Quick service restaurants (QSRs) make up one of the largest categories in franchise investment. One look at the booming industry and it isn’t hard to see why. These businesses have dominated the food sector for years. They continue to be one of the surest bets for franchisees and entrepreneurs. Where other restaurant concepts may falter, an established QSR franchise is ready to take off. But what do entrepreneurs need to know to find the right franchise for them?
A QSR franchise can be a sound investment for entrepreneurs willing to take a chance. Even so, it’s important for investors to understand that partnering with an established brand isn’t cheap. These partnerships often require that potential franchisees have a particular minimum net worth. This is in addition to also having a specific amount of liquid assets. You may hear people talk about net worth and liquid assets, but do you know what these terms actually mean?
How does an individual determine their net worth? In a nutshell, a person’s net worth is whatever properties or assets a person owns, minus any outstanding debts they may have. This means any specific debts owed to someone else. To get a clear definition of your own net worth, you may want to consult with your accountant.
Other terms you may hear when applying for franchises are liquidity and liquid assets. What are liquid assets? A liquid asset is any asset a person has that can turn into cash quickly. The asset can also make this conversion without losing much value, or any at all.
Examples of liquid assets include cash on hand, stocks, bonds, and mutual funds. Real estate is not considered a liquid asset because it may take months to sell and receive cash from the sale.
Before you decide to start a franchise of your own, it’s important that potential franchisees do the math first. You’re going to want to have more than the bare minimum necessary to open your franchise. You never know what sort of unforeseen costs may come up. It’s crucial that you’re prepared for everything. Understand what you’re getting into before signing on the dotted line.
A key benefit of investing in a franchise as opposed to starting an independent business is the support of the parent company. This support comes in the form of training, marketing, operations, products, distribution, and more. Your franchisor has a vested interest in having its franchisees succeed. This is why the best franchises have dedicated training for new franchisees. This helps them understand everything from product preparation to finding the right personnel and optimizing operations.
As a potential franchisee, you should have a reasonable expectation of what to expect regarding the support of your parent company. If a franchisor doesn’t take the time to help its franchisees be the best they can be, it may not be the right fit for you. Franchisor support reflects more than how much it cares about franchisees. It also correlates to how the parent company is doing. Do your research beforehand and see how involved the parent company is before you make a commitment.
Partnering with a franchise means you don’t have to worry about branding and décor. Franchisees don’t have to spend time trying to nail down the look and feel of a brand. All this is already done for you. People all over already know and trust your brand. That’s why you want to invest in a QSR franchise!
Because of this, customers also have specific expectations every time they visit a location. Consistency is key to retaining customers and reinforcing the brand. This is why franchises have very specific rules as to what you do and how you run your business. These rules are for the benefit of franchisees as much as they are for customers. Be sure you know the rules. Know what franchisors expect of you before committing to a franchise agreement. Make sure that these are reasonable requests that you’ll be happy to fulfill.
Franchisors want their franchisees to be more than business partners. They want people who love the brand and believe in the concept as much as they do. Even so, being a big fan of a brand doesn’t necessarily make you qualified to run a franchise.
You don’t need to have a background as a business owner to start a franchise. In fact, you don’t even need experience in the restaurant industry. What’s most important is a leadership background and a passion and willingness to learn.
Under the right brand, with the right owners, a QSR franchise can be a veritable gold mine for entrepreneurs. What’s most crucial is to know you’re asking the right questions and getting the right answers before making your investment.
The best franchise opportunities have this information available on their websites. Learn about the benefits and qualifications of a Scooter’s Coffee® franchise, and how you can become a part of a franchise family that gives you the support you deserve.