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Sector Focus

How to be a Winning Multi-Store Franchisee

Peter and John Baladakis are no strangers to success. They own several successful Pick n Pay franchise outlets. monique verduyn chats to john about his 16 years of experience in business.

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Peter and John Baladakis

John Baladakis says he is high on life. He has every right to be. In partnership with his brother, Peter and father, Alex, the self-proclaimed headstrong 40-year-old has achieved what many entrepreneurs can only dream of – ownership of seven highly successful Pick n Pay supermarket franchise stores, Pick n Pay liquor stores and Pick n Pay clothing stores, all within the retail giant’s thriving franchise system.

Born into a family of entrepreneurs, even as a teenager Baladakis knew that he would run his own business and never work for anyone else – being employed was just not an option.

He began his relationship with Pick n Pay in 1994, acquiring his first franchise when he was just 24. The supermarket in the Kempton Gate Shopping Centre located in Edleen, Kempton Park, flourished from day one. That was the beginning of a relationship with the retail group that has endured for 16 years and is still going strong. Baladakis recalls: “I had a BCom degree and a lot of retail experience which I’d gained through working at my father’s Spar supermarkets. Pick n Pay had just started franchising and my father, my brother and I were very keen to buy into a business with such a strong brand.”

Innovating within the box

How does an entrepreneurial spirit succeed within the franchise system? It is a well known fact that entrepreneurs have an almost uncontrollable urge to reinvent the wheel based on their confidence in their ability to figure out how things should be done. “I believe the key to being a successful franchisee and, at the same time giving free rein to your entrepreneurial drive, is to recognise that you can have the best of both worlds,” says Baladakis.

“A successful franchisor offers proven operational, marketing, HR and financial systems, as well as a trusted and highly valued brand. Combine that corporate systems thinking with your entrepreneurial flair, and you have a winning formula that enables you to avoid making mistakes and to become successful more quickly.”

Baladakis believes that while innovation may sometimes be curtailed by a franchising system, this has not been his experience with Pick n Pay. “We actually have a fair amount of freedom when it comes to issues like new marketing ideas within our stores. As one example, we have developed a hot food section that is quite unique in its offering. I believe in working within the box rather than trying to break it. What’s the point of expending your energies on things you can’t change? Rather find ways to work innovatively within the parameters.”

Traditionally the franchisee-franchisor relationship can be fraught with problems.

But Baladakis’s attitude has paved the way for a profitable partnership built carefully over time. Franchisors have to understand how important it is to nurture their franchisees and the franchisees need to trust the franchisor. Baladakis has this to say about his franchisor: “We have never had issues with head office.

The people I deal with are people I have built a long and healthy relationship with – they trust me as I trust them. In my view, every new franchisee has a duty to become trustworthy.”

Choosing the franchise

Baladakis stresses that two-way communication between the franchisee and franchisor is a key element to the success of the relationship.

He also notes that he was fortunate in choosing to partner with a franchisor that ‘got it right’ when it comes to franchise management. “It’s a system,” he says, “that creates wealth for people.”

Although the Pick n Pay franchise system was new at the time that Baladakis bought into it, there were several compelling reasons driving his decision. The strength of the brand and its power were amongst those, as was the company’s history and profitability. He believed in the brand. But his own passion for retail played a role too. “You have to love the business you choose to go into,” he stresses. “It becomes an integral part of your life. Understand that as a franchisee you have to sacrifice any of the comforts that a regular job gives you – there are no coffee breaks, corporate lunches or long weekends.”

Baladakis has some words of advice for people who are thinking about buying a franchise: “Speak to existing franchisees; look at the history of the franchise as well as the number and location of stores; get a detailed model of the business operation; and find out how profitable the franchise is. In addition, make sure you know what the set-up costs are and what that includes, such as design, building costs, equipment and so on. Determine upfront what the ongoing fees are, like joining fees, royalties and advertising costs.”

Building a successful outlet

In the retail industry, a customer-friendly environment is critical. Baladakis has succeeded in getting it right time and again. “You have to believe in the franchisor’s customer service philosophy, otherwise you will not be able to transfer it to your employees.”

Standards are important too, he adds. Consistency is vital – from cleanliness, to merchandising, to the way a till packer packs a bag – these all need to comply with a high standard. “The customer has to be able to rely on a certain level of service that is associated with the brand, so you cannot deviate from the standards that have been set because you will sacrifice customer loyalty, and that is what impacts the bottom line,” he says.

