The growing industry of franchising has undeniably attracted a lot of small time entrepreneurs to start up with their own franchise opportunity in hope of being a success and gaining profits more than other business type owners. Buy franchise restaurants is one of the most common type of franchise being sought after by entrepreneurs in the present because of the high profit results and low capital or income costs affiliated with this kind of business model. Most restaurant chains have already expanded from places to places since some, if not most of them, believe that there is a need for them to open up and operate in certain locations to test and prove their credibility to their franchisees and on the other hand to try out new ideas, strategies and concepts. With all this growing demand for franchise opportunity, how would you know the right and accurate percentage of your company ownership?
Jim Greco, the former CEO of Sbarro and Bruegger’s said in a conference held in Four Season’s Hotel in Las Vegas that there are no magic nor exact percentage that business owners should expect when it comes to company ownership. A number of restaurant heads and executives joined together on the Franchise Finance and Growth Conference sponsored by their sister publication the Franchise Times to discuss the recent trends and changes in the restaurant industry.
Subscribing to a percentage rule is done mostly by systems that operate on their own with the belief that there is a need for them to operate 10 to 50 percent particularly when their buy franchise is growing in demand. However more and more restaurant franchisors like Applebee and Burger King have set down their locations in the past recent years compared to those successful ones that have been profitable and buying.
The CEO of Texas based Wingstop Charlie Morrison once said that holding to the percentage of unit ownership is not necessary, since franchisors need to keep in mind that enough locations is done to be able to understand the changing variable and demand of vast markets especially in a franchise opportunity. He says that when you are an owner you will know when you already achieved the right numbers. When you are an owner remember to keep in mind when you buy franchise to not mix franchise market with company because it creates problems and conflicts. Merging the two can give rise to competition for employees and locations that are not supposed to happen when approving for a franchisees new location. Looking for locations for company units is a much different thing as stated by Greco.