business plan franchise restaurant

Franchise Restaurant Business Plan: 10 Facets of Your Plan

Starting a franchise restaurant business comes with a great deal of work and planning. You’ll need skills in restaurant management , restaurant data analytics , and forecasting for restaurants . You’ll need financial support and projected success. To bring it all together, you should have a franchise restaurant business plan.

You don’t need a business plan to start a restaurant, but oh boy will your job be easier with a plan in place. It gives you a sense of security in your future, with sets of guidelines for any situation at the ready. Read on through this BinWise blog to learn how to write and work with a franchise restaurant business plan.

What Is a Franchise Restaurant Business Plan?

So, what is a franchise restaurant business plan? It’s a detailed guide to the things you’ll need to do for your business, and the facts and figures to know. It’s similar to many other types of business plans, including:

• Cafe franchise business plans
• Cafe business plans
• Standard restaurant business plans
• Brewery business plans

All in all, most business plans follow the same structure. It’s a structured plan to give you the tools to run a successful business. There are going to be lots of parts of your franchise restaurant business plan that are unique to your business. There will also, however, be many parts that are standard across business plans. 

10 Facets of the Franchise Restaurant Business Plan

Setting up your restaurant franchise business plan starts with the basic steps. As you work through the sections of a business plan, you’ll find yourself going in-depth in all the important places. A business plan structure gives you the tools to find the strengths, weaknesses, and opportunities of your new business plan. 

These 10 facets of the franchise restaurant business plan will get you started. Some of these steps are unique to franchises. Others are basic parts of every business plan. They all come together to show you how to plan for your franchise restaurant business. As you follow through this sections you’ll learn about the process of running a successful franchise restaurant.

10. Executive Summary

Your executive summary is the place to define your business and give a brief, succinct overview of your business needs and plans. This is your introduction to frame your business plan.

9. Franchise Disclosure Document

The franchise disclosure document, or FDD, is the legal work of declaring your franchise business. It’s helpful to complete this as part of your business plan work. 

8. Menu Components

The restaurant menus part of your franchise restaurant business plan are vital for the legal startup process. You need to share exactly what ingredients you’ll be needing in your supplies. If you're doing something unique, like table d’hote menus , you'll need to plan that out entirely.

7. Franchise Operations Manual

The franchise operations manual is the guidebook of how your franchise restaurant locations will operate. This is a comprehensive guide, with daily, weekly, monthly, and yearly plans written out in full.

6. Industry Analysis

Your industry analysis should be focused on all franchise restaurants. This is a broad scope for your first analysis among the several analysis projects on this list.

5. Market Analysis

Your market analysis is all about your customer base. This is the place to dive into what customers will be looking for from your franchise, and how you can provide for them.

4. Marketing Plans 

Your marketing plans come up right after the market analysis because the two go hand in hand. Your marketing plans should be curated to reach your target market of customers.

3. Competitive Analysis

A competitive analysis is the third of the analysis projects, and the last one in your business plan. It serves to show you the franchises in your immediate area, and how you can be better than them.

2. Management and Staffing Organization

Management and staffing organization showcases the functions within your business. This is especially important for organizing each franchise location.

1. Financial Planning

The financial planning section is the place to write up your budget, financial situation, and any possible needed assistance. This part is particular for being shown to potential investors. 

"Key Takeaway: You don’t need a business plan to start a restaurant, but oh boy will your job be easier with a plan in place. It gives you a sense of security in your future, with sets of guidelines for any situation at the ready."

Frequently Asked Questions About Business Plans for Franchising a Restaurant

Creating a franchise restaurant business plan comes with a lot of heavy mental work. You’ll face the tough questions of your franchise business, and need answers to continue. You’ll have to plan for each possibility, and prepare your plans for your franchise partners. It’s a lot to manage. Our answers to these frequently asked questions will help you get started and remain steadfast.

How Do I Write a Business Plan for a Franchise?

Some key tips to use when it comes to writing a business plan for a franchise include:

• Defining your target audience, so you have a clear idea of who you’re creating this business for
• Setting business marketing goals, to set up a marketing plan that will lead to direct, tangible results through content marketing , email marketing , and more
• Develop your marketing strategy, so that marketing can become an instinctual, regular part of your franchise business
• Build up your sales strategy, to learn how to sell from a franchise perspective, as opposed to a singular restaurant perspective
• Identify your KPIs, or key performance indicators, to be able to measure your success and areas for growth
• Continue to monitor your business, to adjust your business plan and strategies as needed

These tips will guide you as you write your franchise restaurant business plan. They work in conjunction with many of the steps outlined in this blog, to support and grow your franchise restaurant business plan.

Do I Need a Business Plan To Open a Franchise?

You don’t technically need a business plan to open a franchise, but your business will do much better with a business plan. When you dive into a business without a structured plan with defined sections and clear guidance, you put your business at risk. You’ll reach points where you’re not sure what to do, and you’ll have to struggle to find out. A business plan is the answer.

How Do I Build a Successful Franchise Business?

