Starting a Franchise Restaurant: Everything You Need to Know
Starting a franchise restaurant can be quite a challenge but it also has the potential for great rewards.3 min read
2. Zoning and Code Compliance
3. Financial Challenges of the Food Industry
Starting a franchise restaurant can be quite a challenge but it also has the potential for great rewards. The key to starting a successful franchise restaurant is choosing a good franchise to work with at the start.
Buying a Franchise Restaurant
Once you've decided to start a franchise restaurant, you'll need to analyze and evaluate your options. Find out which franchises work with your long-term business goals. Look closely at the characteristics of the business and make sure that it's a good match for you.
Pay attention to some of these particular aspects of the business before jumping in:
- Is there a demand?
- How simple or complicated is the financing?
- What's the track record of the company?
The best way to be sure that a business is successful is by filling a need in the market. Checkout what kinds of competitors will be in the area of your potential franchise restaurant and make sure you can compete. You want your place to have staying power and to fill a real need.
You may plan to open in an area with other restaurants nearby, but that's not necessarily a problem. What's the area like? Are there people hanging around there frequently? Are the other restaurants exactly like the one you'll be opening, or do they fill a different need based on the type of cuisine?
Most lending companies are familiar with the franchise startup process and everything involved. This means that finding the financing needed for starting a franchise restaurant will most likely not be a problem. The more well-known the parent company is, the better luck you'll have with lenders.
Look for a franchising option with a good track record. Many restaurant franchises have already opened several successful locations, so it's best to work with a company that has past success and plenty of experience. Looking into the success of their other franchises is a great way to determine if they're a good option.
Zoning and Code Compliance
Many codes and requirements come with the food industry. Because the level of risk is higher when customers are ingesting your product, the government is very careful to make sure that all restaurants are careful and clean in their operations. Thankfully, starting a restaurant franchise can make handling zoning and code issues easier than if you were opening an independent restaurant.
Franchisors are experienced with such matters because they've successful opened other locations, so they can walk a franchisee through this process and provide helpful support. Make sure that the franchise company you choose plans to offer lots of support with zoning, permits, and code compliance. If they don't, it's probably better to go with a different company.
Financial Challenges of the Food Industry
Food franchises need workers, but these employees tend to be lower paid. Lower paid positions usually lead to high turnover. This means that keeping good employees working in your franchise can easily become one of your greatest ongoing challenges. The recruiting and training process for new employees takes time and manpower, so if this process is happening frequently, it can take over a large portion of the business's operations.
Along with labor challenges, there are other specific financial challenges that come with the food industry. Because foods spoil and costs fluctuate, keeping a well-stocked kitchen can be a challenging aspect of a running a franchise restaurant. Many fast food and other types of restaurant franchises also face the issue of theft. Whether internal or external, this risk of loss is a real issue and must be prepared for.
Although there are many challenges that are specific to the food industry, starting a franchise is a great way to get started as a business owner with the support of a company behind you. Before you decide that this is the right path for you, ask yourself whether you're up for the challenge and if you have the skills needed to get the job done.
There's a certain combination of skills and abilities that a person needs in order to run a franchise restaurant well. Speaking with other franchise owners and doing thorough research on the subject will help you decide if you're the right fit. If you do decide to take this step, there are many benefits you can look forward to.
If you need help with starting a franchise restaurant, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.