This article will provide a brief overview about the concept of hospitality industry, the problems faced by this industry and importance of hospitality marketing to ensure customer satisfaction and business growth. Buying or leasing a restaurant: McDonald’s franchisees pay a 40 percent down payment (of total cost of the space) to purchase a new restaurant and a 25 percent down payment to purchase an existing restaurant. Twenty-five percent of the down payment must be in cash, and franchisees can finance payment for the rest of the cost through a lending institution. Once a McDonald’s franchise is up and running, the franchisee must pay McDonald’s a monthly service fee that is based on the restaurant’s sales performance, usually around 4 percent of monthly sales.
Aside from expanding responsibilities with a farm and sustainable practices to support a larger menu of both lunch and dinner, plus cocktails, Copa Matos and Turnbull also had to tackle the new ownership and management duties that came with opening a full-service restaurant that doubled seating and added a full bar.
As with any new business, a strategy and plan need to be put in place before moving forward with the execution. This is the point at which things like franchise fees, royalties, territory structure, training, support, five-year financial models, and other critical items are determined. Have a sound plan is critical to success. There are many different options for getting this put together including a self-run development which is managed by the owner or a more collaborative effort by hiring a specialized franchise consultant.
Despite the many benefits of a pre-established reputation, instant brand recognition can be a double-edged sword. There may be some bad applesâ€ in the franchise system that can damper your success since public perception and consistent quality is what the customer plans to expect. A poor experience at another restaurant in your franchise system can impact and limit a patron from visiting again, create bad reviews, and poor public opinion for the brand overall, ultimately affecting your restaurant’s reputation as well.
Many people would ask why you should start a hotel franchise in the first place. Well, the hotel industry is growing. In fact, in 2006, hotel revenues totaled over $133 billion with roughly 52% of gross hotel operating profit margins. That was excluding beverage and food options, having a lager ROI potential than the vast majority of businesses. And since the 1990s, profits and revenue have almost doubled. So as you can see, franchise hotel ownership has high potential as a wealth-building asset as well.