That’s not to say it’s all pitfalls. After choosing a restaurant, go on an on-site inspection and see more. Believing in yourself is the most important thing!
Franchising is not a pitfall if you do it well, but it is a pitfall if you don’t do it well!
It’s not all pitfalls. The important thing is to investigate before doing it. Go and have a look at the existing franchise stores to see the decoration costs, customer flow, and personnel situation. You can make your own rough calculations. You will know immediately whether you can make money
From making the decision to join, to choosing the franchise brand, signing the contract, and opening a store, every step may lead to falling into a pit. The vast majority of catering entrepreneurs join catering franchises to make money, but many unscrupulous companies take advantage of entrepreneurs' lack of understanding of franchises and eagerness to make money, setting up many traps that are difficult to guard against. 1. First, let me tell you what franchising is!
Franchise is the ongoing contractual relationship between the enterprise organization, or the franchise chain head office and the franchise store. According to the contract, a unique business privilege must be provided, plus assistance in various aspects. Franchise stores also need to bear corresponding costs. There are many types of franchise operations, including single store franchise, multi-store franchise, original store franchise, investment franchise, direct holding franchise, employee holding franchise, store transfer franchise, investment franchise, regional franchise, secondary franchise, regional franchise Cooperation etc. Among them, original store franchising is to change the brand on the basis of the original store. It is not recommended because customer consumption inertia has become a huge obstacle;
Regional franchising is a brand authorized franchisee to develop franchise business in a certain area with a direct operation model. , store management is difficult and is generally not recommended except for a few third-tier cities and towns. There are also mature store transfer franchises, investment franchises, regional franchises, and regional cooperation, all of which have manpower or geographical restrictions, so they can be used as alternatives for franchisees;
The investment agent finds an individual or organization to carry out the franchise business on its behalf. However, there is no support for management in the future, and no recommendations are made;
Finally, direct holding franchises and employee shareholding franchises involve equity issues and are not suitable for "newbies" in catering franchises. Therefore, here we focus on recommending single-store franchises and multi-store franchises to franchisees. Introduction to single store franchising: Single store franchising is the most typical investment model. Franchisees sign a franchise contract directly with the brand, and the company only authorizes franchisees to operate catering stores in a certain business district. Analysis: Franchisees can enjoy various promotional activities such as large-scale advertising and publicity by franchise companies. By using the service trademark, product trademark, ownership, patent and design of the franchise brand, franchisees can also receive management training and knowledge from the brand headquarters, and obtain a stable supply of goods from the brand headquarters. Although it requires investment such as franchise fees, raw material fees, and profit margins and is subject to operational constraints, it has less investment and less risk than starting a business. Multi-store franchise introduction: Franchisees directly join two or more stores and sign franchise agreements separately, which are not linked to the region. Franchisees cannot authorize third parties. Advantages: Both the franchisee and the franchise brand are familiar with each other and have cooperation experience and foundation. It is suitable for entrepreneurs with franchise experience and sufficient funds. 2. So what are the common pitfalls of joining?
1. Brands are confused. Take the steel pipe factory as an example. "Steel Pipe Factory Sixth District Xiaojungan", "Steel Pipe Factory Qianmen Xiaojungan" and "Steel Pipe Factory Eighth District Xiaojungan" make entrepreneurs who are planning to join the franchise confused. , without a pair of "fiery eyes", it is really easy to be led into the pit of the village. 2. When the other party successfully attracts your attention, you will be invited to the "flagship store" for inspection and experience. You will see the "grand scene" of queuing outside the store. When you want to enter the store to experience or prepare to taste, Immediately, the prepared remarks or samples will be presented to you, allowing you to conclude that this store is indeed popular. But when you open your own store, the level of training provided by the other party cannot make your store achieve the effect shown by the alliance leader. 3. Then comes the step of signing the contract. When initially promoting, the alliance leader often promises franchisees the profits of voluntary joining, entrusted franchise services and management support, but in the end they set traps in the contract and charge high fees for simple training. After paying fees and training fees, they ignore the franchisees, or force them to provide raw materials that are much higher than the market price and lower than the market quality. There will also be additional fees for the clever name. The initial franchise fee is only 30,000 yuan, and fees will continue to be charged later for reasons such as rising raw material prices and providing better training. 4. Additional terms are a pitfall. If you think that everything will be fine if there is no problem with the contract, you are wrong. There are pitfalls of additional terms waiting for you later, such as how long the profit must be reached within a certain period of time, otherwise what will happen.
