7 Things to Know before you Buy an Existing Restaurant Franchise

If you’re looking to make a career move, you may be considering buying a restaurant franchise as a bridge between working for someone else and taking the risk of building a business from the ground up. Franchising can be a great opportunity, but there are some important factors you need to consider before you take the plunge.

what to consider before buying a restaurant franchise

The Benefits

Having a franchise means the brand is already there

Someone else has gone through the hard work of creating the business, building name recognition, and designing marketing materials. The corporation handles training for you and your employees, the software you need to run your business and the contacts for supplies. Most importantly, they’ve also handled the food. You don’t need to worry about building your menu or testing your recipes when you buy an existing franchise business.

Buying power without the capital

The corporate office for your franchise will collect a percentage of your sales, and at least part of that money will go into advertising. This is why a franchise like Subway can air a commercial at the Superbowl, though individual franchisees would not have been able to afford it. Additionally, because every franchise in the chain will be using the same uniforms, supplies and marketing materials, you get a wholesale discount on these items even if you are only placing a small order.

The Downsides

You don’t have control over the company’s direction

While franchisees may have a say in certain business decisions, especially within their own region, the company’s direction is ultimately not up to you. You cannot decide on major marketing pushes, menu changes, or the look and feel of your restaurant.

Expansion may be a requirement

business expansion as a downside to buying an existing franchise

Some chains will require franchisees to open more stores as time passes. The number might depend on your sales numbers or market saturation and opportunities in your region, but either way, you have to foot the bill for those new stores.

Other Things to Consider Before You Buy an Existing Franchise Business


consider the business costs when buying a restaurant franchise

Buying a restaurant franchise is not cheap, and you need to have capital available to buy into the franchise, build your store, and pay for your operating costs.

Franchising Fees

Buying into a franchise comes with an upfront cost. For example, buying a Papa Murphy’s franchise costs $250,000 with a liquid capital requirement of $75,000. As part of the franchise application process, you will also need to prove that you have the funds available to be successful.

Building and Running a Store

It’s up to you to build out your store, and you must follow the chain’s specifications. The brand will require that you use specific materials for the store and may even require you to buy those materials from a certain source. This ensures that all Baskin Robbins and Subways give the customer the same experience, but it may also mean increased cost for you. You are also still responsible for buying your food, hiring and training your employees and paying their wages.

For more detailed steps on buying an existing franchise, and searching for the perfect restaurant franchise for you, visit https://nationalfranchiseresales.com/buy-a-franchise/.