and run. Sometimes you can have great ideas that you can’t use because “management won’t approve”.
re. Hidden issues -. If management has an issue that threatens the business that they don’t tell you about, it could ultimately affect your business.
Let’s move on to the pros and cons of starting your own restaurant business from scratch:
5 benefits of starting your own restaurant business from scratch
- Ability to use your own concepts and ideas -. When you start your own restaurant business from scratch, you can incorporate all of your ideas into the business. Your business is 100% yours and you are fully responsible for the decision-making process.
- The ability to build your own reputation -. When you start your own business, you are not walking in some sort of shadow. You have the ability to build your own business reputation and you won’t have to suffer for what you did or didn’t do.
- Flexibility -: This also gives you the flexibility and the ability to make changes and improvements at any time.
- Menu control -: You can also plan your own menu and use your own recipes at the start of your meals. business from scratch.
- Capital city -: The amount you want to invest in your business and the sources of your capital is entirely up to you. No one will insist that you get a certain amount of borrowed funds before you can start your business.
5 disadvantages of starting a restaurant business from scratch
Starting a restaurant business from scratch also comes with certain risks, some of which are:
- Licence -: The responsibility of obtaining a license for your new restaurant business lies solely with you and it can take time and effort not to mention money.
- Receive clients -. You will also have to struggle with acquiring clients to sponsor your business. It will cost you a few dollars in advertising, marketing and publicity costs.
- Recruitment -. When you decide to start the restaurant business from scratch, you will need to hire new employees and train them yourself, as to how it was done for you when buying a franchise.
- Bad sales -: You also run the risk of losing your investment due to bad sales.
- Unprecedented spending -. Despite the fact that you have already drafted a business plan and analyzed all the start-up costs, there may still be unprecedented expenses that you are absolutely unaware of, and this can affect your business and even discourage you at the start of your business.
In conclusion, I want you to know that catering, like any other, is a risky business. in other cases, and it is not uncommon to run into problems and obstacles, but the most important thing is to analyze carefully, find the disadvantages of each model and find out what works for your personality before taking a decision.