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
Cons
| Cafe Franchise Pros
Cons
|
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.