Successfully growing a restaurant brand is no easy feat. But that doesn’t mean that it’s impossible—especially if that concept is a franchise.
When expanding a brand from its first unit to its second, third, fourth or even fifth, restaurateurs are faced with a myriad of challenges when going it alone. By turning to the franchising business model and growing alongside local owners, they’re exposed to a long list of competitive advantages. To better understand the benefits that come with launching a restaurant franchise, 1851 spoke with Steve Beagelman, president and CEO of SMB Franchise Advisors. Backed by years of experience in helping entrepreneurs launch their franchise concepts, SMB Franchise Advisors is one of the industry’s leading resources when it comes to leveraging the potential behind the franchising business model.
“When your business is growing and reaches maturity, there comes a time when you have to start making some tough decisions. Do you open that second, third or fourth restaurant on your own, or do you create a franchise system and expand with the help of local owners,” said Beagelman. “One of the most important factors in making that decision is cost. It’s expensive to open restaurants. That doesn’t mean that it’s inexpensive to franchise, but there is a significant financial difference. Do you spend what could be upwards of a million dollars to open up the next unit on your own, or do you invest a couple hundred thousand dollars to create a franchise where other people build and run restaurants in your model?”
In addition to providing a more cost-effective solution to expansion challenges, the franchising business model also positions brands for more rapid growth. According to Beagelman, working with franchisees better positions a restaurant brand to reach major development milestones.
“If you’re operating as an independent restaurant owner, it’s challenging to cross that 10 unit mark, let alone 50 or 100 units,” said Beagelman. “Franchising allows you to grow more quickly. By teaming up with aspiring entrepreneurs in other communities, you’re able to break into more markets at a much faster rate. Each franchisee brings a level of knowledge and expertise to the table about their neighborhood that can only be present with local restaurant owners. Plus, franchisees manage the day to day operations of their restaurants, eliminating headaches that a restaurant founder may have when trying to oversee multiple restaurants located in other cities.”
Ultimately, experiencing success in the restaurant industry comes down to the owner knowing the communities it serves. That’s more easily achievable with franchisees given that most of them are residents in the areas in which they open up their businesses.
“Franchising creates the opportunity to leverage the owner-operator business model in a variety of markets. Franchisees have personal and professional connections in the communities where they work and live—they’re familiar with the real estate market and they know all the right people when it comes to getting a business off the ground,” said Beagelman. “If you’re an independent restaurant owner looking to bring your business from Boston to Chicago, for example, there would be a learning curve for you to fully understand the market. Franchisees bring that level of understanding to the process from day one, adding another benefit that’s significant when growing a business.”
Keep in mind, just like franchisees will have you to mentor and teach them what they don’t know; you can gain access to the support of an experienced franchise development and consulting team. To learn more about how to enjoy the benefits of franchising your restaurant model and creating your own restaurant brand please visit http://smbfranchising.com/.