Discuss about the Literature Review Of Guzman Y Gomez Restaurant.
Guzman Y Gomez is a licensed restaurant of Australia. It has specialization in Tex-Mex dishes such as nachos, burritos, and quesadillas and may other special items. It is a business of franchised with more than 65 stores in operation throughout Australia. Along with that it has 3 franchisee in Singapore and 4 in the country of Japan. It is the restaurant which wants to expand its business with new stores around Australia. The first store of this restaurant has opened in Newtown, Sydney in 2006. It wants to expand its business in near future by using franchise model. The taste of the food of this restaurant will enhance the range of customers. The idea about opening franchisee of restaurant will allow them to earn more profits. Guzman Y Gomez has five strong restaurant chains in Sydney involving a new store in the bustling Centre of MLC. It is planning to expand its business nationally as a franchise. It is the business which put lot of efforts to develop its business. in the begin point there were only 15 staff operations in Newtown but now it has more than 100 staff and $4 million annual revenue. It is essential for restaurant to analyze all factors before expanding its business by using franchisee model. Guzman y Gomez needs to analyze the potential marketers, marketing mix, STP analysis, communication plan, promotional plan and resources. It wants to expand its business because it found that its taste is liken by many customers and it would be benefit for the company to adopt the franchise model because it will support to enhance the growth of the restaurant in particular stream appropriately.
Guzman Y Gomez is the fastest growing brand in Australia that serves fresh and delicious Mexican food and delivers rapidly. It is the passion and pride of Guzman Y Gomez to make Mexican food and make customer satisfied about the taste. The menu of this restaurant is to make the real and delicious dishes of Mexican and cut above the competition. It is the belief of this restaurant that there are two kinds of people in the world. One is who prefer fresh guacamole and other one is wrong. It is the concept of this restaurant to deliver the fresh food to the customer because it is the meal only as good as it is made up of. It believes to make the foundation of the business solid without any compromising and to develop its concept it never compromise with its products and services. There are three store of Guzman: strips, food courts and thru, but they have common ting in three stores that is fast delivery.
There are so many benefits of expanding the business. The purpose of Guzman restaurant is to enhance the franchisee of this restaurant in so many places. New personnel, broad customer base, relocation possibilities, favorable financial opportunities and considerations are some benefits of expanding the business. Guzman would get opportunity to staff the restaurant with new skilled, qualified and experienced personnel with new range of ideas and views. It would enhance the opportunities of employment along with the growth of the business. These new hired people will be helpful for streamline process and would be able to bring then fresh ideas for the organization. Business expansion offer has a point of advantage to wider their business in to a broader customer. It will enhance the pool of potential customers and bring the possible benefits in the favor of the growth of the restaurant. Effective expansion is able to come in the mind of customers foremost and they get attract towards experience the latest changes. Successful business expansion is able to put the business in the positive place when it comes in the situation of acquiring necessary financing. This financing might be the lifeline of the business in the time of expanding process.
Effective business expansion will be helpful to enhance the market share and a solid financial position might acquire financing. Along with that the major benefits of expanding business is get the opportunity of relocation possibilities. Relocation will allow business to get the experience of different countries and their political, geographical, technological and legal challenges. These all challenges Guzman has to face wisely because wise business owners consider the benefits of such scenarios if relocation is possible. Increased access to suppliers and logistics suppliers can also be considered as essential element to contemplate relocation. Business expansion is only good when organization is ready to accept the changes and potential challenges otherwise it may cause the issue for the growth of the business. It is important for the Guzman to focus on profitability level while expanding the business in the comparison of growth level. The owner of the business can periodically review the return on investment from an expansion. Guzman wants to expand its business with using the franchise model. It is required for the Guzman to analyze the franchise model positively and negatively and know about the pros and cons before implementing it. Along with that it should consider other model or sub model of franchise model to expand its business widely. It will help organization to take decision appropriately (Lee, Hallak & Sardeshmukh, 2016).
