How to Franchise Your Food Business – A Complete Guide
Are you ready for the next career phase as a food business owner?
Suppose you are a successful food business owner running your food factory smoothly in a particular area. Your next best step might be to learn how to franchise your food business.
Franchising makes fast expansion, a more extensive consumer base, and brand recognition that may transcend local markets and reach new cities. But creating a profitable franchise out of your favorite restaurant involves more than just copying the menu and atmosphere.
In this guide to owning a restaurant franchise, we’ll cover:
- What is a franchise restaurant?
- Purchasing a franchise vs. franchising your current restaurant
- How to franchise a restaurant (as a franchisor) in 8 steps
Feeling ready to build your franchise empire? Let’s dive in!
What is a franchise restaurant?
A readymade restaurant concept with an established brand is called a franchise. Instead of building your restaurant from scratch, you buy an existing location under this business plan.
If you’re interested and availability permits, you can even buy a restaurant concept that has multiple locations.
Also, Read 9 Tips to Build a Strong Brand for Your Food Business
Examples of Restaurant Franchises
Are you curious about the appearance of a franchise restaurant?
You probably passed a franchise restaurant the last time you were on the road. Here are some typical examples:
McDonald’s
For a cool $700,000 (minimum), you can franchise your McDonald’s restaurant, the self-described “most recognised franchise business in the world.” You will receive the powerful brand’s winning formula in exchange.
Pizza Hut
With over 2,000 franchisees worldwide and 60 years of experience, Pizza Hut is a well-liked choice for restaurateurs, employing more than 150,000 people in the United States alone.
Tim Hortons
Canada’s biggest quick-service restaurant is expanding rapidly in the United States, focusing on the California, Texas, Illinois, and other markets.
Learn Food Safety Certifications Required For Small Businesses
How to Franchise Your Food Business in 8 Steps
Suppose you’ve decided to franchise your restaurant as a franchisor (rather than buy into another business as a franchisee). In that case, your next move is to learn everything about franchising a restaurant. Let’s walk through 8 crucial steps.
Assess Your Current Restaurant Business
Hold your horses! The first step of your research on starting a franchise restaurant should be to pause and evaluate your current business. This will help you determine whether your existing restaurant concept can be scaled.
Ask yourself the following questions while thinking about scalability potential:
- Does my current restaurant turn a profit?
- Would the idea work in more than one place?
- Can I easily standardise my processes?
Before proceeding, ensure that your current business is operating smoothly, that your finances are stable, and that franchising is your best option. Alternatively, consider launching a second restaurant.
Also, Read Best Wholesale Suppliers For Small Food Businesses
Create Your Franchise Disclosure Document
After you give the go-ahead to open a franchise, you must handle the legal work. Before you can sell your restaurant as a franchise, you, as the franchisor, must issue and disclose to potential franchisees a franchise disclosure document (FDD).
Additionally, the FDD must include your audited financial statements. You should hire a lawyer to review and assist you in issuing your FDD and registering it in the states with additional franchise laws.
Create Standard Procedures
It’s essential to develop strong and effective procedures to ensure uniformity and profitability throughout your prospective restaurant empire, assuming your concept can be replicated. The franchise operations manual is now available.
Consider this operating guidebook to be the bible of your restaurant. This is the go-to resource for all the information a franchisee needs to manage their restaurant. Your brand, different company milestones, employee training, the technology and systems you utilise, marketing, and more should all be covered in the handbook.
Remember to include a legal notice at the start of your operations handbook that the information therein is secret!
Protect Your Intellectual Property
Part of understanding how to open a restaurant franchise in a way that will set you up for success is ensuring your brand will be protected. When you franchise your restaurant, you give other restaurateurs (your franchisees) the right to use your brand’s logo and trademark.
So, register your logo and acquire a trademark through the U.S. Patent and Trademark Office. This will give you nationwide rights to use your trademark, distinguishing your restaurant from competitors.
Also Read How to Use Influencer Marketing For a Food Business
Create a New Franchise Business
You must establish a new franchise corporation even if your current restaurant is a corporate entity. This will allow you to maintain a clear separation between your present restaurant operations and your future franchises.
Assess Franchising Costs and Develop a Budget
When you first opened your restaurant, you most likely calculated your start-up expenses and developed a budget and investment plan. The good news is that you will have more experience to draw from this time.
When you project the financials for your future locations, keep in mind the cash flow from your current restaurant and try to gauge the growth your brand will likely experience from entering new markets. Your objective is to build a profitable franchise system.
Create a Brand Profile
To begin, develop a brand profile each franchisee may utilise to promote their locations. A brand vision statement, restaurant mission statement, and information about your products, such as menu items and any merchandise you sell, should all be included.
Ensure your franchisees know the importance of keeping all of your marketing “on brand” and the relationship between this profile and the marketing plan described in your operations manual.
Provide Startup Support
Providing the support your franchisees need to launch their restaurants is the next step after completing all the back-end work required to become a franchisor.
This can involve offering marketing and advertising materials, helping hire and train employees, and providing guidance on technology and systems such as restaurant POS software, particularly a multi-location POS that can accommodate many locations.
Every system in your tech should be able to communicate with the others. Each solution should connect all of your restaurant properties. Because enterprise-scale tech solutions are designed to support chain and franchise restaurants, it makes sense to choose them after franchising your restaurant.
Conclusion
Now you are aware of all about How to Franchise Your Food Business. You can grow your business at a national level. This way, you will be known by the entire nation because of your business and taste. Provide people with unique tastes and quality food.
Ready to expand your business?
If you find it difficult, contact our team to guide you further!
FAQs
How to build a fast food franchise?
- Find the Franchise. It may seem obvious, but your first task will be to decide on the franchise you will open.
- Evaluate the business plan
- The legal aspect
- The financing
- The room and the equipment
- Human resources
- Boom: go for it!
What is the wealthiest food franchise?
- McDonald’s. McDonald’s is one of the most well-known fast-food franchises in the world.
- Jack in the Box. Jack in the Box offers our customers an extensive, distinctive 24/7 menu with five-day parts.
- Taco Bell.
- Wendy’s.
- Del Taco.
- Freddy’s.
What are the main disadvantages of a franchise?
- Disadvantages of Franchising
- Limited creative opportunities
- Financial information is shared with the franchisor
- Varied levels of support
- Initial investments and start-up costs can be expensive
- Contracts aren’t permanent
- You’re your boss, but you have less individual control.
