Franchising fast food chains has proven to be a fairly lucrative endeavor. The brand is already established, and so franchisees do not need to rely on self-marketing. These businesses also anticipate rapid growth, as the costs of building, opening, and running are done independently, and the fast food company will receive a percentage of the profits.
Chipotle’s Business Model
Chipotle is a lone wolf in this seemingly tried and tested endeavor, as the company reported does not want to franchise its company. Chipotle spokesperson, Chris Arnold, stated: “The reason we don’t franchise is because we don’t need to.” What prompts Chipotle’s powerful stance on this issue? It is a matter of control.
Franchising offers the following benefits:
- An established brand
- Robust training programs
- A history of proven success
- Very little to no risk
- Assistance with construction, real estate, and marketing
Chipotle has long been committed to being a chain that serves higher-quality fast food. From the sourcing of their ingredients to the way the stores are run, every aspect is calculated precisely. It is an exact science, if not an art, their unique business model. Suffice to say, they know it works for them and continues to be a profitable success at that.
Have Questions? Call Franchise Legal Support!
For over 28 years, Los Angeles franchise lawyer, David Levaton, has been representing franchises exclusively on any and all legal matters, including the purchase of a franchise, real estate matters, and contract disputes. If you have any questions about the legal processes behind franchises, we encourage you to contact the firm to discuss your options.
Request your free appointment at (888) 631-0048.
Source Link: http://www.businessinsider.com/why-chipotle-doesnt-franchise-2014-10