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Guide to Becoming a Restaurant Franchise Owner

Joe Sieve, who bought his first franchise restaurant 20 years ago when he was 24, admits that he didn't know what he was doing and made costly mistakes. He hopes to save new owners from some of those same mistakes by this primer of the rewards and pitfalls of the business and the steps to becoming a franchisee.

Sieve eventually expanded his business, operating three different restaurant brands — including La Salsa Fresh Mexican Grill and Domino's Pizza — totaling more than 50 restaurants across four different states. He's now the vice president of franchise development at Arby's, which has roughly 3,300 restaurants around the country.

…One major benefit to being a franchisee is the built-in support network of other operators. Throughout the process, Sieve met other franchisees within the system who operated multiple units, and sought advice from them on how to build his own business.

One of the biggest problems first-time franchisees run into is cash, or lack thereof. “I probably was undercapitalized in the beginning,” Sieve says of his initial investment. “There was a lot of learning and innovating that had to be done as a franchisee.” He says guidance in terms of budgeting the start-up costs was limited, and there were some thin years in the beginning. But he ultimately became profitable. — Dana Hatic, Eaters

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