Hospitality Franchise Opportunities | 7 Areas for Growth
Let’s face it, operating a hospitality franchise can come with many obstacles and challenges. In fact, that’s how it can be across the entire hospitality industry.
Maybe you’re learning how to open a franchise restaurant or a hotel franchise. Or, perhaps you’re trying to determine ways to level up your business. Either way, this blog should give you some valuable insight. Read on!
Hospitality Franchise: Definition
A hospitality franchise refers to a business model that consists of multiple units. They operate on a much larger scale, often across several regions, too. In general, they offer food, beverages, and lodging services. Without such businesses, the hospitality sector would look quite different.
Now that we have discussed what defines a hospitality franchise, let's dive into some examples.
Hospitality Franchise Examples
If you really think about it, you'll probably realize that you encounter a hospitality franchise all the time. That's right, from eateries to hotels, they're more common than you might think. Not only do such franchises come in various forms, but each falls within a niche market. So, let's discuss two of the most popular categories:
Hotels and Resorts
An enterprise hotel is one of the most lucrative business models you’ll encounter. Their top priority is to provide guests with overnight accommodations. In many cases, they offer far more.
Vacation destinations are full of all-inclusive resorts. Within the walls of these establishments, guests can experience in room dining, spas, and other luxurious amenities. The business’ mission centers around customer retention strategies. In turn, they’re able to accomplish guest retention to the fullest extent.
Restaurants and Fast Food Eateries
The restaurant industry heavily contributes to the hospitality franchise market. In almost every town you'll stumble across more than one chain restaurant. Not only do they provide the public with inexpensive options, but they are fairly simple businesses to run.
Though franchise restaurants often offer a casual dining experience, they don't have to. Operating a franchise is all about quantity. So, even upscale eateries can fall within a franchise.
7 Hospitality Franchise Opportunities for Growth
Ready to learn about seven growth opportunities for a hospitality franchise? Well, it looks like you’re in the right place. Read on for several outstanding ideas.
1. Using an Integrated POS System
Some of the best POS systems have unique and innovative features that can enhance a business. App integrations for things like marketing tools and customer data reports are becoming more popular than ever. POS systems have become so much more than just payment technology. From contactless payments to a frequent point of sale report, this tool can help your franchise.
2. Launch a Customer Rewards Program
Retaining guests can be a challenging feat. But when they have points to redeem for free rewards, the incentive will be there. One of the best parts about a rewards program is that they can be custom for each brand. The same rule also applies to the reward tiers.
Just be sure that you project the frequency of reward redemption before launching the program. If by some chance you offer too many perks, the program can have adverse effects on the business’ profitability.
3. Use Inventory Management Solutions
Does your hospitality franchise service food and drinks? If yes, use a restaurant inventory management app. By keeping better track of inventory levels, you’ll always have what you need. Plus, restaurant inventory software can prevent you from purchasing excessive quantities. In turn, using such a tool is an opportunity to reduce restaurant expenses and food spoilage.
4. Partner With Delivery Service Providers
Is your customer base unable to order food via delivery or pickup? If so, what are you waiting for? Online ordering apps provide two solutions: a sense of convenience to the customers and higher profits for the business.
If your hospitality franchise consists of any kind of food service business, don’t sleep on the reach delivery apps can achieve. A restaurant seating capacity can only serve so many people. And sometimes, people just aren’t in the mood to go out for a bite to eat. But when you’re available on delivery apps, you’ll never have to miss out on a sale.
5. Open Locations In Multiple Cities
One concept that all franchises have in common is that they’re multi-unit entities. However, we discourage you from opening multiple locations near one another. The primary goal of any business should be to reach the broadest audience possible. So, try your best to cover a wider geographic area.
If you can expand to an area like Los Angeles or New York City, even better. The larger the population, the larger the chance of steady sales.
6. Offer Catering and Event Management
Catering events and using your space for events can allow profits to skyrocket. First, create a catering menu. Then, decide what kind of amenities you would like to offer for each event type. Remember, the kinds of offerings some may choose for corporate events will differ from weddings. Then, utilize your POS system to enable guests to pick and choose their preferences.
7. Use a Franchise Manual
Every franchisor has a manual that instructs the reader exactly how to run the business. It entails everything from how to pay royalties to marketing assets. If you’re a franchisee, it’s vital that you follow the manual. Not only will it help you avoid errors, but it will let you maximize profits and the business’ success.
Frequently Asked Questions About a Hospitality Franchise
We get it, it can be challenging to learn how to grow a hospitality business. Though we think this blog will supply you with a ton of insight and great ideas, we decided to cover a bit more. Read on for extra details about operating a hospitality franchise.
What Fees Can a Franchisee Expect to Pay?
As a franchisee, expect to pay royalty fees on a regular basis. This figure will be a percentage of sales. There may also be a portion of advertising and IT support fees that you'll need to contribute to. However, it can vary from one franchise to the next.
What Is the Initial Investment to Open a Hospitality Franchise?
The initial fee to open a hospitality franchise can be anywhere from several thousand to over a million dollars. It all depends on the type of franchise, the brand, industry, and location. This is why it's so important to budget and research a franchise.
What Kind of Support Will a Franchisee Receive From the Franchisor?
Franchisees can expect to receive the following kinds of support from the franchisor:
- The franchise's manual
- Onboarding training materials
- Ongoing training programs
- Marketing and advertising support
- Access to tech solutions
How Do I Choose the Right Location for My Hospitality Franchise?
There are many factors that go into choosing the right location for a franchise. Choosing a location is a densely populated area. It's also ideal to pick a location that's visible from main roads.
How Long Does It Take to Open a Hospitality Franchise?
On average, it can take anywhere from several months to over a year to launch a hospitality franchise. This is a timeline that can be easily influenced by numerous factors. For example, it might take some people longer than others to obtain the necessary licenses. In this case, the launch date would be far out.
A hospitality franchise comprises many components. So, it’s vital that the business owner and their team always keep an eye out for new opportunities. As you implement new strategies or onboard innovative solutions, you’ll become set for success more than ever. Just remember to monitor progress on a steady basis. Then, you'll discover exactly what works for your franchise.