To build a successful franchise business, you need a steady plan, a great team, and patience. Your business plan will pave the way for success with defined steps to take. Your team is vital for managing your franchise locations and supporting you in specified ways. Patience is a must for any restaurant, bar business , or hospitality industry job. It will bring you through hard work.

How Do I Write a Food Business Plan?

To write a food business plan, for a restaurant, bar, or even a country club, follow the basic steps and map your business in your mind. The basic steps of a business plan can come from this blog. You can also dive into restaurant business plans or a catering business plan . Mentally plan on top of these phsyical plans to develop your restaurant concept .

Your Franchise Restaurant Business Plan: Details to Run Your Business 

Writing up your franchise restaurant business plan is one of the most tangible steps toward starting up your franchise. It shows you what you’ll need to focus on with particular attention. It gives you a place to organize finances, marketing, market analysis, and so much more. 

When you’re ready to create your franchise business with a quality plan, reach out to BinWise and BlueCart . The BinWise Pro beverage inventory program , paired with the BinScan app , gives you peace of mind when you do inventory . BlueCart’s order management software simplifies your order management system . 

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How to Franchise a Restaurant: A Step-by-Step Guide

Table of contents.

If you’re looking to learn how to franchise a restaurant, congratulations are in order—your business is ready to grow. 

While it’s only one of many ways to grow, franchising your restaurant can help you reach new customers, gain brand recognition in a new region, develop merger or acquisition opportunities, and so much more. 

If you think your restaurant is a good candidate for franchising—what’s next? In this guide, we’re breaking down how to open a franchise restaurant. To clarify, we’re teaching existing restaurant owners how to start a franchise operation—how to start a franchise restaurant as the parent company. 

Explore the franchising process step-by-step below. 

Introduction to restaurant franchising

Restaurants can expand in various ways, but three of the most common growth tactics are:

• Self-funded growth (re-investing business proceeds into growth measures)
• Investor-supported expansion (growing a restaurant with outside funding)
• Franchising

The latter will be our focus in this guide. Simply put, franchising allows business owners to lean on a parent company’s resources, knowledge, and expertise as they grow a “branch” of that parent company. Meanwhile, the parent company (that’s you) gets to expand its brand, access startup capital from franchisees, and more. 

You’ve probably heard of some of the biggest names in restaurant franchising (even if you can’t find one of these franchises near you):

• Domino’s Pizza
• Outback Steakhouse (and other Bloomin’ Brands outfits)
• Olive Garden (a subsidiary of Darden Restaurants Inc.)

If these international household names are any indication, franchising has the potential to become a highly successful model for your growing restaurant business. 

Pros and Cons of Restaurant Franchising

Pros of starting a restaurant franchising, 1. brand awareness.

Creating a new brand or business is both expensive and demanding. It requires substantial funds, tools, and a dedicated team. By harnessing the established brand of the franchisor, developed over the years, you can reduce the initial cash investment burden and concentrate on delivering excellent cuisine.

2. Customer Base

Similar to brand awareness, the franchisor has cultivated popularity and demand over the years, making it the go-to choice for specific types of food such as pizzas, burgers, and tacos. Therefore, you don’t need to worry about lacking demand or spending money to acquire customers.

3. Product Market Fit & Returns

The franchisor has iterated multiple times, demonstrating a proven product-market fit (PMF). The ability to build a strong brand and sustain market presence over an extended period indicates customer satisfaction with their food. As a franchisee, this implies better returns from the outset.

Cons of Starting a Restaurant Franchising

1. high costs.

Starting a franchise restaurant isn’t feasible for everyone. The costs vary based on the chosen franchisor, ranging from $20,000 to $100,000 or more. In addition to these initial fees, there are additional expenses like real estate, equipment, staffing, marketing, and more. Learn more about the associated costs of starting a franchise here.

2. Limited Innovation

The franchise contract, aimed at protecting the parent brand and its products, imposes limitations on the franchisee’s ability to easily modify the menu or introduce new products. While some localization might be permitted upon approval, this hinders franchisees from making swift iterations to address local customer needs.

3. Poor Financial Privacy

Many franchise agreements include a provision allowing the franchisor to have full oversight of the franchise’s financial aspects. If you’re uncomfortable with others closely monitoring your financial matters, franchising might not be the ideal business venture for you.

Restaurant franchising: a step-by-step guide 

What does it take to become the next big-name franchise? Let’s explore how to franchise a restaurant in ten steps.

1. Figuring out if your restaurant franchise is feasible

Why doesn’t every popular neighborhood restaurant try to become a national (or even just regional) franchise? Because it isn’t a feasible growth model for every restaurant. 

