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asked in Business+Finance by (14 points) 2
As a company, wants to know more about restaurant franchising model, also digging deep on this wants to know how more profit can be gained through restaurant franchising model?

2 Answers

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answered by Patron (2,369 points) 2 5 23
Hi!

franchising can be quite the challenge, however it is much cheaper than opening a restaurant from scratch.

You usually just have a pre determined value to pay for the location (as the operator of the franchise is usually responsible for building the restaurant itself).

Then when the restaurant starts selling you will give a % of the earnings to the franchiser and you got to keep the rest.
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answered by LEGEND (5,927 points) 4 11 25

This can be a profitable or a risky business. You'll need to do some research before you even attempt to go into this type of business model. Here are a few things you should do before buying in or joining a restaurant franchise. 

  1. When selecting a business franchise you should select one that you feel good about. One that you can excel in and know you can make it work. You'll be identifying your strengths, weaknesses, and ability to succeed. This is so important in business. Furthermore, if this is a large franchise you should visit a few of the existing establishments and talk with the other business owners first. This will give you a good idea if this one is right for you. 
  2. Don't go into a business franchise that is based on fads. This is too risky and fads are here today and gone tomorrow. Furthermore, if you want a franchise, avoid the ones that are based around one unique product or service.
  3. Before you buy or accept a franchise you need to know if this business structure is safe or if the owners of this franchise are trying to dump their business off cheap and get out of it. You can easily do this by checking a few business brokerage companies. A good one to use is Sunbelt. 
  4. Simple but effective is to do an online search of the business name. But at the end of the name type in the word scam. This will bring up all the reports and complaints people have about this business. This will tell you the low down and the dirty about this business. People love to scream scam and write up reviews when they aren't happy. This is a great way to find out the dirty about this company. 
  5. Research is your key to success in a franchise. This will let you know if you make money or you are in for a major loss. The more you know about the company, the other franchise owners, and the disclosure documents the better your chances are for success. 
  6. You need to know up front what the payment structure is of this business. How much goes back into the franchise and how much is left as your profits. Each one works a bit different so it is best to know how yours works upfront before accepting or signing any papers. 

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