If you’re reading this, it’s likely that you’ve already narrowed the massive field of franchise options to the specific QSR (quick-service restaurant) segment, which, even by itself, includes an overwhelming number of brands. If you have dug even deeper into the QSR world, you might know that fast-casual concepts are leading growth in the industry.
In 2019, Restaurant Business, citing research by Technomic, noted that fast-casual chains in Technomic’s Top 500 Chain Restaurant Report claimed sales of $42.2 billion in the United States, an increase of 8 percent from the prior year.
Another component that can hinder the process of choosing a QSR franchise is parsing through them to determine which claims are solid and which brands’ purported success is just a game of smoke and mirrors.
But with smart research, and by asking the right questions, launching a franchise can become more a leap of reason than a leap of faith.
Start With the Franchise Disclosure Document
Begin your examination of a given company by reviewing its Franchise Disclosure Document (FDD), which the franchisor is required by law to share, and contains comprehensive information about the company.
Estimated initial investment, fees, obligations, and financing are just a few items this document will include. Reviewing the FDD is a critical step in the due diligence process.
Gather Feedback from Other Franchisees
Item 20 of the franchisor’s FDD contains names and contact information of current and former franchisees. Find out from the current franchise owners if their sales are growing, declining or plateaued. Pick their brains for challenges, pros, cons, proud successes and candid complaints.
Former franchisees can share what led them to leave the chain. Did they decide it was time to sell the unit for a tidy profit or was owning the franchise a financial boondoggle they wanted to escape?
Ask them all about the management team of the franchisor company and what they are like to work with.
What Financial Investment is Required?
The initial investment to open a QSR franchise is just the start, and the FDD holds valuable intel. Beyond the documented projected operating costs and ongoing fees, dig and dig some more to find out everything you can about costs.
These may include royalty fees, investment in equipment, food costs, labor costs, marketing costs and more. Be very alert for hidden costs, something you definitely want to ask those other franchisees about. Hidden costs should sound a loud alarm that something’s not right.
What Investment of Time is Required?
Some QSR business models are very complex, while others are more “turnkey” if the franchisor has created an excellent system.
Think about whether you want to be an owner/operator or instead hire a full-time manager, remember you are the owner and can make the decision to hire people to actually do the work. The time required of you will vary drastically depending on which way you go. Either way, you’ll need an intimate knowledge of how to run the business, especially if you have to fire your manager or he or she quits.
Bottom line is, know what you are good at and passionate about and keep focused on those things.
Do You Need to Buy or Lease Real Estate?
The answer to this question varies from franchise to franchise, and it’s a key item to understand on the front end. Some QSR franchises lease space, while other franchisees buy and build.
If the franchisor is truly support-driven (more on that below), you’ll get expert guidance on finding the right location, negotiating the lease if applicable, or negotiating a real estate purchase and construction contract. It just depends on the brand you go with.
What ROI Can You Expect?
Most franchisors will disclose the total investment you need to make, and some will commit to stating a return on that investment you can expect.
This is one reason talking with existing and former franchisees is invaluable, even when looking at a franchisor that does also share projected ROI.
Make Sure the Menu is Simple and Concise
The best QSR franchises constantly innovate, but do so within the space of a well-defined, brand-driven core concept. A menu designed for success should be easy to take in and understand. It should not try to be all things to everyone. The menu must have an identity.
A pizza franchise should not get into the burger business, for example.
Besides just staying true to the consumer’s idea of the brand, an important reason for staying within the lane of a defined menu dynamic is controlling costs. A smart menu keeps it simple enough to cross-utilize ingredients.
Support, Support, Support
Besides brand recognition and a turnkey business model, the biggest reason to partner with a franchise, rather than open an independent QSR business, is the benefit of strong support resources.
Make sure to know upfront whether the franchisor offers significant assistance in site selection, buildout, team training, tech systems and platforms, marketing and more. You’ll be paying ongoing royalty fees, so make sure you’re getting what you pay for.
At Wayback Burgers, we know there is much to consider when determining which burger franchise is the right fit, but with a little care and investigation, an owner can pinpoint the best QSR concept for his or her goals.
Wayback Burgers is a Connecticut-based fast-casual restaurant with a commitment to an environment that hearkens back to a simpler place and time – when customer service meant something and everyone felt the warmth of the community.
The Wayback reputation for cooked-to-order burgers and thick, hand-dipped milkshakes, has allowed this burger franchise to rapidly expand to qualified candidates the opportunity to open and operate a business in the highly sought-after fast-casual sector, with a small footprint and big upside.
Wayback Burgers offers initial training and ongoing support for all its franchisees and works diligently on finding innovative ways to offer franchisees the opportunity to increase revenue while adding value to the customer experience.
For more information on how to get started visit https://waybackburgers.com/franchising/.