Site selection is another vital aspect. “A good franchisor will assist franchisees with the identification of a great site. They have the resources and experience to do so. It’s also in their interest to ensure the site is viable, as failure is bad for the brand.”

Another consideration when it comes to site location is the position of the store itself within a centre. “You need to determine how accessible the store is and whether it’s located close to the parking lot so that people can easily unpack their trolleys. When it comes to location, it’s also important to understand the local community. Who is your target market? Are they low income earners or affluent consumers? This has a major impact on the items you stock,” he explains

But the Baladakis team also did something different that has helped to cement the success of the stores they operate. “Although I love being on the shop floor, I have moved into focusing on growing our property portfolio, while Peter runs the actual stores,” says Baladakis.

“As a result, we now own five of the seven centres in which our stores are situated. This gives us an enormous advantage as we are able to pick and choose tenants. By turning the centres into better places for people to shop, we are able to drive traffic to our stores. It’s a level of control that not every franchisee has.”

Developing the team

Baladakis has been fortunate to have two partners who are family, and who bring their own retail and financial experience to the business. They now employ more than 500 people in their stores. “We make our own employment decisions,” says Baladakis. “Every store has a manager and a second-in-charge individual. When we appoint people, we look at the individual, rather than his or her experience. Systems and skills can be taught, but drive and commitment are rare qualities. It’s also important to know at what stage in its lifecycle a business is in when you are making hiring decisions. An older, established business that has been around for a while needs a stabiliser, while a new business requires the energy of a go-getter. A store that has high shrinkage rates needs someone who pays attention to detail and cares about security.”

When it comes to staff motivation, every single employee is inducted into the business and learns about the brand ethos from the outset. Having access to the franchisors’ training policies and procedures obviously has a positive impact on establishing and maintaining one’s staff complement, but giving staff inspiration is also of vital importance.

Contact Pick n Pay Franchising on: +27 11 856 7000

Pick n Pay franchising fast facts*

  • There are currently 291 franchised Pick n Pay stores in South Africa, Botswana, Namibia, Lesotho and Swaziland
  • The minimum investment required is R9,152 million, including stock, for a family supermarket
  • Ongoing operating costs vary from store to store
  • Franchisees must have previous retail management experience
  • Pick n Pay won the FASA Franchisor of the Year award in 2009. The award celebrates the success of a franchisor which has made a significant impact in the marketplace and has, through effective business management and marketing, achieved outstanding financial results and significant growth in a sector. The group converted 49 Score Supermarkets over 2008 and 2009 to Pick n Pay Franchise stores

* Information supplied by Anton Smith, GM, Franchise, Pick n Pay

The habits of effective franchisees

John Baladakis shared his ‘habits of effective franchisees’ at a recent franchisee networking breakfast hosted by Standard Bank and the Franchise Association of South Africa. They were:

  • Engage the customer

The closer you are to the customer, the higher your success rate. Excellent service should be seen as an investment because bad customer service loses you business and therefore profit.

  • Set the standards

Every day should be opening day. Your business needs to be consistent and maintain the same standard you set on your opening day.

  • Lead the team

Leadership is more than just being the boss. You need to pick a direction and stick to it. Don’t lose focus on the target, adjust the course when necessary to get there, but never take your aim off the goal.

  • Improve one thing daily. Innovate

Find ways to cut costs, to improve the customer experience, and to basically run your business more efficiently.

  • Make excellence happen

Find ways to push the goals further. You should strive to make your success today bigger than yesterday’s excellence.

These habits combined, Baladakis says, will ensure that franchisees run successful businesses, giving them the opportunity to make a positive contribution to the economy.

A Franchisee’s Perspective is published by superbean.net. For more information visit www.superbean.net

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Sector Focus

3 Tech Trends Your Franchise Should To Keep Up With During The 2018 Restaurant Revolution

For the first time in history, the majority of consumers are – arguably – more interested in how they buy instead of what they buy, according to research. Catch up quickly by responding to this in three ways.

Diana Albertyn

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How many ways can you customers choose an item, order it and pay for it in your restaurant? Mike’s Kitchen, Spur, The Baron, and other sit-down restaurant franchises across South Africa have widely started accepting mobile payments using the Zapper app. If you have too, you’re on the right track, because convenience reigns in the restaurant industry, especially where trends are concerned, for your current and future customers.

“In the last two years, there’s been a 50% increase in restaurants using technology. Almost 80% of guests say restaurant tech improves their guest experience, especially when it makes service faster,” according to a recent study focusing on diners and technology.