To expand its business effectively, restaurant should consider the business expansion strategies as well. Business expansion strategy will be helpful to analyze the different factors for the business from local to global. It is a strategy which is adopted by the organization to attain the high level of growth in the comparison of past experienced. It is the plan of Guzman to expand its business with using the franchising model. It should consider the business expanding strategies initially. There is some ways which has to follow by the restaurant to expand its business in effective way. These ways are increasing the sales of products and services in the existing market because it is the risk free initiates to expand its business. As Guzman has specialized in Chinese foods, little changes in the menu will enhance the attraction of the customer towards the business. Business expansion is required to develop the market segment to move into new geography. Guzman should analyze the market trends by researching the market. It can be done via new marketing strategies. A restaurant is able industry to run and expand its business via making supply chain. But for this it must be cognizant of what made the first location a success. Franchisee or license is the elements of fast growing (Maslova, Timyasheva, Nikishin, Tyunik, Nikishin & Pankina, 2016). Franchise agreement cost is very high to prepare. It needs to be flexible because it is the factor which can be successful if the owner of the organization are willing for travel and handle the business globally. Join force and strategic alliance are an idea of expansion of business by merging the two companies (Stankovi?, 2017). It has the trick to find the new partners. These partners can be new distributors that should have the expectations of higher profitability. Guzman can expand its business and move global by growing markets, rising customers spending and improve the climate of business environment. To expand its business within the use of franchising model, Guzman need to focus on demand of customer, attain legal and assistance of accounting (Kacker, Dant, Emerson & Coughlan, 2016).
As it mentioned in the point of rationale that business want to expand its business through franchise model because it is the safest model which is beyond from all potential risks. Franchising has various benefits which is helpful for not only to the seller but also for buyer. It is the benefit of franchisor to use money of other’s people to expand its business appropriately. The benefits of franchise model include a great chance of success in a sole proprietorship, initiate training and ongoing support, the power of selling of particular brand, use of manufactured business model, lead generation of customers, network of peers and national and regional advertising campaigns to provide moral support through an intranet of company, franchisee associations and annual conference (Sohn, Tang & Jang, 2014). Franchise model is seceded particularly with known franchises such as McDonald’s, Subway, and Panerra Bread. Every coin has two aspect one is able to show the positive part and another one is able to negative parts. Same with franchise model, it has some downsides as well. Guzman Y Gomez needs to utilize the positive factors of franchising model instead of seeing negative aspects.
Franchisees need to use the colors of the company and approved those colors on their walls. At significant expenses, Guzman Y Gomez can redesign their units. The franchisee is done with the basis of long term contract which make ensure that the business of this particular brand will be grown effectively. The model of franchising is all about following the systems (Noh, Yun, Jang, Jung & Cho, 2014). With the support of franchisee, the restaurant will grow certainly. It is because the franchisee has the confidence about the model of franchisee and purchases it (Boulay, Caemmerer, Evanschitzky & Duniach, 2016). Franchisee feels that it would be possible for him to expand its business and grow easily if they follow the system perfectly. It is important for the Guzman to consider regional variations appropriately and suggest some for amendments. Business expansion is essential factor for the purpose of growth and if organization needs to expand its business, it needs to analyze the trend of market and taste of customers by taking reviews from them (Chiou & Droge, 2015). A good franchisor know that if they are leaving the system without attaining approval from the first franchisor, theory would be able to violate the agreement if franchise. It may cause them to have their responsibilities by utilizing the name of franchisors and can revoke the business model.
There is a various kind of restaurant franchises such as fast food, fast casual and full services. Fast food is also known as quick services restaurants which are not specialized in provide table services. Fast casual is considered as the between medium of full restaurants and fast food restaurants such as café and takeout restaurants. Full services are franchise restaurants that offer table services and a complete selection of core menu of food and drink options and allow customers to payment after having the dinner or leaving the table (Emerson, Mulley & Bliemer, 2016).
The model of franchisee will be advantageous for the restaurant because it is the model which can be expanded easily in local and global. There are so many examples of restaurant that has utilized the franchising options of marketing entry and proved that they have chosen most correct option to expand its business globally (Chen & Tsai, 2016). These examples are McDonalds, KFC, Pizza hut, Doca bell and Buffallo wild wing which used franchise model. The main question arises that how it works. In a model of franchise, Guzman as a franchisor and franchisee involve in the contractual agreement which is made on the basis of selling the products and services of Guzman. The franchisee of the products of Guzman takes the burden of enhancing the restaurants, staffing, overseeing the daily activity operations and handling the costs for running the restaurant. The franchisor (Guzman restaurant) may own the place of the restaurant and lease it to a franchisee. In such process, franchisee will pay a certain initial fees along with royalties from the sale of restaurant to the franchisor. It is the form of profitability and the Guzman will be able to gain the advantage in the form of royalty. In case if the franchisee leases the destination from the franchisor, in such case franchisee will be liable to pay the rent of an entity as well. It is the condition of the franchising model that franchisor need to report entire incomes in the form of revenue. The margin goes at higher range because of eliminated operational (Carins & Rundle-Thiele, 2014).
