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Restaurant Franchise – Is It for Me?

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The restaurant industry employs the highest number of people and, pre-Covid, it was growing at the rate of 9% YOY, which is higher than India’s GDP rate. Yet, restaurants see the highest failure rate as compared to any other industry. The restaurant industry attracts all kinds of people – from sportsmen, to actors, to businessmen and even politicians. Still, over 40% of new restaurants are unable to make it through their first three years. Surprisingly, even a business which has glamour, cash transactions, limelight, high growth rate and demand may not survive.

Perhaps you too have thought about owning your own business because you want to be your own boss. Should you start a business from scratch? Should you buy an existing business from owners who are seeking to sell so they can retire? Or, should you buy a franchise? In my experience, the top few reasons that can lead to the failure of a restaurant venture are lack of understanding of the restaurant business, too many decision makers, inconsistent menu and taste, supplier issues, incorrect location, high rentals, lack of management, no audits or controls, and ineffective marketing strategy.

On the other hand, chain restaurants and cafés have long lives. Mc Donald’s, KFC, Applebee’s , Chili’s, Starbucks, Gloria Jean’s Coffee, Dominos, Pizza Hut, TGI Friday, etc.; all of these brands have more than 1000+ outlets across various countries. These brands have been operating for over two decades and are still growing. And, while there are many advantages to opening a franchise, you will also find some challenges. Here are some pointers to help figure out whether a franchise would be the right choice for you.

Read the full article here in our October 2020 issue.

Rohit Malhotra is CEO of Applebee’s Neighbourhood Grill & Bar India and Gloria Jean’s Coffee India. An accomplished professional in the hospitality industry, with a career dedicated to operations management, leadership and culinary expertise, Rohit has an exceptional flair for Franchise Operations and Business Development and has written and implemented numerous Franchise Operations and Training Manuals over the years. Among other achievements, he was recently awarded an honorary doctorate by the University of Jerusalem for his significant contribution to business administration.

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