Have you ever eaten at a McDonald’s or Burger King and said to yourself, “I can own a place like this and make millions of dollars.” A burger franchise can be a wise investment if you go into it with your eyes wide open. Research and honesty with yourself is crucial. It is important that you do a lot of research first and that you ask yourself some hard questions. The first thing you need to consider is whether you want to own your own burger restaurant or buy into a franchise. There are pros and cons for both. So, let’s try to help you answer the question, “Is owning a burger franchise right for me?”
With your own restaurant, you will have full creative control and you can run the restaurant exactly how you want. With a franchised business, however, you have a brand that you have to follow as well as a pre-determined menu. Your restaurant will have to look like other franchise as well. One con of owning your own burger joint is that you don’t have a built-in support structure to help you be successful. When you buy into a popular brand, you get to capitalize on that name. Franchisors also offer training and other types of support including advertising campaigns to help you.
With a franchise business, you don’t have creative control and will have to follow certain preset criteria, which may or not be a good thing depending on your personality and experience level. If you are looking to start something from scratch then a franchise is not right for you. However if you really enjoy a restaurant brand and love their food and their service, then it is a no-brainer to join the family.
Questions to ask yourself:
Do you love burgers?
If you are going to own a burger franchise and be knee deep in them every day, then you really should have a passion for creating not only a delicious burger, but a menu full of customer favorites that will keep them coming back for more.
Do you have enough startup capital?
Initial investment for franchises range from just under $10K to 100K or more. You need to factor in the cost of the initial franchising fee and any monthly royalty fees. And this is on top of the money you will need for rent, food and staff. Some franchisors will also require to pay an advertising fee and to buy products from them or a certain vendor. Read your franchise agreement closely so you understand exactly what you are getting involved in.
What type of burger franchise do you prefer?
While burger franchises might seem all cookie cutter, they do come in different shapes and sizes. You have restaurants like McDonalds and then there restaurants like Sonic whose specialty is drive-thru service. Consider the types of burgers being offered and the type of service. Some restaurants pride themselves on only using organic meat and are very conscious of their energy footprint. Which restaurants are a better fit for you?
How much entrepreneurial experience do you have?
If you are a newbie to the business of owning a burger restaurant, then a franchise with its built-in business plan and corporate campaign strategies might be the way to go. If you go it alone with very little experience, you are more likely to make more mistakes which can end up costing you a lot of money. You definitely need some business acumen to run a successful business.
After you have asked yourself some tough questions, then you should create a list of what you are looking for in a brand. Besides missions and values that you can get behind, you should also look for a strong support structure and a robust training program that will help you grow your franchise. Especially if you are new to the business, having experts on your side can be a real boon. Also keep in mind that is you want to run more of a specialty burger restaurant like one that only offers organic products or who delivers healthy-alternatives to typical fast food, then you should look for a brand that already does that.
The next step is to hire a legal advisor. You will want an expert in franchise legalese to help you navigate contract negotiations. You need someone who has your best interests at heart and who will alert you to any sticky matters found in the contract. Before signing anything, however, have your legal advisor do some research to see if the franchisor you are interested in has any past or current ligations that concern you. You don’t want to invest in a brand that is struggling financially or has shady dealings in their past.
A franchise consultant can also help guide you through picking a franchisor, contract negotiations and through the development of your franchise unit. If you are looking for extra support, a franchise consultant could be a smart choice.
The final step is to pick the right franchisor for your vision. Before you make your final choice make sure you ask from some references to call and that you have the answers to some key questions like what the market saturation is like for burger joints. You don’t want to invest all this money and time into a burger restaurant when they are already similar restaurants already on every corner of your area. Also find out what is their approach to marketing and advertising is. Will they offer support in that area or are you on your own. Most importantly, make sure there are no secrets that will pop up later and possibly hurt your success. Know exactly what you can expect from the parent company and what they expect from you, including all financial requirements.
No matter what you choose, make sure you do a lot of research so that you are making an informed decision and not flying by the seat of your pants. Owning a burger franchise is not for everybody so keep an open mind and be honest with yourself.