Here are three of the top trends influenced by consumers’ mounting affinity for experience over your menu items, décor or prices:

1. Self-service via touchscreen kiosks

Who wouldn’t appreciate skipping the queue and enjoying a consistent enhanced ordering experience? Add rich imagery and food customisation capabilities and you can see why self-service is poised to make a huge impact on the QSR industry in 2018.

Related: How Your Fast Food Franchise Can Attract Quality-Conscious Consumers

While kiosk aren’t a new form of technology, combined with loyalty programmes, touchscreens for mobile order pick-up and – in the near future – facial recognition to identify and service customers accordingly, they’re about to become a mainstream addition.

What’s in it for you though? Well, besides happy repeat customers, your order accuracy will improve and staff will be free to attend to more strategic activities within the business.

2. App-enabled ordering and pick-up

Research by QSR Web found that digital restaurant ordering is growing 300% faster than dine-in traffic.

Because “restaurant consumers are aggressively gravitating toward concepts that offer the greatest level of convenience and control across ordering, payment and distribution,” according to analysts from Wells Fargo, mobile ordering technology requires your franchise to go a level higher than its current system.

Consider implementing features such as dedicated drive-thru lanes to for app orders. Or what about outdoor locker systems activated by a mobile phone, enabling a customers to receive their order without interacting with restaurant staff?

3. Analytics aiding personalisation

Even better than mobile ordering though, is using AI to leverage apps including Facebook Messenger or simple SMS to take customers’ orders, for a personal touch. Not only does the chatbot record orders, but based on individual customer data, it’s able to predict what they may choose to eat based on various factors including age, gender and even mood.

Related: The Only How-To You’ll Need To Start A Restaurant

If you’re wondering how the mood is detected, fried chicken giant and search engine firm Baidu have established the answer: Facial recognition technology piloted in Beijing that predicts customer orders based on their face displayed in the kiosk screen.

“Restaurant technologies that capture data, such as customer orders and preference will businesses better understand their target audience. Hence, they will be used extensively in 2018,” according to Indiez, the company that developed Domino’s pizza’s app.

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Sector Focus

How To Start A Funeral Business

Running a funeral business can be lucrative, but you must determine whether it’s the right venture for you.

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In South Africa, burial remains the most popular end-of-life choice.

“Just how many burials take place is difficult to measure because there is a formal and an informal funeral industry in South Africa,” says Rey von Ronge, secretary of the National Funeral Directors’ Association, an industry watchdog organisation specialising in resolving disputes between undertakers and the public.

Franchise vs independent operators

In South Africa, the funeral industry operates through two channels – independent companies and franchises. The two franchise players are Martins Funerals and 21st Century Funerals, both members of the Franchise Association of South Africa (FASA).

Related: Want To Invest In A Billion Rand Industry? Then Look To the Funeral Business

A Martins Funerals franchise costs upwards of R485 000. This includes start-up stock. Royalties are paid on gross monthly turnover at 7%, working on a sliding scale. The franchise contract is renewable after ten years and full training and ongoing support is included.

There are independent operators in the market, but setting up a well run business that complies with the laws of the country is expensive. “The problem we face is that there are many fly-by-night funeral businesses in South Africa,” says Von Ronge.

Fly-by-night undertakers do not provide proper services and are in the business purely to make money. Fly-by-nights operate without a licence and do not comply with the industry’s rules. People are buried in the wrong graves and health requirements are not met.

Some smaller private funeral homes make use of government crematoriums and store bodies at private and government mortuaries until it is time for the burial or cremation.

It’s the responsibility of local municipalities to ensure the proper management of cemeteries, crematoria and funeral undertakers within their areas of jurisdiction.

The cost of running a fully functional private funeral home

funeral home“Most people think that the funeral business is an easy way to make money, but it isn’t,” says Theo Rix, MD of Independent Crematoriums of SA.

He says the cost to set up a fully functional crematorium in South Africa is around R7 million. A cremation furnace costs around R1,5 million and you need at least two to run a profitable business.

Other costs include smoke extractors and their installation, protective clothing for radiant heat and so on.

A typical start-up

Consider a typical existing upmarket funeral home based in Johannesburg:

  • Sales revenue: R4 million
  • Cash flow: R1,2 million
  • Employees: 7
  • Hearses: 3
  • Leasehold rent: R108 000 per annum
  • Size of the premises: 300 m2

It can take up to two years to get the necessary permits and permission to run a funeral home from local municipalities and government authorities.

