Tell Me More: Franchise restaurants

Franchise restaurants are everywhere – from TV and radio advertisements to highway billboards. These restaurants are widely recognized by brand name and the public knows exactly what they offer. It's certainly easier to promote a franchise restaurant than an independent business offering something new and unknown into the marketplace. Since they have obvious staying power, it's no wonder that entrepreneurs are jumping at the opportunity to buy a franchise of their own.

Before you look into purchasing franchise restaurants, you need to decide what type of business would work in your community. First, consider the type of food you will offer. Will it be a fast food chain, ethnic cuisine, or standard diner fare? You also should determine if you want to offer a "sit and dine" atmosphere where you need to factor in seating and restroom requirements or "take out" only that requires less square footage for your restaurant but could fill up quickly during busy hours. Don't overlook demographics in your decision to purchase restaurant franchises. An area populated with college students may not have much of a need for expensive, formal restaurants.

The start up costs of restaurant franchises can be tens of thousands to hundreds of thousands of dollars for the land, equipment, and construction. You need to make sure you're comfortable enough with the business to make such a big investment. If the costs are a concern, franchisors can help you get financing. Banks understand the success of franchise restaurants and don't view it to be as risky as other business ventures. You also get to save money when it comes time to promoting your franchise by sharing the advertising costs with other franchise owners.

Don't pursue franchise restaurants blindly. There are various challenges you will face to make your business work. It takes a lot of work and long hours to make a franchise restaurant successful – you're often the first to open the doors and the last to lock up. If you don't have the time to invest, or you don't have a passion for the restaurant industry, a franchise may not work for you.

Excessive employee turnover is also a tremendous problem for franchise restaurant owners. With low pay and little opportunity for employees to advance their careers, it makes it very easy for them to quit at any time.