From complexity to profitability, there are big differences between running a single restaurant and managing a multi-state chain of them. Whether you want to get into the business or you’re already in it, it’s smart to understand the pros and cons of each. For instance, there are different marketing and labor considerations with a franchise than with a restaurant you started yourself.
Let’s explore some of the key differences, and what they reveal about where to focus your energy and save the most money.
Introducing new changes is easier with a single restaurant
One of the best parts of running a business is figuring out what your customers want. It’s a moving target, which means that you need to listen carefully and then respond accordingly. For entrepreneurs, this is the definition of fun! You can introduce seasonal items or change the menu, based entirely on your customers’ desires and your interests as a business owner.
With a single restaurant, you’ll find it much easier to implement changes and respond to the demands of the market. Firstly, you probably know your customers far more intimately than a major corporation does. You may even know them by name and favorite dish. This type of direct relationship with customers allows you to introduce new items with far more confidence than a multi-state chain.
As the owner of one restaurant, you don’t have to worry about staying consistent across different locations. This is a major perk that keeps restaurateurs from opening up other locations. No customer segment is exactly the same. If a customer visits the same seafood chain in California and in New York, they may want to order the exact same items. But this isn’t good for business if most customers in one location want something different.
Focus your energy—and your investments—on tools that help you get to know your customers. Building close relationships with them is the key to unlocking their pocketbooks. When they feel listened to, they’ll come back for more.
Growing your business is easier with a franchise or multi-state chain
If growing your business is important to you, then a franchise or multi-state chain is the best option. Of course, with a single restaurant, you can do things like launch a product line or release merchandise. But it’s far easier to scale by expanding to multiple locations or working with an existing brand as a franchisee.
As a solo owner under your own brand, you are completely alone when it comes to growing your company. But with a franchise, you have built-in support when it comes to marketing and training. After all, the franchiser needs to ensure consistent quality, so they’ll offer you lots of help. Plus, you can’t beat the brand recognition that comes with an existing company.
Save money by starting your restaurant journey as a franchisee. You won’t waste resources on making costly mistakes, and you can learn from the franchiser until you’re ready to start your own business. You can also open multiple franchise locations and grow your business that way.
You can be more flexible with technology in a single restaurant
We’ve already mentioned that consistency is a challenging limitation for multi-state restaurant chains. Larger businesses are less agile, and they take longer to implement necessary changes. When it comes to restaurant technology, a single restaurant allows you to be more flexible. You can assemble the exact suite of technological solutions that meet your specific needs.
One major example is tip distribution software. At a major chain, it’s a struggle to integrate new software even if the need is clear. It requires re-training, customer education, and sometimes a complete overhaul of hundreds of other systems if integrations aren’t available.
But you, as the owner of a single restaurant, have far more freedom when it comes to tip distribution. Smart tip allocation is one of the key strategies for retaining great staff. You can choose an automatic tip sharing solution like Tiphaus that instantly generates and pays out tips to your team. It’s easy to find one that can integrate with your existing system, too, since you’re more nimble than a larger company.
Tip sharing and tip pooling are the two most common processes for how to fairly distribute tips. If you’re still using a manual spreadsheet to figure out how to calculate tips, we promise that you can afford a tip sharing software. This tool will save you time and money with quick and accurate calculations, which increases retention and allows you to focus on activities that actually generate revenue.
Flexibility to try new technology, like tip pooling software, is just one of the many ways that a single restaurant differs from multi-state chains. This has been made very clear during the pandemic, as small businesses pivoted quickly to adapt.
The key to running a great business is to reduce expenses smartly while investing in the things that will grow your business. A tool to make the restaurant tip automatic is the just “tip” of the iceberg. Overall, the restaurant industry is so valuable because it’s so diverse. So enjoy the type of business you’re in and appreciate what your unique restaurant is capable of achieving.