Restaurant Expansion: Owning vs. Franchising — A New Culinary Crossroads

As the culinary scene evolves, restaurants face a momentous decision, steering the trajectory of their brand’s legacy: should they multiply through direct ownership or via the franchising path?

This choice is by no means new, but as the food industry becomes increasingly competitive, making the right decision is crucial for sustained success.

Owning vs. Franchising ?

Restaurant Entrepreneurs and Key leaders has this to say…

Velvet Taco

The heart of Dallas, a burgeoning Mexican chain, finds itself at this pivotal juncture. The company’s top brass recently convened to deliberate on the restaurant expansion. Their verdict? To nurture growth by maintaining ownership of their restaurants. By doing so, they believe they can preserve the essence of their chef-driven ethos, enabling them to craft unique dishes and sustain the brand’s quality and reputation.

However, Velvet Taco’s strategy is not universally adopted. The spectrum of restaurants’ growth strategies reveals diverse thought patterns. While some companies, like Salad and Go, based in Phoenix, Arizona, echo Velvet Taco’s perspective, prioritizing full control from farm to fork, others perceive franchising as the golden goose.

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Chris Ives

CFO at Bubbakoo’s Burritos, located in Wall, New Jersey, sings praises of the franchising model. He highlights its low overheads and reduced liabilities, not to mention the local knowledge brought by franchisees, which can often be a game-changer in a location-driven industry.

Bubbakoo’s itself commenced as a beach-themed entity with a company-only model but later pivoted to franchising, resulting in growth that has seen them burgeon to over 100 locations spread across 16 states.

Contrastingly, Jeremiah’s Italian Ice from Orlando, Florida, meandered down the franchising route after cultivating a local, loyal customer base for more than two decades. This transition wasn’t just about rapid expansion but was catalyzed by the desire to share their simplistic yet delicious offerings — their renowned Italian ice and ice creams — with a larger audience.

Michael Keller

CEO of Jeremiah’s Italian Ice, acknowledges the complexities franchising introduces. However, he stresses that a robust franchising agreement, combined with diligent training and oversight, can ensure that franchisees uphold brand standards, resulting in a harmonious symbiotic relationship.

One common undercurrent in these narratives is the quest for brand control. Direct ownership undoubtedly offers this in droves, as exemplified by Salad and Go. They pride themselves on their intricate knowledge of the journey their produce takes, down to the last lettuce leaf. Such granular control empowers them to provide an unparalleled guest experience, which they deem critical to their success.

However, franchising isn’t devoid of control, but it shifts the dynamics. It necessitates impeccable franchise agreements and rigorous monitoring, ensuring franchisees resonate with the brand’s ethos.

Hmmmm….

The question for Owning vs. Franchising remains. Regardless of the route chosen, the ultimate goal remains the same: to achieve growth while preserving brand integrity. As the culinary industry evolves and these choices become even more intricate, one thing is clear — whether owning or franchising, the key lies in ensuring that every bite tells the brand’s authentic story.

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