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4 Myths About the Restaurant Industry: Busted!

  • March 12, 2015

If you’re looking into exploring your opportunities with restaurant franchises, you’ve likely come across some key arguments or statements that have been touted as facts but are actually myths. Just as any myths, these statements can become commonplace in the subject matter when we engage in discussion about a certain topic. So if you come across these myths while looking into restaurant franchises, keep in mind that they truly are myths!

Bulk Purchases Always Save Money

Some restauranteurs will swear by the process of purchasing all of their supplies in higher volumes so that bulk discounts will apply. While this is often true, it’s not always true. There’s more to consider than meets the eye. Most importantly, you have to consider the waste that will occur from unused ingredients expiring. Did you lose more money than you saved in the long run? Then it wasn’t the best operational decision.

Running a Restaurant Is Easy as Pie

Don’t get us wrong: when you have the right systems, support, and savvy in place, restaurants can be very rewarding when everything is balanced and fully operational. But it’s not always going to be a walk in the park. Restaurant franchises should always be prepared for booms and dips in business, and they should always be able to plan accordingly. Owners should be ready to make up for slower times while using the bursts of good business to work toward making the business even better.

Low Costs Means Larger Profits

While this may seem at first like common sense, it’s not always true. Many restaurant franchises have surprisingly high food costs – some even up to 50 percent. The more pertinent issue to consider isn’t so much the food costs themselves, but the gross profit dollars generated by the menu items. So when promoting menu items, based it on gross profit contribution in dollars as opposed to a low percentage of food cost.

Anyone Can Run Restaurant Franchises

While franchisees come in a huge array of shapes and sizes, the owners of restaurant franchises need to possess certain qualities. There are key traits that simply can’t be missing in a person who takes on the franchising industry. Characteristics like business savvy, an entrepreneurial spirit, good communication skills, working well with others, and a certain kind of creativity and resilience are mandatory to be able to take all the challenges that may come from owning a hot dog franchise.