Building Your Own Empire: How to Start a Franchise Restaurant from Scratch

08 - 06 - 2024
Daniel Chin

A franchise is a business model in which the owner (the franchisor) licenses its business model, operations, branding, and products to another party (the franchisee). In exchange for this license, the franchisee can sell a service or product under the franchisor’s business name and established system.

Restaurant franchises are a popular investment not only because they offer a proven business blueprint, but also because their brand recognition plays a crucial role. Customers are much more likely to visit a restaurant they recognize and trust. Furthermore, franchises pool resources for advertising and promotional campaigns, and shared marketing efforts are a major advantage. If you’re considering starting a restaurant franchise, here are some questions you may have:

How Much Money Do I Need to Start a Restaurant Franchise?

It can be difficult to calculate the total cost of a franchise if you don’t have specific details from a franchisor. Your financial outlay will depend on the size of the franchise, the location, and the franchise fee structure. Here are some typical costs associated with a franchise:

  • Franchise fee: This is an initial, one-time, non-refundable investment that must be paid up-front. It can range from $10,000 to $500,000 depending on the brand.
  • Real estate costs: Additionally you will need to pay for the rental of your restaurant franchise space, build-out costs, and any required leasehold improvements. The cost can range from several thousand dollars to several hundred thousand depending on the location and size of the restaurant.
  • Equipment and inventory: As a new franchisee, you will need to buy equipment, supplies, and inventory for your restaurant. Even with your franchisee discounts, your costs can range between $50,000 to several hundred thousand.
  • Operational costs: Franchisors usually require a minimum worth to ensure that you have sufficient liquid assets to cover operating expenses such as salaries until the business begins to make money. The working capital required can range from $40,000 to $175,000, depending on the franchise’s size and location.

Do I Need a Business Plan?

You will likely need additional financing before you begin your journey as a franchise owner. This is why you will need to draw up a business plan. However, there’s no need to be daunted by this. Ensure that you include the following information in your plan. Use as much information from your Franchise Disclosure Document (FDD) as possible.

  • Company description: Your prospective lender will need an outline of the restaurant brand you intend to invest in and its history. You should also describe the type of service and style of food that the restaurant provides.
  • Market analysis: By now, you’ve already done your research and should have the information and figures you need to show your lender that your restaurant franchise is a lucrative investment. Include your location the size of your market, your target customers, your competition, and predicted industry growth trends.
  • Marketing plan: Provide an overview of the advertising and marketing strategies that the franchisor utilizes. It will also help to outline any training that you will receive as part of your franchise package.
  • Your financial situation: You will need to give the lender a detailed breakdown of your current finances, including your savings and any loans or credits. You should also include any other sources of financing for your franchise.

How Do I Choose a Restaurant Franchise Location?

Finding the right location can be tricky, particularly if you’re new to the franchise world. When you’re starting to look for locations, keep these factors in mind:

  • Target customers: Think about who will eat at your restaurant. For example, if your franchise is a fast-casual restaurant, a highly visible location such as a high street in the middle of town is a good location.
  • Finances: Consider how much money you will have to spend on your lease each month. The closer you are to a central business area, the higher your rent will be.
  • Property size: How much space do you need? For example, a fine dining restaurant will take up more space than a fast food eatery because you will need to seat your diners.

Take a good look around your local community and see which areas draw the most traffic. Notice where your competitors are located. You may also want to look into any possible territorial restrictions. Often, your franchisor will help you find a suitable location for your restaurant.

How Do I Know Which Restaurant Franchise is Right For Me?

There are many restaurant options within the franchise market. Choosing the right one can seem overwhelming. Arming yourself with the following questions can help you narrow down your options until you find one that suits your needs:

  • How long has the franchise been in business and how many franchises are within their brand?
  • What is their franchisees’ failure and success rate?
  • How long do franchisees tend to stay with the brand?
  • How strong is the franchise’s reputation?
  • Is the franchise financially stable?

Why Choose a Juici Patties Restaurant Franchise?

Fast-casual restaurants are becoming increasingly popular in the U.S. as individuals and families with busy lifestyles seek convenient dining options. Add to this the growing trend for healthier meals and the popularity of authentic Jamaican food and you have Juici Patties. A Juici Patties franchise offers a way to provide food that’s bursting with island flavors, to eager customers who crave new tastes, convenience, and value. What’s more, starting a franchise with Juici Patties is an affordable option for new franchisees. If you’d like to find out more about Juici Patties franchise opportunities, contact us today.

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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