Restaurant Franchises - Things to Know Before Entering into a Restaurant Franchise Agreement

If you are looking forward to starting your own restaurant business, there are several areas to first consider. More and more, people who are looking to start their own business are looking to franchising a proven concept that has purchasing power and has worked out the kinks and systems of operation.

The increasingly lower entry investment required to start a restaurant franchise has helped increase the growth of franchise owners over the years. In addition, brand recognition from certain restaurant franchises oftentimes means the difference between success and failure in certain markets. Franchising offers a lower rate of risk compared to traditional family start-up restaurant businesses.

Things to be considered before taking a franchise:

All of us know that every business, including franchising, comes with various advantages on one side and disadventagous on the other. If you are looking to own a restaurant franchise, then you should consider the points below:

• The Cost to be Paid for Rastro Franchise

First, you should consider the budget of the restaurant franchise especially working capital in case initial sales are not as strong as forecasted. You should have a firm understanding of ALL costs involved so that you do not run out of capital before you are able to break even or be substantial profitable. Not doing so may require you to pay in additional capital or take out a loan which you may not be able to do or may take time. The understanding of the total investment most often includes the franchise fee, registrations, equipment, furniture & fixtures, inventory, launch advertising, deposits, and working capital.

• Your Passion and Awareness

It is not necessary to have a great understanding of the specific menu for you to be successful. For example, you don’t need previous expertise in smoothies, juices, shakes, or yogurt to operate a successful juice bar franchise. The franchise should have a great training program including a system of operations that makes the learning curve on how to run your own restaurant franchise much shorter and easier. This should include how to train and hire your staff which are often found within the Operations Manual as Human Resources, Ingredients, and Training sections.

However, no matter what is taught to you, your success is largely dependent on how you operate your own business and the guest experience you are able to provide to your guests day in and day out.

• Surveying and potential for the Restaurant franchise

Opening a restaurant franchise is very different than opening a general business. In a franchise, you must work within the established agreement, guidelines, and systems of operations without any deviations. In addition, the hours of operations for restaurant businesses are notoriously long. Most often, it will not simply be a 9am to 5pm shift and you will need and should want to work more hours, initially, until your restaurant franchise operations are on track at a minimum.

• Planning for your success

Prior to entering into a restaurant franchise agreement, you should evaluate existing brands to get insight of the pros and cons of each. In addition, it is not enough to simply do this due diligence online. Instead, you should also visit each of the restaurant franchise brands to taste the product and get a feel of their guest service which should reflect their training program. This experience is invaluable when considering which restaurant franchise to choose. Also, if possible, talk to the restaurant franchise owner or manager to ask how their business is doing and if they had the opportunity to franchise again with the same brand, would they?

This article is written by Olena Villasana, associated with International Franchise Development at Smoothie Factory International.