How to Decide if a Food Service Franchise is Right for You
Not everyone has the right personality and mindset to launch a successful food service franchise. Some that think they do may find that they are unhappy while others who don’t initially consider a food service franchise decide that it’s exactly the right path for them. When it comes to choosing a food service franchise or building your own restaurant brand from scratch, there are several points to consider before choosing a path.
Can you live with an established process?
In order to run a successful food service franchise, you’ll need to possess an entrepreneurial spirit, but also be willing to “stay within the lines” of the already established operational procedures. For some people, owning a business where they must conform to preconceived ideals that they may not necessarily whole-heartedly agree with, is little more than being someone else’s employee. If you have very strong convictions about doing things your own way, ownership of a food franchise may not be for you.
On the other hand, the reason food service franchise companies have such systematic processes, is because they are profitable. A study conducted by Ohio State University shows that between 57% and 61% of new restaurants fail within 5 years of operations. Some of these are food service franchises, but more are independent restaurants. With such a steep rate of failures, having a system to depend on is considered by many to be one of the most significant benefits of food service franchises.
Consider your financing limitations
If around 60% of restaurants fail within 5 years, that means that a healthy percentage of new restaurants remain profitable and successful. If you’re certain that your independent restaurant will be successful in your area, then the odds are good that it will. Building a restaurant from the ground up can add up to hundreds of thousands, if not millions of dollars when you factor in brand development, menu creation, advertising, establishing procedures, equipment purchase, etc.
You’ll also need to have a cushion for unexpected costs and to help you navigate through difficult times. If you truly don’t have all of the money you need, you may be placing yourself in a very vulnerable position. Another benefit of food service franchises is that you can generally get into the opportunity with much less starting capital than if you were to build a restaurant from the ground up. That’s because the menu is established, the promotional materials created, the paperwork streamlined, and advertising costs are shared between the entire food service franchise network.
Ultimately, deciding whether or not food service franchising is right for you depends what will truly make you feel satisfied. If your ultimate dream is to create your own menu and restaurant ambiance but you don’t have the funding to get it off the ground, perhaps your efforts are better spent raising capital. However, if you like the idea of entering into an established business with a proven success record, a food service franchise may be the ideal solution for you.
Christine Harrell
http://www.articlesbase.com/business-opportunities-articles/how-to-decide-if-a-food-service-franchise-is-right-for-you-53795.html
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Is this how government makes us poor?
Scenario one:
Johnny wants a new widget, so he hires Freddy to produce one and pays Freddy ten bucks for it. Freddy, now richer by ten, decides he wants his field hoed, so hires fourteen year old Eddie, and pays Eddie ten bucks. Eddie, now richer by ten, decides he wants a restaurant meal and goes to Frans Deli for the ten-buck eat-all-you-want pig-out-special. Fran, now richer by ten bucks, etc.
Going around, that ten bucks has already facilitated the creation of a big meal, a field being hoed, and one widget, and it is still going around. In this scenario, the people have money and a lot of goods and services.
Scenario two:
Now put a little government into it. Freddy earned ten bucks from Johnny, but after tax has only eight left. His eight only gets part of his field hoed, and Eddie has to pay tax on his eight, leaving only six dollars to go to dinner with. Fran gets Eddie’s six for the blue plate economy special, but after tax has only four left. In this scenario, produced is a small meal, part of a field being hoed and one widget — while the government is richer by six bucks.
Now, put government into it some more. To help the agrichemical industry, the government passes a regulation prohibiting youths under eighteen from hoeing fields, so child labor won’t reduce the sale of herbicides. To help the fast food industry, government decreed that restaurants who offer cooked-to-order all-you-can-eat meals have to have separate seating areas for them, while blue plate specials have to be served on real, blue ceramic plates, much to the protest of the paper plate industry, but much desired by the ceramics industry, which had the right connections to lobby for their interests. The result — produced: one widget, Freddy (an organic farmer) has to hoe his own field or go out of business which makes him overworked, depressed and afraid. Under-age Eddie, unable to earn any money at all, goes criminal and steals part of Freddy’s crop in the middle of the night and Fran has to charge so much more for her food that her independent business is destroyed, making her feel she would be better off with a McDonald’s franchise.
