6 Ways To Secure A FranchiseApril 1, 2015
Current Trends in FranchisingSeptember 1, 2015
Purchasing a food franchise can be both exciting and scary. Exciting in that you will own your own business and be your own boss, scary in that you risk losing your investment if you choose a franchise that does not work for you. You most likely have done your research and learned to be sure the franchise is one with a track record of success, one where the level of commitment required will match your life style and other important considerations. But, there are other less obvious things that a lot of experienced franchisers suggest you check out.
Level of support from corporate office
The training and support of the franchise makes a difference in whether you succeed or fail. Five main factors the program should include are:
- A comprehensive pre-opening training program that provides you all the information you need about how the business works and what the expectations are.
- Providing you with a mentor who is a successful franchise owner who you can “shadow” for a time before you open your own franchise and see how it works in the real world.
- Send on-site trainers to be with you during your opening week.
- Make consultants available for you to contact whenever you have a question.
- Providing training programs, trouble-shooting and opportunities to meet with other franchise owners and discuss the business for the duration of your ownership.
Is it recession proof?
A 100 percent recession proof business is not realistic, but investing in a major, well-known franchise is the best insurance against failure during a recession. When you have the muscle of a successful and major brand behind you, it is easier to maintain success during the lean years of a recession.
A food franchise is generally located on a fairly busy street with good traffic patterns. With the familiar cuisine and loyal customers plus the consultant support from the franchise, the business will be as recession proof as possible.
Level of investment required
Food franchises generally require a high level of investment due to the many requirements beginning with real estate purchase or lease, complying with state laws and local ordinances, requirements for the food preparation appliances, venting requirements, bathrooms that are handicapped equipped, seating areas and more. More costs are required for zoning permits, a parking lot, and a state license to sell alcohol if applicable.
Franchises require purchasers to have a minimum net worth as well as a certain amount of liquid assets to even qualify to be a franchise owner. For just one example, Burger King requires purchasers to have a minimum net worth of $1.2 million with $500,000 in liquid assets. Requirements may be even higher depending on the location. The franchise fee is $50,000 and 4.5 percent of all gross sales goes to the corporate office.
Attorney review of the franchise documents
It is easy to assume that the legal documents of a franchise have been thoroughly reviewed and drafted in a way that you can trust them. Assuming this is not in your best interest. You need a franchise attorney to review all the documents. The legal fees will be well spent since your attorney is looking out for your needs, not the needs of the franchise.
Nardelli’s Grinder Shoppe may be the food franchise in Connecticut for you. The business provides guidelines for you to follow with on-call assistants to help you any time. The company has been in business for 85 years with training and support you need to make your franchise a success.
Training and support: www.franchise.com/franchise-news/Evaluating-a-Franchise-Training-Program-Five-Essentials.cfm
Recession proof: http://us.businessesforsale.com/us/search/Businesses-for-sale/articles/Five-uncomplicated-recession-proof-businesses
Level of investment:
Burger King example: www.bk.com/franchising/FAQ
Attorney to review documents: www.franchiseknowhow.com/buying_franchise/duedilligence_musts.htm