How to Start a Restaurant Franchise in 10 Steps in USA
Owning a restaurant is a dream for many people. After all, people will always need to eat! Yet for many, the prospect of opening a restaurant can seem rather daunting at first. Since starting a restaurant completely from scratch can be incredibly difficult, many savvy entrepreneurs and businesspeople choose instead to purchase a franchise of an existing restaurant concept. Franchising offers numerous benefits including existing business plans and operations guides as well as the added benefit of a centralized franchise support team. The following are generalized steps for those wondering how to start a restaurant franchise or how to open a restaurant franchise.
The first step is to identify whether buying a restaurant franchise is the best option for you. This is by far the most important part of how to open a restaurant franchise. It involves assessing your internal strengths, weaknesses, opportunities, and threats as well as external industry factors and variables specific to your community.
The next step is to assess your interests, experience, and desires. A person who has worked for years in restaurant management and enjoys cooking would likely find themselves exploring restaurant franchise opportunities more so than other franchise opportunities such as a gym or spa.
This does not necessarily mean that you have to have a great deal of experience in the restaurant industry for all restaurant franchise opportunities, but in that case, you would likely have to be willing to hire experienced staff that does have restaurant experience.
Once you have determined that you want to open a restaurant franchise, you should identify a need in your local community. Sure, people need to eat, but you need to make sure that your franchise will not be entering a market where the supply significantly outweighs the demand. It is crucial that you research the demand for different franchise offerings in your city. For example, if there are ten Mexican quick service restaurants in a city of 25,000, then that market is probably saturated and you should look at other food opportunities such as a Mediterranean quick service restaurant.
You should also perform local market research to see if people in your local community will be likely to patronize your restaurant. Opening a five star restaurant might seem like a great idea if you are in a large city, but it would not make sense for a smaller market with an average household income below the national median. Luckily most quick service and fast-casual restaurants have price points that realistically work in almost any market.
You will also need to check your local regulations and identify how they will affect your decision. Licensing and regulations vary from state to state and even county to county. If you are thinking about opening a food franchise, you’ll need to see what kind of licenses you will need from your city’s health department as well as what types of taxes that you’ll be obligated to pay. How difficult it is to obtain licensing and the cost of licensing and taxation may be a determining factor in your decision making process.
Once you have completed your market research, the next step is to research how to buy a restaurant franchise. You can do this by looking online, visiting franchise expos, or inquiring about existing franchise opportunities of brands that you are already familiar with. Look at FDDs, financial documentation and reports, and talk to other franchisees to see what they say. Make a list of each franchise offering’s strengths and weaknesses as well as note any questions that you have as you go along. Be sure to identify what your obligations are to each franchisor and what the franchisor provides you with (for example: technical support, significant vendor discounting, comprehensive menu training, etc.).
Once you understand how and why to buy a franchise restaurant, the final step is to make your final choice of a franchise brand. Assuming you meet the franchisor’s criteria, and that there is a mutual good fit, and once your franchise documentation is signed, it’s time to get started on the next phase of learning how to open a restaurant franchise.
Now it is time to get started. The pre-opening phase usually takes several months at least. During this time, you will be working on the construction, logistics, and development of your franchise location. Your goal in this phase is to build a solid foundation and begin to establish yourself as part of your local community.
Typically, the ideal location for your restaurant franchise should be one that is in a high traffic area that is highly visible from the road. You should be in a centralized area that is easy to access and has an adequate residential and business population nearby. This is especially true if you plan to offer delivery options. The size of your location will depend on your type of franchise. A dine-in restaurant will need more space than a quick service restaurant. You will need to make sure that your location is capable of supporting your kitchen equipment and is zoned for a restaurant.
Requirements for permits, insurance, and license vary by industry as well as by state, county, city. etc. as well. The franchisor will likely be able to advise you on some of the common permits that you will need to obtain as well as required insurance types and minimums, You should also check with your local authorities to ensure that you are in compliance with all local laws and regulations and that you have filed the correct business and tax documentation.
Be sure to order your equipment in plenty of time for it to be shipped and installed. This is crucial in the beginning to prepare your menu items and to train your staff. You should ideally have enough consumables and dry goods for your first three months of operations.
Even if you will be hands-on in the daily operations of your franchise, you will still need to hire staff. One of the most appealing aspects of franchising to those wanting to open a business is the training component. Franchisors usually provide training, in a combination of classroom and practical experiences, usually to at least the franchisee and another manager. A copy of the franchise operations manual is also typically presented at this time.
The number of staff members that you will need will depend on the size and type of your franchise restaurant. It is a good idea to post ads on your local help wanted websites as well as social media. You should look for people who have restaurant experience and who are friendly, personable, and hard-working.
During franchise training, you will learn how to operate your business on a daily basis as well as how to prepare menu items to the franchisor’s specifications.
You will want to set up your online and other local advertising campaigns prior to and around the time of your Grand Opening, so that you can start to develop a loyal customer base before your doors are even open.
Your franchisor may likely provide guidelines on what tools, tactics and media channels are your best options, and whether they will provide you with website and social media presence through system-wide accounts or whether you can consider establishing and leveraging your own local franchise’s Facebook, Instagram, Twitter, Snapchat, and YouTube accounts.
You will need to train your employees and practice not just preparing your menu items, but also managing customer traffic and flow. A great way to do this is to invite your family and friends in for a few “test runs” to work out any kinks.
Once everything is ready to go, it is time to open your doors! This is the most crucial part of the “how to open a restaurant franchise” process. You want to make sure that you announce your grand opening in as many places as possible- on social media, through press releases, and with signage out front. Many franchises have grand opening celebrations.
So, How to open a franchise restaurant?
In conclusion, opening a restaurant franchise can be a very exciting and rewarding career option. However, it also takes a lot of hard work and dedication. If you think that a quick service restaurant might be a good fit for you, contact us to learn more about the possibility of opening a Shawarma Press franchise
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