Your restaurant may be flourishing. You are slowly thinking of expanding your business. Franchising is a thought that has crossed your mind on several occasions. Take a look at McDonalds; did the Colonel know something that no one else did? Franchising is not a big secret, but if done, it has to be executed well. And with numerous industries franchising, franchised businesses have generated trillions of dollars into the economy. Restaurants by far, however, are the biggest successes yet in the franchise industry.
People franchise because they have time, money and manpower. You may think franchising costs more than you can afford, but in reality, the franchise is the initial investment which means restaurant operations can occur at a lower cost. Your investment in franchise is limited to documentation and recruiting costs. What restaurateurs should worry about is turnover costs. With turnover rates exceeding 100% according to recent statistics, you can recruit and train a manager only to see them leave or be hired by a competitor.
Franchising a restaurant takes time. A hospitality consultant will help you find a suitable location, hire a contractor, find financing, recruit staff, purchase equipment, train staff and the list goes on. The next question, is your restaurant franchisable? Any restaurant can be franchised depending on whether it meets basic criteria. Your restaurant at any point in time should be something you can sell; it must be professionally designed, credible, unique and sizzle all on its own. Secondly, you need to clone the restaurant. It should be an exact replica of the current restaurant you operate. The reason your restaurant is succeeding is the reason you are franchising, your customers do not want to see anything different to the current establishment.
Once you make the decision to franchise, there are many important things you need to address which include territorial development, speed of growth, staffing and support services to name a few. Don’t rely on instincts alone, look at market data. Would your restaurant be a smash halfway across the country? Perform a thorough research to confirm consumer demand is widespread beyond your current location.
Get ready for change. You are now no longer only a restaurateur, but also a franchise owner. You will be engaged in different activities entirely. You will not be limited to selling pizza but supporting franchises. Are you comfortable playing many different roles? Can you be a teacher, salesperson and supporting franchisees? In addition, you may no longer be in complete control of your business. Franchising means you may have to hand over the reigns to someone else.
Learn the legal requirements of franchising. You have to sell your franchise legally, and you need to get ahead of all legal documentation and requirements. It can be very intense work and you need to be fully prepared. To advise you in this process, take on a restaurant consultant who has the knowledge and expertise to ensure every step taken is done correctly.