While recently discussing restaurant opportunities with a friend – one of the best restaurant operators in the country- the topic of franchises came up. We both had a good laugh remembering when he passed on a Southern California Krispy Kreme Doughnut opportunity. The deal was enticing, yet the numbers didn’t work. No matter how well you ran the franchise the profits just weren’t there. We both agreed how tough it would be to make enough money with such a narrow day part window. And, as many are experiencing, the icing on that cake wasn’t as sweet perceived. The cost of equipment was high; the site build out expensive, and the stand-alone product had a minimal life expectancy. Even though the presentation was sweet and the doughnuts delightful, the stock deal went stale sooner than anyone expected. Many people, however, made some serious dough buying and selling stock rather than doughnuts. When the stock went in the subway, franchising took a knock. Today franchising is back stronger than ever and concepts are being brought to market at a rapid pace.
Franchising frequently proves to be the perfect opportunity for the person with minimal knowledge and a maximum desire to enter the restaurant business. A relatively new gelato concept, Melt, can be yours for as little as $150,000. Most franchise packages offer complete site design, product development, and staff and management training. Aside from those assets, franchises also offer support systems that are vital to restaurant operators whether novice of experienced. Thanks to the Internet, numerous sites offer volumes of franchise information. Allbusiness offers a great franchise directory. Nations Restaurant News also covers the topic. Before you leap into the pickle bin at your very own Subway, make sure you take the time to research the project.
Here are ten questions to consider when searching for that perfect franchise:
1) What is your long-term culinary goal?
2) Analyze your capitalization capabilities –franchises begin as reasonably as $25,000.00. How much can you afford to spend?
3) Location – do you want to relocate or are you looking for something in your geographic vicinity?
4) Will you be purchasing a single unit or do you contemplate multi unit operation?
5) Will you be working the location full or part time.
6) How important is management and operational support? Some franchises offer more support than others.
7) Are you a completely creative person?
8) Do you work well within a structured environment?
9) What segment of the food business do you most enjoy?
10) Have you researched every possible franchise in your investment category?
Franchising isn’t the answer for everyone, and it isn’t always a sure ticket to success, but it is a reasonable approach to the restaurant business. Frequently it serves as a great base to build a culinary conglomerate that is profitable with fewer hurdles than a single unit independent operation.