Friday, August 29, 2014

Franchise Ownership Myths, Debunked!

Investing in a franchise doesn't have to break the bank
Thinking about owning a franchise but not sure if it's right for you? There are a lot of myths about owning a franchise that might be holding you back from making the investment. Here are some of them, debunked!

I Can’t Afford a Franchise!

The costs of becoming a franchisee can largely vary depending on a number of factors. Of course, franchises with hugely recognizable companies like McDonald’s, Burger King, and Pizza Hut can come with some pretty steep price tags. But even with a huge company like McDonald’s, a big factor in cost is whether you want to purchase an already existing restaurant or build a completely new one. To purchase an already existing McDonald’s restaurant, you need to make a 25% down payment and pay off the remaining balance in no more than seven years. Building a new McDonald’s restaurant requires a $45,000 initial fee and equipment and other pre-opening costs that typically range from $955,708 to $2,209,146. Franchisees starting new restaurants also have to pay 40% of total costs with their own money and can only finance 60% of them.

If nationally or internationally known brands are out of your price range, smaller, regional chains may be a good option for you. For example, Cottage Inn, a pizza restaurant franchise popular in Michigan and Ohio, estimates the total costs of starting a Cottage Inn restaurant as a franchisee at between $99,000 and $160,000 (figures include all costs involved including initial fees, signage, equipment, training, rent, and supplies). There are also fewer restrictions on whether you use your own money or use financing.

I Won’t Be Able to Make My Own Decisions.

While you do have to follow the basic guidelines set forth by corporate, you have the freedom to make many decisions independently. Corporate has no say in who you do or don’t hire. Although some franchises offer assistance with marketing, in most cases, you’re able to make your own advertising choices. For example, you could set up a Facebook fan page just for your franchise’s location rather than having your customers “like” the main corporate Facebook page. Also, if you have a restaurant franchise, you can allow your kitchen staff to experiment with new ideas. You never know what might catch on. After all, McDonald’s Egg McMuffin was originally created by a franchisee, not at corporate headquarters.
You can be a businessperson too! Invest in a franchise.

I Don’t Know Anything About This Industry.

So maybe you’re interested in buying a franchise restaurant, but you don’t have any managerial experience and have never owned any kind of dining establishment before. Some companies may want inexperienced franchisees to find a partner who does have experience, but in many cases, lack of experience isn’t a deal breaker. You will be undergoing training that will teach you the valuable skills you need.

Franchises Are a Safe Investment/It’s Hard for Franchises to Fail.

While it’s true that franchises have an advantage in the sense that you’re working with an established brand that comes with a name many people will recognize, that doesn’t guarantee a franchisee’s success. Although franchisees can get guidance and training from corporate, there’s only so much corporate can do. You still need to invest a lot of time and effort into your franchise to make it a success. Corporate can’t help you if customers stay away because you make poor managerial decisions or hire a staff of people with poor customer service skills.

Friday, August 22, 2014

Food Trends for 2014

Fresh, local foods are increasingly popular in restaurants

If you’re thinking of joining a restaurant franchisee, it’s important to consider what customers are looking for. Just like the fashion industry, the food industry goes through big trends every year. The National Restaurant Association publishes an annual report of culinary trends for the upcoming year based on a survey of over 1,300 chefs in restaurants across the country. Here are just a few of the highlights of their report for 2014:

Locally Sourced Meat and Produce

Consumers are very concerned about environmental sustainability these days. Even when dining out, many people tend to choose restaurants that get their meat and produce from local farmers rather than having it shipped from across the country. In some cases, restaurants are going hyper-local and starting gardens to grow their own vegetables. Owning a franchise restaurant doesn’t mean it’s impossible to use locally sourced materials. Chipotle recently began promoting their efforts to use organic, local, and family farmed ingredients with their Food With Integrity program.

Healthy Kids’ Meals

With childhood obesity on the rise, many parents are clamoring for healthier options on the kids menu. Parents are looking for restaurants that offer options such as fruit, yogurt, and whole grains instead of french fries and hot dogs.

Healthier Options for Adults

Eating healthy certainly isn’t just for kids. Many adults are growing tired of the oversized portions so many restaurants serve. In response, some restaurants have started offering half-sized portions for a lower price. Vegetarian dishes continue to be very popular. As of 2012, roughly half of all Americans were eating at least one meat-free meal per week, which is 40% higher than it was in 2007. Vegetarian options aren’t just healthy, it makes good business sense to include them. Many people dine out in groups and offering vegetarian options might prevent groups from choosing another restaurant over yours because there are vegetarians in their group.

Gluten-Free Options

The demand for gluten-free food options continues to grow. As a result, many restaurants are using grains such as buckwheat, quinoa, and amaranth as a substitute for wheat products. Even restaurants that specialize in foods like pasta and pizza are trying to offer gluten-free alternatives. In the Metro Detroit area, Renee’s Gourmet Pizza, a pizzeria with a completely gluten-free menu, has recently opened. Cottage Inn Pizza, a franchise restaurant in Michigan and Ohio, has also developed a gluten-free pizza crust and sandwich bread for those who request it.

Shutterstock_High Quality Pizza.jpg
High Quality Pizza

People are starting to get bored of pizzas with the same old processed meat toppings, processed cheese, and vegetables that aren’t fresh. If you want to really impress pizza-buying customers, you’ll want to offer some different cheese options, fresh vegetables, unique toppings, and interesting concepts for pizzas. Blaze Pizza lets customers create their own pizzas (kind of like at Subway) with high quality ingredients and a variety of cheeses and sauces.

Friday, August 15, 2014

Five Benefits of Franchise Ownership

Franchising is one way to own your own business
Owning your own business is the dream of many entrepreneurs. Franchising is one way to do that. Thinking about buying into a franchise? Here are five reasons why I love franchising:

1. Be Your Own Boss

Doesn’t everyone dream of getting to be their own boss? With franchise ownership, you can be. While you do have to follow the guidelines set forth by corporate, you’ll have plenty of room to make your own rules. And with so many different types of franchises available, you’re free to pursue whichever opportunity suits you best.

2. Reduced Risk

Franchises aren’t a fail-proof business venture, but there is a lot of added security that comes along with them. When working with an established brand, you follow a system that has been proven to work time and time again. Your business will also benefit from having a name that many people already recognize. Many banks are also more inclined to give loans to people looking to buy franchises because of the reduced risk.

3. Training and Ongoing Support

Franchisors have a vested interest in your success because if you succeed, they succeed. Most franchisors require a training period so you can learn about everything you need to know to run your business. They will help you through every step of the process, from location selection to marketing. Even after your franchise location gets up and running, you’ll always have the benefit of having people at corporate who can help anytime you need it.

4. You’ll Be Able to Give Back to the Community

Wouldn’t it be nice to be able to do something to make the community you live in a better place? With your franchise, you’ll be creating jobs for the community and contributing to the local economy. You’ll also be able to participate in local events that enrich the community and become involved with local charities.

5. There’s Room to Grow

Even when you’re your own boss, you still have room to grow. If you start out as a franchisee with a single location and you turn it into a big success, why not invest in a second location?