Marketing Restaurant Online

Every restaurant entrepreneur has a dream to expand their business empire by adding more stores to their port folio. Most of the entrepreneurs start with a single unit restaurant. Gradually they add multiple stores into their business. This is when it starts getting tricky managing multiple stores. There is no way you can be in all the stores at the same time. Your time and focus is divided now. When you bought the second store and started devoting time and effort into the second store, the sales of the first store went down. Have you ever experienced that pain?

So as an entrepreneur I’m sure you must have thought about which business model to follow in order to avoid the problems in your ambition to expand your business empire to multiple stores.

After seeing so many restaurant brands and their business model I’ve seen one restaurant chain that I believe has set up a great business model that has proven successful. The restaurant chain that I’m talking about is Chick-Fil-A and their Profit Sharing business model.

Now let’s discuss how they do it?

Selected Chick-Fil-A employee or any chosen candidate pay only $5000 as an earnest money upfront and the rest of the money to construct the store is invested by Chick-Fil-A. The employee who is selected after several rigorous test operates the store empowered virtually as a owner of the restaurant. What ever profits they make out of the restaurant they share 50-50 percent. (Thanks Pete Kane for the comment on my previous blog post for their business model updates.)

Isn’t this deal attractive to a hard working motivated manager, operator or any restaurant entrepreneur who has a motivation, drive, determination to make it happen but doesn’t have money. Chick-Fil-A however controls the real estate which is their main business which in itself is another topic that can be another blog post in itself.May be I’ll save that one for  one of the future post. But for now let’s focus on their restaurant business model based on profit sharing.

With this kind of business arrangement like of Chick-fil-A  restaurants, you have a great opportunity to solve your core problem of growth and expansion.

Even if you are a single restaurant owner or with few restaurants in your portfolio, I believe this is a great business model especially if you want to get away from day to day operational headaches and focus your most of the energy in high leverage investment opportunities. Why not come up with similar profit sharing business model and hand over all the operations to the best capable employee which in your case would be a manager or some one you know very well and trust. You are confident that they can run your restaurant effectively and efficiently than you. The key is to leverage other people’s time and expertise and in return also rewarding them for their hard work. This is a WIN-WIN situation for both the party. For the person operating the store who gets to keep certain percentage (you can negotiate ranging from 10-50%) but make sure it is high enough to attract and retain them for a longer period. With this strategy you are aiming for multiple stores, so I hope you keep that in mind while you are negotiating with the eligible candidate. Your focus here is trying to get more and more stores without having to spent a whole amount of time baby sitting the manager/operator or who ever is running the store.

I saw an interview of Warren Buffet on a television. When he buys a company, he selects the best possible CEO for the company. He said that he doesn’t waste time doing all those kind of long meetings and conferences. He meets the CEO one time, hands over the key and bid a goodbye and says that he is gonna meet him next year.

The reason I bring up this is that to grow big one should have that kind of mindset. Like Warren Buffet once you select your best possible manager or operator that you trust and have confidence on, you just have to hand over the driving seat to him or her and move on to another one in search of another potential restaurant.Unlike Warren Buffet who meets with his CEO in one year, may be you will have to meet with your operator/manager on a regular basis to support them.The point is that you will not have to wander from store to store just to make sure your business is doing ok.

This is just my thought on this profit sharing business model that I think is great for any restaurant business entrepreneurs. What do you think about this kind of business arrangement? Would love to hear your thoughts. If you have some other business model that you think is good and is successful in restaurant industry, I would love to hear from you. Thanks.