Questions to Ask Yourself Before Starting a Restaurant Franchise

Buying into a restaurant franchise is more than just purchasing a complete business. It also comes with all the paperwork, management demands, and late nights that come with establishing a company from the ground up. Even with a well-established brand to back you up, you don’t want all your hard work and money to go to waste because of poor management.

It’s important to assess yourself and the franchise you’re buying into. Here are questions to ask.

Is My Heart in It?

When you buy a restaurant franchise, you become the boss. Being in-charge requires passion, above all else. Passion is what drives you to study the industry and ask questions to make sure you’re going on the right path.

Be prepared to work long hours and, if the situation calls for it, dig into your personal savings for emergency expenses. As The Great Greek Grill says, running a franchise in the restaurant industry is fulfilling, but it’s also a tough and financially risky business. This is why franchisors look for franchisees with restaurant or business-related experience.

Greek Food

Can I Afford It in the Long Run?

Most restaurant franchises offer a “turnkey” package with the design of the whole restaurant and advertising done for you. This package comes with a hefty upfront cost, but it doesn’t stop there. As the business owner, you’re in charge of funding the day-to-day operations of the restaurant.

Franchise owners also have to deal with high employee turnover. You have to account for the cost of hiring new employees. Management costs like these are why some franchisors require their franchisees to have upwards of $1.5 million net worth to prove that they can afford to own a franchise.

Will I Be in Good Hands?

The worst thing you can do financially is to invest in a fad that will quickly fade out. Buying into a popular franchise brand in your area is smart because they’re already known and have regular customers. Research on your prospective franchise by talking to existing franchisees. Ask them if they’re happy with how the franchisor does business with them, and what the challenges are in representing the brand.

It’s important to ask your franchisor how much support you’re going to get from them. Apart from turnkey operations, most restaurant franchises already determine the location and train employees for you.  Consult an attorney regarding the extent of training services they’ll give you and your employees. All of these are found in the franchise disclosure document provided by your franchisor.

Will I Get Reasonable Territory?

Most restaurant franchises can’t promise you exclusive territory in your area. Try to negotiate the size of your territory with your franchisor if you think it’s too small. But keep in mind that their decision to have your location close to a competing franchise may still be firm. They may have studied the area and found that having multiple franchises will be beneficial for them.

Success in franchising doesn’t come easy, even with restaurant franchises from established brands. This is why your vigilance is essential. Always ask your franchisor and existing franchisees the right questions. Get as much information as you can about your prospects. Make sure that the restaurant franchise you choose aligns with your passion. No feeling is as great as waking up every day to do what you love.

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