What to know about buying a White Castle franchise
White Castle is the oldest hamburger restaurant chain in America, serving up steam-grilled hamburgers (affectionately referred to as "sliders") to millions of customers since 1921. With more than 350-plus locations in the Midwest and eastern US, the company helped lead the way for the larger players in the fast food market. Looking at this success story, an aspiring entrepreneur may want to buy a White Castle franchise. Unfortunately, that opportunity isn't available.
Unlike other fast food corporations like McDonald's or Taco Bell, you can't purchase a White Castle franchise in the US. The fast food restaurant chain is family-owned, and its parent company (White Castle System) maintains strict control over its restaurant operations in the 10 states they're located in. The few White Castle franchise opportunities are located internationally, which makes it difficult for someone in the US to enter the market.
A White Castle franchise isn't your only choice
While you won't be able to pursue a White Castle franchise, there are many other potentially lucrative franchising opportunities available. Regardless if you turn to another fast food franchise or move on to a different industry, you can still open a successful franchise business. Here are some helpful tips to keep in mind before pursuing the right franchise opportunity:
It takes money to make money
This certainly rings true in the franchise world. You need a lot of up-front capital, often hundreds of thousands of dollars, to afford the franchise fee, the location and equipment, and recurring fees like annual royalty payments and ad sharing costs. If you don't have a lot of money to work with, franchising may not be for you.
Do what you love
Look for a franchise opportunity that best incorporates your skills and interests. You're likely to enjoy better success if you're working at something that you know you'll enjoy for years to come. If you enjoy interacting with customers, look for a service-based franchise like a Jiffy Lube or Jani-King. If developing a team atmosphere is more your speed, a fast food franchise like McDonalds or a coffee chain like Dunkin' Donuts will afford you that opportunity.
Seek reputable franchise opportunities
The franchise you select should have a strong history of success - like a White Castle franchise would. A fly-by-night franchise opportunity might offer potential for big returns with a small investment, but it's likely not a legitimate opportunity. You won't find many shortcuts that work in the franchise world - you have to put in the time and effort to make your franchise a success.
Know the facts
To make sure you found a reputable franchise, request a Uniform Franchise Offering Circular (UFOC) from the parent company. This details everything you need to know about the franchise from the history of the company to the financial requirements to corporate responsibilities. You also get other data like revenue trends, profit reports, and the number of locations worldwide.
Perform your own research
In addition to reviewing UFOCs, perform your own due diligence. Check with the BBB and local chamber of commerce to see how consumers feel about them. Also, find out if they have pending litigation against them, particularly from their own franchisees. If you encounter too many red flags, it's best to walk away and look elsewhere.