Restaurant Organizations: Chain, Independent or Franchise? Chapter Five

Forms of Restaurant Ownership Chain Independent Franchise

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

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

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

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

Services Provided to Franchises Continuing Services Operating and control procedures Information management Quality control Training Field support Purchasing Marketing Advertising New products New concepts