Tips For Purchasing A Restaurant Franchise
Many people dream of owning their own company, especially in the restaurant industry, but it can be very difficult to grow a restaurant business from the ground up. One way to realize your dream is by purchasing a franchise of a well known restaurant. You still get to own your own business, but you will benefit by being part of a franchise that is already known and has loyal customers. However, before you dive in and invest in a restaurant franchise, it is very important to be informed and prepared. Use the following tips if you are interested in buying a pizza restaurant franchise:
Carefully Read the Franchise Disclosure Document
As you begin researching restaurant franchises that you may be interested in, pay careful attention to the Franchise Disclosure Document. The information found in this document can provide an immense amount of information about the company and help you decide if investing in a particular franchise is a good idea. The Financial Disclosure Document will include information about any legal problems or bankruptcies by the parent company, the responsibilities of a franchisee, fees that the franchisee is responsible for, and contact information for other local franchisees.
Speak with Other Franchisees
After receiving contact information for local franchisees, it is in your best interest to contact them and discuss their experience with the parent company. Hearing about the experience that other franchisees have had can help you determine if a particular restaurant franchise is a good fit for you. You may also want to ask about revenue, typical profits, and what the fee that you pay to the parent company covers. Don't be afraid to ask as many questions as possible-- the more you know about a franchise, the more likely you are to pick the right one to purchase.
Ask About Financing
Purchasing a restaurant franchise can require a large upfront investment. Thus, it is always a good idea to inquire about financing offered through the parent company or a lender that works closely with the parent company. Successful restaurant chains that sell franchises typically are able to provide financing options for new franchisees. If you're interested in buying a restaurant franchise but the parent company does not offer any financing or can't recommend a preferred lender, it can be a red flag that indicates that the parent company may not be as successful as they may seem to be, meaning that buying one of their franchises may not be the best idea.