Buying a franchise restaurant is a huge decision.
No one should go into making a huge decision without first asking some tough questions, and doing their due diligence.
“Completing due diligence with an existing franchise partner is an invaluable step for an incoming franchisee,” advises Mark Sozanski, Chief Operating Officer at Montana’s BBQ & Bar. “It provides confidence and a level of validation to any discussions leading up to making a final decision for both the incoming franchisee and the franchisor. This is the power in this step of the process.”
It’s no surprise that this makes the top of the list. After all, owning a successful franchise takes a ton of hard work. You would expect that work to provide proper compensation, right?
Frustratingly, there’s no direct answer:
“Legally, franchisors cannot give income amounts or forecasts of future income. This practice is more protection for franchisors as they cannot guarantee the same performance for all franchisees.” – FranSmart
However, that doesn’t tell us the whole story given that this salary would be offset by startup costs and associated fees.
In short, franchise owners can earn a lot of money if they have a strong brand.
A strong brand can really make the difference when it comes to getting a new franchise off the ground. This doesn’t change the amount of work to make it happen, but a strong brand can certainly help you recoup upfront costs faster.
Similar to salary, this question gets right to the point: how much will this cost me?
Again, not all restaurant franchise systems are created equal. You would do well to review your FDA in detail before making your decision. Often all the details of associated costs are included in that document.
Having a full picture of what this endeavour is going to cost is crucial to starting off on the right foot.
As stated by Franchise 500, there are three important things every potential franchisee should consider when deciding which franchise to invest in:
“When you acquire a franchise, what you’re supposed to receive is a proven system for producing predictable results.” – Jeff Elgin, Franchise 500
Aside from those key items, do your research and trust your gut.
Owning a franchise is a big financial investment and personal commitment.
During the purchasing process, you’re going to need support – especially if you’re getting into franchising for the first time. Then, once you’re up and running, the support needs to continue.
That’s why it’s critical that you partner with a franchising company that will help to get your business going and be fully dedicated to helping you succeed in the long run.
By asking the right questions, you’ll be able to determine if your franchisor’s ongoing offerings will be right for you. These supports can include everything from start-up costs to mentoring to hosting job fairs and beyond. “You’re in business for yourself, but not alone, thanks to the guidance offered during startup, and then ongoing franchise support as your business grows.” – All Business
It’s Important to understand how the relationship between franchisor and franchisee will work. Both sides are responsible for making the business a success, so it helps to know who is responsible for what throughout the relationship.
For example, who handles what tasks in regards to the pre-opening of your location? How is marketing handled, both pre-opening and on an ongoing basis?
A good franchising opportunity will support potential franchisees with hiring support, new business support, ongoing marketing, and brand advertising in apps such as SkipTheDishes.
“Make sure you confirm that the company has specific strategies and tactics to accomplish this and that its program works consistently in various markets around the country.” – Jeff Elgin, Franchise 500
Franchisor and franchisee relationships will differ depending on the market and the industry. It’s important to know the details about who needs to bring what to the table.
Before investing in any franchise, we encourage you to speak with current and former franchisees to better understand the personal and financial commitment of owning a franchise. At Recipe Franchising, our franchise managers would be happy to introduce you to members of our current franchise family and to provide you with any answers you seek.
Despite the massive challenges that the restaurant community is currently facing, the Recipe Franchising Team would like to extend our message of reassurance. Having been in business for over 137 years, we are confident we can get through this challenging time just like many others in the past. We take pride and ownership in the well being, health and safety of our franchisees, associates and customers. Recipe Franchising is looking towards the future with hope and continuous growth. With the challenges at hand, The Recipe Franchising Team has adopted a new process that we like to call "Frictionless Franchising", a way for you to meet, research, investigate and explore new franchising opportunities with us from the comfort of your home. We want to make sure that we are always here to answer your questions, inquiries, and help anyway we can. Please do not hesitate to contact us.
Stay healthy and stay safe.
The Recipe Franchising Team