The world of restaurant franchising is full of choices that can make it confusing for prospective franchisees to choose just one. Among the earliest decisions you’ll have to make is deciding which type of franchise you want to join. And although you may be thinking primarily about which style of food you want your restaurant to be, you’ll also need to consider which restaurant formats and business relationships you want for yourself as a new franchise owner.
You’ll need to weigh the pros and cons of your personal preferences, experience, skills, and the cost involved. While not all of these options may be available to you, it’s important for a newcomer to understand these differences in order to make smart business decisions that ensure a bright future.
Franchise Relationships
First off, let’s begin with a brief overview of the different types of franchise relationships:
- Single-Unit Franchise
Also known as a direct-unit franchise, this type of franchise is where a franchise owner invests in a single location. For this type of franchise, it is common for a franchisee to manage your own restaurant. - Multi-Unit Developers
Multi-unit developers sign a development agreement that allows them to open multiple locations within a certain time frame and geographic area. This gives the franchisor the advantage of finding franchisees at a lower per-unit basis, while the multi-unit developer gets the benefits of pooling their resources between opened locations. As well, multi-unit developers are able to achieve critical market mass more quickly than the franchisor on a single unit basis. - Master Franchise
Through a master franchise structure, the control over an area’s franchising activities are given to the “master franchisee” who will take the role of the franchisor without actually owning or operating the franchise. Due to its complexity, the master franchise system has largely fallen out of use in North America, and is more commonly seen in foreign markets.
If you’re just starting out, you’ll likely have to limit your scope to opening a single franchise location at a time. Otherwise, franchise owners with deeper capital can expand their operations as a multi-unit developer.
With that explained, here’s a rundown of the different types of restaurant franchise that you can choose from:
Full-Service Restaurants
The customer experience doesn’t get any more involved than with a full-service restaurant. This type of establishment looks to provide every possible need to customers by providing full table service, a full food and drink menu, and an appealing environment. To accommodate this, a full-service restaurant specializes in customer service that specifically caters to its diners. Instead of a meal, a full-service restaurant provides an experience that can’t be replicated anywhere else.
Subcategories of full-service restaurants include:
- Fine Dining: Formal dining that showcases high-end chefs.
- Casual Dining: Informal dining with familiar foods and dishes.
- Family-Style Restaurant: Places an emphasis on sharing with large, communal dishes.
- Contemporary Casual: Upscale cuisine without the formality.
- Destination/Tourist Restaurant: Established by reputation for an out-of-town crowd.
Fast-Food Restaurant
Fast-food restaurants have been an extremely popular type of restaurant for three main reasons: low price, high convenience, and a fast speed. Customer service is just as important for a fast-food restaurant, except in this case the customer’s needs have to do with a more streamlined experience that emphasizes quickness. In this environment that has no table service, fast-food restaurants have to prioritize rapid food operations that are able to accommodate services such as drive-through windows.
Fast-Casual Restaurants
This type of restaurant serves as a hybrid between fast-food and full-service restaurants. Like a fast-food restaurant, customers order food over a counter and receive their order in disposable containers. And yet, fast-casual restaurants take after higher-end establishments by offering healthy, gourmet foods from an extensive menu.
To put the spotlight on their upscale cooking and preparation process, fast-casual restaurants often feature an open-kitchen design. This type of restaurant is distinguished by being more affordable than full service and casual, and healthier than fast food.
Cafes
Cafes are entirely different from restaurants by which customers come for the ambiance, and not for the paid products. After buying a coffee or a prepared food like bread, a customer sits down to enjoy their purchase over a protracted period of time, choosing to chat with friends or work on their computer. Cafes will often score very high with customer loyalty, but experience low turnover due to its unhurried atmosphere. Another advantage here is that cafes don’t require a large staff or expensive operating costs since it has no need for a kitchen.
Bar & Grill / Sports Bar
This type of restaurant franchise has distinguished itself from other types of franchise restaurants by offering a wide, inclusive experience at a single location.
First originating as a local bar for socializing, the modern pub has evolved to offer a full menu (including late night) and caters to a larger customer area. Through its festive atmosphere, a bar & grill caters to celebrations and after-work relaxation. More than that, this type of establishment often features attractions that include large-screen TVs for sporting events as well as games and even a dance floor.
By operating a bar & grill, it’s important for franchise owners to remember that the main thing they are offering to their customers is an experience that they can’t get anywhere else. Customer service is vital to establishing a warm and welcoming environment that customers will want to return to again and again. As the host of these ongoing festivities, you need to be a person that is passionate about customer service and enjoys making people happy.
St. Louis Bar & Grill is always looking for talented and gregarious individuals that want to join our team. We have over 70 locations across Canada, and we’re looking to expand in neighbourhoods near you! Find out all the advantages to joining the St. Louis franchise here!
Want to learn more about franchising? Read our blog to learn about franchise fees and how your restaurant can supplement revenue with off-premise sales.