When you want to buy a franchise so you can start your own business, you’ll have the opportunity to experience several benefits upfront. You’ll be part of an established corporation, so you’ll get assistance for people who have been in the business for years and can show you the ropes. If you’re interested in the restaurant business, becoming one of the best BBQ chains could prove lucrative for you.
Here is some helpful information to keep in mind if you’re thinking about financing one of the top franchises in your area. Once you learn the ropes, you can provide customers with some of the best BBQ Baltimore has to offer.
1. Research BBQ Franchise Businesses
One of the first steps you should take when you want to become a franchise owner is to do your research. Learn about the opportunities that are available to you based on your passion for owning a restaurant, your qualifications, and your overall budget. For instance, if you want to open a pit barbecue franchise in Baltimore, you can search online for resources that will help you get started.
You should also know the requirements for opening the franchise and make sure you have accurate information before you start the application process. It’s also essential to be honest with yourself and evaluate your skillset, sincere interests and additional resources you’ll need to make the franchise a success.
Let’s explore each aspect of research when it comes to franchise businesses.
2. Learn About the Qualifications
Usually, franchisors will establish minimum requirements to verify that all their franchise owners have the professional experience and finances to run a business. This is largely due to the fact that the success of the franchises will affect the overall reputation of the corporation and the brand’s bottom line.
The qualifications you’ll have to meet with vary depending on the type of franchise you want to purchase and the franchisor. However, you should know that business owners will take these factors into account in most instances:
Your credit score – your minimum credit score qualification will vary by franchisor. However, in general, you should have a score of at least 680 to receive approval for a business loan or other types of financing.
Your net worth – if your BBQ business requires you to make a huge upfront investment, you’ll need a higher net worth to obtain your own franchise.
Cash on hand – you must have adequate cash on hand to offset franchise costs or take care of a down payment if you’re using a financing option.
Outside income – it’s important that you have other sources of income and additional resources to take care of your living expenses while you’re building your franchise.
Experience in the industry – Some franchisors don’t require you to have prior industry experience before you open your business. However, corporations usually are more comfortable providing financing and resources if you’ve worked in the industry before. If you’ve worked in restaurants for years and finally want to open up your own BBQ restaurant, make sure the corporation knows this.
Leadership experience – If you’ve managed a restaurant in the past or had a leadership role at a BBQ joint, your skills will come in handy when you’re opening a BBQ franchise. Once your business opens, you’ll be responsible for managing and leading a team while managing the business aspect of having a restaurant. If you don’t have much management expertise, this could be a sign that you need to receive more training to increase your chances of success.
To understand qualifications further, you should be aware of average franchisee demographics, according to the IFA (international Franchise Association).
In general, franchise owners are between the ages of 35 and 55. The average income for franchise owners is $60,000 or more and these business owners have a net worth of $250,000 or higher. These business owners also have corporate management experience in most cases, as well as a 401K or IRA retirement plan.
The IFA also states that most franchisees haven’t owned a business before. So, if it’s always been your dream to own a BBQ restaurant, don’t be intimidated by the fact that you’ve never owned a restaurant.
3. Evaluate Your Resources, Skills and Interests
Knowing what you’re interested in, the resources you have and your professional skills is crucial when you’re buying your franchise. Franchisors will likely ask you how financially prepared you are to open a business and whether you have professional experience. This will make it easier to narrow down your options. So, even if you’ve never been a restaurant owner, if you have a vested interest in BBQ, have the funding to support your business and are willing to learn how to manage a business, you’ll be on the path to success.
Make sure you prepare a net worth report that includes your income, assets, liabilities and credit score. There are several online resources that allow you to check your credit score for free. You should also create a resume that lists your managerial, professional and industry experience to show why you would be an ideal fit for a BBQ business.
You should also create a timeline for your franchise. You need to know how long it will take for you to research the ideal BBQ business, get in touch with franchisors and go over disclosure documents and agreements for the franchise. The timeline should also include how long you think it will take for you to choose a location and secure the right funding.
