The challenge of how to franchise a restaurant, and whether or not to franchise a restaurant, will confront an individual who operates a successful restaurant at some point. Sometimes the original restaurant owner has designs to franchise their restaurant from the very beginning, but this should not discourage restaurant owners who did not consider the challenge from the beginning.
The first step to franchise a restaurant is to research the economic reality that governs similar franchisee-franchisor relationships in the same area and similar concepts. Franchise fees and commission percentages are the most important factors of which to be aware.
Next, the owner who wants to franchise a restaurant should develop a uniform franchise offering circular which draws on the above information to detail the relationship that will exist between the franchisor and the franchisees.
The third step to franchise a restaurant is to assemble a statement about why an investor should franchise that particular business, describe the restaurant’s history, distinguish between that particular restaurant and the competition, and give a general outline of the success experienced by any other restaurant in the franchise.
A road show should be formed to attract individuals who may want to franchise a restaurant in order to highlight the features of the restaurant in question and attract greater attention. If there is a high level of interest, a training center should be invested in which is a replica of the kitchen in the current restaurant so that investors can see how the kitchen operates.
The penultimate step to franchising a restaurant involves interviewing the possible franchisees. It is important to gauge their interest in and dedication to franchising the particular restaurant.
The final step to franchising a restaurant is to form a contract, although even after the restaurant is signed there persists obligations between the franchisor and franchisee.
