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Cafe Franchise vs an Independent Cafe | What’s better in 2021 ?



One of the biggest questions in the mind of a first time food entrepreneur is to decide whether to go for a cafe franchise or to set up an independent restaurant. It can get really confusing because there is no right or wrong answer.

It’s really up to the person to measure their business goals against the various aspects that affect the setup and operations of a food business. For example, how soon do they aim to break even? How much of their time are they willing to dedicate ? What will be the scale of operations etc


PROs & CONs Below is a very basic analysis of the Pros and Cons of owning an independent cafe Vs a Cafe Franchise

Independent Cafe


Pros

  • Creative Control

  • No franchise fee

  • Own all profit gains

  • On ground learning



Cons

  • Work on the concept from scratch

  • Figure out recipes

  • Hire and train staff

  • Build brand value from scratch

  • No Marketing Support

  • High chances of business failure


Cafe Franchise


Pros

  • Complete setup assistance

  • Staff hiring and training support

  • Quality control

  • Brand value

  • Already set menu

  • Marketing Support

  • Inventory sourcing support

  • Continued support during the franchise tenure

Cons

  • Renew franchise in 4-5 years

  • Pay Royalty

  • Pay Franchise fee




The Difference between a Cafe Franchise and an Independent Cafe-

Now, if you're interested in enlightening yourself more on what factors should be taken into account before making a sound decision for yourself; following is a very crisp and clear tabular representation of what the two formats of businesses entail.

Format of Business

Cafe Franchise

Independent Cafe

Parameters

Budgeting

The brand lays out the entire project cost with detailed break up

An individual may not be able to assess start to end costs

Location Planning

The brand suggests locations after market research

No research done on market standing, avg sales of similar businesses . Location is finalised on the basis of rentals

Kitchen Planning

Professional Kitchen Planning in place for a functionally sound kitchen, Also saves more space for dine in

Dysfunctional Kitchen Planning due to less experience

Kitchen Equipment Sourcing

Standard kitchen equipments at best possible costs since brand has a tie up with manufacturers

Select and finalise equipment individually. May or may not be cost effective.

Menu Planning + Standardisation

Menu already in place with standardised recipes for staff to adhere, to maintain quality

Needs to design menu from scratch, hold trials, research on taste profiles, etc.

SOP's + Menu Planning Pricing

Brand provides with standard operating procedures. Pricing is computed scientifically using fixed and operating costs in consideration

no standard operating procedures in place. makes operations chaotic without stringent processes and rules to follow. Menu pricing is done non scientifically

Staffing

Skilled staff is hired by the brand with industry level salary offers

Staff hiring responsibility rests with the individual

Training

The brand hires replacement if needed and trains the staff personnel in question

The training responsibility lies with the individual or the chef they hire.

Inventory Sourcing

Brand helps with sourcing and supply of all inventory required in the cafe

the individual needs to find vendors, negotiate and ensure timely sourcing of inventory

Interior Design

Brand follows a theme across all its stores and designs floor plan accordingly which is cost effective and state of the art

Individual needs to hire an interior designer to help them design the space which may or may not compliment the concept

Marketing

Brand supports in marketing the new store. Designs campaigns and executes them in a professional manner

Individual may need to hire a PR agency to professionally get the marketing done or handle all marketing activities themselves

Brand Development

Brand has a team deployed in further strengthening the brand value by means of opening new stores, collaborations etc . This is very important for the long term.

In most cases, the individual is busy taking care of everyday operations that the Brand building aspect of the business is overlooked

Returns

Franchise charges either a fixed amount or percentage of gross sales

All profits go to the independent business owner

Troubleshooting + Quality Control

Franchise supports the business in terms of troubleshooting issues arising from time to time

Sole responsibility of the business owner to take care of the issues and ensure quality control

Business Coaching

The brand provides business coaching to make you a better business person, to help you take better business decisions

You learn things as you go. Learn from your mistakes and gradually build your business

I guess the most important question to ask yourself is why are you interested in entering this field work. Is it because you have a food business background by means of education or work experience or you have always wanted to own and run a food business Either way it's very important to ascertain your business goals beforehand so you are better equipped to face challenges. If you are confident to meet all responsibilities at the helm and wish to have complete creative control, then starting an independent business is a better idea for you to go with whereas if you are looking at the business from an investment perspective then going ahead with a franchise is a better option for you.

Look at various franchise formats here.







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