A Guide to Building and Scaling a Restaurant Franchise

Think of the top performing restaurant franchises in the U.S. – like Chick-fil-A, McDonald’s, and Wingstop – and consider what makes them so successful. Importantly, they each offer uniform food offerings across locations, and they all have strong brand recognition. Customers know where to find them, and understand that the food offerings will be the same regardless of which location they visit.

Chick-fil-A, McDonald’s, Wingstop, and many other restaurants throughout the U.S. have shown that franchising offers significant benefits, with positive economic impacts for franchisors, franchisees, and the U.S. economy overall. For restauranteurs, franchising can provide new revenue streams, expand brand visibility, accelerate growth, and increase customers. Franchising also expands entrepreneurship opportunities, providing franchisees with the safety net of a proven brand, established systems, and ongoing support. 

Published reports demonstrate that franchises tend to earn higher revenue – and are more likely to succeed – than independent businesses. When done properly, franchising can be a very lucrative endeavor for restaurant brands. Therefore, not surprisingly, restaurants are consistently the largest industry sector to franchise.  

If you’re considering franchising, consider these tips for success:

Plan Ahead

You wouldn’t build a house without a proper blueprint, so don’t build a franchise without proper planning. 

First, evaluate franchise feasibility. For instance, determine whether your existing restaurant concept has a desirable, replicable concept, with consistent customer demand. Also, consider how you’d finance a franchise, which could cost between $15,000 to $100,000, depending on circumstances like your profitability, location, systems, and infrastructure.  

Next, create a franchise-specific business plan, outlining your operational goals, financial projections, territory and real estate strategy, and a competitive analysis of the business landscape. Fully understand the demographics, competition, and demand for a franchise system and develop cogent strategies before making any expansion decisions. Also, consult with franchise experts, who can advise you and provide key insights based on current and past trends. 

Empower Franchisees for Success 

One of the most important elements of a franchise system is to position franchisees to succeed. That means building systems, processes, and protocols that are standardized and understandable, so all your franchisees are following the same proven methods. A scalable business model allows you to maintain consistency and excellence as you grow, so guests have exceptional experiences at every location across your network. 

To ensure that all franchisees are “singing from the same sheet of music,” develop a franchise operations playbook that documents and standardizes everything in your business. The playbook should include guidelines for employee training, food safety protocols, customer service standards, recipes, etc. Additionally, be certain that all locations are using the same design, marketing, and branding elements for a seamless look, feel, and message across all locations.

Provide what franchisees need to thrive, including training, marketing, and networking support. Recognize that this will be an ongoing collaboration that requires your continuous support. Proactively help your franchisees accelerate growth, profits, and customer loyalty – which will also elevate your overarching brand.

Partner Strategically

It’s extremely valuable to collaborate with experts in the franchising space, including a franchise attorney and financial advisor. These specialized experts will guide you through the entire process, including planning, execution, and expansion. Leverage their experience and advice to help develop your plan and strategies, overcome inevitable challenges, negotiate terms and contracts, and create a sustainable, scalable business.

For instance, most people don’t realize that, due to the broad scope of franchise distribution laws, many licensing, supplier, and distribution arrangements are illegal franchise arrangements. Without a legally compliant franchise program in place, your restaurant brand and franchisees may be subject to regulatory actions, criminal penalties, and lawsuits. Having a proper, legally vetted franchise program helps reduce (or avoid) adverse legal exposure, misrepresentation, and fraud claims. Partnering with a franchise attorney can be one of the most important decisions you’ll make, allowing you to mitigate legal risks associated with your franchise program. 

Use the Right Tools 

Invest in the tools that will help your franchise system prosper, including innovative technologies that will optimize operations, standardize systems, centralize data, and improve collaboration across your network. Tech solutions enable consistent workflows and streamlined processes that will elevate the way your franchisees work, and ensure that they provide high-quality products and service – every day, across every location. 

Besides improving day-to-day operations for your franchisees, modern tech solutions will also help you scale efficiently and effectively. Leverage tech tools to centralize data and drive better, more informed decision-making. This information can help you decide when, where, and how to scale.

While there’s inherent risks in starting – or scaling – any business, restaurant franchising can be a lucrative proposition, if properly developed and implemented. Maximize your successes by following industry best practices, like creating a franchise-specific business plan, a scalable model, standardized processes, and replicable systems. Importantly, rely on franchise-specific experts who can guide your efforts and help you develop the right strategies, mitigate risks, grow sustainably and, ultimately, thrive.