Transcript Restaurant Industry Organizations: Chain

Restaurant Organizations:
Chain, Independent or
Franchise?
Chapter Five
Forms of Restaurant Ownership
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Chain
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Independent
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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
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Two Kinds of Franchising
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Product/Trade name franchising:
Confers the right to use a brand name and
to sell a particular product
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Business Format franchising:
Includes the use of product, service, and
other systems and standards associated
with the business
Common Characteristics of a
Franchise Agreement
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The duration of the
agreement
Fee and payment structure
Responsibilities of both
parties
Permitted use of symbols
Operating procedures
Confidentiality
Advertising and Promotion
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Financial accounting and
maintenance of records
Training
Insurance
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Products and services which
will be purchased by
franchisee
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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
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Purchasing
Marketing
Advertising
New products
New concepts