All cast a shadow on the prospect of joining, and the fatal back-up move is hard to guard against. 5. Loss support, old pits are not filled and new pits are dug. When your franchise store has losses and seeks compensation or assistance from the alliance leader according to the terms, the headquarters will launch a new franchise "package" for you, just like being "trapped" in the stock market. "Generally, one step at a time will lead to a deeper fall. 3. How to identify these pitfalls? 1. At the beginning of looking for a project, try to find well-known brands to join, which have certain market appeal. Do not go for cheap and go to unknown brands. 2. When going to the store for research, you should not only "see is believing" but also have a comprehensive understanding of its corporate qualifications, operating level, management experience, raw material channels, etc. 3. When signing a contract, be sure to find professionals to identify loopholes in the terms and investment risks to prevent "falling into traps" and cut off various potential problems at the source. However, despite these pitfalls, you should not lose confidence in the catering franchise industry. The essence of franchising is to "sacrifice interests and reduce risks." Regardless of the global market or China, the survival time and profit prospects of franchise stores are better than those of going it alone. The benefits of joining a catering franchise are also obvious. Get the market influence of a mature brand and quickly open up ways to make money;
Shop opening support, not everyone has the energy or ability to handle complex procedures, as well as those with site selection/design/decoration experience , these franchise brands can bring you good experience models;
Technical training, high-quality authentic franchise brands have standard production processes and service standards, which can make your store quickly become more Professional;
Perfect supply chain. The upstream supply is stable, so you don’t have to run the market yourself. And there is security. Experience, a large-scale high-quality genuine franchise brand, has a large number of profitable stores for you to learn and imitate, and make money faster. Data proves that, whether globally or in China, the average survival time of restaurant franchise stores is much longer than that of operating alone. According to statistics from the U.S. small and medium-sized enterprise management department, the proportion of self-operated stores that fail in the first year of opening is as high as 30~35%, while the failure rate of franchise stores is only 3~5%. In China, the situation is similar. The average one-year survival rate of regular franchise brand stores is 34% higher than that of operating alone. Opportunities exist, but there are many pitfalls, so you need to be particularly careful when choosing a franchise brand to avoid falling into pitfalls. Finding a franchise brand with high-quality and authentic products is half the success of your business. Professional word-of-mouth survey: Professional evaluation of the brand applying for entry by the founder of a well-known catering brand. Online information retrieval: Search whether there are negative news/legal risks for catering brands through search engines/Tianyancha, etc., and review the results. Founder interview: Through communication with the brand founder, we can understand the brand’s current and future development plans and its management and support methods for franchisees.
Many entrepreneurs know that "franchising" is currently the best option. Especially for novice entrepreneurs, joining a well-known chain brand is the most worry-free way, but there are still many Entrepreneurs suffer in finding brands, visiting headquarters, and signing contracts.
Super pitfalls not recommended
80% chance of failure in catering business, 20% chance of success! First position, second management! Don’t touch it for laymen
If you are a good brand, then there must be no pitfalls. If you don’t see clearly and find an unreliable one, then you have no choice but to admit defeat. .
It’s not a trap. Everyone gets what they need. If you want to make money, you still have to rely on yourself. Franchising is a shortcut, but you still can’t make money without working hard. You have to choose yourself.
Looking at the conditions for joining, there are now more internet celebrity restaurants joining, and most of them have been popular for a while, but their business has plummeted. The reason is that the price and quality of the actual products do not match the market. Not a reasonable price/performance ratio. After trying it out, customers no longer remember it. I don’t feel the need to spend again. Joining such a brand will undoubtedly make you a target of being cheated. However, mature brands such as Haidilao and McDonald's cannot join. Therefore, I personally think that franchise stores have more pitfalls and less profit.