The best franchise to own isn’t as simple a matter as choosing between a retail franchise and a restaurant chain. Both franchise models have clear pros and cons, and both have proven remarkably successful. But still many people will tell you one or the other is better, so for now we’ll focus on some key factors that have made retail businesses like Cash Converters some of the most profitable franchises to date.
Less Product-Related Stress
Any business, retail franchise or restaurant chain, needs to sell some kind of product or service. The difficulty with restaurants, though, is that stock purchasing needs to be carefully planned. Certain food items are only available during specific seasons, and you also need to try to use up your ingredients before they expire.
With retail products you avoid that level of stress regarding quantities and spoiling. If you order too many plates, for example, you can keep them on the shelves until they sell without worrying about them going off. Retail franchises also have the advantage of being able to order goods that customers are looking for, whereas in a restaurant it wouldn’t be acceptable to say that you’re out of stock but can order for another day.
In the case of a Cash Converters store, they have become one of the most profitable franchises globally by constantly bolstering their stock with interesting products brought in by customers, which can then be bought by others. Their stock is constantly changing and interesting, their prices are great, and both buying and selling customers come to them on a regular basis.
Fewer Licencing Issues
It is a fact that any business needs certain licences to operate. These differ according to industry, product and location, but this is a particularly volatile area for restaurants. Consider a restaurant with a liquor licence: they have strict rules with which to comply, and if they are caught breaking those rules they are liable to be fined and to lose their licence. That is an entire source of revenue gone, then.
With retail businesses there is a chance to lose your licence as well, but this only tends to happen to businesses that are guilty of cheating and mistreating their customers. So long as you stay within the boundaries of the law, you’ll remain unscathed.
Shrinkage As Opposed To Wasted Food
As mentioned above, one of the product-related stressors present in restaurants is the wasting of food. Whether through overuse of certain ingredients, bad service, or customers who are just picky, the amount of money lost in wasted food can be enormous (for example, American restaurants reportedly waste around 11.4 million tons of food per year). However, in a retail franchise your closest relative concern is shrinkage (loss of a product through theft or damage, with the business owner covering the cost).
The good news for retail businesses in the case of theft or accidental damages is that there are insurance options available to cover that. So while you might face some losses, if you have quality insurance in place you shouldn’t need to face any crippling losses because you were the victim of a crime.
Interested in really learning about the benefits of owning a retail franchise? Get in touch with the professionals over at Cash Converters Southern Africa, and they will show you exactly why theirs is one of the best franchises to own.