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Your thoughts? Rants? Rationalizations?
@ disgruntled — Now that is an interesting development. It would be VERY interesting if that action has such tangible good effect that it encourages them to ‘enlarge’ the qualifying bracket.
@ bawnit — in a free market, nobody does business long with thieves. They get shut out real quick.
In fact an argument can be made, with current real world examples, that government ‘regulation’ actually ENABLES thievery. Regulators aren’t beholden to the anti-thievery self-regulation of a free market; they can be bought for the right price. Whereas, loyal patronage cannot be bought — it must be earned.
@ ash — Granted of course that essential services of civilization need to be paid for. How about substitute "income tax" for "tax" in my story. Because income tax is what removes capital from the market before it can be used BY the market.
All of the essential services of civilization that you mention can be paid for by a consumption tax, which unlike income tax does not leach fresh capital from the private sector before it can be put to use.
@ Clouseau — credit default swaps are a gambling operation — a con game. See my explanation per thievery above.
You forgot that Eddie can’t get his meal because the government cut went to a farmer that was paid to not grow crops.
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Johnny pays Freddy for the widget. Freddy produces one and gets ten for it. Freddy wants his field hoed so he lobbies congress for a special visa to get a qualified foreign worker to hoe his field for three bucks; then keeps four bucks for himself and takes three bucks to produce more widgets n china which he will try to sell for ten bucks to Eddie, Frans Deli, and so forth, but they are struggling because Freddy produced his widget somewhere else so he could keep the change…..That is scenario three, with NO government intervention such as tariffs.
As always, there is no black and white for this; I could add, Freddy pays taxes but if he did not, Junior could could steal the ten bucks he owned because there are no cops, or he could have to rebuild his barn because there was a fire and no fire department showed up. Or not. Sorry the poor farmer gets all said and blue and depressed, he needs to man up; if Eddie "turns criminal" that is because of how he was raised, not about the circumstances he was dealt in life; and as for Fran, well, odds are her restaurant would have failed anyway, around here very few last more than a year or two…..you have a very negative attitude, what would be the excuses if the government did not intervene and freddy still got depressed (depressin is a medical condition) and Fran’s deli still failed anyway…
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You’re preaching to the choir (and I’m singing bass).
And yet, there are way too many people who want more government involvement.
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Problem is, trickle down doesn’t work anymore, it trickles right out of the country and stimulates jobs over there; or stimulates the creation of huge financial bubbles. Try your scenario with regulation of credit default swaps. lol
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That just about sums it up, of course Johnny could try sourcing his widget abroad or Freddy could try importing cheap labour but isn’t that the result of the government being too greedy in the first place,
there is a limit for how much people will pay for goods/services so by the government taking so much money out of our wage packets and forcing through expensive legislation and pricing our goods out of the market we bring it all down on ourselves. At least our new coalition in the UK is starting to get it by raising the tax threshold and taking lower paid workers out of the tax system altogether instead of just giving handouts they are allowing them to keep the fruits of their labours. A much better and more humane and more dignified way of helping the poor out of poverty
EDIT They are hoping to lift the tax threshold to £10,000 eventually before you pay any tax. This may encourage long term unemployed to seek work. At the moment when you add up all the benifits ie rent paid, council tax paid, free prescriptions etc etc by the time you pay tax you can actually be worse off working, this is why we call it the poverty trap.
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The government took no taxes in scenario 1 so there were no courts to enforce contract law. Freddy took Johny’s ten bucks and told him to F off.
Another result was that none of the rest of the people earned anything because Freddy only paid Eddie 5 cents to hoe the field, etc etc.
Freddy is a capitalist and intends to get rich.
That is what deregulation does.
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