As you run and operate a successful restaurant, you will soon have this ambition that most restaurant businesses seek to fulfill: franchise your own business.
A lot of hospitality businesses expand into multi-outlet operations some through franchising, some through multi-branching, and others through a mix of franchised and self-operated outlets. At the end of the day, you will become a Franchisor or multi-chain business owner.
Like many in the market, a number of good restaurants failed to accomplish their mission. Some went bankrupt and some closed down their outlets to later get back to a one-outlet operation as they were before the expansion. I will not go through the brands that failed during the last decade, but I will recommend a mature path to success.
First, allow me to give you a quick glance about the differences of branching. Franchising is when the original owner of the brand (called franchisor) authorizes or grants another person or group of people (called franchisee) the right to open, manage, and operate a similar business of the same brand against an agreement. Branching is when the founder or owner of the entity opens sub-branches or outlets under the same entity operated and managed by them.
To Franchise your brand or concept is not as easy as many entrepreneurs think; it requires a lot of hard work, imposes stress, and needs financing. Hence, once you successfully franchise your restaurant, the returns can get very promising.
The setbacks of failing in franchising or multi branching is: less market share, lower customer retention, and thus less confidence in the brand.
If your answers to the above points were 'Yes', then you can start considering franchising. 90% of franchisees have 0% knowledge in the franchised business. It is your role to provide them with the know-how on how to operate, run, manage a successful franchise of your brand, and build an effective quality control system that evaluates and maintains the core values of your company.
During the early stages of your first successful store, you may get approached by friends, customers, or investors to open your next franchised outlet. My advice to you: don't get too excited to accept franchise applicants before building a strong system that would accompany your growth! Sticking to your plan and timeline makes your brand more valuable and gives the potential franchisees more confidence in your entrepreneurship skills. Remember that fast expansion with no grounded experience is a killer.