5 Things to consider while looking to buy a franchise in Canada
If you have that entrepreneurial streak in you and you are passionate about the food business, starting a restaurant is the natural next step. Or is it?
Launching a restaurant from scratch is not easy, especially for first-timers. There are numerous issues to handle, starting with the new restaurant’s location, getting all the mandatory licenses, staffing needs, vendors, designing the kitchen, doing the interiors, selecting the menu, the list is endless.
A better and more practical option is to buy a restaurant franchise.
For new entrepreneurs looking to step into the food industry space with little insight and no experience, a franchise of an established and successful restaurant is the best option. It presents a less risky way of stepping into the restaurant space as you have access to an established brand name with a decent market share.
Understand The Definition Of a Restaurant Franchise
A restaurant franchise is a business model in which the owner or franchisor of the restaurant offers the rights to use the branding and model of their business to a franchisee in exchange for fees or royalties. They also provide ongoing support in the form of advisement or marketing. The franchisee has the right to open and operate a popular restaurant by its brand name.
The franchisee pays royalties to the franchisor as a part of the business agreement. The franchisor takes care of other vital aspects such as marketing, designing of menu design, etc. They will do the problem-solving for all franchisees.
What to look for when searching for a restaurant franchise in Canada
Here is the tried-and-tested process of buying a restaurant franchise.
1. Spend Time Researching The Local Market
Before you buy a restaurant franchise, you must know which type of franchise to buy. Many restaurants offer franchises for a royalty fee. Before signing the contract, you must know if the restaurant format will work in your chosen location. It is also important to research the local market to understand the kind of restaurant format that will work best in that market. Our Experts here at Southbrook Business can guide you through the many available options and assist you in making the right choice for your investment needs.
2. Decide On A Franchise Model
Southbrook Business Development Group works with many franchise companies in Canada and assists in finding the right match between the Franchises that we represent and the Franchisees requirements and investment goals. We sell individual franchise units, franchise area developments and master franchises. For those businesses that are thinking on franchising their Businesses in the future, Southbrook Business offers years of expertise and various services to make that expansion possible.
Once you have researched and chosen a restaurant format, the next step is to select the restaurant franchise model you want to manage. There are various options available. The franchise models include:
- Master Franchise Model
- Company-Owned Franchising Model
- 100 Percent Ownership
- Joint Venture Model
3. Know Your Budget
Depending on the brand and model chosen, different restaurant franchises will come at various price points and some additional expenses. There is the franchise fee, franchise royalties and advertising costs to consider. Before you start researching different restaurant franchise options you need to consider your budget and investment capabilities.
The Team here at Southbrook Business Development Group can provide you with information on ROI and the ins and outs of the franchise business. We are knowledgeable and can guide you to the right professionals to assist with your financing needs. There are various government programs available to assist new businesses with funding for restaurant projects.
4. Assess Your Limitations
Budget constraint is not the only thing you must focus on. There are other restrictions you may have to deal with. These include finalizing vendors and wholesale suppliers, hiring the right staff, providing them with initial and ongoing training, remaining updated with the latest restaurant technology, etc. These are all things you must consider before signing on the dotted line.
The advantage of buying a franchise is that you will have the support of the franchisor on your side. You can take advantage of the proven business model and money making and saving protocols. Franchisors will provide you with the training you will need and arm you with all the tools that you will require to run a successful operation. Before you open your business, you will undergo a period of training that will prepare you for operating the business even if you have no prior restaurant experience. Franchisors will guide you in the right direction to prepare you for running your own franchise restaurant.
Southbrook Business Development Group specializes in selling restaurant franchises. We will use our many years of experience in running our own successful businesses and the knowledge of the franchise law to assist both the franchisees and the franchisor throughout the process. Members of our team will be in constant contact with you to help find the right franchise fit, real estate locations, lease negotiations and other aspects of the operation prior to you opening the doors to your own business for the first time.
5. Create A Business Plan
Undoubtedly, the franchise agreement will bind you to some extent to follow the franchisor’s business plan. However, you will also have the freedom to create a plan for yourself to achieve your stated business objectives. You must have a fair idea of the potential profits the franchise outlet can earn. Also, consider what must be done to attract more people and boost sales. Give deep thought to making changes in the areas that are under your control. A detailed business plan will help you in making an informed choice.
If you need help with running the business, Southbrook has a team of experts who can assist with all of the aspects and logistics of the restaurant franchise operation.
Starting a restaurant business can be a huge challenge. That’s why taking the franchise route is a smart move. It is a comparatively easier way of entering the food business. It also mitigates the risk factors substantially. As you are handling an established brand, the marketing challenges will be less, and so will the risks involved. Make sure you choose the right restaurant franchise to make your venture into the food business a solid success.
Contact Southbrook Business at 1 844 832 4999 today and find our how we can help you find success in the restaurant franchise business.