Before you take any other steps, consider how you’ll address some of the most common setbacks restaurateurs face when trying to franchise: 

• Scale Issue : Imagine that you start another restaurant that’s identical to yours in every way: same menu, suppliers, building, and prices. You’ll essentially double your workload once you start the second. Even if you bring in a franchisee (who will have some capital and a few big ideas), you’re still at the helm of not one, but two restaurants. 
• Liquidity : While you might have an emergency fund tucked away for potential catastrophes at your restaurant (like major equipment breakdowns or ingredient price fluctuations), is that fund big enough to cover the costs of opening a new restaurant and maintain financial peace of mind (for you and your franchisee)? You simply might not have enough cash in the bank yet.
• Demand : Is there enough demand to sustain your restaurant in your new market (or your existing market if you want to start franchising locally)? If market research doesn’t indicate potential success, keep marketing your current restaurant before you start franchising. 

2. Develop your restaurant franchise business plan 

While writing a restaurant business plan deserves its own guide, your business plan should (at minimum) include:

• Your business goals
• A current financial analysis
• Short- and long-term financial forecasting
• Your brand’s mission, vision, and values

A fully-formed business plan can help you navigate the early years of franchising in two major ways:

• It’ll show franchisees (whom you’ll be courting in your franchise infancy; more on this below) that you have a sound plan for making your joint venture work.
• It can serve as a foundational document as you reach critical turning points in your franchise business. When you’re considering changing a beloved menu item or revisiting a relationship with a long-term supplier, for instance, you can return to your original plan to help make an informed, intentional decision. 

3. Securing financing for your restaurant franchise

While we discussed investor-supported growth as a distinct growth method above, it’s also one of a few ways you can secure funding for your franchise operation, along with:

• Leveraging your own capital
• Applying for a traditional business loan through a bank or credit union
• Collecting a “franchise fee” from your first franchisee

The last method is one of the most common, and it can be a hard sell for potential franchisees in the early days. But you can leverage the worth of your existing assets (and access to them) to convince franchisees to pay the entry fee.

Learn more about the cost associated with operating a franchise .

4. Establishing a legal structure

Legal experts recommend that restaurateurs establish a franchising company as a separate legal entity from their primary restaurant company. Eventually, when the paperwork is done and you’ve officially started a joint venture with a franchisee, you should have three distinct companies with their own sets of books:

• Acme Franchising, LLC (the parent company for every future franchise location)
• Acme Eats, Inc. (your original restaurant)
• Acme Eats Springfield, Inc. (your first franchise location)

Ensuring that all three of these companies are separate legal and financial entities should protect each individual business (including your original restaurant) if one of them experiences legal or financial trouble. 

5. Creating a franchise operations manual

Consistency is key for franchise businesses. A franchise operations manual will help each franchise location consistently embody the parent brand by:

• Preparing menu items the same way at all locations
• Adhering to a brand-wide dress code or uniform
• Decorating facilities or designing facilities to match company colors and standards
• Streamlining processes like HR, payroll, recruitment, and vendor negotiation

Your franchise operations manual should be as detailed as possible, but be open to modifications—as your franchise restaurant grows, so will your manual. Whenever you make changes, ensure that every franchisee has the latest version of the document. 

6. Creating a franchise operations manual

7. Finding franchisees

If your franchise becomes successful enough, you’ll likely be approached by aspiring franchisees. But as we mentioned above, this is unlikely to be the case in the early days of your franchise restaurant. You’ll probably have to recruit your first few partners yourself. 

Be as selective as possible when choosing your first franchisees. These first partners will set the tone for your growing brand and collaborate to solve early brand-wide problems.

Look for candidates with

• Significant restaurant experience —preferably in all food service roles, but specifically in management
• Enough capital to pay the franchise fee and startup costs
• A verifiable history of ethical and successful business practices

Early franchisees will be some of the first faces of your growing brand—choose them wisely. 

8. Marketing and launching your restaurant franchise

As you’re tackling all of the other steps in this list, don’t forget about the most important part of opening a franchise restaurant: telling customers about it. 

You might be too busy to tackle marketing on your own, so don’t be afraid to hire an internal employee or an outside marketing firm to take the reins. Delegating tasks you’re not an expert in (like managing social media) will free up your time for tasks that require your expertise like menu planning and vendor negotiations.

Once your marketing is up to snuff, prepare to launch your first franchise location: an event that should include all of the fanfare it so deserves. 

9. Managing and supporting your restaurant franchise network

As you continue recruiting franchisees (and as ambitious candidates start approaching you), one of your most important roles as the franchise business owner is to support your network of franchisees. 

This role deserves a guide of its own, too. But some of your responsibilities in this capacity include:

• Maintaining brand integrity at every location (I.e., making sure menus and methods are consistent across locations)
• Helping franchisees overcome operational challenges
• Administering (and maintaining) a franchisee training program
• Overseeing the finances at every location

This is just the tip of the iceberg. As your business grows, consider hiring more franchise management staff to help shoulder the burden of leadership. 

10. Measuring the success of your restaurant franchise

How do you know if your restaurant franchise is successful? You should measure your performance by evaluating:

The success of individual franchises – How is each restaurant location doing? Are they turning a profit, satisfying customers, and embodying your mission? Use a combination of quantitative and qualitative metrics to assess a branch’s success.

The success of the brand as a whole – Is the parent company making (and saving) money? Is your brand image generally positive in the market? Do people want to work at your franchise locations? These are just a few elements you can assess to determine how well your parent company is doing. 

