Table of Contents
Franchising offers an attractive opportunity for substantial growth for your restaurant business. The franchise business structure has many benefits, and many of the largest restaurant businesses in the UK operate as franchises. This article will explain how you would franchise a restaurant in the UK.
What is a Franchise?
A franchise is a business structure where a franchisor provides another with the right to use their business’s intellectual property. If relevant, a franchisor will also grant a franchisee the rights to other aspects of their business, such as suppliers and products. These rights are granted in exchange for fees. These include an initial set up cost and ongoing fees paid by the franchisee. Franchise units operate under the name and business model of the franchised business.
Franchising a Restaurant
In the UK, there are many examples of successful franchised restaurant chains. These include:
- McDonalds;
- Wagamama;
- Subway; and
- Burger King.
Franchising can work for a variety of businesses, irrespective of their size. The structure provides an excellent opportunity for growth with reduced risk as franchisees invest their own capital to set up a new franchise unit. You will provide them with your restaurant’s trademarks, products, and suppliers. Additionally, you will train new franchisees and offer ongoing support whilst they run their separate unit of your restaurant business.
Continue reading this article below the formCall 0808 196 8584 for urgent assistance.
Otherwise, complete this form and we will contact you within one business day.
Is My Restaurant Franchisable?
The first step to franchising is to confirm that franchising is feasible for your restaurant business. The concept of your restaurant must be replicable, and financial stability is very important. Due to the nature of the franchise business structure, you need to provide a transparent restaurant business model to franchisees.
Consider elements such as:
- your restaurant’s branding;
- the customer experience; and
- the food.
Consider whether franchisees can replicate your existing business model and offer a consistent customer experience. If yes, you may have a restaurant ready to be franchised.
At this stage, market research is critical. Ensure that you conduct thorough market research to ensure that there is a demand for your restaurant at further locations within the UK.
Refine Your Business Model
The next step towards franchising your restaurant is to outline your business model. For a successful franchise, you must provide franchisees with a clear structure and instructions for operating the restaurant.
Be as detailed as possible. Clearly outline aspects such as:
- the restaurant’s menu;
- how a new unit should be set up;
- marketing strategies (consider local and national marketing approaches);
- a program of training and ongoing support; and
- restaurant standards and expectations.
By having a clearly outlined business structure, you also make it easier for franchisees to decide whether opening a unit of your restaurant is a good idea for them.
Prepare Key Legal Documents
To franchise any business, you must prepare two essential legal documents. These include:
- a franchise agreement; and
- a franchise operations manual.
A lawyer with expertise in franchising can help with the process by drafting and reviewing the paperwork and providing advice. These documents form the foundation of your relationship with franchisees. They outline the responsibilities owed by you and the franchisee. These must be well-drafted as this can avoid unnecessary legal implications further down the line.
This handbook covers all the essential topics you need to know about franchising your business.
Training and Support
Training new franchisees and their staff is essential for franchised restaurants. The staff will create the atmosphere alongside your restaurant’s branding and style. The initial training you provide new teams is critical to forming a consistent customer experience across your growing restaurant chain. The ongoing support you offer franchisees will ensure you meet your franchisor responsibilities. Support can include training on significant business updates to maintain consistency across the franchise units.
Franchise Relationships
Healthy franchise relationships are the bedrock of a successful franchise. From the outset, you should set strategies for open channels of communication and dispute resolution. Your offer of training and support will also aid strong franchise relationships.
Key Takeaways
Franchising is an excellent opportunity to grow your restaurant business. The structure offered a level of risk reduction as the franchisees will invest their own capital into starting a new unit. A franchise is a business structure where a franchisor provides another with the right to use their business’s intellectual property. Franchise units operate under the name and business model of the franchised business. To franchise your restaurant, you must provide a clear business model that franchisees can replicate. Your restaurant’s branding, customer experience, and food must be consistent across franchise units. Furthermore, your restaurant and your franchise’s practices must comply with the law. This includes employment laws, food safety standards and health and safety regulations.
If you require legal assistance with franchising your restaurant, our experienced franchise lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
We appreciate your feedback – your submission has been successfully received.
