In this tough economic climate, starting a new business is a risky venture and this is particularly the case with restaurants, as customers cut back on luxuries such as eating out. However, restaurant franchising can offer an ideal business opportunity with minimal risks. Of course, no business is guaranteed to be recession-proof, but those which offer value for money while maintaining quality are still names for restaurants seeing growth. Fast-food firms are revealing record profits and increased sales as people turn their backs on costly restaurant meals and opt for good value, fun food. And these firms nearly all have one thing in common – they are run as restaurant franchises.
Franchises offering “comfort foods” are thriving particularly well and their resilience in the face of the downturn is very encouraging to would-be franchisees. After all, however bad the economic news, customers still want their morning coffee and donut and, whilst they are likely to be cutting down on the large spends, those little luxuries of life become more important. OK, maybe you won’t be taking that Florida beach holiday this year, but great coffee and delicious food that you can enjoy any time of day are still affordable for the majority and offer up a little consolation and reward for the hard-pressed worker or consumer.
For many well-known restaurant franchises, business is booming. In the UK, sales figures for pizza delivery firm Domino’s showed an increase of 15 per cent in January, traditionally the slowest month in the restaurant trade. McDonald’s have reported an increase in sales of 7.6 per cent in the final quarter of 2008, despite the credit crunch. Sandwich chain Subway has announced plans to open 600 new stores in the UK and Ireland, creating 7,000 jobs, and fried chicken chain KFC is planning to invest up to £150m in opening up to 300 more restaurants, with 9,000 new jobs. It is surely no coincidence that the above mentioned businesses are run as restaurant franchises. A successful restaurant franchise responds to the needs of its intended core customer base – which tends to be centred on very busy people on the go, up early in the morning, wanting a hurried lunch, looking for an afternoon lift or a snack at the end of the day.
Why is restaurant franchising such a good business opportunity? A recognised brand name will instantly attract customers into your business. A good restaurant franchise provides practical solutions for its franchisees, ranging from site selection and development processes to ongoing new product training. Training and support teams will deliver the information and tools that help to promote their franchisees’ business. In essence, therefore, the major difference between a good restaurant franchise and running your own business is the great support structure coupled with the advantage of a ready and well-known trading name.