11. Planning for the future

Business owners in all sectors must be future-minded. One way to make plans for the future, maintain a goal-oriented approach, and make decisions that secure your franchise restaurant’s future is to return to your business model. 

Remember those short- and long-term financial forecasts you made in your original business plan? As your business grows, make a habit of refreshing those forecasts regularly to maintain a constant eye on the horizon. 

Note that you can plan for more than your financial future. You can also set goals (and make plans to meet them) related to:

• Your brand’s image and reputation
• Your menu offerings
• Your ingredient sourcing
• Your human resources efforts

Staying focused on the future of your brand will help you make savvy business decisions in the present. 

CloudKitchens: Reimagining restaurants of the future

Learning how to open a franchise restaurant can be overwhelming—the learning curve is high, you need substantial start-up capital, and there are many challenges to overcome as you rise to the top. 

Future-minded franchise restaurateurs always keep their eyes open for innovative opportunities to expand their brands. As the demand increases for quality food delivery, for instance, how will you answer the call?

When you’re ready to embrace the future of delivery, partner with CloudKitchens. We help restaurant owners by providing seamless delivery, cost savings, and ghost kitchen spaces. 

Instead of navigating the muddy waters of the startup phase for months on end, CloudKitchens partners can have their delivery businesses up and running in just weeks. Now offering ghost kitchens in Austin , NYC, Orlando, Chicago, Los Angeles, and many more cities across the U.S.! Expand your restaurant business and take advantage of the bustling food delivery scene.

Learn more about how CloudKitchens is changing the game for restaurants—from small businesses to national franchises.

Explore ghost kitchen locations across the US:

• Ghost kitchens in San Francisco
• Ghost kitchens in LA
• Ghost kitchens in NYC
• Ghost Kitchens in Toronto
• Ghost Kitchens in Atlanta
• Ghost Kitchens in Dallas
• Ghost Kitchens in Chicago
• Ghost Kitchens in Denver
• Ghost Kitchens in Miami

Investopedia. What Is a Franchise, and How Does It Work? https://www.investopedia.com/terms/f/franchise.asp  

Investopedia. 10 Biggest Restaurant Companies. https://www.investopedia.com/articles/markets/012516/worlds-top-10-restaurant-companies-mcdsbux.asp   

NerdWallet. How to Write a Business Plan, Step by Step. https://www.nerdwallet.com/article/small-business/business-plan   

US Small Business Administration. Franchise Fees: Why Do You Pay Them and How Much Are They? https://www.sba.gov/blog/franchise-fees-why-do-you-pay-them-how-much-are-they   

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How To Write a Business Plan for Franchisee Restaurant in 9 Steps: Checklist

By henry sheykin, resources on franchise restaurant.

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan
• SWOT Analysis
• Business Model
• Marketing Plan

Are you considering opening a franchisee restaurant? You're not alone. The restaurant industry has been growing steadily in the past year, with a 4% increase in sales in 2021 according to the National Restaurant Association.

But before you jump in, it's crucial to have a solid plan in place. Our nine-step checklist will guide you through the process of writing a business plan for a franchisee restaurant, from conducting market research to determining staffing needs.

Here's what you'll need to do:

• Conduct market research
• Identify potential franchise options
• Analyze franchise disclosure documents
• Evaluate financial requirements
• Consult with legal and financial advisors
• Develop a business concept
• Create a marketing plan
• Consider location options
• Determine staffing needs and develop a hiring plan

By following these steps, you can create a strong foundation for a successful franchisee restaurant and join the ranks of thriving restaurant businesses.

Conduct Market Research

Before starting your franchisee restaurant, it's crucial to conduct thorough market research. This research will help you understand the local market, evaluate competitors, and identify opportunities for growth. Here are the main steps to follow:

• Identify your target audience
• Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to evaluate your potential in the market
• Research local demographics, such as age, income, and consumer trends
• Assess your competition and identify their strengths and weaknesses
• Identify potential barriers or challenges you may face in the market

Tips for Conducting Market Research:

• Use online resources, such as Google Trends, to identify popular restaurant trends in your area
• Visit local competitors to gain insight into their menu, pricing, and customer experience
• Use focus groups or surveys to gather feedback from potential customers
• Check with local organizations such as the chamber of commerce to get information on local events and other happenings you can take advantage of

By conducting comprehensive market research, you'll have a better understanding of the local market and be able to develop a business concept that resonates with your target audience. This research will also inform your marketing plan and help you establish a pricing strategy that works for your franchisee restaurant.

