Yampa Sandwich Co. Blog

5 things to look for in a restaurant franchise for sale

The difference between a great restaurant franchise and one that is not is usually left for the customer to determine. However, when franchising there are many factors that go into determining which brands are worth considering and those that should be put aside. In today’s marketplace there is an abundance of restaurant franchising opportunities.  Everything from exciting new concepts, hot trends and of course the tried and true legacy brands that we have all come to love and admire. Yet at the end of the day, choosing the right franchise can be identified in 5 simple ways.

1: Restaurant Performance

The first question most people ask is does this restaurant franchise perform well. Legally, the franchisor cannot direct a potential franchisee with regard to financial success. But one of the great things about franchising is the Franchise Disclosure Document (FDD). Within this lengthy yet thorough legal document includes the Item 19. This particular supplement gives a potential franchisee a financial overview of the particular concept. Some brands will provide more financial detail than others. But either way, it is a great starting point for the investor to size up the economics of the restaurant concept and begin to make some sound investment decisions. Now it is important to understand that more mature and recognized restaurant brands will typically be able to provide more historical and involved data in comparison to younger brands. But this does not necessarily mean success. So, when researching potential restaurant franchise concepts, be sure to request their FDD and do your research with the help of a franchise attorney. Make sure the information provided fits within your desired level of risk.

2: Ease of Operation

According to a 2019 Food Franchising industry report, restaurant franchising is the most top of mind when considering a franchise. Why? Because people need to eat! It is probably fair to say you are already familiar with the many restaurant franchise opportunities that currently exist. There is everything from Fast Food, Quick Serve and all the way up to Fine Dining. And these categories can be broken down even further. With that said, each style of operation has its’ own benefits, but they also require different degrees of experience. Most people become interested in the restaurant business because of their passion for food and love of people, but don’t necessarily know the “how to” part. That’s where the beauty of restaurant franchising shines through. No matter what level of operation is being considered, you can rest assured that the brand you are considering has thought through their processes and operations in order to deliver a business model that is proven to work and is ready for you. Be sure to visit all potential franchise restaurants that are being considered and ask, “Is this the right operation for me”?

3: Training and Support

It makes no difference if you plan on being an owner operator or an absentee investor. Either way, restaurant franchising requires an amazing resource, the human element. This element is what brings the life and character to your potentially new restaurant franchise and it is paramount that they are trained and ready. The initial franchise training program will lay down the foundation to help launch your new business. It is important for you to understand what level of training you will require and does the potential restaurant franchisor provide the education you need. In fact, isn’t this what you are paying for? There is good news, which is that most brands start by assuming the franchisee knows absolutely nothing about the business which is why they are ready and willing to provide everything necessary. There is no benefit to the franchisor if they do not provide quality training. In fact, they could potentially risk the loss of brand value, future growth and most importantly, you as a franchise partner if the training program is lacking. Just as important as training, future support must be readily available. Be sure to understand the restaurant franchisor’s support system whether it be in person or virtual. Other things to consider are: How accessible are they? Do you have a direct contact? How often are site visits?  Remember, your success is their success and it all starts with training and support.

4: Menu and Menu development

Similar to topic three, the menu offering of a potential restaurant franchise can determine the degree of difficulty when exploring different types of operations. But more importantly, the menu is the “Holy Grail” of any successful franchise. The menu is your most important and valuable marketing piece you have. The menu is what brings new customers in and keeps your current customers coming back for more. It is fair to say that when exploring restaurant franchise opportunities, most people will start by identifying what they like to eat or what might be new and exciting in the culinary world. Being able to attach yourself to a brand with a menu that excites you is way more appealing than one that does not. Equally important is menu development. How is the franchisor going support you with new and innovative menu ideas to keep you and your customers excited about the brand and its offering?  A good restaurant franchise brand will be established around a proven menu offering while at the same time providing timely and exciting menu innovations.

5: Culture

Often overlooked is culture. Something which is seemingly intangible, is probably one of the most important assets in searching for a restaurant franchise opportunity. Just like the menu and the training, the brand culture you are investing in speaks everything about where the brand is and where it is going. A strong and positive franchise culture is contagious, which has no limitations to the effects it can have on owners, employees and ultimately customers. By choosing a restaurant franchise that has a history of embracing its creation for the good of all involved is a sure sign of a commitment to success.

Yampa Trailhead
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