Thinking about owning a restaurant, but feel like you just don't have a concept in mind? Then franchising may be for you! Franchising contains many benefits (and also some risks of course - but then again - entrepreneurship always does!) Here's what to know before you buy:
Competition exists no matter what. Just because you purchase a franchise doesn't necessarily mean that someone else won't open a similar or even identical store right down the street. When you negotiate - keep this in mind and build some non-competes into your agreement. That way, you won't have to look across the street or down the road and see another one of your mother company's locations going in to cannibalize your own business.
Enjoy knowing you'll have built in marketing and recognition. One of the biggest challenges to face a new restaurant owner is 'getting the word out there.' With no reputation or brand recognition, you'll have a hard time attracting new customers and may need to invest heavily in marketing. But when you have a franchise, the name is already established, and chances are the marketing system is already in place. So make sure to ask about marketing and advertising plan before you buy, as well as any expectation or cost for your own marketing (what are you allowed to do by corporate, for example, and is there any required spend on your behalf on an annual or quarterly basis). Knowing and understanding the marketing behind your business will help you get an instant following and traceable, quick ROI.
Know you'll still have cost. You're buying a name and a concept. You still need to make that investment. Restaurant equipment will be needed (and you can shop here, of course, to find the best deals!). Plus rent, utility, labor costs. All of the traditional business costs associated with you new start up will still be present, so do your budget accordingly. One major plus: franchises tend to be proven concepts, so securing a business loan in typically a much more straightforward process than with an original restaurant concept.
Don't be afraid of hard work, but also know that major success is possible. Unless you have an active partner in the business and you're just a silent financial backer, be prepared to pour yourself body and soul into your new enterprise. You'll be investing many hours into your business to get it up off the ground. However, once you have one location, you can buy another, and another. And still another. Eventually, many franchise owners will have multiple chains and a successful business model which virtually runs itself. But to start out - you're going to be putting in major hours to make your vision a reality.