Identify Potential Franchise Options

Once you've done your research and have decided to open a franchisee restaurant, the next step is to identify potential franchise options. This involves researching the different franchise options available, evaluating their pros and cons, and determining which one best fits your business plan. Here are some important steps to consider when identifying potential franchise options:

• Research Different Franchise Opportunities: Do thorough research on the different franchise options available for your restaurant business. Check out various franchise directories, attend franchisee tradeshows, and read up on industry publications to help you come up with a list of potential franchise options.
• Consider Your Business Goals: Consider your business goals and objectives and see how each franchisee option aligns with your vision. Look for a franchisee that has the same values as you, such as a commitment to quality and excellent customer service.
• Assess Franchise Viability: Assess the viability of each franchise option. Check out their franchisee business model, products, and services, and see how they stack up against the competition. Speak to other franchisees who have joined the same franchise and ask about their experience with it.
• Evaluate Costs: Evaluate the costs involved with joining each franchise option. Consider the upfront franchisee fees, the franchisee royalty fees, marketing expenses, and other associated costs.

Tips for Identifying the Right Franchisee Option

• Look for a franchise option that has a good track record and a proven success rate.
• Consider a franchisee that provides adequate training and support to its franchisees.
• Choose a franchise option that has a high level of brand awareness and a strong customer base.
• Check out the online reviews and ratings of each franchise option to get a feel for their reputation with customers.

Be sure to do your due diligence when identifying potential franchise options to join. Take the time to research and evaluate each franchise option to determine which one is the best fit for your restaurant business. Once you've identified your top choices, compare them against your business goals, budget, and vision to make the best decision.

Analyze Franchise Disclosure Documents

When considering investing in a franchise restaurant, it is essential to analyze the franchise disclosure documents (FDDs) provided by the franchisor. These documents will provide a potential franchisee with valuable information about the franchise agreement and the franchisor's history and current financial status.

The FDDs will typically include information on the following aspects:

• The franchise's background and history
• The franchise system's structure and operational procedures
• The franchise fees and initial investment costs
• The franchisor's obligations and expectations of the franchisee
• The franchisee's obligations and requirements
• Financial performance representations and earnings claims
• Renewal, termination, and transfer conditions
• Franchisee training and ongoing support
• Intellectual property rights and other legal considerations
• Carefully read and review all FDDs provided by the franchisor.
• Seek the advice of a lawyer or financial advisor to help you understand the legal and financial implications of the franchise agreement.
• Pay close attention to the franchise fees and initial investment costs, as they could significantly impact your overall profitability.
• Validate the franchise's financial performance representations and earnings claims by contacting existing franchisees and conducting independent research.

As a potential franchisee, it is your responsibility to analyze the FDDs thoroughly and make an informed decision about whether to invest in the franchise restaurant. Take the time to review the documents carefully and seek professional advice before making any commitments. By doing so, you will increase your chances of success and protect yourself from the potential risks and liabilities of investing in a franchise.

Evaluate Financial Requirements

When it comes to opening your franchisee restaurant, it is essential to evaluate financial requirements . You need to have a clear understanding of the capital expenses, ongoing operational costs, and expected revenue streams to help you formulate a realistic business plan.

Analyze the initial financial obligations that come with owning a franchise. These obligations typically include franchise fees, royalties, advertising costs, and other expenses related to operating a franchised business. Identify the amount you need to pay to purchase the franchise rights, ongoing fees like royalty payments, and required supplies to get started.

• Research multiple franchise options to get a better understanding of what is standard and what excessive.
• Consider talking with other franchise owners to determine if your franchiser’s financial obligations are reasonable.

Also, consider the costs of building and launching your franchise. You'll need to invest in equipment, appliances, and furnishings to create a welcoming front-of-the-house environment for your guests and a streamlined back-of-the-house experience for your team members. Your franchise might also have strict requirements around the look and feel of the restaurant, which can drive up the expenses you'll need to cover before opening.

Finally, evaluate all operational expenses to create an effective financial projection. Start with labor costs and project the number of employees that your restaurant will need to hire to run smoothly. Include employee benefits, taxes, and relevant insurance policies. All these costs should be factored into the cost of goods sold and deducted from your revenue stream to determine profitability.

• Use spreadsheets to compare value and make accurate financial statements.
• Consult finances experts and other business owners.

Evaluating financial requirements can be challenging, but it's a crucial aspect of ensuring your franchisee restaurant is successful in the long run. With proper planning and diligent attention to detail, you can develop a financial projection that gives you a clear understanding of what you need to put into your business and what you can expect to get out of it.

Consult With Legal And Financial Advisors

Once you have identified potential franchise options and evaluated the financial requirements, it is crucial to consult with legal and financial advisors to ensure that you fully understand your obligations as a franchisee and the financial implications of your investment.

A franchise agreement can be a complex legal document, and it is essential to have a qualified attorney review the agreement and advise you on the terms and conditions of the contract. Legal advisors can help you navigate complex legal issues, review contracts, and ensure that you comply with regulatory requirements.

Here are some tips to consider when consulting with legal advisors:

• Find an attorney who specializes in franchising and has experience working with franchisees.
• Ensure that your attorney is familiar with the specific laws and regulations that govern franchises in your state.
• Ask your attorney to explain the terms of the franchise agreement and any clauses that may be ambiguous or unclear.
• Discuss your obligations as a franchisee, including obligations related to advertising, marketing, and reporting requirements.
• Anticipate any potential legal issues that may arise and develop a plan to address them.

