With the pandemic causing widespread layoffs across the industry, many people are looking to invest in restaurant franchises as a way to pursue alternative career paths. But, the decision to pursue a franchise business is an important one that should be carefully considered and researched. To make your investment journey easier, the International Franchise Professionals Group (IFPG) is here to lend our expertise in franchise consulting. In this article, we will answer some of the most frequently asked questions (FAQs) that we receive from people interested in the foodservice franchise industry.
FAQs include such topics as the availability of ongoing training, best practices for financing a franchise, understanding the franchise funding process, competitive advantages of certain franchise vs. corporate ownership, and more. By understanding the answers to these FAQs, prospective franchise owners can make well-informed decisions that will set them up for success.
Is There Ongoing Support and Training Available?
Absolutely. One of the biggest benefits to owning a franchise is the support of a franchise system. Before opening your restaurant, you’ll benefit from extensive training and support. Your franchise will provide brand standards, menus, and protocols to follow during your grand opening and beyond. Once you’ve opened, the franchisor’s support team will be available to help you with ongoing challenges and new growth and marketing strategies.
What is the Best Strategy for Financing a Franchise?
It’s best to thoroughly research all of your available options for financing a franchise. Franchisors may have a list of recommended lenders who provide financing to their approved franchisees. Franchisees can also explore their personal finances to see which options fit with their overall financial goals. This could include a combination of savings, home equity loans, business loans, crowd-funding platforms, and other financial products.
How Must One Have an Understanding of the Franchise Funding Process?
The franchise funding process is relatively straightforward, but there are several steps that franchisors and franchisees need to take to close a deal successfully. The first step is to determine the total cost of the franchise investment. This is typically done through an analysis of the franchise fees, royalty fees, costs for equipment, technology, and other materials. Once the cost has been determined, franchisors and franchisees must then obtain the necessary funds to complete the deal. This might include personal funds, traditional business loans, or new financing options, such as those available through crowd-funding platforms. Once the funds are secured, the parties can move forward with the purchase agreement and the necessary paperwork.
What are the Benefits of Buying a Franchise vs Corporate Ownership?
For established and aspiring entrepreneurs alike, owning a franchise may offer a number of advantages compared to corporate ownership. Some of the most significant are that franchises are often more affordable, require less business experience, offer supportive national and local networks, and provide proven systems and processes. With a franchise, most of the guesswork has been completed, so you’ll know exactly what to expect in terms of marketing, menu selection, employee training, and more. With corporate ownership, on the other hand, you’ll have to start from scratch with all of these decisions.
Franchising is a wonderful opportunity for aspiring business owners to create their own restaurant story. By thoroughly researching franchise opportunities, understanding the funding process, and exploring the benefits of purchasing a franchise instead of corporate ownership, restaurateurs can set themselves up for greater success. We are here to answer your questions and offer our resources and support as you embark on your franchise journey.