“Because the paperwork is so extensive, we don’t attempt to do it ourselves. We employ attorneys to get the process going on our behalf,” says Rix.

Related: The Complete Guide to Starting a Business in South Africa

Are you the right person for the job?

Starting a funeral home is not for everyone. Here are some points to consider:

  • Because of the nature of the business funeral directors must be able to work at odd times of the day.
  • A person who runs or owns a funeral home should be an excellent communicator and a good listener. People from various cultures and traditions will have to be managed with equal ease.
  • An understanding and caring attitude is a must, while at the same time the funeral director has to be emotionally strong and not shaken by other people’s distress.

Related: Want to Run a Funeral Business? Then You Must Know This

Usual tasks include:

  • Speaking to the bereaved in order to make funeral arrangements.
  • Liaise with others such as the clergy and cemetery workers, and even write obituaries.
  • Keep records, such as lists of items that come with the body.
  • Obtain all clearances and adhering to regulations associated with the event, he or she will need to be well versed in procedures and legal issues.
  • Have extensive knowledge and respect for the religious sentiments and beliefs of various cultures and communities and will also need to know about different customs and rituals followed by various religious groups during the funeral service.

Study the art of funeral directing

funeral directingMany funeral home owners seem to view training and personal development as more optional than essential; that is all set to change with the opening of the very first funeral director training school in Gauteng.

The Funeral Academy for Africa (FAfA) offers a Certificate in Funeral Service (NQF Level 3) which has been introduced for the first time in South Africa and Africa.

The course teaches students to prepare and present funeral services and manage funeral logistics and administration. FAfA also offers a variety of short courses and has opened campuses in Durban and Cape Town.

For more information, visit www.fafa.co.za

Regulation for burial societies on the cards

The burial society business in South Africa is largely unregulated. But this is set to change with the establishment of a new, overarching regulatory body – the Burial Society of South Africa. By Gill Abraham

What is a burial society?

A burial society is an informal self-insurance scheme. It absorbs the costs of social activities and cultural requirements of funerals. The total amount invested annually in burial societies is said to be around R6,4 billion

“Burial societies have massive potential for wealth creation within South Africa’s poor and vulnerable communities, given the right assistance. Research has shown that more than 20% of the South African adult population are members of a burial society – so the importance of this sector must not be underestimated. Burial societies also represent a significant spend with members prioritising 15% of their income for this financial product,” says Inseta’s CEO Sandra Dunn.

“The aim of the newly formed Burial Society of South Africa (BSSA) is to unite all the burial societies that operate in the informal sector under one umbrella,” says secretary general of the BSSA, Zulu Ratswana.

Related: 7 Disgusting Businesses That Could Be Tomorrow’s Mega Money-Spinners

“Each burial society has about 30 members and each member contributes R50 a month. This money is then deposited into a bank account where it stays until it is needed.”

Banks and insurance companies need to change

Tradition and belief influences the decision-making of a burial fund member when arranging a funeral for a member of the family. “Banks offer policies, but they have never consulted with the burial societies and they do not appear to understand their needs,” explains Ratswana.

All causes of death are covered by burial societies with no questions asked, whereas formal insurers exclude (or at least make it difficult to claim on) certain deaths such as HIV/Aids or suicide. The banks do not include the needs of the extended family, whereas burial societies do.

“We also want to provide a free last will and testament to those who join the BSSA,” he says. The membership fee is R100 per year. The BSSA will also seek to mass produce coffins in order to keep costs down.

“We want to assist with pauper funerals and we believe ‘a human being is a human being’, meaning that even if someone is destitute, that person deserves a decent funeral. So we would adopt the corpse, and by giving that person a proper funeral; they will be able to rest in peace,” explains Ratswana.

Related: 3 Key Law Areas To Know When You Launch That Start-up

Another aim is to allow members to borrow money at very low interest rates. Ratswana says the BSSA plans to include education and training for the industry as well, and will offer bursaries to deserving students.

A need to unite

Because the industry is unregulated, Ratswana explains that burial societies need to organise themselves, which is why the BSSA has been formed. Ratswana sees the insurance companies and banks as a possible threat because the burial societies lack the skills and resources to provide their growing market with the right products and services at the right price.

“If we organise the players in this industry we will be able to compete with the formal funeral insurance sector. We will be able to provide proper control and manage fraud as well as the many problems that HIV/Aids has created. Once we are united, it will be much easier.

“We intend to establish offices in all provinces of South Africa and we will impose standards. We will become the watchdog of the industry,” he says.

