2009-06-24

Local restaurants and franchising

Is it ironic that someone who promotes local unique restaurants is trying to franchise them? Read this letter from Diana Fairbairn of Five Star Franchising.

First of all, I am not against franchising. It is an important mode of doing business, and it provides options for local people to operate locally-owned businesses. The concept covers not just restaurants but dealers of products. For many businesses it is a better option than risking a new concept when you can get the support of a system that provides research and marketing. However, if your interest is in unique local businesses, doesn't franchising work against that? Franchising is intended to promote uniformity across the franchise units. It is a process which is heavily regulated by the Federal Trade Commission, and it is hardly suitable for a business concept which is intended to stay local and small-scale.

I have patronized the Five Star Day Cafe on East Broad Street, and I find it has an interesting menu and concept which could easily be enjoyed across ten or 10,000 other restaurants. That is to say, I would be glad to see many other cities and states enjoy the food. But Fairbairn writes, "I know I love experiencing all the great local spots in town and would be devastated to see them be replaced with chain restaurants offering the same 'unique' menu as their other 1500 stores." Would her own restaurant concept's menu lose uniqueness if she franchised too many units? Would she want entrepreneurs in other towns to buy into her concept or develop their own?

Again, there is nothing wrong with Five Star Day Cafe or with franchising, but I am a bit confused. I think this franchise owner has presented an argument against her own business methods.

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