The literature review notes that this model has the benefits which involve the opportunity for the company to grow faster in same industry by expanding its menu globally. It is done because in that case the franchisor provides the capital for building the ready restaurant for operation. It would be the benefit point for the Guzman if the store under forms. Along with that it would be the benefitted point for the franchisor because franchisor will get more time to focus on products and research on operations in an appropriate manner (Gerhardt, Hazen & Joiner, 2017). Since the restaurant and its products is owned by the franchisee, who is highly enthusiastic to make the restaurant a success. The other benefits point for the restaurant of Guzman that it would be able to get the instant brand recognition and gain the trust of the customers which usually take many years to build (Calderón & Ruiz, 2015).
Each line has two ends which show advantage and drawback, same strategy is applying on franchising model. The downside of this model is that company or business has less control over the management. Along with that the business enters into the formal agreement (Das Nair & Dube, 2015). It has been analyzed that selling a franchise has the potential risk as well such as if the performance of franchisee is not good and franchisee is unable to perform good at higher level or as per expectation, it may fall the reputation of the company in the view of customers. It decreases the value of products and gives the opportunity to competitor to move ahead. A weaker core community is another disadvantage of franchising model. Innovation challenges can be the core reason of drawback of franchising model because it is not possible every time that franchiser adapt new technology in easiest manner (Slater, Mohr & Sengupta, 2014). The outlet of Guzman restaurant will be in other country and it would be difficult for the restaurant to force its franchisor to adapt quickly because a change depends upon the environment.
However, there are so many drawbacks of franchising model but Guzman is able to grab the opportunity systematically and appropriately by leaving the disadvantageous point. It has been stated by the Steven Marks founder of Guzman to expand plan which is focused initially on Newtown and then interstate. “We plan to open the franchise in our existing hub in Sydney including north and west store. We are planning also to sell our franchises in our existing location. It would be big initiation from our side to expand our business nationally buy sing the franchise model. As we have seen that the great response we achieved from the launching and many inquiries for franchise opportunity.” It has been realized by Guzman that so many potentially great owners were out there that was eager about the food of Mexican and its culture. However, it has been decided by the founder of Guzman that franchise of its business open within the first 12 months to just for 12 outlets. The business model of Guzman Y Gomez was purpose to build the current economy Marks said, “We have inaugurated niche which is rapid casual revolution that has been accepted in the US, the quality of serving is very fast. Australia has quality food and expensive restaurants. The main aim of this restaurant is to provide the high quality along with affordable food (Coombes & Nicholson, 2013).
The main aim of this literature review to focus on the Mexican restaurant Guzman Y Gomez that wants to expand its business by adopting franchise model. It is required for the business to analyze the business environment before adopting any model for its business. Restaurant has to research on potential marketers (Dahles & Susilowati, 2015). To find the Potential marketers, restaurant needs to analyze the marketing mix which contains four Ps of product, place, promotion and price. STP analysis helps Guzman to analyze the situational, targeting and positioning of the business. It would be helpful to analyze the current condition of the market and make able business to set up the target market. Positioning helps Guzman to establish the image of brand in the eye of the customer. To expand its business, Guzman should be active to find out the resources to develop its business. Without promotional activities, no one can be able to see the changes and growth of the business. It is required for the business to explore new strategies of promotional activities that enhance the promotion of the restaurant (King & King, 2016). The promotion of product and services is most common form of marketing. Promotional activities for Guzman can be done via advertising in news paper, radio, online pages, television and many more. It is the key element of marketing mix. Communication plan is the business plan that describes the strategy of the organization that what it wants to accomplish with the information. It is considered as the important element for daily activities. It is a living document which involves media activities as per internal and external communications. Along with that it is able to clarify the priorities of an organization, staff assignments and target audience (Santos, Pache & Birkholz, 2015).
It has been identified that franchising model has the lesser risk. It would be able to enhance the business without putting a lot of efforts. There is a choice of business model which reflected the high and low factor of franchised business. it can be seen that education , risk tolerance, family participants, support provided, training provided, proven system, positive view of franchising and investment level are some factors which enhance the interest of franchising. It is required for the business to analyze the environment appropriately before adopting the franchise model. It suggests that franchisees are enthusiasm to make an option and when evaluate in alliance with time taken which is tend to be voluntary (Chiou & Droge, 2015). It has been appeared that Guzman should be aware of the upper level of research and information that substitute investors are likely to need. To take benefit of the pool, franchisor need to win the bad perceptions of franchising as a business model, which conquer in the group of potential customers.
References
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