December 7, 2022
Lauren Platero

How to Open a Franchise Restaurant: The Ultimate Guide

Learning how to open a franchise restaurant takes time, dedication, and a passion for the restaurant industry. Enterprise restaurants are some of the most complex yet uniform business entities. In this blog, we’ll cover everything you need to know about franchising a restaurant business. Let’s begin!

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What Is a Franchise Restaurant

A franchise restaurant is a food service brand that consists of multiple units. So you have the corporate level, which is the employer of individual franchisors. Then, those franchisors sign licensing deals with the franchisees. The franchisees are who operate each individual restaurant unit. 

If you ever ask yourself, “what does enterprise mean in the restaurant space,” just think of franchises. The enterprise definition almost always refers to multi-level businesses with an extensive hierarchy. Now, let’s dive deeper into one of the most lucrative hospitality enterprise sectors. 

How to Open a Franchise Restaurant In 10 Easy Steps

Ready to learn how to open a franchise restaurant? You’ve stumbled across the right blog! Read on for all the key details:

1. Determine Your Target Audience

Once you learn how to find a target audience, choose a franchise brand that’ll suit the audience you want to open. For instance, if you find that your geographic location has a lot of families, consider franchising a family style dining establishment. Or, if you’re located near a college campus, it might be worth opening a coffee shop. It all depends on whether you're near a niche market or not.

2. Look Into Franchise Opportunities

Consider the local market for opportunities to open a franchise. Between finding a suitable location and seeking approval from franchisors, it can be a lengthy process. So, it’s important to begin by weighing your options.

3. Check the Franchise Requirements vs. Your Information

Not just anyone can open a franchise restaurant. There are numerous factors that the franchisor and local officials will need to consider. Assets, other units you operate (if any), and credit scores are just a few of the information pieces they’ll check out. During this stage of figuring out how to open a franchise restaurant will also be when you need to present your funding options. And of course, financial and restaurant budget plans will be a part of these conversations.

4. Check Availability Requirements and Restrictions 

Before moving forward with learning how to open a franchise restaurant, check availability restrictions. You want to make sure before any major decision-making that you’re able to open the unit. You’ll be able to find out this information by contacting the franchisor. Local government officials might also be able to shed some light on the topic.

5. Select the Best Location for Your Franchise

The location of your franchise unit can strongly influence its success. After all, it’s commercial real estate. Try to find an available unit for rent in a location that gets a lot of traffic. Even in suburban towns, there are plazas with high-demand retailers. Some of which even get a lot of foot traffic. In the event that you don’t secure a stellar location, be sure to make your restaurant available via delivery service providers.

6. Negotiate the Terms of the Franchise Agreement

The franchise agreement will consist of clauses and terms that dictate how the whole unit will be run. With this in mind, it’s important that the potential franchisee negotiates any terms that might not seem suitable. Some of these terms might be royalty percentages, monthly fees, and access to marketing materials. 

7. Study the Franchise Manual Inside and Out

The franchise manual will be your go-to document for all things pertaining to the brand. Manuals typically come along with contractual agreements and outline everything you need to know about running the unit. From marketing efforts to ingredient costing methods, it’s all in the manual. In fact, these are why franchises are all uniform across the board. Every franchisee of different units has the manual. Plus, it’s nearly impossible to deviate from it.

8. Set-Up Restaurant Marketing Strategies 

Even though franchises are often well-known brands, you still need to implement restaurant marketing tactics to succeed. This step of the process is where operating a franchise is so beneficial. You know the manual we previously talked about? This resource will contain marketing ideas and guidelines. So, all the creative decision-making is completely taken out of the equation.

9. Host a Soft Launch for the Franchise Restaurant

Before you open your doors to the public, host a soft launch with an exclusive invite list. Taking this approach will allow you to double-check if all your ducks are in a row. If not, there will likely be a few weeks before the official launch to tweak various aspects of the business. Considering it’s a new restaurant, there’ll probably be necessary adjustments you won’t notice until restaurant operations are in motion.

10. Host an Official Launch for the Restaurant

After you host a soft launch and everything goes smoothly, it’s time for the official launch of your restaurant. Ensure that you have everything in order, from inventory quantities to a full wait staff. Now that the soft launch is over, it’s likely that traffic will be consistent. So, prepare for high order volumes and steady cash flow. 

What Does It Take to Open a Franchise Restaurant

If you want to open a new restaurant, there’s a lot you’ll need to obtain. Use the following elements as a checklist for what you’ll need in order to launch your franchise restaurant:

  • An understanding of the franchise ecosystem. 
  • A grasp on how franchises differ from other restaurants. 
  • Financial resources and plans to budget restaurant expenses
  • Knowledge about the economy’s current labor force
  • An interest in tech solutions, especially for restaurants. 
  • Legal assistance to assist with negotiating and contracts. 
  • Ideas on how you’ll implement the franchisor’s marketing materials. 

Frequently Asked Questions About How to Open a Franchise Restaurant

It can feel overwhelming when learning how to open a franchise. To simplify it just a bit, we’ll cover a brief recap on the topic below. Keep reading for a condensed version of our guide on how to open a franchise restaurant!

How Much Money Can You Make Owning a Franchise Restaurant?

You can make upward to $80,000 per year when you own a franchise restaurant. Just remember that during your first year, you’ll incur many startup expenses. Then, you’ll have to pay out monthly fees and royalties. Don’t let these costs discourage you from opening a franchise, as over time, they’re very lucrative business models.

How Much Cash Do You Need to Open a Franchise Restaurant?

The amount of cash you'll need to open a franchise restaurant can range from $10,000 to $100,000. It all depends on your restaurant type, the brand, and which services are included. The initial fees will also contrast with the monthly fees and royalties.

Is It Hard to Start a Franchise Restaurant?

It’s easier to open a franchise restaurant than it is to open a new eatery from the ground up. Bear in mind that there are still many challenges that come along with doing so. Approval timelines, funding, and startup processes can be expensive and time-consuming.

Can You Become a Millionaire Owning a Restaurant?

Yes, it is possible to become a millionaire owning a restaurant. It might even take owning several restaurants, though. Reaching millionaire status is a feat that few restaurant owners achieve. With the more units you own, the greater your wealth will be.

What Types of Restaurants Make the Most Money?

Bars are the most lucrative type of restaurant due to liquor sales. Liquor has the highest markup of all the different types of inventory in an eatery (see: markup vs margin). For businesses that don’t serve alcohol, food trucks are a close runner-up. This is because of the low expenses it takes to operate one.

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Now, Let’s Open a Franchise Restaurant

Use this guide as a step-by-step manual as you open a franchise restaurant. With this information, you can be on your way to restaurant success! Obtain all the materials to launch your business. Revolution Ordering also offers a ton of resources that can help you during your entrepreneurial journey. Book a demo to learn more!