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Restaurant Franchise

Written by: Cynthia Gleeson

Article Overview: Quick! I say ‘franchise’, you say…McDonald’s? Well, despite the vast array of franchise possibilities out there, it is nonetheless true that when most people hear the word franchise, they think of food. That is thanks in large part to the amazing success that many fast food giants have had in growing by franchising. And, despite the increase in franchising throughout many different industries, buying a restaurant franchise still remains one of the most promising opportunities out there today.

Restaurant Franchise

Quick! I say ‘franchise’, you say…McDonald’s? Well, despite the vast array of franchise possibilities out there, it is nonetheless true that when most people hear the word franchise, they think of food. That is thanks in large part to the amazing success that many fast food giants have had in growing by franchising. And, despite the increase in franchising throughout many different industries, buying a restaurant franchise still remains one of the most promising opportunities out there today.

According to a study by PricewaterhouseCoopers, a total of $1.53 trillion was generated along with 18 million jobs in America as a result of the over 760,000 franchised businesses throughout the country in 2001. That means that franchises represent roughly 10 percent of the private sector economy in the U.S. And, among the 75 different industry groups, restaurants represent by far the largest percentage of that growth. So, whether you’re interested in buying into one, or expanding your own business, the opportunity in the food industry is most definitely there.

For those of you interested in getting yourself a food franchise, there are a number of things you need to be aware of. First of all, the advantages are obvious: from being familiar establishments to the traditional lending sources to having a record of proven success and typically high demand, food establishments can offer much promise for the future.

However, the pitfalls of owning a restaurant franchise are not to be overlooked. In most cases, setting up shop requires a large initial investment from the franchisee, not to mention the costs involved in meeting government zoning and code regulations. High staff turnover rates and low margins are also factors to take into consideration before making your purchase.

If you’re one of the ones that are looking into franchising your own restaurant, whether due to lack of money, time, or people, you will have a number of obstacles in your way. Capital and time are two of the most major ones. After all, expanding your business does not happen overnight. It takes time to do everything from finding a site for your outlet, to finding sufficient financing, to hiring and training your staff.

You also need to make sure that your restaurant is of the kind that can be franchised. Is it unique and professional enough that people will want to become a part of your team? Can that uniqueness in your design and process be replicated? And, will you be able to generate an adequate return on your investment to make all of the time and hard work worthwhile? All that being said, if you are willing to put in that time and energy, it can be done!

Develop a growth plan for your restaurant franchise that takes into account such things as how fast and where you want to expand, and what kind of support you’ll provide. Next, draw up a franchise contract and create whatever manuals or training plans will be needed. Then, go out and find your future business partners! Market, get your new franchise out there, and generate interest among your prospects. And, last but not least, enjoy the ride!

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  The Many Types of Franchises
  Tips for Buying a Franchise

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Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Franchise Surveys - Another good tool to researching a franchise is to speak with their existing franchisees. This contact information is included in most Franchise Disclosure Documents. In order to get a Franchise Disclosure Document or FDD as it is often referred to, you will have to complete a basic franchise application. The franchisor will then usually provide you with the FDD at that time. Included in that book of information is a list of the existing franchisees, the contract, the investment information etc... This information is required by Federal Law to be disclosed to your prior to making a purchase. So be sure to do your research and start with the Franchise Documents to get the initial information.
Re: Info for would be franchisers... - [quote="Sebastien":2gam0klq][quote="BuzzAroundBooks":2gam0klq]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to.[/quote:2gam0klq][/quote:2gam0klq] That is really what I look for in any industry publication. We lead busy lives and when people fill their magazines with fluff, not only does it benefit no one, but it makes us truly appreciate those that don't. Thanks!


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