In addition to consulting with legal advisors, it is also important to work with a financial advisor to ensure that you understand the financial implications of your investment. A financial advisor can help you evaluate the costs and benefits of the franchise and develop a financial plan to manage your investment. They can also help you identify potential risks and develop a contingency plan.

Here are some tips to consider when consulting with financial advisors:

• Find a financial advisor who has experience working with franchises.
• Ensure that your advisor understands the financial requirements of the franchise and can help you develop a realistic budget.
• Ask your advisor to review the franchise disclosure documents and help you understand the financial projections provided by the franchisor.
• Develop realistic revenue projections and discuss your cash flow needs with your advisor.
• Discuss your financing options and develop a financing plan to ensure that you have the necessary funds to start and operate the franchise.

Working with legal and financial advisors can help you avoid costly mistakes and ensure that you are fully informed about your obligations and financial prospects as a franchisee. Take the time to find qualified advisors who understand the franchise business and can help you navigate the complexities of the franchise agreement and financial planning.

Develop A Business Concept

Once you have done your research and identified potential franchise options, it is time to start developing your business concept. This is where you will start to bring your restaurant to life and determine what makes it stand out from other franchises in the market.

Define Your Brand: Your restaurant's brand is the overall image that customers will associate with your business. This includes your logo, mission statement, values, and culture. It is important to create a brand that differentiates you from other restaurants in the market. Your brand should be reflected in everything from your menu to the decor in your restaurant.

Determine Menu Offerings: Deciding what to include on your menu is a crucial part of developing your business concept. Your menu should reflect the culinary expertise and unique dishes that your restaurant has to offer. Consider including dishes that are popular in the local area as well as experimenting with new and innovative dishes.

Establish Your Service Style: Your restaurant's service style should be aligned with your brand and target customer base. Will your restaurant offer fast-casual service, fine dining, or something in between? Determining your service style will help guide your hiring process and ensure that your staff is trained accordingly.

• Utilize customer feedback to help shape your business concept and menu offerings.
• Test your concept and menu with focus groups before opening to ensure that it resonates with your target market.
• Consider implementing a sustainability plan as part of your business concept to appeal to eco-conscious customers.

Developing a strong business concept is essential for the success of your franchisee restaurant. Take the time to carefully consider all aspects of your concept, including your brand, menu offerings, and service style, to ensure that your restaurant stands out in the market.

Create A Marketing Plan

The success of any business venture heavily relies on marketing efforts , and a franchise restaurant is no exception. A solid marketing plan can help ensure that your restaurant will attract customers, build brand loyalty, and grow franchise opportunities. Here are some important steps to consider when creating your marketing plan for a franchisee restaurant:

• Identify your target audience . Knowing who your target customers are will help you create a successful marketing strategy. Consider factors such as age, income level, and location to determine the best way to reach potential customers.
• Research your competition . Analyzing the marketing strategies of your competitors can give you an idea of what works and what doesn't in your particular market. Take note of successful tactics and incorporate them into your own plan while avoiding copying them directly.
• Develop a branding strategy . Build a unique brand identity with a memorable name, logo, slogans, and other branding elements. Ensure that your branding strategy is aligned with your target audience's preferences and values.
• Create a content marketing plan . Develop blog posts, articles, or videos about your franchise that can be shared on social media, third-party blogs, and other platforms. Share these posts on your website, social media accounts, and other marketing channels to increase brand visibility and attract customers.
• Utilize social media marketing . Use social media platforms like Facebook, Twitter, and Instagram to engage and interact with customers. Share promotions, discounts, and other offers to attract customers and build loyalty.

Tips for Creating a Successful Marketing Plan:

• Use analytics tools to track your marketing efforts' performance and monitor their effectiveness
• Consider hiring a professional marketing consultant to help you develop and execute the ideal plan for your business
• Allocate a budget for marketing initiatives and make sure to regularly evaluate the return on investment (ROI) of each effort to determine which ones are worth continuing

By creating a comprehensive marketing plan that leverages different tactics, you can reach and engage your target customers, build a strong brand identity, and grow your franchisee restaurant in the long run.

Consider Location Options

Choosing the best location for your franchisee restaurant is crucial to its success. You should consider several factors before finalizing the location.

• Visibility: Your restaurant should be easily visible to your target customers. Look for locations that are on the main road or near busy intersections.
• Accessibility: The restaurant location should be easily accessible to your customers. Consider the availability of public transportation, parking, and pedestrian walkways.
• Demographics: Study the demographics of the area where you plan to open your franchise. Target the areas where residents have similar interests and buying power to increase your chances of success.
• Competition: Check the competition in the area. Are there already established restaurants similar to yours? If so, will you be able to offer something unique that will set you apart from them?
• Consider conducting a feasibility study. This will help you to determine the most suitable location for your restaurant.
• Closely analyze the lease terms and conditions, rent, and other contractual obligations before signing the lease agreement. Get a legal professional to review and advise you where necessary.