Related: Entrepreneurship Is All About Overcoming Obstacles

“As the informal market becomes more sophisticated, and companies include funeral insurance in salary packages, the market will change,” says Dr Chris Molynex, past president of the National Funeral Directors’ Association.

Registering burial societies as co-operatives

Inseta is pushing for burial societies to register as co-operatives in an endeavour to become more professional. Inseta has committed to provide capacity building workshops that will be held nationally.

Contact Inseta’s call centre on 0860 113 0013 for  dates and venues for these workshops.

Pros and cons of funeral businesses

Pros and cons of funeral businesses“R5 billion is spent on funerals annually in South Africa,” says Inseta’s CEO, Sandra Dunn.

Threats to the industry as a whole include the lack of burial land. At Avalon cemetery in Soweto, for example, it has been reported that over 200 funerals take place every weekend. This is Johannesburg’s biggest and busiest cemetery, accounting for 40% of burials.

Another threat to the sector is emissions caused by cremation. Cremation spews about 400 kg of carbon dioxide – a greenhouse gas blamed for global warming – into the air, along with other pollutants like dioxins and mercury vapour which are emitted if the deceased have silver tooth fillings.

But these threats to the industry also can and have created opportunities. Internationally, there are many new practices which are being used to deal with these problems. In Japan, most deceased people are cremated.

According to a recent BBC report, it has become extremely difficult for the Japanese to find places to store ashes, especially in big cities. The solution has been to save space and money by converting old warehouses into storage facilities for the ashes of family members.

Because Israel is such a small country and tradition dictates that the dead are buried, a simple solution has been devised where two family members are placed in a single grave that is dug deeper by an extra metre. Israel has also designed above-ground niche burials, in which the niches are pre-cast concrete units.

Related: Steps for Writing a Mission Statement that Means Something

However, the most significant innovation is the multi-level cemetery. It allows for single and double conventional graves as well as niche burial, on at least two levels.

Sub-contracting is a good way to make money

“A funeral director is in fact an events manager, but one who doesn’t have as much time to organise an event,” says Dr Chris Molynex, past president, National Funeral Directors Association Southern Africa. Funeral directors sub-contract services such as catering, fresh flower arrangements, rental of tents and chairs, transport for mourners, tombstones, coffin name plates and wreaths.

A popular tribute at a funeral can be a dove or butterfly release at the graveside. Another appealing choice is a bagpiper or a ‘live’ jazz band to play at the end of the ceremony.

These services are all spin-off revenue earners. Other business opportunities include the manufacture of casket trimmings, linings and handles.

Green burial

In some parts of the world, and especially in the United Kingdom, the increasingly popular green or natural burial movement is working hard to reform how the dead are returned to the earth. With natural burial, bodies are not embalmed; coffins are simple and made of easily decomposable, non-toxic materials.

Sonja Smith, CEO of Sonja Smith Funerals for Pretoria, has been awarded the franchise rights in South Africa for natural woven coffins. “I want to help the funeral industry in this country to become a friend of the environment,” says Smith. “I started my research two years ago when I read an article about natural woven coffins in a British publication called The Funeral Journal.

“I was convinced that this concept would work well in South Africa and started to liaise with the company in England. I was offered the sole mandate for South Africa and Africa. The range features coffins woven from natural fibres like seagrass and cocostick. They are bio-degradable and made from easily renewable resources that don’t pollute the atmosphere when they are burnt in crematoriums.”

Smith’s first consignment of adult woven coffins arrived in April and she was overwhelmed by the response from funeral directors across South Africa. More than 80 funeral homes took a keen interest and wanted more information.

Coffin making

In South Africa a coffin should be manufactured to SABS standards. Coffins are generally made from wood, while caskets are produced from wood or metal. Most importantly, a coffin must be sturdily constructed in order to protect the dead and safeguard the health of the living, which is why the SABS has set strict standards.

There is a growing demand for coffins and training centres where coffin making is taught. Courses are available throughout South Africa and they provide the necessary practical knowledge to start a coffin and casket manufacturing business. Online business coffins.co.za was formed eight years ago due to the huge demand for affordable funeral products.

Related: 6 Of The Most Profitable Small Businesses In South Africa

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Sector Focus

The Pros & Cons Of Owning A Restaurant Franchise

Do you have what it takes to be a successful restaurateur? Our franchise expert offers some words of wisdom.

Jeff Elgin

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There are many different types of business format franchises, but when most people think of a franchise business, their first thought is of food. The success and growth of the many big brand-name fast-food franchises makes this a logical first stop in the thinking process.

