Whether you’re a successful businessperson, entrepreneur or a rookie to the industry, making the decision to buy a franchise has its fair share of pros and cons. In this post we will top pros and cons that may help you to make the decision, to buy, or not to buy a bar or restaurant franchise:

Pros

You may have already heard this much-quoted phrase about franchising: “You’re on your own, but not alone”, so let’s see why you should buy a franchise:

1) Brand Recognition

When opting to purchase a franchise much of the work in regards to marketing has already been done for you. The brand has already been developed, the menu, logo and the design of the bar has been tested, so people know what to expect when they walk in the door. Although you may have to do some local marketing to let people know where you are located, the national marketing campaign will driver the customers to your bar.

2) Support

Being part of the franchise family offers many unique benefits that would not be present when opening your own bar by yourself, such as support in the form of training, both for you and your staff, advertising, in the form of national campaigns and materials for local advertising, and possible start-up help, depending upon the franchiser of course.

3) Group Pricing

Another great benefit of owning a franchise is the ability to purchase supplies at a discounted rate. Most franchisers will purchase their stock in bulk and pass the savings along to the franchisee, and this can also include saving money on storage of inventory.

4) Profits

This is what it is really all about isn’t it? With an individually run bar, you can expect to start making money at the 5-year mark. Because a franchise already has brand recognition already built in, the time it takes to turn a profit can be considerably smaller.

5) And finally, this guy could be your new boss… ‘nough said:

Cons

I know a franchise sounds like the be-all, end-all of running a successful bar, but there are some disadvantages of owning a franchise, and here they are:

1. Design Guidelines

As we mentioned under the pro section, brand recognition is an important feature of owning a franchise, but it can also be a disadvantage, since you may not have any control over the design of the bar itself. Imagine if you were required under your franchise strict rules and regulations to design your bar in this fashion:

2. Menu Guidelines

How important is it to you to be able to change or adjust your menu? If you really need to have personal control over the ingredients the chef puts in, don’t franchise. But if you want a proven formula, where food has been tested across a wide audience, franchise has done this and you don’t have to spend valuable time fiddling with the menu.

3. Franchise Fees

Another disadvantage of owing a franchise are the high franchise fees and royalties. Even if your business is booming, these fees may cut into your profit significantly. You may also be required to pay extra money for national advertising campaigns, which may or may not, help your business in any way.

4. Accountability

You are more accountable for situations that arise in the brand as a whole. For instance, if a franchised bar in another market has an issue that gains national media, say someone getting sick from the food, you can bet that your local business will feel the effects. The other disadvantage of a franchise is your reliance of the franchiser staying in business. Even if your business is profitable, the franchise as a whole can go under based on the poor sales of other franchises.

5) And finally, this guy could be your new boss… ‘nough said:

With a franchise you can benefit from brand awareness and the support of a tried, tested, and true company. The disadvantages are the inability to make any changes that are set outside the franchises’ strict rules and regulations. Stepping outside these rules could end up with you forfeiting your business.

Although a franchise can be a good way to make money and run a successful bar, for those true entrepreneurs, having the freedom to create your own concepts, brands and systems, will only really be possible outside the realm of the franchise. So in the end, it’s what you really feel most comfortable with.

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Author: Corey Rozon