How To Buy a Turnkey Restaurant

Have you recently made a small fortune out of working decades in the corporate world and now want to invest in the food business? Are you thinking of resigning from the restaurant you’ve been working for as an Executive Chef to finally strike out on your own?

There are many challenges awaiting you if you want to venture out into the food business or the restaurant industry specifically. To minimize the risks, experts recommend starting with a turnkey restaurant operation, which is a business that’s already chalked up experience, reputation, a name, and is viable in terms of customer base and profitability. In other words, the foundation, brand recall, and loyal following have already been established since the time it opened its doors for business thus, minimizing the risk of it folding up even before it picks up heat.

In the United States, a turnkey operation that’s big is franchising. Franchising by definition, means acquiring an existing business that has been approved by the main Franchisor (Headquarters) for a Franchisee (Independent Operator/Businessman). In this case, the Franchisee is given full, legal, and copyright access to a Franchisor’s products, services, and logos/trademarks.

The restaurant business is no stranger to a turnkey operation which is probably the way you should build your business from the ground up. Of course, since you’re going into franchising, you already eliminate the anonymity factor of your restaurant.

You have a number of options to go into so let’s narrow it down to one turnkey restaurant business: Fast Food.

So how do you start to buy a turnkey fast food restaurant?

1.    You have to have a budget. The cost of an existing turnkey fast food restaurant is from $2 to $5 million and that’s just to cover the sale price.

2.    Then you have to find out why the Franchisor is selling a franchise in your particular location. Was there a falling-out between the Franchisor and the ex-Franchisee? Have the profits taken a nosedive year-on-year? Details like these matter so try to find these out and go beyond these questions so you can have the big picture before investing your money.

3.    Next, you have to really study how much it will cost you to operate the business taking the following factors into consideration:

  • Location
  • Size of the fast food restaurant
  • Overhead expenses like utilities and manpower
  • Food and drink expenses
  • Kitchen equipment
  • Profitability
  • Sales volume
  • Rental of the real estate property
  • Repair and maintenance
  • Competition
  • Training

4.    With your lawyer, go through the fine print of the Franchising agreement and do not hesitate to get something changed if the situation calls for it. Franchising agreements may be written in stone but this should not stop you from suggesting changes that will work mutually for both the parties involved.

5.    The reputation of the former owner should also be background checked. If you decide to take over the franchise, you should be able to access the vendors and suppliers of your restaurants. This may be a franchise but this does not mean that you should be riding the coattails of its brand name alone. Your franchise restaurant’s reputation is an important part of your decision-making process.

These are just some of the nuts-and-bolts of buying a turnkey fast food restaurant. To get more information about this, you can visit the International Franchise Association in your City or State or the StartupNation website.


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