At the moment, franchise regulations leave it largely up to the franchisee to ensure they are not investing in a bad business. Here are a few steps operators can take to keep from falling into a Burgerim-like trap.
The franchisee takes most of the risk in the franchisor-franchisee relationship, and failure means you can lose your business and even your personal assets. Keep that in mind as you look for franchise opportunities.
Favor franchises that provide earnings claims in their franchise disclosure document (FDD). But don’t trust them. Talk with numerous franchisees and get their profit-and-loss statements. Ask them everything you can about the brand.
Simple Google searches of the brand can do wonders. Look up legal actions, Yelp scores, Facebook, Twitter and other social media accounts to see what people are saying about a brand. Talk with customers and visit multiple locations.
Just because a lot of people are opening locations doesn’t make a brand good. Look at the FDD and compare the number of franchises sold with the number of locations open. If a franchise has a lot of sold locations but not many open, that’s a massive potential red flag.
The Week in Restaurants: This week’s episode of the weekly restaurant news discussion podcast looks at the McDonald’s-Burger King rivalry, the coffee market and what’s wrong with Sweetgreen.
Employers, including restaurants, cut jobs last month. Oil prices are soaring and gas prices are going with them, potentially adding another challenge for operators during a sensitive period for the industry.
Behind the Menu: The Wisconsin-born fast-food chain is spreading its Midwest culinary roots into new territory, and that growth is fueling the launch of new menu items.
