From Research to Purchase: How to Buy a Restaurant Franchise That Fits Your Needs

17 - 05 - 2024
Daniel Chin

If you’ve been dreaming about opening a restaurant you may be overwhelmed by the process of not only starting your own business but also beating the competition in your area. When you understand how to buy a restaurant franchise, you’ll see that not only does the franchise option mitigate much of the risk of starting a business, but it can also be more cost-effective in the long term. 

The Benefits of Starting a Franchise Restaurant Business

There are numerous reasons why choosing a franchise is the better way to start a restaurant business. These include:

  • Easier access to financing: If you’re concerned about the financial aspects of a new restaurant venture, the good news is that entrepreneurs typically have an easier time acquiring small business loans for a franchise than for an independent business. Because of their established brand and business model, they are considered a safer investment. 
  • Proven business model: Finding a viable concept is one of the greatest challenges to starting an independent restaurant. Once you sign a franchise agreement you have access to a fully functional business model that identifies your target market, has a design and layout for your restaurant, and a menu that has been vetted and tested at multiple locations. You are given a roadmap to success. 
  • Established brand: Let’s not forget the value of existing brand recognition. Building a restaurant brand from the ground up can be brutal, especially if you have no prior experience in the industry. As a franchise owner, you will be operating under a brand that customers know and trust. 
  • Operational support: You’re never on your own when you’re part of a franchise. You can take advantage of a high level of support from the franchise company, and fellow franchise owners. From finding the best location to purchasing ingredients you’ll always have someone to turn to for advice. 
  • Marketing guidance: Marketing can be complicated and time-consuming for new restaurant owners, particularly if you have no promotional experience. As a franchise owner, you can leverage existing marketing tools and strategies from the parent company.    

Finding the Type of Restaurant Business That’s Right For You

There are four main types of food service franchises. Which one you choose will depend on your financial situation, experience, and target market. 

  • Fast food: A fast food restaurant lives up to its name. The service is quick and the food is readily available for eat-in or take-out. The menu is fixed and the prices are inexpensive. Examples include MacDonalds, Taco Bell, and Dairy Queen.
  • Fast-casual: In a typical fast-casual restaurant, customers order at the counter and then wait for it to be served at their table or packed to take out. Menu items are generally considered to be healthier than fast food restaurants and the prices may be a little higher. Examples include Juici Patties, Panera Bread, and Five Guys.
  • Casual dining: A casual dining restaurant offers a casual environment with a menu that caters to family meals and is priced in a range between fast-casual and fine dining. Servers take orders and deliver food to the table. Examples include Applebee’s, Buffalo Wild Wings, and Olive Garden.
  • Fine dining: A fine dining restaurant offers a menu with more sophisticated dishes at higher prices than the other categories. The kitchen is typically run by chefs who are culinary-school-trained and have several years of industry experience. Examples include Ruth’s Chris Steakhouse, Mastro’s Restaurants, and Seasons.

How to Evaluate a Restaurant Business Franchise

When you’re searching for a restaurant franchise that suits your needs there are several factors you need to consider:

  •  Your budget: The investment should be well within your budget. Make sure you consider all the fees and royalties.
    • Sales record: Look into the franchise’s sales history and make sure that the business model is using a system that is already a success.
    • Service marketability: Based on the proposed location of your franchise, you should consider its potential market share based on your customer demographic and your competition. 
  • Ask questions: Talk to people who are already within the franchise and find out if they are happy there and how much support they get. 

How Much Does It Cost To Start A Franchise Restaurant?

The cost of a restaurant franchise will depend on several factors including the type of restaurant, the size of the brand, the location, and the franchise fee structure. All the costs will be prevented up front in the franchise disclosure document. Here’s a rundown of the typical costs associated with the purchase of a franchise:

  • Franchise fee: This is the initial investment and it can range from $10,000 to several hundred thousand depending on the industry and the brand. This is a one-time cost and is non-refundable. The franchisee must pay the franchise fee upfront. 
  • Real estate: As a franchise owner, you will also have to pay for a rental space and any build-out costs. The price will depend on the size and location of the franchise
  • Inventory and equipment: These starting costs can range from between $40,000 and $200,000, depending on the franchise industry. 
  • Operational costs: Typically, franchises set a minimum net worth requirement to ensure that new franchisees have enough liquid assets and working capital to cover initial operating expenses until the business starts generating revenue. This can range from $25,000 to $150,000, depending on the franchise size.  

Want to find out more about how to buy a restaurant franchise that’s already a huge success and growing? Contact Juici Patties to get the details about joining our fast casual franchise family. 

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Meet the Founder and CEO of Juici Patties Franchise in the United States, Daniel Chin. As the son of Jukie Chin, he inherited a legacy of mouthwatering patties. Recognizing the brand’s potential, Daniel joined the business in 2013 and is now the driving force behind Juici Patties’ success in the U.S. With a strong commitment to quality and exceptional customer care, Daniel aims to expand our presence while staying true to our core values.

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