When evaluating restaurant franchises, you must focus on the characteristics of the business from a franchisee’s perspective to determine whether this industry is the right one for you.

There are some wonderful advantages to having a food business, but there are also some challenges you need to be aware of before proceeding in this industry.

The advantages

restaurant-layout

In assessing a food business, the main advantages are typically considered to be:

Built-in Demand

Consumers have been trained to look for franchise food outlets, which can represent a big advantage for a start-up. You need to make sure the product offering of the food franchise has “staying power” in the marketplace rather than being a fad or fringe product.

Related: The Only How-To You’ll Need To Start A Restaurant

Ease in Financing

Traditional lending sources are very familiar with the real estate and equipment needs of a prepared food operation, which may ease the challenge of obtaining start-up financing. These sources also like the relatively high revenue production of a typical food franchise.

Track Record of Success

Many food franchises have multiple units and have been operating for a while, making it fairly simple to determine and verify their track record of success. That can help you make an informed decision about the business prior to getting involved.

Prestige

Whether valid or not, many people associate a high degree of glamour with a person who owns a food franchise business. The fairly high degree of status associated with this occupation is important to many prospective franchisees.

The disadvantages

restaurant-plating

In assessing a food business, the main disadvantages typically include:

High Initial Investment

Most food franchises require a significant investment to get started. Food preparation stations, sinks, stoves and ovens, grease disposal systems, venting requirements, customer seating and bathroom areas – the list goes on.

Zoning and Code Compliance

The government tries to ensure that any food business meets numerous codes and guidelines so the food product is safe for the public to consume. Complying with these regulations can initially can be time consuming.

Virtually any food franchisor will provide extensive assistance to a new franchisee in terms of dealing with zoning, permits, code compliance and all other site-related issues, because the new franchisee probably doesn’t have a clue how to do this whereas the franchisor has lots of experience on these matters.

If a food franchisor doesn’t offer extensive support on these matters (you can determine this during your conversations with existing franchisees), pick a different one.

Related: 10 Business Ideas Ready To Launch!

Labour Challenges

Most food businesses require the services of a significant number of low paid employees to conduct their business. Turnover of these employee positions is normally very high, and recruiting and retaining a sufficient number of acceptable quality employees is typically listed as the number-one challenge in any food franchise.

Relatively Low Margins

In food operations, the franchisee has both the cost of goods sold and Labour costs to contend with in an environment that is very price sensitive, especially in fast-food outlets. The net margins of most food businesses are not nearly as high as other (particularly service-related) franchises, and you’re also dealing with spoilage, theft and other issues that you don’t find in many other types of franchise businesses.

Quality of Life

As mentioned above, many people associate a high level of status with owning a food business, at least until they understand the facts of a typical food franchisee’s life. The hours can be very long, as you’re often the first to arrive and the last to go home. The Labour challenges can be very frustrating and are the main reason owners cite for wanting to leave this industry. Then there’s also the issue of what a person smells like after spending long hours each day in a food franchise.

In conclusion

south-african-restaurant

The obvious question, assuming you don’t have previous experience running a food business, is “how do you know whether you have these skills and aptitudes?” The best answer, and one that is actually required by a few of the most successful food franchises, is to go to work in an existing unit and shadow the present owner until you’ve gained enough experience to know for sure.

This isn’t going to be a process involving an hour or two – more likely it’ll take at least a few weeks to know for sure. The time commitment involved may seem high, but it is infinitely better for you to find out early (and without risking your life savings) if this business is not for you.

A final consideration related to food franchises is this: Some food franchises run very simplified operations and can provide a business model that avoids a number of the disadvantages listed above. These are typically businesses that don’t involve cooking a product, at least not on site. They may use a commissary system to deliver ready-to-serve products, or products that only have to be assembled in order to serve, to the franchise outlet. These types of businesses, like a Subway outlet, can avoid many issues but almost always still have to deal with the employee issues discussed above.

Give some serious thought to the franchisee role in terms of the tasks required in a typical day or week, the hours worked, the investment and the possible returns. Make sure you know what it takes to succeed and that you possess those qualities. Then you’ll know whether being a restaurateur is right for you.

Evaluation Tip

The secret to success in evaluating any food franchise (or any franchise for that matter) is to clearly identify the skills necessary to succeed, then make sure you either have them or go do something else. The food business can be very rewarding to a person who has the special blend of skills and aptitude to make the business work, and these operators are among the most respected in all of franchising because of their success.

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