4. Contact Business For Applications
Once you have decided on the top franchises that you would like to apply for, then it comes time to contact the business directly about their application process. Many franchise businesses will have some sort of paper or online application and questionnaire that will allow them to see if you will be a good fit for their particular business.
You may feel like you are applying for a job and want to put yourself in the best light possible, but you want to be honest in your application and answers so the business can properly access you. You might think that you would be a great fit for a business, but the company may see that there would be better options for you.
This is not personal and often does you a big favor as well. You want a company that is thrilled to be working with you, and if they aren’t then you may be better off elsewhere.
Once the application and questionnaire are finished, and the business of your choice approves your application for moving forward, then you will likely meet with the franchisor’s representative and receive a disclosure document. This will tell you all you need to know about your responsibility as a part of this company and will have much of the legal and financial history of the company for you to see.
5. Meet For Discovery Day
In simplest terms, a discovery day is a time where you and the business owner meet to discuss details of the business and get to know more about one another. You will get a behind the scenes look at the company and the managers who work there, and the employer will get to see your passion and outlook for the business.
An owner wants to know that you will take your business as far as it can go, and so do you. You wouldn’t want to meet the company head only to find out that they don’t plan on doing any expanding in the future.
This can also be a chance to see how well you and the rest of the team get along. You want to work well with those who you will be in contact with, and knowing you all get along will make things easier. So, feeling each other out and finding more about both parties is the goal for this day.
6. Sign Your Franchise Agreement
Once the initial meeting goes well and they choose to move forward with you as a franchisee, you will receive your franchise agreement. This document allows you the legal right to purchase and run the business according to the company’s regulations and rules. This will also mention all of the details about ordering supplies, transferring ownership, and other important items you will need to know.
Now, this is not a document that you want to take lightly. If you don’t have any legal or business background, you will want to have a lawyer take a look at the paperwork to ensure that everything looks good. You will also want to ensure that anything that was promised to you during your initial meeting is in the agreement. If it is not in writing, then it’s like it was never said.
So, go through this agreement thoroughly and make sure each section is clear and beneficial to both parties. Once this is signed, there is no going back. Take your time and have your legal counsel sign off before officially signing and handing over the agreement.
7. Get Proper Financing
Now that you have all the paperwork done, it is time to start thinking about the dollars and cents. Knowing where the money will be coming from is a major decision for your franchise business. There are start-up costs for the business, construction for the building, and the equipment that you’ll need for running the restaurant.
Each one of these topics will require you to talk to both a lender and the company head to ensure that everything is done properly and within the regulations of the franchise agreement. You may need to purchase certain types of cooking equipment for the business’s food items, and the building may have some restrictions or adjustments that need approval from the company.
So, get a lender that is willing to work with you the whole way through.
8. Location, Location, Location
The location of your new business is one thing that will likely take some time if you look yourself, but with the help of a realtor, or even from the company itself, you can get your perfect location faster. However, as a franchisee, you will need to follow the rules that are laid out by the franchisor. Some space requirements, number of parking spaces available, and distance between other franchisees that can limit where you can go.
This can make it much easier to look for something specific, but it could also take more time to find if there aren’t many places available. Take the time though, because having a good location where there are no other similar restaurants around and is in a high-traffic area is worth the wait.
9. Attend Workshops or Training Sessions
Getting someone to buy a franchise is beneficial to the company because they are able to train the owner to run the business successfully from day one. Even with no business experience, people can become successful from learning all they need from the franchisor’s workshops and training sessions. These events will offer you the training and know-how to get through the first few years of business.
These years are often the toughest, and with a new learning experience happening often, you will be in for a bit of a wild ride. But, with the help of these training sessions, you can prepare yourself for the road ahead and go into your grand opening with confidence in your newfound skills.
Some franchisors may offer other sessions that have to do with advertising, management skills, and other important areas to improve on for those who would like to learn as much about their franchise business as possible.
Taking a calculated risk to buy a franchise is one that you won’t regret. With the backing and support of the entire company behind you, and the rules and regulations laid out for you to look at, you can have a full business up and running in a fairly short time. With a BBQ Baltimore restaurant who is known for its great food, you can start with a BBQ chain that already has a following.