If you’re looking to change your career and have an interest in the restaurant business, franchising might be the perfect move for you. There are several benefits that come with owning a franchise restaurant. You will, for example, have the power of a major brand name behind you. Furthermore, you won’t have to worry about creating a menu from scratch, which can be a daunting task.
Before you can open your new franchise establishment, though, you must figure out how to finance your venture. Remember, this doesn’t have to be overwhelming! There are many great tips that can help people just like you get the money they need for their first franchises. You will discover a few of these in this guide.
Make a List of What You Will Need to Spend
Put together a list of expenses that you will incur while starting your new business to help you see precisely how much money you need to even open your doors. Number one on your list should be your franchise fee; this differs for every restaurant brand.
You also need to consider the following:
- Price of your new storefront (whether you are renting or buying, there will be a monthly cost)
- How much your utilities are going to run
- The price of start-up supplies including kitchen appliances, uniforms, and serve ware for patrons
- How much money you want to dedicate to your payroll
Once you’ve tallied all these expenses, you can move on to finding financing.
Develop a Business Plan for Your Franchise
Every good restaurant franchise has a solid business plan. Your plan should include profit projections, who your local demographic is going to be, and why this particular franchise is a good fit for your proposed location. If you need to take out a business loan to open your restaurant, you will have to present this plan to the loan officer.
Find Funding for Your Franchise
Once you’ve taken care of the prep-work, you will need to secure the money for your franchise. If you don’t have the necessary capital yourself, there are two different ways to go about this. The first is to take out a traditional business loan from a bank. As mentioned above, your business plan will need to be completed before your initial appointment. You may also be asked to provide additional documentation, such as bank statements, tax returns, and written references.
If you would rather not take out a conventional loan, you can seek financial assistance from an investor instead. Some venture capitalists specialize in working with would-be restaurateurs such as yourself, while others are simply interested in seeing local neighborhoods thrive. One of the great things about working with an investor is that he or she may be able to partner with you, aiding you in the development of your business plan and answering questions you may have as you get up and running.
We hope this has provided you with some food for thought and that you have been spurred to seriously consider opening an Earl of Sandwich franchise in your area!