Pros and Cons of Operating a Chain Restaurant
If you think operating a chain restaurant is going to be a piece of cake, you need to think again. Sure, it can offer you the chance to have a successful business but you are going to have to work at it too. In many ways, operating a chain restaurant can be more stressful than setting up your own business. Not only do you have to keep your customers happy, but you have to keep the corporation happy too. Many people want a chain restaurant because they know consumers will be excited to come in. This is often true, but it depends on the particular restaurant you are talking about.
There isn’t any easy answer to this question, and you will have to look inside of yourself to determine if it is or not. It can be much easier than trying to build up a customer base though. You will already have a product to offer that is in demand. You can depend on the marketing tactics of the entire franchise to carry you along. Once you get people into your restaurant you can keep them coming back by offering the quality that they have come to expect.
However, there may come a time when your particular chain restaurant experiences negative publicity. They can have a huge impact on your business because the media takes such issues and sensationalizes them. Even though it may not be your particular business that is involved it will reflect on your image. Think about the Taco Bell rats in New York City and the finger in Wendy’s chili issues that have come up. These images definitely make a person lose their appetite for a while and you can see a significant drop in business because of it.
Many people are afraid to start their own business because they have read plenty of material that tells then more than half fail. While these statistics are true, don’t let them prevent you from following your dreams. That statistic also means that half of them didn’t fail – and you have a good chance of being in that group since you are carefully doing research instead of jumping in right away.
Even though you will have a steady flow of customers, you need to take a look at your overhead. The amount of money that your business earns isn’t important. The amount of it that falls into the category of profit is what matters. Are you going to make enough to pay for the chain restaurant and to earn enough to keep you happy?
You will find the cost of a chain restaurant is going to be more expensive than starting one on your own. You will be paying for the exclusive rights to having that business name. On the other hand, lenders are more willing to offer you the funding to start up a chain business than your own. Statistically, there is less risk of the business failing if it is a known business entity that is thriving in various other locations. Some chain restaurants even having financing available through them so you don’t have to work with an outside lender.
Some restaurant owner’s are very disappointed with a chain restaurant image. They feel that they lose their individuality in the process. You will be very limited in advertising and ways that you manage your business. You may have to provide specific types of uniforms and a specific type of layout for the design of the business. You won’t be able to decorate it to suit your tastes.
If you are serious about operating your own restaurant, you really need to discover which is a better option for you. Cover all the bases and see which one comes out in your favor. Many people are happy and successful operating their own business. Others aren’t, and do very well when they are part of a chain restaurant. One isn’t necessarily better than the other so take your time making this important decision.
Patricia Farnham – Restaurant industry veteran, owner/operator, author and enthusiast. She recently put her considerable expertise (gained from many years of managing other peoples restaurants), to the test. She purchased a failing operation and turned it around quickly.
If you’re considering starting your own restaurant, or buying an existing operation, there are vital concepts you need to know to make it profitable. Check out her opinions regarding opening a restaurant on her website.