5 Things You Need When Buying A Restaurant Franchise

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The public franchising business model is one of the most lucrative investments you could make. That is, of course, if you have the money to get one started (it can cost between $10,000 to $3 million or more just for the opportunity); but that high cost comes with lots of benefits.  Still, it is a lot of money to put into a single venture so you should make sure that you have weighed the variables and are willing to make the sacrifices that go along with it.

CONSUMER DEMAND

Perhaps the very first thing you need to consider is whether or not there is actual consumer demand for whatever product or service this company sells.  Whether the Ben et Florentine franchises are a fast food chain or an auto maintenance shop, you want to look at whether or not your community will gladly welcome the shop to the neighborhood.  Also, you want to look at whether or not there will be demand for it in the future. Times change—and so do trends—and that means what might be popular today may not be popular tomorrow (and vice versa).

FINANCIAL STRENGTH

Once you establish consumer demand is high (or will be) you are going to next want to investigate how quickly and broadly this franchisor is expanding.  Are they well established?  

MARKET RESEARCH

If a company is expanding, of course, that means it is a wise investment.  But, do you remember the first thing we talked about?  You did your research to determine that this would be a wise investment, but is the company staying on top of industry trends and market activity?  

FRANCHISEE SELECTION

Another thing you could consider is how the franchisor (the parent company) chooses who they sell their operations to.  Do they tend to only sell to a certain demographic of people? Or people with a certain credit score?  There are lots of variables and you want to make sure you are as attractive to them as they are to you.  That doesn’t mean you need to change who they are, but if you feel you do not meet some of their criteria you might have to wait a little while before diving in.  Scrutiny can work in your favor, by the way.

LEGALITIES

Finally, you want to make sure you get a hold of their legal agreement before you make any big decisions.  It is imperative that you have an independent third party look at the paperwork, preferably a lawyer. This is a formality but it ensures that everyone sees eye to eye and there are no surprises.

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