Pre-Investment Strategy Ideas for Purchasing a Fast Food Franchise
If you’re looking to invest in a fast food franchise, it is very important that you plan out your per-investment strategy. Even if you and your partners have the liquid cash ready to invest, many reputable franchises will want to see some sort of viable business plan before allowing you to buy into their company. A well known franchise will not want to be associated with failures (it hurts their brand image) so they want to make sure that they are dealing with professionals. Here are four things to do.
Scout Out an Appropriate Location
The first thing you will want to have lined up is the right location. You can either find an existing storefront that you will lease and rebuild, or you can find a lot where you plan to construct the building. It’s important to check with the franchise regulations on property location. Some franchises will demand a certain size storefront, or might even, in the case of the major franchise locations, require you do a fresh build on a lot. So, you will need to find a real estate agent adept at sourcing good commercial property.
Pay for a Traffic Analysis Assessment
Once you have the site picked out, pay a marketing firm to do a traffic assessment. You need to know the foot traffic past the location, the vehicle traffic, what major sources of transportation are in the area (is the location near a big subway or bus stop), as well as nearby population centers (high schools, colleges, office buildings, etc…). All of these items will later be used in constructing the spreadsheet that will be used in creating your business plan. You need these hard numbers.
Bring in a Consultant on Your End
If you and your partners have never actually worked in the fast food industry, then it is prudent to hire on a consultant to assist with the initial setup. While most franchises will have assistance for new owners, it will vary as to how hands on it is. Some require owners to attend seminars, while others are more hands off and simply provide manuals. A good idea is to bring in a consultant (someone who has managed a fast food store) to help with the initial setup. They should be contacted before you and your partners have signed the deal so that there is no delay. Their first task can be helping to hire staff.
Contact a Franchise Attorney to Draw Up Paperwork
The most important thing you can do is contact an attorney that is experienced in dealing with franchise arrangements. There will be an enormous amount of paperwork involved in the deal. You and your partners will need to incorporate, the franchise will need to sign documents with the investors, and then there are all of the leasing deals involved in the property. So, even if you currently have a lawyer for certain business (perhaps a tax accountant) it would behoove you to establish a relationship with a good franchise attorney. Learn more through resources like Mohajerian A Professional Law Corporation.