Do you desire to open your personal restaurant but you don’t know where to begin? A franchise gives a turn key opportunity for having a restaurant which has an in-built name recognition as well as a proven success track record. With different ads and announcements showing readings like “Ben & Florentine franchise for sale” and many more, it is important you also take a good step to learn some basic things about restaurant franchise before making an investment.
#1: Restaurant Chains and Restaurant Franchises are two different things
Starbucks is an example of a restaurant chain, however, due to the fact that it is owned by just a single parent company, it can not be considered as a franchise. You can not buy a Starbucks coffee outlet. While the Burger King in the other hand is regarded as a chain as well as a franchise since you can easily purchase individual units of the restaurant. Thus, all franchises can be regarded as chains, but not every chain is a franchise.
#2: Restaurant Franchises Are not Cheap
Some restaurant franchises usually come with a heavy price tag. The Dunkin’ Donuts needs prospective franchisees in order to have a minimum of about 1.5 millions dollars net worth as well as $750,000 in total cash reserves. Wendy needs $500,000 in normal liquid assets and about one million net worth.
#3: Franchises Usually Need Restaurant or Other Business Experience
Several franchises need previous restaurant or other related business expertise prior to allowing you represent their brand. Have it in mind that, even though you need to open a restaurant which is independent, investors will be looking out for expertise within the restaurant industry, also.
#4: Franchises May Need Multiple Locations
Both the Taco Bell and Pizza Hut Franchises need a minimum of about three brand new restaurants every three years, while the Dunkin Donuts needs a minimum investment of about five new restaurants at a particular time.
#5: Restaurant Franchises are usually Turn Key Operations
One of the main reasons why restaurant franchises are always so expensive is because they are always turn-key ready. The dining room design, kitchen layout, menu, as well as the campaign market are all done for you. You do not need to work at developing name recognition. It is all part of what you are purchasing.
#6: Restaurant Franchises Have Guidelines And Rules
Consistency is the key whenever it concerns restaurant franchises. Customers always expect the same food, service, and atmosphere, whether they are in Arizona or Alabama. To maintain consistency across every unit, restaurant franchises always come with a good thick rule book that outlines the do’s and the don’ts of any franchise ownership. When you accept to buy a restaurant franchise, you are as well accepting to adhere to all of their rules.
#7: Restaurant Franchises Do Not Leave Too Much to the Mere Imagination
If you love to create and cook new foods and also love to plan out every aspect of events, such as designs for the dining room, menus, etc. the setup restaurant franchise structure may not be too creative for you. Ditto if you will prefer setting the rules as well as trying new things.
- You Still Require a Business Plan in order to Purchase a Franchise.
Even if restaurant franchises are usually turn key operations, you still need to have a properly thought out business format and plan.