Have you decided to get a new restaurant, but the idea of starting from scratch seems daunting? In that case, buying an existing restaurant franchise is just the right option! This is because when you buy a franchise, you also buy a pre-made brand recognition, a market-proven business model, and get unlimited support from the franchise owner.
Here’s what you need to do:
- Conduct research and self-assessment
- Decide on the location
- Prepare franchise disclosure document (FDD)
- Create a business plan
- Get necessary permits and licenses
- Hire a franchise attorney
Before looking at these details, let us first understand a franchise.
What is a Restaurant Franchise?
It is a concept that independent investors can purchase from an existing restaurant brand. Buying a franchise not only gives you restaurant property but also the right to use the restaurant’s name, branding, marketing, business model, and trademark.
Many restaurants continually seek qualified individuals to become franchisees. This is indeed a rewarding business that offers entrepreneurial independence and the support of a well-established brand.
How to Buy an Existing Restaurant Franchise?
Here’s how to start a franchise restaurant:
1. Conduct Research and Self-Assessment
Before you buy a franchise, make sure you do a thorough industry analysis to understand the market size, growth potential, and current trends. At the same time, assess your skills, strengths, risk tolerance, and personal goals.
It’s better to understand your level of involvement in day-to-day activities. A detailed assessment and analysis are always beneficial in understanding a franchise business.
2. Decide On the Location
The location of a restaurant franchise is very important in determining sales. While some franchisors already have a location, you can also come up and suggest one. But before deciding, consider factors such as competition, foot traffic, demographics, and accessibility.
You can always choose areas with a high demand for your concept. Contact the franchisor for help with site selection.
3. Prepare Franchise Disclosure Document (FDD)
FDD is actually a legal contract between a franchisor and a franchisee. Some of its key elements include quality control, training, and branding information. More information can be found on an FDD based on a state’s requirements.
It’s a good practice to have an FDD reviewed by your lawyer to understand better what you will need to do to enter the franchise system.
4. Create a Business Plan
Though you must follow the business plan of your franchisor, having a business plan of your own will help you gain insight into your position. This also helps you understand what you can bring to the table, all the control you have as a franchisee, and the need for the franchisor’s support.
It’s recommended that you create detailed marketing strategies and operational plans, along with staffing requirements. Such a comprehensive business plan helps a franchisee make informed decisions.
5. Get Necessary Permits and Licenses
Before buying a franchise restaurant, you should consult local authorities to know the legal requirements. Gain knowledge about the local, state, and federal requirements for the restaurant industry. Some common permits include:
- Certificate of Occupancy.
- signage permits
- Fire department approvals
- Food facility health permit.
- Employee health permit.
You may also need a food handling and liquor license permit, depending on the type of restaurant you pick.
6. Hire a Franchise Attorney
To make the buying process smooth, you will need a franchise attorney as they better understand the complexities of franchise agreements. They review the FDD for you and ensure your interests and rights are protected.
They can also assist you in various steps, including trademark protection, contract enforcement, and dispute resolution. You can also get advice on local, state, and federal law compliance.
Is purchasing an existing franchise a good idea?
Absolutely! Buying an existing restaurant franchise is actually a great move. Before getting started, you should understand the business model and franchise disclosure documents well.
What is the key to a successful franchise?
Great customer service is the key to a successful franchise, no matter the location. When your customers are happy, they will choose your business over and over again.
What factors to consider when selecting a franchise?
Thoroughly research the franchisor’s brand recognition, training and support, and location.
Conclusion
Before buying a restaurant franchise, it’s recommended that you have a know-how of all the legal aspects of franchising. Do your research, pick the right location, understand the licenses, permits, and other important documents, and most of all, get help from a franchise attorney for smooth operations.
If you have made up your mind, consider getting a franchise from Chuck’s Roadhouse Bar and Grill. We have been here since 2015 and have made an amazing base of happy customers.
If you get stuck at some point, get in touch with us. Our support team will guide you through each step of the process.
