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Why investing in restaurants is so rewarding

by on January 21, 2015 in Business, Events, Events & Awards, Lead Article, Retail, Retail News

Why investing in restaurants is so rewarding

 

Picked up this story from Hospitality and Catering News today and key event information for restaurateurs and investors looking to expand their businesses.

With less than 3 weeks to the Global Restaurant Investment Forum (GRIF), we asked our expert panel of speakers their perspective on why investing in restaurants is so rewarding. REGISTER NOW and be part of this exclusive restaurant investment community.

The Investor’s Perspective:

Sami Daud, Founder, Gourmet Gulf

In the last 5 years, the restaurant industry has experienced significant growth, new brands entering the market have increased the customer offer and developed the market’s appetite for dining out. The industry, specifically in the UAE, has moved away from a hotel and mall centric approach to restaurants, with casual, QSR, and more recently premium casual to fine dining, branching out to city locations. Foreign brands have been well received and extensive numbers of significant brand names have entered the market, with success, new real estate, including key mall openings, has increased the opportunity through the provision of increased real estates, and landlords are targeting key restaurants as F&B anchors.

From a financial standpoint, restaurants can offer healthy, sustainable returns for the right Brand/location mix. The level of investment, or market entry point, can be reasonably low in terms of initial investment, with the market becoming increasingly diverse, there are a number of low investment franchise options, through to high end brand names either entering, or wanting to enter the market. The market has become much more developed and responsive to the restaurant sector, with an increasingly talented local skill base available (reducing the need for importing staff) and a much more mature supply chain able to deliver better quality, at competitive prices.

The Chef’s Perspective:

Todd English, Chef

It’s two fold, restaurants have become more entertainment driven and intertwined in our lives. They are forming the social epicentre of our culture – The new living rooms of society – for many different occasions (business, social, leisure, romantic, etc.). Food is the ultimate democracy, despite turbulence around the world, food remains a constant.

The Entrepreneur’s Perspective:

Eric Partaker, Co-Founder & Co-CEO, Chilango

Investing in basic industries such as food has a timeless appeal I believe. Whilst not everyone can relate to the fast-paced buzz of new ground-breaking innovations and technological developments, everyone can relate to food… and with the dawn of exciting new investment mechanisms and opportunities, investors can profit from brands they interact with on a daily basis.

The Industry Insider’s Perspective:

John Quilter, Food Busker, Co-Founder of CRU

It’s not!, 90% of them still fail in the first year. However, with the use of tech and new business practices your exposure today can be significantly less. You can test your market, your concept and your team as well as significantly build a customer base even before you’ve opened the doors to your new establishment. Today you can drastically lower your risk. Basically you don’t have to start from zero anymore.

The Franchise Lawyer’s Perspective:

Babette Marzheuser-Wood, Partner, Dentons

Investing in a restaurant franchise or joint venture has never been more attractive than today. Restaurant franchising is a form of cooperation that offers clear benefits to all concerned. The franchisee gains access to a proven concept and the franchisor taps into the local market expertise of his franchisee. International expansion of your restaurant brand on an equity basis is a high risk undertaking with the costs and risk resting exclusively on the shoulders of the brand owner. In a franchise or joint venture the risk is shared and both partners stand to gain significant advantages. The success of brands such as Costa Coffee and Jamie’s Italian are proof that franchising works.

The Operator’s Perspective:

Kim Rahbek, Chief Executive Officer, Sticks & Sushi

Although officially we still are in a “financial crisis” the overall economy has improved in Europe. We are talking about “a new normal”. The market and people have gained more trust and confidence in the future and are willing to spending more than in the years just after the crisis. Maybe not in bigger investments as “new kitchens”, more flat screens and high tech or new expensive furniture etc. But people seem to go for smaller spending within travel and leisure and hospitality in which the restaurant scene plays a more and more important role. And if you can offer a great product, in nice design with great service, then a lot of people are willing to meet family and friends and spend time (money) while eating and drinking at the same time.

Moreover we also face a demographic fact that we number of “singles” are increasing and “single groups” tend to have a larger purchasing power and meeting with their fellow friends often take place “in the public” e.g. cafés and restaurants.

Finally we also see many “busy families” that wants to meet with other families, but do not have the time to cook at home but prefer to meet in restaurants.

Hear from these expert speakers at the Global Restaurant Investment Forum (GRIF)

 

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