Tom’s Franchise Information Blog

This weekend I was walking with a neighbor for one of our favorite charities and hit up a conversation on starting a business. My friend had just lost his job and was considering several future career options including opening a business, specifically a restaurant business. As we discussed various types of business he could get into, we talked a great deal about various restaurant businesses their business models etc

I have known my neighbor and his family for a number of years and have always enjoyed excellent food at their house. They always are very generous and invite us to their dinner parties and typically make excellent and innovative new items. They are always trying new recipes from around the world but always turn out wonderful. I always joke with them that they should open up a restaurant and turn their unique talent as a business.

But as I thought more seriously about the possibility of my friend or any one for that matter opening a new restaurant or buying a business,several concerns immediately popped in my head. When I drive around in my town I always pay attention to new businesses opening up and especially notice new restaurants as a place to checkout whenever our family decides to dine out. Whenever there are new mom & pop restaurants open up most often I notice them close down in several months or a couple of years. While a few do make it, by far, my observations lead me to think that a big majority of them fail relatively soon. At the same time, I see a lot of franchise restaurants open up and do really well.

There are several advantages to a franchise business. Most importantly, established franchise businesses built on concepts that have been successfully tested in the marketplace. The products and services sold through a franchise have been accepted by customers and are proven to be profitable. In addition the brand recognition is immediate and the marketing costs are shared by all franchisees. One of the main benefits to a new business owner is operational training, which is s crucial element of a successful business.

While a new restaurant business owner has to invent every process from food preparation, quality and taste consistency and financial models, a franchise comes with all these elements already created and tested. I am not saying it is impossible to create a viable and successful new business, but just that extreme amount of planning and thought needs to go into making a business successful. However not all franchises are created equal, by and large a franchise exists based on a successful and proven business model.

My advice to an entrepreneur that wants to hang a shingle and start a business is to first check out successful franchises in the niche that they are exploring. You can visit several sites on the internet that list franchise for sale and businesses for sale. Review their business models, return on investment, marketing approaches and operational processes. Consider the franchises that appeal to them as a first step to launching them into entrepreneurship.