How do you know if you should buy a franchise restaurant or start your own independent restaurant concept?   This is a complicated question and the answer depends on a number of variables.  Ultimately, it comes down to your motivation and your degree of risk tolerance.

Buying a Franchise RESTAURANT

When you buy a franchise, you’re usually buying a “proven concept”, something W&W Restaurant Consulting Group advocates for.  However, some franchises are young and don’t really have a long and consistent record of success.  These types of franchises are much higher risk ventures.  With franchises, you’re buying a “brand” instead of building your own. If your motivation is to get into the restaurant business with a concept you like, and there are franchises out there doing it, then it may be a good option for you. The franchise will dictate how your restaurant looks, what’s on your menu, your operational procedures, how often you have to remodel, and how you market your business. Because the “brand” that you’re buying is typically recognized by the public, the task of marketing the new restaurant is significantly easier and greater initial revenue can be expected.  But, franchises also contractually require royalty payments be made to them on an ongoing basis for the life of the business.  These royalty payments typically fall in the range of 5 to 8% of your gross sales. Often, royalty payments equate to as much as 50% of your bottom line.  Their claim is that the your royalty payments support the ongoing brand development through research and development, national pricing and effective marketing programs.  Some franchises deliver, and many don’t.  Looking at the cost to open a franchise restaurant, we find that there is very little, if any, savings opening a franchise versus opening your own concept.

Opening Your Own Concept

If you’re the creative, entrepreneurial type and you have your own ideas of the restaurant you want to open, this is the better option.  Is the risk higher?  If you’re a novice, or have limited restaurant experience, the risk is much greater.  However, if you use consulting services such as W&W Restaurant Consulting Group, your risk will be dramatically reduced.

W&W can advise you and support you in either decision.  Contact us for a free telephone consultation.