Another option is to collaborate with other local businesses in the area. For example, partnering with hotels and bed & breakfast establishments can help you build a customer base. Drop-off menus, discount coupons, and other marketing plans can be developed and implemented to give you an edge in the highly competitive restaurant industry.

Identifying a suitable location for your franchisee restaurant is essential to attract a consistent flow of customers. Research well, explore multiple options, and consult experts to make a sound and well-informed decision.

Determine Staffing Needs And Develop A Hiring Plan

One of the most crucial steps in opening a franchisee restaurant is determining your staffing needs and developing a hiring plan. You’ll need to hire a team of skilled and dedicated professionals to ensure your restaurant runs smoothly and efficiently. Here’s what you need to consider.

• You should start by assessing your restaurant’s staffing needs. Think about the different roles required and the number of staff needed for each role.
• You’ll likely need a team of chefs, cooks, servers, bartenders, cleaning and maintenance staff, and possibly a manager or two.
• You should determine the ideal number of staff needed to serve the expected customer footfall, and also bear in mind that you may need to hire seasonal staff for busy periods.
• Creating job descriptions is an important step to ensure you hire the right people. Clearly outline the roles and responsibilities of each job and the qualifications required for each position.
• You should also define your restaurant’s culture and values to ensure that new hires are in line with your business’s ethos.
• Recruit through social media, job portals, and local ads to spread your job vacancies widely.
• Thoroughly vet the candidates, including checking references and conducting face-to-face interviews to gauge their suitability for the roles.
• Ensure that you have a comprehensive orientation program to train the staff on the specific operational procedures of the restaurant.
• Consider offering staff perks such as free meals, uniforms, and performance-based bonuses to boost employee morale and productivity.
• Be mindful of the local labor laws and regulations to prevent any legal pitfalls.
• Also, be sure to have a staffing contingency plan to manage any unforeseen circumstances such as employee sick leave or an unexpected mass exodus of staff.

In conclusion, an effective staffing plan is an essential component of your restaurant's success. By determining the staffing needs and creating a hiring plan, you can ensure you hire a team that aligns with your company culture and meets the operational requirements of the restaurant.

Starting a franchisee restaurant can be a challenging but rewarding endeavor. By following these nine steps and doing thorough research, aspiring restaurateurs can increase their chances of success.

From identifying potential franchise options to determining staffing needs, each step is critical to creating a successful business plan.

By creating a solid business concept and marketing plan, franchisees can attract customers and establish their restaurant as a reputable brand in their local area.

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Writing a restaurant business plan.

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Introduction

If you're considering opening a restaurant, your first step should be writing a business plan. A well-written business plan can help you raise money, manage your restaurant and succeed. Here's what you need to know about writing one:

Executive Summary

An executive summary is a short but powerful document that can help you to get your point across quickly and effectively. Although it is usually the first section of a business plan, it should be the last piece written. It should be one page at maximum and clearly describe your business plan's critical points in a way that makes sense to anyone who reads it. The purpose of an executive summary is to convince potential investors or lenders that they will profit from investing in your restaurant idea, so avoid unimportant details or lengthy descriptions of how great your food tastes.

An excellent way to write an executive summary is by starting with an introduction paragraph that summarizes what the rest of your plan contains—this helps readers understand why they should continue reading further into the document. Then go into discussing why this particular project is worthwhile; why people need it. How will it benefit them? Next comes some background information about yourself: include any relevant experience or education related to running this business. Finally, end with future goals: where do you see yourself after opening the shop?

Here are some items to include in your restaurant business plan:

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Best covid-19 travel insurance plans, concept validation and business model testing.

Before you launch your business, it's important to validate your concept and test the viability of your business model. You can do this by conducting market research, talking with potential customers, and interviewing industry experts with similar business experiences. You can also test the viability of your plan by completing an "experience economy" analysis. That is, looking at ways people enjoy spending money on experiences rather than goods (such as dining out). For example, if people value experiences over material goods, opening a restaurant may be a good idea!

Labor Costs and Staffing Plan

Labor costs, including direct and indirect labor, are essential to your labor budget. Direct costs refer to wages paid directly to employees, while indirect expenses include benefits like healthcare coverage and payroll taxes. To calculate these figures, you'll need to estimate the number of full-time equivalents (FTE) positions you'll need and their average salaries. This calculation can be tricky because each restaurant has its unique staffing plan based on its size, location, cuisine type, and reputation among customers, not to mention any other factors that might affect staffing decisions (e.g., whether it's open 24/7).

The first step is deciding whether or not you want full-time staff or part-time workers who work only during peak times such as lunchtime rush hour or Friday night dinners out with friends at restaurants nearby yours. As tempting as it may seem, wait to write anything down until after reading through the following sections because several factors are explicitly related to determining how many people we'll need overall.

You want your menu to be focused and simple. Try to add only a few items, as too many menu items may confuse customers, making it difficult for them to choose what they want.

If there are any "signature" items on your menu, include them first when listing off your offerings so that people know what kind of food you serve before even stepping inside the restaurant. Also, incorporating local ingredients into these specialties will help build community spirit around supporting local businesses.

