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1851 Growth Club
The Pros and Cons of Buying a Restaurant
Two experts sound-off on the joining food industry.
When asked to name franchise brands, most people will rattle off three or four different restaurants. That is just the perception of the industry.
Although there are brands across an incredibly diverse range of industries, it may not be all bad that people associate the industry with one of the strongest sectors. Brands like McDonald’s and Subway have gotten to where they are because of their franchise system and strong multi-unit franchisees.
The face of franchising will continue to be with the restaurant segment for a long time to come, but why are people buying into these businesses? Are they right for everyone?
Gary Occhiogrosso, president and CDO of TRUFOODS, LLC, the parent company of Ritter’s Frozen Custard and Burgers and the newly repositioned Naked Chicken Co., says that most people gravitate to restaurant ownership because they think it’s easy.
“My experience has been that people think it’s easy, it’s not.” said Occhiogrosso. “Serving food and eating at a restaurant is something most people can relate to, so they see themselves in that type of business. For the savvy investor, they look at the returns, the stability of the industry and the simplicity of growing into multiple units with a concept through using the franchise system.”
In addition to Occhiogrosso, I had a chance to speak with Blair Nicol of FranNet, a franchising consultant for the Pacific Northwest and Southern California, a company that matches prospects with potential franchise opportunities.
Pros of restaurant ownership
“When done right, you have the opportunity to turn your passion into a career. It can be a very profitable endeavor. Good concepts can be duplicated and create enormous legacy,” said Occhiogrosso.
“Typically when we see a client that isn't good at sales but they have a great personality, they’re good with working with teams of employees and work well with a group, they can find success with restaurants. Also, if it’s a new franchise location you will usually get out of the gates strong,” said Nicol.
Cons of restaurant ownership
“You may end up physically, mentally and emotionally drained. You will also have little social life in the beginning,” said Occhiogrosso.
“Restaurants have the longest hours and most employee turnover. But, if you can handle that, it can be a great opportunity,” said Nicol.
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