What Are the Requirements for Starting a Franchise Restaurant?
You're restaurant is successful and it is a perfect concept for franchising, so what's the next step to realizing your dream? Starting a franchise is difficult, but the rewards can outweigh the effort. First and foremost, you need to completely believe in your concept and your ability to launch the franchise.
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Starting a Franchise
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Starting a franchise is an involved task that needs to cover all bases. According to Entrepreneur.com, the major areas to consider are accounting, legal, systems and mind-set. First off, owning a successful restaurant is paramount. Potential investors will be hesitant to invest in a concept without a profitable working model. The International Franchise Association suggests that between $500,000 and $1 million in startup capital is needed to begin a franchise venture.
Accounting
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Accounting is the first step in the startup process. You will need to get a professional accountant who is familiar with franchises to prepare audited financial statements. These statements are important, because you will not be able to proceed with the legal requirements until they are completed. Information gathered in this audit is necessary for completion of further legal documents.
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Legal
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Get an attorney who is familiar with the franchise process, because there are a myriad of federal and state laws to contend with. The Federal Trade Commission (FTC) oversees franchising, and many states have requirements of their own. The form to be filed with the FTC is a standard disclosure document called the Uniform Franchise Offering Circular (UFOC). Having an experienced franchise attorney is the best way to navigate the FTC's legal requirements.
System Considerations
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In franchising, uniformity is an essential element of success. You will have to research the systems to be used in your franchise. This includes computer and cash register systems, a uniform training and standards policy and recipes that will be the same in every restaurant. This involves lots of research and planning. There are professionals who specialize in franchise consulting, and, while costly, they save time, effort and frustration.
Selling Your Dream
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This is where mind-set comes into play. Marketing your franchise is much the same as selling your dream. You have to believe in the concept or getting others to invest will be a hard sell. The list of successful restaurant franchises is very long, and it is wise to study those you respect and admire, especially the successful ones.
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