How to Make the Jump From a Single Operation Restaurant to a Franchise

Franchises can make the same product available all over the world.

Taking your small restaurant business into the world of franchising is one of the most difficult decisions you will ever make as a business owner. Strike too early and you could find yourself without the capital and brand recognition to sell enough franchises quickly. Wait too long and the market could become saturated with restaurants too much like your own. While there is enormous risk in franchising your single restaurant, the rewards, if it works, can be huge. Plan carefully and ensure that the conditions are in place to make your franchising story a success.

Instructions

1. Detach yourself from the daily restaurant duties of your operation and start managing the business side of things. Hire a kitchen manager to run the food service aspect of your business. Focus on profitability and building the brand of your restaurant through marketing. Remember that your customers are not only the hungry people who eat in your restaurant, but potential franchisees looking to buy into your business.

2. Come up with a system for potential franchises to learn. Make sure your business model can be reproduced without your oversight. Produce a manual that ensures that franchisees can follow to make each franchise identical in its operations. Come up with standards for food items. Make sure ordinary people can a franchise exactly according to your vision for the business.

3. Make sure you can provide an acceptable return to prospective franchisees. They will want to see that your business already has credibility, a recognizable brand name and proven success in at least one market. Set royalties to a level where franchisees can make at least a 15 percent return on investment. Hire a lawyer to draft a franchise contract.

References

• Restaurant Owner: How to Turn Your Good Restaurant into a Great Business
• Entrepreneur: Should I Franchise My Restaurant?