Owning a restaurant franchise can be an extremely rewarding experience for Black entrepreneurs. Owners manage their hours and growth prospects — with the ability to make upwards of $200,000 per year. While potentially lucrative, restaurant franchise ownership requires a bit of leg work to ensure that the business will make sense for you.
Good franchise owners are usually categorized as being great leaders, strong communicators, and team players. They are also said to have patience, financial aptitude, and adaptability. Do you think you have what it takes to be a successful restaurant franchise owner? Here are a few things to consider if you’re interested in restaurant franchise ownership.
Research Comes First
In the United States, there are thousands of restaurant franchises available for interested parties to purchase. This site allows people to look for franchises in their area that are available to purchase, and provides information on the amount of cash needed to buy each franchise. It also details the financing and training process.
When researching, don’t forget to inquire about local and Black-owned franchises in your area
Create a Finance Plan
Most franchises run from about $50,000 to $200,000 to purchase. Additionally many franchises require owners to have a certain network and amount of liquid assets available. For instance, McDonald’s requires those interested in the franchise to have a minimum of $955,000 in nonborrowed assets. The Dunkin Donut franchise requires $250,000 liquidity and net worth of $500,000 per unit with $40,000 in franchise fees.
There are resources available for interested investors to get loans to purchase these franchises. Some good places to check out are Smartbizloans, Fundera, and Boefly.
Analyze the Market
This step is crucial. Before thinking about purchasing a franchise, it is essential to research the surrounding area and competition. It would not be the best idea to purchase a Taco Bell in an area that is already saturated with similar restaurants. An investor would also want to avoid areas with little commercial interest.
In order to conduct a sufficient analysis on the market, it is important to research the industry, target audience, competition, and pricing information. All of these factors will help determine whether or not the franchise is a good investment.
Go to a Discovery Day
Discovery Day is conducted by some franchise companies to allow potential investors to see how the business operates before buying. Activities include touring facilities, interviewing staff members, and going over business plans.
Discovery Day provides a great opportunity to ask important questions about the company’s growth plans, strategic goals, and management practices. This opportunity can change an investors perspective on the company and give them an advantage over competitors.
Assess the Commitment
Running a franchise is no easy task. It takes a lot of time, money, and energy. Franchise owners have to put more hours in than other employees and are constantly in charge of managing a lot of people at once. Prospective owners must fully understand the amount of commitment that is required to run a franchise.
We Buy Black Intern Writer
Hello! My name is Elisa Tilley. I am a sophomore English major with a minor in Writing from New York. I’m passionate about using language as a tool for social justice and advocacy. I’m excited to be working with We Buy Black and I can’t wait to use my skills to bring awareness to Black-owned businesses.