Restaurant Franchise: How to buy and important things to consider

There are lots of franchises options available in cosmopolitan cities like Mumbai and Ahmedabad; investing in the restaurant business in states like Gujarat and Maharashtra opens a wide door of opportunities for huge profits. But before you consider taking up that franchise for sale in Gujarat, Maharashtra, Karnataka or any other state in India, there are certain factors that are needed to be kept in mind while starting up with this business, they are:

• Franchisor details- Before paying the franchise fees, it's very important to check whether the brand is popular enough, and is running successfully. Making sure about its recognition and existence is crucial.

• Financial history- It's necessary to know the success rate of the franchise before investing in it. Finding out the number of outlets it processes along with the income from the individual outlet, without being fooled by the average income is equally important.

• Franchisor’s competitor- Checking into the direct and indirect competition that is existing or may appear in the future is much needed as it affects the earning.

• Franchisor support- The franchise agreement should be read thoroughly before signing it. It should be examined properly that adhering to the standards and policies of the brand, basic rights are given for supporting one’s business.

• Financial obligations- The initial franchise fees and the impending royalties should be clearly known. Everything should be planned well, i.e. Required working capital, development cost, etc.

• Consultation- To make a wise decision, it is always good to seek advice from a franchise consultant, and also from the chartered accountant.

How to buy a restaurant Franchise?

• Research Local Market- It's very important to find out, that the restaurant franchise will gain that attention in the respective area. Understanding the type of format that works in the given area. For example the franchise for sale in Mumbai; if one wishes to opt for a posh locality, then fine dining will work the best, but in areas near the college campus or shopping streets, a fast food outlet could do great business.

• Deciding the Franchise Model- After finding a suitable locality, the next step is to finalize the type of franchise model one wishes to open. These models include:- Master Franchise Model, Company Owned And Franchising Model, Company’s 100% Ownership and Joint Venture Model.
• Examining budget- Franchise for sale in Mumbai would differ from the franchise for sale in Ahmedabad of the same brand, this is because of the difference in the place value and also of the demand of that restaurant. Other factors, that affect are the type of model and the chosen restaurant company. Such things should be considered while creating a budget for this business and sticking to it.

• Overall sources- After finalizing a suitable budget, other resources are needed to be looked into. This includes things like training and hiring the staff, finalizing vendors, and suppliers, restaurant technology, etc.

• Setting an appropriate business plan- Creating a proper plan before beginning with a business not only helps in how will it be managed but also gives a fair idea about the profitability that will generate through it.

• Finding a Franchisor suiting our plan and budget-Looking for an appropriate franchise which fits into the criteria set by us is required. This involves a lawyer for legalities like the royalty fee, payment tenure, etc. Referring to web sources and newspapers does great help.

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rajat shah Joined: November 7th, 2019