How to Grow and Scale Your Restaurant by Franchising

May 24, 2021 | Operations

Franchising is an alternative to growing your restaurant by yourself, but it still is a lot of work. Learn how to get started and grow your franchise using technology with this guide.

Expand you F&B Business with Franchising

Your restaurant’s doing incredibly well, with great sales figures, positive reviews, and plenty of orders streaming in on a regular basis. You’ve basically cornered the market in your area. Congratulations!

So, what’s next for you and your business?

If your restaurant is always full, renovating and increasing seating capacity certainly is an option. Alternatively, you could work with what you have, hosting events and workshops or improving table turnover rate to generate more profits. But once you’ve reached the limits of your single location, it might be time to set up a new branch.

However, going through the process of building a new location, hiring new staff, the whole shebang… this can be incredibly time-consuming (and expensive). You might not have the resources or the time to do this on your own. 

That’s why many businesses opt for a franchising model instead to delegate the growth work to other people. Of course, it’s not as simple as handing the keys to just anyone with the capital.

So let’s break down everything you need to know about how to successfully grow and scale your restaurant through franchising.

 

1. Determine if you and the market are ready for your franchise

When are you ready to become a franchisor?

Jorge Wieneke, President of the Association of Filipino Franchisers, Inc. (AFFI), says that when you start getting serious inquiries about franchising your restaurant, that’s a good indicator that it’s time. These people probably have done their own research and identified other markets where your brand may succeed, and they want to get in on it for themselves.

But demand from franchisees isn’t the only thing you have to consider. You should also be ready to invest time and effort into the project yourself. Franchising doesn’t just mean leaning back and taking a cut from your franchisees’ businesses. You need to provide guidance for them, help them succeed, and ensure that every location adheres to your brand and standards of quality.

 

2. Develop your franchising business model

Your prospective franchisees will want to know everything they can about your business plan. It should have all the usual components, such as a market analysis and operational costs for your business. 

On top of that, it should also identify the types of support that you will give each franchisee, which can include:

  • Intellectual property rights
  • Training support
  • Financial investments
  • Equipment and technology

Providing greater levels of support for your franchisees can make the deal much more enticing for prospective owners. However, it also entails a bigger investment on your part for each franchisee.

You should also create standard operating procedures (SOPs) for your franchisees, based on your own business SOPs. By doing this, you avoid getting low-quality franchisees who might dilute your brand and negatively impact your reputation.

If you implement a cloud-based restaurant management system such as Mosaic, onboarding your franchisees onto this system can improve their efficiency right off the bat as well, and contribute to a unified operations playbook for your entire business.

 

3. Identify your ideal franchisee and what they want from you

The most effective franchise owners know exactly the kind of person they want to work with. They favor partners who share their values on growth and quality of service, making them very easy to work with. This also helps ensure that they stick to brand guidelines.

Aside from this, you may also want to set specific financial background requirements, such as level of income, upfront capital, and net worth. You don’t want to hand your business over to someone who might not be successful enough to handle it.

It’s also a give and take relationship—meaning you want to set deal terms which are favorable to franchisees as well. Decide whether you want to ask for monthly franchise fees, a percentage of sales, or both. You should also set an initial buy-in figure that is achievable by your potential franchisees.

 

4. Promote your franchise

While some potential franchisees may have approached you already, they won’t be the only people to whom you want to reach out. 

Create a marketing campaign to advertise your franchising plans. Post on your main social media page, as well as in Facebook and LinkedIn groups for food-related businesses and entrepreneurs. You can also create posters and videos that indicate what you’re looking for in franchise partners, and what you have to offer.

You can also attend marketing and business networking events that are relevant to the restaurant industry. These will give you the connections you need to grow your franchise.

 

5. Innovate business processes for your whole franchise

Manual inventory management and basic point-of-sale (POS) technology might be sufficient to manage a single, small operation. However, once your business grows, you’ll want to stay on top of how your franchisees are doing and provide them with a unified model for streamlining their restaurant operations using technology.

Incorporating a restaurant management and analytics platform, like Mosaic, is your ticket to optimizing profits from your growing restaurant network. This way, you can set up standardized implementations of inventory and purchasing systems in your SOPs, so that franchise owners can automatically resupply from the best suppliers according to their needs.

You can also get centralized real-time reporting and analytics for how each franchise is doing, giving you a bird’s-eye view of the whole operation. This data can give you insights into whether you should continue expanding or focus on supporting individual franchises that need some assistance.

 

Conclusion

Becoming a franchisor involves lots of hard work, patience, and careful management of the people with whom you’ve entrusted the success of your brand. You also need to be invested in the success of each and every franchise, because the more money your franchisees make, the more revenue you’ll get from them.

You can make this process a lot easier by using Mosaic Solutions for each franchise. Integrating cloud-based analytics, purchasing, inventory and POS with every branch will level up how your whole franchise operates—not to mention help you make data-driven decisions about where to take your business next!

Thinking of franchising your restaurant? Contact us to find out more about how our restaurant solutions can help you build and grow a successful franchise. 

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