Innovation is key in business, which drives change and helps organizations adjust to changes arising externally.
The need for innovation will differ, of course, across different types of businesses. Take the example of an investment firm: the company will identify which sectors to invest in and how much money to put in each investment. The necessity for innovation arises from the need to diversify investments to ensure an adequate return. If an investment firm limits itself to a single sector of the economy, it may be unable to weather a downturn in that sector. At the same time, if an investment firm diversifies across too wide a spectrum, it runs the risk of losing sight of its core strengths and becoming involved in businesses it does not understand fully.
Food franchise investment
Investing in a food franchise poses specific challenges to investors. A potential risk from investing in a food franchise is that expected turnover figures for a majority of franchise investments are particularly high. You will be required to sign a lengthy franchise contract and if the business fails, you could find yourself locked into handing over a set amount to the franchisor for the duration of the contract regardless of how the business is doing. It is wrong to assume that an established chain will work in a particular location, so hard work and patience is critical. Obviously, a chain restaurant does not offer much in the way of innovation in respect of menu choices, decor, and other set elements of the operation, but innovation in a franchise is still possible. For example, you may be able to identify a market where a similar food franchise does not exist. There will be scope to spend more on such items as advertising beyond recommended limits and an innovative business owner can be clever in how they spend their advertising budget. It helps to have a background in restaurants, because running a food franchise is a tough business, with small margins relative to other investments.
Rick Schaden’s burger blog offers a useful insight into innovation, other lessons in business, and how to succeed in food franchise investment. As the founder of Consumer Capital Partners, Schaden has been a driving force in the development of such dining brands as Smashburger, Tom’s Diner, and Live Basil Pizza, as well as the continued success of the Quizno’s chain. At Smashburger, a focus on handcrafted burgers and the use of local culinary influences has put the chain on the map as far as casual dining is concerned.
Investing in a food franchise is one option for an investment firm. A wise approach to investment in food franchises is to invest in a globally recognizable brand that already has a well-established customer base. At least then the marketing of the brand takes care of itself.
Organizations that do not embrace innovation could end up losing ground to competition, losing employees who wish to work in a more dynamic environment, or simply end up operating inefficiently. Innovation can be the key difference between becoming a market leader or an also-ran.