Your dream of having your restaurant is now coming to fruition, and you can’t be any happier. Your choice between building your unique restaurant and acquiring a franchise has been a debate in your head for a long time. But after much pondering, you have settled on getting a restaurant franchise.
The food business doesn’t seem to be getting slower, even with the world’s current situation. If it’s anything, it’s gaining ground with many people getting more adventurous with their food choices. In the United States, both quick-service and full-service restaurants have seen tremendous growth, with USD$100 billion in sales growth in 15 years for both categories.
If you are new in the food business industry and are looking to open a restaurant, it would be best to be fully equipped with the proper knowledge of how this industry works. It’s not a decision you make with a flick of a finger. If you want to know how to open a franchise restaurant, you may need to research or maybe enroll in some classes to build yourself up for success. But first, what is a franchise?
What Is A Franchise?
A franchise is a business model wherein an already successful business with established standards of operation can grant franchisee access to proprietary business knowledge, trademarks, and processes. It will allow the latter to operate under the franchisor’s business name. In exchange for that, the franchisee will pay initial and annual licensing fees based on their agreed terms.
Opening up an international restaurant franchise is exciting and, at the same time, very challenging. The pressure to live up to the name and the standards of the popular restaurant chain is enormous, and if you’re not prepared for it, you might not be able to achieve business growth. So, to help you out, here are some do’s and don’ts in opening a franchise restaurant:
- Do Pick A Franchise You’re Passionate About
It’s so easy to ride with the latest trends, but if it’s not something you’re passionate about, even you might lose interest in it. When you’re passionate about the type of food you’re serving, you can talk about it fervently and promote it vigorously.
People will see in your eyes how eager you are to serve your food and how much you want people to experience the same joy it brings you. If you’re passionate about the franchise, you’ll be more resilient in times of difficulty and work harder to overcome the challenges you’ll face.
You will also grow faster because you are highly motivated. Working on something you love will fuel your dream of running your business successfully.
- Do Read The Franchise Agreement Thoroughly
Franchise agreements can be very complex, lengthy, and filled with technical and legal jargon. Therefore, hiring a legal professional to help you review and understand what’s stipulated before signing the document would be best. Having a legal professional on your side can help you bring up concerns, such as terms you disagree with, so you and the franchisor can discuss and maybe amend some terms to benefit both parties.
- Do Utilize The Resources And Intellectual Knowledge Shared With You
The franchise you acquired reached the success it had because its manner of operating was effective and solid. Therefore, you could trust that the franchisor knows what they’re doing and apply their standards.
If you are able to think of a new strategy you believe might work, you can suggest it to the franchisor, but you can’t implement it without prior approval because that would be deviating from your agreement. That doesn’t mean you can’t make suggestions for operational improvement. The franchisor will be accommodating any tactics you present for business growth.
- Don’t Neglect To Perform Due Diligence
Before getting into any agreement, you need to assess everything, especially the risks that go with the acquisition. A franchise is a significant investment, and you might entrust a considerable amount of money from your savings. Hence, don’t rush into signing anything when something is unclear upon the initial reading of the agreement or during the first meeting with the franchisor. You may need to interview or contact other franchisees and get insights from them to know what you’re getting into.
- Don’t Hesitate to Ask The Necessary Questions
As you are about to meet with your potential franchisor, it is best that you are prepared. It means that by that time, you have already read the agreement thoroughly and jotted down your questions so the franchisor could shed some light on them.
- Don’t Hesitate To Walk Away If You Feel Something’s Not Right
Of course, because trust hasn’t been established yet, there might be a tendency for the franchisor to make decisions that will make them gain the upper hand. If there’s something that your gut instinct is telling you that’s not right, it would be best to take a step back and assess the situation. Remember, this is a long-term commitment, so if something feels wrong, you can’t abandon it easily once you sign a contract. Thus, before sealing everything with a sign, it is best to reassess the franchisor if they are someone you are willing to trust and partner with.
A franchise restaurant can be a very successful way to diversify your investment portfolio, but only if you have chosen the franchise that would match your business propensity. Choosing the one you’re passionate about and following all the other dos and don’ts mentioned above can set you up for success.