Franchising your restaurant offers an effective way to expand and branch out, while still maintaining the ability to rely on the experience and resources that you have developed in your original location.
When all goes well, your parent company can gain access to capital from franchisees while boosting brand recognition that benefits everyone involved.
But just how do you go about franchising your restaurant?
1. Determine feasibility
Your first step is to make sure that you and your eatery are the right candidates for franchising. Ask yourself, for instance, if you are ready for the added work that will inevitably be involved, even when you bring a franchisee into the mix.
Next, make sure that you have enough liquid cash in the bank to make it happen. In addition to planning for opening costs and price fluctuations, you also must be prepared for emergencies.
Finally, ensure that there is sufficient demand for a franchise in the market that you want to serve. If your research is lukewarm on this question, you might want to wait or reframe your business model.
2. Develop a franchise business plan
This living document must, at a minimum, contain several components. These include your business goals, a current financial analysis, financial forecasting for the short and long term, and your brand’s values, mission, and vision.
An effective business plan is the road map that demonstrates to investors and potential franchisees that you have a solid idea to move forward.
It is also something that you can look back on and modify as your restaurant and its franchises grow and evolve.
3. Get financing
You can’t fund your franchises alone. In addition to garnering investor support, you might also consider putting in your own funds, applying for a business loan through a bank or credit union, or collecting a franchise fee from your first franchisee.
This final option works best if you have also leveraged some of your own funds into the operation, because it demonstrates that you have “skin in the game.”
4. Do the legal legwork
You should establish a franchising company that is separate from your primary restaurant company. In the end, you will have a parent company for all present and future franchises, your original restaurant, and your first franchise location.
Making these entities distinct helps to protect the rest if one experiences financial difficulties.
5. Write a franchise operations manual
Consistency is vital for franchises.
To that end, be sure that all owners know exactly what you expect and require in terms of food preparation, dress code, facility design or decoration, and streamlined processes such as payroll, HR, and recruitment.
6. Recruit franchisees
In the beginning, you might need to conduct your own searches for the right franchisees. Look for candidates with a great deal of restaurant experience, including with management.
Obtain evidence that they have sufficient capital to pay the startup fees, and closely examine their history to be sure that their past ethics and practices were totally above reproach.
7. Market your franchise
Get the word out about your new enterprise. In addition to touting your amazing menu and showcasing the benefits of online ordering, find ways to incentivize foot traffic to your store. Create exciting promotions and harness the massive power of social media to get the word out.
If you don’t have the time or expertise to accomplish these tasks yourself, hire someone. You will be glad you did.
8. Manage your franchise network
As your business grows, it remains more crucial than ever to support it from behind the scenes. Do so by fostering consistency and brand integrity, assisting franchisees with challenges as they arise, administering regular training, and overseeing finances.
Installing a cutting-edge restaurant POS system can go a long way toward ensuring that you have your finger on the pulse of your operations at all stages.
9. Measure franchisee performance
Another stellar feature to be found in franchise POS solutions is their ability to gather data and to create insightful reports. Use the data this system can glean to learn about the performance of each franchise as well as the overall success of the brand.
10. Make plans
A good restaurateur is always looking ahead while never failing to learn from past mistakes and successes. As you chart your course for the upcoming months and years, create goals for financial success, brand image, menu offerings, human resources, and even the sourcing of your ingredients.
Your dual focus should be on both your present performance and the areas where you want to make gains in the future.
Success in starting and maintaining restaurant franchises does not come without significant challenges.
However, approaching the task with in-depth planning backed by solid research will give you the information and tools that are vital to creating and maintaining a thriving franchise restaurant empire.
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