What To Know Before Investing In Restaurant Franchising?
Do you have plans of opening a restaurant but it just happens you don’t know where to start? A franchise offers turnkey opportunity in owning a restaurant that has built-in name recognition and proven track record of success at the same time. Keep reading to know more about the most important things about restaurant franchising.
Number 1. Franchising a restaurant is not that cheap – many restaurant franchises do come with hefty price tag. So to give you an example, one restaurant may demand prospect franchisees to have minimum of 1.5 million dollars net worth as well as 750,000 dollars cash reserves while others need franchisees to have a million dollars net worth and half a million in liquid assets.
At times, before the franchises allow you to represent their brand, they will require you previous restaurant or various business related experience. Always remember that even if you’re opening an independent restaurant, investors may still be searching for experience in restaurant industry too.
Number 2. Restaurant franchises are turnkey operations – one of the common reasons to why it is extremely expensive to get restaurant franchises is that, they’re turnkey ready. The dining room design, menu, kitchen layout and even the marketing campaign are all done on your behalf. There’s no need to work hard and even think of ways on how you can build name recognition as it is already part of what you’re buying.
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Number 3. Restaurant franchising have specific rules – with regards to franchising most especially in restaurants, being able to have consistency is so important. Customers expect to get the same food, atmosphere and service regardless whichever state or part of the world that they are in. In an effort to keep everything consistent on units, the franchises also come with a rule book which describes the do’s and don’ts of owning a franchise. As soon as you have made an agreement to buy the franchise, this also means that you agree to follow their rules.
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Number 4. It don’t leave much to your imagination – the structured set up of restaurant franchise might not be for you in the event that you like cooking and creating new foods and planning out every aspects similar to dining room design, menus, pricing and so forth. You’ll do better in investing in a standalone restaurant if you wish to do things on your own terms.
Number 5. You still need a business plan – whether you believe it or not, even if restaurant franchising is turnkey operations, you will still need to present a business plan.