What to Know Before Purchasing a Restaurant Franchise

 

Franchises have proven to be a lucrative venture for savvy investors, and the restaurant industry continues to remain a popular option for entrepreneurs looking to expand their business sights. While in theory it sounds like an easy venture—buy a pre-existing business that’s proven to be successful and oversee it—in reality, the ins and outs of securing and maintaining a restaurant franchise can be time-and-cost intensive. Consider the following facets of franchise endeavors and determine whether this venture is right for you.

Raise the Funds

While opening a franchise restaurant is generally much cheaper than starting a restaurant from scratch and building it from the ground up, that’s not to say it doesn’t come with its fair share of expenditures. Whether you choose to crowdfund your venture or pursue more traditional loans, you’ll need a huge cache of capital to even get your restaurant idea off the ground. Fortunately, securing the financing for a franchise is often easier than searching for capital for an independent business idea, because the success of the proposed business has already been proven. The cost of opening a restaurant can vary, but it’s easy for entrepreneurs to see themselves spending hundreds of thousands to millions of dollars.

The Struggle to Secure Permits

Restaurants require a bevy of permits and there are many stipulations regarding legality. The food industry faces some strict governing policies, and you’ll need to be knowledgeable about local and state laws to ensure your doors stay open. Always consult restaurant legal counsel to maintain your business and be sure to give yourself enough time before opening to secure the zoning permits and determine local government hurdles you’ll need to jump. The permits you require will depend heavily on the franchise you wish to acquire.

Some franchises may require additional permits, for example, alcohol. Alcohol sales make up a bulk of restaurant profits, and if your franchise is well-known for its bevy of spirits, beer, and wine, you’ll need to keep up by securing the right liquor license depending on your state and local laws. Depending on your geography, you can face some tough competition for alcohol permits. Consider this: Some liquor licenses in California (a highly populous state with fierce competition when it comes to the restaurant and hospitality industries) can cost upwards of hundreds of thousands of dollars. The cost is one thing to consider, but the availability is a concern all on its own. In most states, the limited amount of alcohol permits have already been issued, meaning you’ll have to finagle a license from a pre-existing pool of liquor license owners that are in the market to sell. Keep in mind that you won’t be alone in your efforts; the restaurant business is competitive, and it’s highly likely you’ll need to outbid other willing buyers, so again, accessing the right capital as mentioned above is paramount.

The Personal Responsibility

Beyond hiring the right employees, coming up with sufficient funds to keep your franchise’s doors open, and utilizing the best marketing techniques to harness loyal patrons, you’ll also need to be prepared to dedicate your own time to an extent you might not have expected. Most franchise owners find themselves the first to show up in the morning and the last to leave at night. There’s also a heavy amount of liability that you’ll open yourself up to as the owner of a small business. If you’re not looking for a time-heavy commitment, franchising may be the wrong choice. There are personal benefits in comparison to solo restaurant ventures, however. Franchisees find themselves inundated with a well of knowledge, as the corporate side of the business will send along training manuals, necessary equipment, and customer support options that will help you navigate the process and maintain the company’s success.

Franchising can be a lucrative opportunity so long as you’re prepared with the right funding and the proper education. Keep these tips in mind before you place an offer on the franchise you’ve been eyeing.

 

 

Tags: , , , , , , ,

HEADLINE NEWS

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news [...]

U.S. News & World ReportWhich Is Best: REITs or Real Estate Crowdfunding? | Real Estate ...U.S. News & World ReportIf you're seeking the benefits of investment real estate but not in the market for the expense and workload of buying and managing rental properties, real es [...]

ForbesSix Tips To Boost Your Next Crowdfunding CampaignForbesBefore we were able to do our first project as a nonprofit, we had this pesky problem of actually having the funds to do the work. We knew we needed a fundraiser, and we knew we needed to get creative since we had no money t [...]

Popular ScienceCrowdfunding helps women succeed in tech because venture capital won'tPopular ScienceBut there appears to be one haven for women in tech looking for investors: crowdfunding sites like Kickstarter and Indiegogo. On these platforms, which allow entrepreneurs to make [...]

WRAL.comPet treat startup raises 26K in crowdfunding campaignWRAL.comBy Kathy Hanrahan, Out and About Editor. Raleigh, N.C. — A pet treat startup, founded by two former tech guys, has met its goal - raising more than $26,000 through a crowdfunding campaign. Zookies Cookies was created [...]

WRAL Tech WireCrowdfunding landscape in NC offers other options | WRAL TechWireWRAL Tech WireRESEARCH TRIANGLE PARK – FundingStack from John Panaccione and Clem Seifert isn't the only effort to simplify the crowdfunding process in North Carolina. Mark Easley, a veteran investor a [...]

Italian Design Studio Is Crowdfunding Floating Solar-Powered City ...OilPrice.comAn Italian design studio, Lazzarini Design, has launched a crowdfunding campaign to kickstart the construction of a floating city consisting of solar-powered pyramids.and more » [...]

ForbesNeed To Fund Your Health Idea? How About Crowdfunding? - ForbesForbesCaringCrowd is an example of a platform to help crowdfunding for public health projects. What are the pros and cons and opportunities and pitfalls of crowdfunding?and more » [...]

BloombergOnline Real Estate Platforms Bring Crowdfunding to the Wealthy ...BloombergReal estate fund managers Michael Episcope and David Scherer had Georgia on their minds—specifically, Atlanta. The city, part of the third-largest-gaining metro area in the U.S. last year, according to [...]

Augusta Free PressCrowdfunding project aimed at creating autism-friendly environmentsAugusta Free PressWhen her children were young, Amy Azano avoided most events because her son, as a child with autism spectrum disorder, found them too loud and bright and crowded.and more » [...]

CFB Finance

Marketwired

  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

Press Release

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |