Restaurant Organizations: Chain, Independent or Franchise?

1
Restaurant Organizations Chain, Independent or
Franchise?

• Chapter Five

2
Forms of Restaurant Ownership

• Chain
• Independent
• Franchise

3
Chain Strengths

• Marketing and brand recognition
• Site selection expertise
• Access to capital
• Purchasing (economies of scale)
• Centrally administered control and information
  systems
• Personnel program development

4
Two Kinds of Franchising

• Product/Trade name franchising Confers the
  right to use a brand name and to sell a
  particular product
• Business Format franchising Includes the use of
  product, service, and other systems and standards
  associated with the business

5
Common Characteristics of a Franchise Agreement

• The duration of the agreement
• Fee and payment structure
• Responsibilities of both parties
• Permitted use of symbols
• Operating procedures
• Confidentiality
• Advertising and Promotion

• Financial accounting and maintenance of records
• Training
• Insurance
• Products and services which will be purchased by
  franchisee
• Transferability and renewals

6
Services Provided to Franchisees

• Initial Services
• Overall concept/design planning
• Franchisee screening
• Site selection and planning
• Pre-opening training
• Operations manuals
• Employee handbooks

7
Services Provided to Franchises

• Continuing Services
• Operating and control procedures
• Information management
• Quality control
• Training
• Field support

• Purchasing
• Marketing
• Advertising
• New products
• New concepts