Opening a restaurant: franchise vs your own

Would you like to open your own restaurant? This is an ambitious plan that involves many risks. By joining a franchise company, you eliminate a lot of risks, but also lose some individual freedoms. Not surprisingly, many new entrepreneurs struggle with the choice between franchising or starting on their own.

In this blog post we explain the main advantages and disadvantages of both franchising and starting on your own. This allows you to quickly discover which form of entrepreneurship suits you best.

Benefits of a franchise

When you join an existing franchise, you become a franchisee. Franchising offers some interesting advantages, especially for new entrepreneurs.

Brand awareness

Generating brand awareness is one of the most difficult things in the early years of your business. People need to know about your restaurant before they come there to eat. Franchise companies such as McDonald’s or De Beren have already built up enormous brand awareness over the years. As a franchisee you benefit from this.

franchiseThe brand recognition of a large parent company saves a lot of promotion costs

Less risk

Doing business always involves taking risks. No matter how good your idea or food is, the products must be sold in the right way. A franchise company can support you with capital, knowledge and experience. This helps minimize the risks as much as possible.

Disadvantages of a franchise

Starting under the wings of a parent company can therefore be very advantageous. However, there are also some disadvantages to be aware of before you sign a franchise agreement.

Less personal input

You want to open your own restaurant, which probably means that you are looking for individual freedom and input. As a franchisee, this may not be the case. The strictness of the franchise agreement varies per franchise. Some offer a lot of room for personal input, while others have already defined all the actions, prices, design and procedures.

Increased difficulty with business transfer

You want to open your own restaurant now, but do you want to keep doing this forever? You likely plan to retire at some point, or perhaps, after a few years, you’ll be ready for a new adventure. The transfer of your business as a franchise can be difficult. This could get in the way of your own personal development or even your pension.

Advantages of starting on your own

We’ve discussed the pros and cons of starting as part of a franchise. But what if you started all by yourself, without the influence of a large parent company? What are the advantages and disadvantages here?

Lots of freedom

The most important advantage of starting on your own is of course the freedom it allows you. Perhaps this freedom is the reason you decided to become an entrepreneur in the first place. When you start on your own you also have all the control. You determine your own mission, vision, pricing, layout, menu and much more.

All the profits for yourself

Becoming part of a franchise is obviously not free. In addition to the initial costs, you may also have to surrender a portion of the profit to the franchisor. This is not the case if you start your own business. Every euro in profit you make is yours, and you can use that money to further invest in your business and/or to implement new ideas.

Disadvantages of starting on your own

Although it’s nice to be able to put your mark on your business and keep all the profits for yourself, there are also a few obstacles to starting on your own. What are the main disadvantages?

Beginning with nothing

When you start on your own, you start from scratch. You must write your own business plan and implement all aspects of that plan yourself; from interior design to menu planning and from administration to promotion. As a franchisee you start with a foundation; on your own you take a huge leap.

franchiseWhen you start on your own, you take a leap. You have to do everything yourself.

Many additional tasks

Because you begin with nothing, there are a lot of extra tasks to be done. Outsourcing is of course an option, but often a very expensive option. As a franchisee, there are many things you don’t have to think about. Remember that as an independent entrepreneur you need to think about everything including (payroll) administration, setting up marketing campaigns, maintaining your website, Facebook, and other means of communicating with your customers.

Setting priorities

There are many advantages and disadvantages to franchising and starting on your own which you need to weigh up. Ultimately, you must ask yourself what is most important to you. The freedom of your own company or the relative security of a franchise? The brand recognition of a parent company or keeping the profits yourself? The choice is yours.

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