Pakistan is a very trend oriented society. Trends lead our lives and mindsets. Those who are still contemplating usually envy those who get it first. It doesn’t really matter how the trend starts but once it start getting discussed it becomes a norm. Without getting into a debate of its capitalistic attribute; trends do vary for different income groups. If we make it simple, there are basically three groups; Starting from rock bottom are the ones who don’t have an income at all, then there are those who have just enough to make the ends meet and the top slab is for those who have disposable income; The Riche Rich. Naturally, trends too follow this rat race accordingly.
| "The latest trend on the go is to own a Café or a Restaurant and if nothing then at least a fast food joint" | Interestingly, at times this trend race brings out some very exciting opportunities for those very few who have the vision of an entrepreneur and want to think beyond. The latest trend on the go is to own a Café or a Restaurant and if nothing then at least a fast food joint. Usually, those who have multiple sources of income follow this trend. For them this “new business” is just another feather in the cap. In this article Xanthum takes a closer look into the reasons as to why people get into this business and what is the downside to it. Also, we will share the Key Success Factors if one seriously wants to make money in this business. |
Who qualifies to own a Food Outlet?
Ideally, the answer to this question is “Everyone and Anyone”. However, like any other business, this industry also has certain rules of the game. “There is no need to invent the wheel when the wheel is already invented”; unfortunately, people end up inventing the wheel and get lost on the way after wasting loads of time, energy and finances. This common mistake occurs because of some very grave misconceptions and the most common misconception is that the ability to finance a project gives you the leverage to call the shots! Wrong, totally wrong. If you want to start a food joint you must hire a team of professionals who have experience and a few successes on their portfolio. It’s just amazing to observe that individuals invest millions and million just to satisfy their ego and to fulfill their childhood dreams but they will resist to engage professionals and pay them for their services.
So Rule # 1 Only a team of professionals can make it happen for you.
| Own Brand or Franchise? “Why not a franchise” this is one question that we have answered umpteen times in the past. “My brother is in Houston and he can get me a kick-ass coffee brand in no time” - the justification we get to hear. “People will go crazy when they will know that its an American Brand”; as if everyone here is an idiot and waiting for someone to bring out a “good for nothing” American brand so they can go crazy about it. | "Individuals invest millions and million just to satisfy their ego and to fulfill their childhood dreams but they will resist to engage professionals and pay them for their services" |
If you look around, the mortality rate of food joints, cafes and restaurants is considerably high. The reason is the “hit and try” business model. We are not shooting down the idea of bring a franchise but we are only suggesting that if one wishes to get value for money with comparatively limited investment then developing a new brand is far more beneficial. Lets take a closer look:
Franchise Fee: The roller coaster ride starts with the Franchise Fee, which is usually nothing but a few hundred thousand dollars. This payment gives you the right to use the brand name and you end up signing your death warrant for the excess baggage that comes with it.
Mandatory Ingredients: It is just very natural that a franchisee will not allow you to play around with his product. You will be compelled to use only the recommended ingredients and that too from the recommended brands. If they are not available locally then you are up shit creek without a paddle.
Approved Vendors: If you think it is all over then its just the beginning. The franchise document that you have signed obligates you to deal only with the approved third party vendors, no matter how expensive they are; because that is what brand guidelines suggest. Having Fun?
 | What’s left for you? Now imagine the operating cost of your outlet after making all these payments, which could have been either avoided or brought down considerably. Besides, there is also a long list of hidden costs that comes with every franchising agreement. But now it’s too late for you since you are committed and have burnt your boats. |
How about switching sides?
Ever thought of being a Franchisee and not a Franchiser. Its very simple only if you remember that you are not suppose to invent the wheel. Brand Development is more of a craft than an art. Unfortunately it is usually assumed that anyone can do it.
Rule#2 Never Assume
What’s Next?
If you still need to be told what’s next then you have wasted your time reading this article. Else, you have reached the right place. Act now and develop your own brand.
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