The New Rules of Restaurant Franchising: Customer Is Key

CHARLOTTE, N.C., Dec. 10, 2013 /PRNewswire/ -- Opening a franchise restaurant has long been assumed as an easy way to make money; a straightforward investment: put up the money, put up the signs, start raking in the loot. Many would-be franchise owners see it as a prepackaged opportunity to be the head of a business, requiring only the pull of a ribbon to roll out and be successful. However, this belief is just what dooms many new franchise owners, as franchise restaurants can fail just as easily as independent ones. While owning a franchise offers advantages such as group advertising, established brand equity and supply infrastructure, there are a plethora of factors that need to weighed by a potential owner-operator that can easily result in its success or failure, such as location selection and competition, market saturation and most importantly, the unforeseen reception by the would-be local consumer.

Most important to any business should be its customers, and it's no different for franchise restaurants. That's why location is so crucial, because customers differ with their respective location. A restaurant's name and logo cannot be expected to sell itself wherever it pops up; it has to be strategically placed where there's a need or a strong desire for its presence and its product. For instance, just because there's always a line at the local McDonalds, doesn't mean that the new one being built down the road will draw customers and turn a profit, and similarly, before opening a new Subway location, the targeted area should be scouted for local deli's, whose potentially large and loyal customer base could react negatively to the intrusion of a new franchise in town.

Mike Pruitt, Founder and CEO of Charlotte, NC-based Chanticleer Holdings, knows all about successfully finding new and unpredictable locations for existing franchise chains. In a few short years, his Company has built, owns and operates 7 international Hooters restaurants in countries like South Africa, Hungary and Australia. "While researching locations, we wanted to target places where the Hooters culture -- with our beach-theme, chicken wings and sports fan atmosphere -- would be welcomed and embraced as a new addition to the community," said Mr. Pruitt. 

However, once he started building them, he realized that local consumers would never embrace the restaurants if they were identical to their American counterparts. "We knew we couldn't keep the menu the same," he added, "so we incorporated local favorites like ribs and steak in South Africa." He then tinkered with the appearance of some of the stores in order to adhere to local preferences, like the addition of vast patios and outdoor seating in his Budapest, Hungary location.

"I've learned that while customer's needs, tastes, and preferences may change with geography, but their willingness to go where those particular tastes are catered to remains universal," Mr. Pruitt concluded.

For more on Chanticleer Holdings and its international expansion of the Hooters brand, visit www.chanticleerholdings.com, who paid for the writing and dissemination of this release.

Contact:  Anna Rofsky, Dian Griesel Int'l
212.825.3210

SOURCE Chanticleer Holdings