Franchise restaurant and cafe: how to start a business for a beginner?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Franchises of restaurants and cafes are one of the cheapest and easiest ways to start your own business. There is no need to start from scratch, invest huge amounts of money in promotions, so that the consumer begins to recognize the brand. Everything is done and ready to work now. Buying a franchise business is a win-win option for newcomers to the industry.

A franchise is…

Literally, the term "franchise" means the transfer of the right to use the company's name, brand. In addition to the name, the franchise seller, hereinafter referred to as the franchisor, also transfers to the buyer the principles and technologies of production, contacts of suppliers and conditions for cooperation with them, a business plan developed and tested in practice, developments of marketers. The buyer, or franchisee, is also not obliged to promote and advertise the brand, all these functions are entrusted to the franchisor.

Thus, the franchisee becomes a part ofa large developed company and at the same time works as a private entrepreneur. This is a very reliable and quite profitable type of business.

The franchisee pays the franchisor an initially set fee for the purchase of a franchise of a bar, restaurant, canteen or any other establishment, and then gives a clearly defined percentage of sales. Franchise companies rarely fail to stay afloat, most of them easily overcome the five-year milestone of work, developing and bringing considerable profits.

Benefits

Opening a franchise restaurant or any other establishment is quite simple and does not require large financial investments. If in doubt, you should familiarize yourself with the main advantages of this business:

• The probability of failure tends to zero. The business scheme has already been thought up, built, tested in practice more than once. The system is guaranteed to make a profit and does not require outside intervention. There will be no need to experiment, learn from mistakes. All bugs have already been fixed for you. That is, this is the best option for those who are still little versed in the field of business and do not know how and how to win over the consumer.
• Recognition. The brand earns its popularity with the consumer for more than one year, a lot of work and finances are invested in this process. The franchise lends a name that everyone knows and already trusts implicitly.
• Full support. The franchisor is ready to support the development of his own brand in every possible way and is in no way inclined to the fact that an institution with his name will get a bad name. That's whyfranchisor representatives provide all kinds of assistance and support to the franchisee, providing him with information about suppliers, procurement organization, service principles, technical requirements, and more.
• Simplify lending channels. Today, banks are in no hurry to issue loans to "unknown to whom", especially for large amounts for business development. But if a representative of a well-known brand contacts, then the situation changes radically. And the bank's fears are left behind. Moreover, the franchisor can always act as a guarantor in a loan transaction.

Flaws

Of course, no matter how beautiful and cloudless the idea of \u200b\u200bcreating a franchise business for a chain of restaurants, bars and cafes, there is always a place for shortcomings. There are not so many of them, only two, but still:

• Dependency. A private entrepreneur operating under a franchise does not have the opportunity to introduce his own ideas or change key lines of business. The franchise development course is set by the franchisor, and the franchisee must follow it steadily. Naturally, if something goes wrong with a franchise buyer and there is no profit, then all participants in this business suffer, but if there is a financial upsurge, then absolutely all representatives of the eminent brand receive a reward.
• Commitments. One of the main obligations is the payment of roy alties, that is, percentages of profits. It must be regular and, of course, not equal to zero. The second important obligation is compliance with all terms of the transaction. By purchasing a franchise, the buyerundertakes to provide a specific service to consumers and business employees. There were situations when the franchisee could not provide the established conditions and the level of service, and then the franchisor was forced to close this enterprise.

Business Choice

Before buying a franchise, you need to familiarize yourself with the conditions offered by the franchisor in detail, and, of course, find out the size of the initial fee and roy alties. For example, the Burgerclub fast food restaurant franchise is provided without a down payment, you only need to pay regularly 2 percent of the proceeds. These are very loyal and favorable conditions. This is because Burgerclub is a regional brand.

But world brands can request an initial payment of up to about a million rubles. A world-famous restaurant costs a little more, and the percentage here will be much higher. On average, world-famous companies set roy alties at around 6 percent of their revenues. Naturally, the price for a restaurant franchise is indicated not in national currency, but in dollars, so you need to pay attention to the exchange rate and, if possible, agree with the franchisor on the possibility of fixing it.

Registration of LLC or IP

To open an official business, you need to decide what it will be in the future - a single point or a network of establishments. If a restaurant franchise is bought for one point, then it is better to choose an individual entrepreneur, and in the case of a long-term strategy aimed at development and expansion, you need to open an LLC. ForTo do this, you should register, register a legal address, open a bank account and pay the state fee.

Room

What to do next? You need to decide on the format of the cafe and choose a room for it. It can be a small closed place or an open street area. It all depends on the type of institution and personal preferences. For example, it is better to sell a beer restaurant franchise indoors, and in the warm season, just take a few tables outside for those who wish.

Then comes the stage of repairing the premises. It is often very long and urgent, because the franchisor is picky about the location, appearance and equipment. The problem disappears if the opening of the restaurant is planned in a large shopping center or in the food court area.

Staff

How many staff to hire directly depends on the size of the future restaurant. The minimum staff should consist of three people. This is a cook, cashier and cleaner. How many employees are required to open a small fast food outlet. If a restaurant franchise is launched, then you need to think about more employees. The salary level is most often set directly by the franchisor.

Total cost and deadlines

The most basic steps for creating your own business have been described above. Now let's figure out how much a restaurant franchise will cost.

So buythe right to work under the name of a well-known company, that is, the franchise itself - up to a million rubles, the conclusion and discussion of a purchase agreement may take an average of 10 days.

Official registration of your own business in Russia costs approximately 30 thousand rubles and takes from 2 weeks to a month.

The choice of premises, drawing up a lease agreement and repair work can last from 1-2 days to several months, the cost of this process will vary from 1 to 5 million rubles on average.

The duration of recruitment depends entirely on the franchisee personally, but at this stage it is rarely necessary to delay, on average - 10 days. You need to allocate from 135 thousand rubles for wages, this is only for the first month of work.

We get the following result: to open a restaurant, you will need from 8 to 10 million rubles, a simple counter will cost less - approximately 1 million rubles. All these costs are paid off within the first year of operation. The profitability of the institution is 15-20% of the turnover. Profit directly depends on the number of seats in the restaurant and the cost of the average bill. Annual income can be from 3 to 8 million rubles.