Independent versus Franchise I

Thinking of starting a restaurant? Have you considered all your options?

If you are planning to start a restaurant, you may want to consider franchise options. Every individual is different therefore a franchise may not be right for you. Both types of businesses offer you different advantages and disadvantages. Regardless if you are choosing to become an independent restaurateur or buying into a franchise, both require hard work, time and money.

Why Should I Choose a Franchise?

If you are an individual who may have the passion for the restaurant business but may not necessarily have certain skill sets to pursue a business on your own, a franchise may work for you. A franchise offers a system that provides new franchisees with all the means to successfully launch a restaurant. The franchise system goes further and also provides access to company resources for the business to continue to run successfully and to allow it to grow.

What can I Expect?

Good franchise systems provide more than the use of branding, trademarks, recipes and operation manuals. They offer a defined support system. Franchise support can differ from one company to another, but the most common areas of support includes:

Real Estate

  • Market analysis
  • Site selection
  • Lease negotiation

Development

  • Design service
  • Consultant assistance
  • Specifications on fixtures, furniture and equipment
  • General contractor support

Training

  • Comprehensive training program
  • Classroom instruction
  • Management training

Operations

  • Opening support
  • Favorable supplier contracts and supplier coordination
  • Ongoing support to increasing sales
  • Ongoing support from members of the Operation and Training team
  • Operation manual, policies and procedures

Marketing

  • Marketing plan assistance
  • Access to company marketing and advertising programs

Other support services may include Human Resources and Financing. In this case, a company will provide franchisees with assistance in staff recruitment and business loans.

Typically for any franchise agreement that has been signed, the franchisee is obligated to have their restaurant ready for operation within a specified time (i.e. in 6 months of signing). Therefore, the support provided is essential to meet the franchise terms.

We’ll continue with the costs and other factors involved with franchises in our next post.

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Staff Incentives

So you have done everything possible and analyzed all your numbers and confirmed you cannot offer staff benefits at this time.

What else can you do? Over and over, I will continue to repeat that retaining employees is one of the hardest challenges for any restaurant. As owners and managers, we are all aware of this. We have the tools and resources so why are we not doing something about it? Too many restaurants look at the bigger picture on what they would like to provide in the future instead of what they are capable of doing in the immediate term.

Employees leave for different reasons, but many leave for the same reasons. I have witnessed dozens of highly talented individuals quit the restaurant. Some move on to other restaurants while others decide to change careers. At the end, a restaurant is left struggling to maintain their operation with the same consistent service. If we ensure employees are happy, then more than likely they will work harder for you. The harder they work, the end results are better for everyone.

Incentives versus Benefits

Forget about staff benefits for minute and think about what you can offer now in a smaller scale. Staff benefits are long-term and expensive while staff Incentives generally are inexpensive and can be provided immediately.

As I mentioned previously in my article “The Power of Two Words,” restaurants underestimate the power of a simple “Thank you.” Likewise, restaurants often do not place enough value on incentives. Staff incentives do not have to be large in any shape or form.

Some of the incentives I have received or given to my staff as a motivational tool include:

  • Complimentary movie tickets for a job well done
  • Bottle of wine for highest departmental sales
  • Staff events such as dinner and drinks at a restaurant
  • Annual staff Christmas party
  • Lotto tickets
  • $50 gift card to you choice of retailer (i.e. Chapters, Best Buy)
  • $100 bonus for “Employee of the month”
  • Holiday with pay on your birthday

Staff incentives are a great way to improve employee productivity, motivation and morale. Regardless of whether you decide to implement benefits in the future, staff incentives can remain in place for the entire span of the operation. Staff incentives are a cost effective method that provides immediate results.

What are some incentives have you been provided?

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Can you afford Staff Benefits? – II

This is a continuation of the post Can you afford Staff Benefits. This edition will feature some of the top benefits in the restaurant industry.

What kind of Benefits have you received?

Some of the top restaurant benefits in North America are offered by Earl’s, The Cheesecake Factory and restaurant group, Darden Restaurants (i.e. Red Lobster, Oliver Garden).

Here is a list of some of their main benefits:

Supervisory / Management Position – Earl’s

Locations: Canada

www.earls.ca

  • Annual golf events
  • Conferences and meetings
  • Trips to New York, Amsterdam or Brussels (every second year)

General Manager – The Cheesecake Factory

Locations: United States and Hawaii

www.thecheesecakefactory.com

  • A company- leased BMW
  • Management Equity Program: no cash investment required, company-sponsored. General Managers can earn up to $1.5 million in the program
  • 5-day work week; 2 consecutive days off
  • Performance based stock options
  • 401(k) with company contribution
  • Health insurance, dental coverage, prescription plan and vision
  • Salary up to $125,000 per year

General Manager – Olive Garden (Darden Restaurants)

Locations: Canada and United States

www.olivegarden.com

  • Medical, dental and orthodontia and Vision coverage
  • Prescription drug program
  • Life & accident insurance
  • Paid vacation (1 week after 3 months of training)
  • Profit sharing savings plan / retirement program
  • 25% meal discount in any Darden Restaurant concept
  • 15% stock purchase discount
  • Access to network of qualified lawyers for legal advice
  • Employee assistance program
  • Student loan program
  • Childcare center discounts

These companies represent some the most generous benefits you can find within the restaurant industry. Few restaurants are able to match these benefits due to their size. However, all restaurants have the capability at some point in their operation to offer a benefit package. The question is: Are you willing to pay money to improve the quality of work and life of your restaurant?

I have worked in several restaurants and have received various benefits but nothing compared to the benefits listed above. I am curious to see what kind of unique staff benefits you have received in your past or current job?

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