Owning a restaurant and purchasing a franchise are completely different investments, even though they both pertain to food. Just like anything else in the world, they each have their pros and cons.

If you’re debating on which route to take, we can assist you in your research. Read on to get an idea about what the left and right entail, and choose your path wisely.

Things to Consider with Restaurant Ownership

Independent ownership comes with a lot of responsibility. If you hold out and break through the chains of beginner’s difficulty, it’ll be profitable and rewarding.

Some things you’ll want to know and/or do before taking a deep dive into this investment include:

• Have a firm concept that you’re ready to implement
• Long approval processes are not required for ownership
• Ability to create personal branding

Restaurant Benefits

Starting a restaurant all by yourself (or with a co-owner) is scary business. Without the influence of a large parent company, you aren’t promised a neat and clean path.

Even still, owning your own does come with positive benefits. What are they?

• Freedom: Starting from scratch means you get to control the branding and growth every step of the way. You can set a mission and a vision, lay out the pricing and the menu, and hire the time of people you want on your team.
• Personal Profit: Every penny you make in an independent startup can be used for your personal gain, whether it be paying employees, investing more in the business, or starting new food ideas. No portion needs to go to a franchisor.

Restaurant Ownership Negatives

The unknown about owning a restaurant is probably the scariest part. Starting something with no clear proof that it’ll work can be the motivation a person needs to nix the idea in the first place. What are some other reasons a person may think twice about owning a startup?

• High Failure Rate: To keep a restaurant standing, you can’t fail. Unfortunately, one in five don’t make it past their first year, and only half make it past the five year mark.
• Long Work Days: Support is hard to come by when you eat, sleep, and breathe work. Say goodbye to fun down time and making plans. With minimal expert training, most of your days will be spent inside the restaurant’s four walls.

Things to Consider with Franchise Ownership

A franchise is a bit different than a restaurant. With this type of ownership, you’re immediately given a restaurant strategy and concept that’s proven to work. The brand and reputation already exist; you don’t need to focus on drawing the public into you.

Even though it sounds like rainbows and butterflies, franchise ownership isn’t always what it’s cracked up to be. You have to be aware that negative publicity may affect sales. For example, if a foodborne illness has taken effect in a different franchise elsewhere, traffic may slow at your location for fear of the same thing happening.

Things to consider if you’re looking to become a franchise owner include:

• Operations will be run under a reliable, tried and true concept
• Marketing growth will not be necessary
• Long approval processes are deemed necessary
• Granted little choice on branding or sway on marketing
• Restaurants reputation is beyond personal control

Franchise Benefits

Joining an existing franchise will make you a franchisee. That sounds like a fancy name, doesn’t it? It’s pretty fancy, and the process is spectacular. Interesting advantages will guide you along the way. Here are some with a brief description:

• Brand awareness: McDonald’s, a franchise example, has a positive reputation. Customers willingly visit and purchase food products from the fast food chain every day. If you invest in a franchise that’s well known, you’ll automatically have customers on the first day.
• Minimal risk: Capital, knowledge, and experience are inherited through the purchase of a franchise. These three wholeheartedly imply less risk than with a restaurant startup.

Franchise Ownership Negatives

Franchising, just like anything else in this world, has a handful of negative cons that come along with it. For starters, it can be very expensive. The target start price is upwards of $500K, and the expense costs don’t stop there. Oftentimes, franchise owners have expense deductions from their take-home pay.

Additional cons to be aware of include:

• Franchise Success Rate: Reports claim a 1% to 40% failure rate. The jump in percentage can be daunting.
• Scandals & Mishaps: Owners and advertising agents aren’t perfect. Sometimes, inappropriate actions or speech can make its way into the media, and like it not, that image and reputation can stick to the entire franchise long term.