Site selection is a critical factor in your success. After conducting a comprehensive market study, the site selection is based on the data you discover to determine if your customers are in and frequent that area. David Simmonds, Founder and CEO of ResolutRE , a Commercial Real Estate firm in Austin, Texas, states: "More than ever, entrepreneurs opening a restaurant need to analyze what their own customers look like on paper (demographics, psychographics, etc.), so then when they are examining a market, they can find the highest concentration of their customers within that market. From that data, they are able to determine the number of restaurants that the market could support, and from there, create the blueprint for their expansion."

Your plan should describe your ideal location . Your chosen location must be close to your target market and similar businesses, such as restaurants or cafes. The site should also have high foot traffic and be accessible by car, bike, and public transportation. Simmonds goes on to say: "Analytics reinforces or disputes instincts. It is a necessary part of the expansion process, whether the restauranteur has 1 unit or 37.

Marketing Strategy

When developing your business plan, think about the marketing strategy you will use. Your plan should consider and explain the following marketing tactics:

• Advertising: You can use print or online ads on social media sites like Facebook and Instagram. Also, consider running commercials on local television stations.
• Public relations: This can include writing articles about your restaurant in local newspapers or magazines, hosting events at your restaurant (such as wine tastings), speaking at community events like Chamber of Commerce meetings with other business owners in the area, participating in charity events related to foodservice industries like Feeding America—the possibilities are endless! The idea is to get people talking about what makes YOU unique so they think of YOU first when ready for their next dine-out experience!
• Social media: Let's face it—most millennials don't even pick up the phone anymore; they prefer texting over talking face-to-face because it feels intimate somehow, and guess what? By interacting directly with customers through social media platforms like Facebook Messenger or WhatsApp (which allows users from all over the world access 24 hours per day, seven days per week), we can offer immediate customer service support during high-demand times such as weekend brunch hours without having employees sitting idle during slow periods throughout weekdays when traffic drops off significantly due the lack of demand generated elsewhere.

Profit and Return on Investment Analysis

• Profit is the difference between your sales revenue and your costs. To calculate it, you need to know the following:
• Sales revenue (how much money you expect to make from selling food)
• Cost of goods sold (the cost of ingredients and supplies)
• Other operating expenses (including labor, rent, and utilities)

The reader of your business plan should be able to find these numbers in your budgeting worksheet and financial projections spreadsheet.

Financial Plan

The financial plan is the most critical part of your business plan. It should clearly show how much money you need to start, run and grow your restaurant.

You will need to show a projected profit and loss statement. The projected profit and loss statement (P&L) shows how much revenue comes in, what expenses are incurred, and what profits are made over time. In addition, the P&L shows all revenue sources, including but not limited to sales of food/alcoholic beverages and income from private parties. It must also project all costs associated with operating the restaurant, such as Cost of Goods (raw materials) and salaries for employees - these include both front-of-house roles such as waiters or bartenders, as well as back-of-house roles like chefs who prepare food during off hours so it can be served fresh upon opening each day - cleaning supplies needed throughout each week, etc., depreciation costs associated with long term assets such as ovens that wear down over time and waste of unused food product.

Multi-Year Projections of Revenue and Costs

Accurate projections are the key to a successful business plan. They help you to understand how much money you will make and how much you will need to make it happen. Projections also help with understanding what your costs will be.

For example, if I were starting a restaurant today and wanted my business plan projections for opening day and going out one, three, and five years.

Then I would look at similar restaurants that serve similar foods, noting their prices, portion sizes, and any specialties they offer, such as breakfast all day or lunch specials every Friday during football season. This research of other restaurants will give you a basis for your projections. Include the documentation of this research in the narrative of the plan.

A Business Plan Is Your Road Map To Success.

A business plan can help you raise money by demonstrating that you have a viable idea for a restaurant. In addition, investors want to see that others are interested in investing in your vision, so they'll be more likely to give you money if they see other investors involved with it as well. An excellent example is when an investor wants to invest but only if another investor does first; this way, both parties feel comfortable investing because they know someone else believes in the project enough to put their own money into it too!

A well-written business plan helps manage restaurants by giving owners information about how much money will be coming in over time, so there aren't any surprises when bills come due every month - which could lead businesses into trouble if left unchecked."

This article has given some insights into how to write a business plan for opening a restaurant. Do your research and learn other aspects of good business plan writing. I know that it can be a lot of work, but I also know that the payoff is worth it. Not only will you have a better understanding of what it takes to open up shop and run it successfully but also potential investors will be more likely to fund your project if they see that you've done your research. And remember: don't be afraid to ask other restaurant owners for help or advice; many of them have been where you are now.

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10 Essential Steps to Building a Lucrative Franchise Restaurant Business

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1. Establish Purpose & Objectives, Define Target Demographics

The first step towards opening a franchise restaurant business is to establish the purpose of the business and set clear objectives. A clear purpose statement should highlight the value proposition of the restaurant and set it apart from the competition. Your objectives should be SMART goals that are specific, measurable, achievable, relevant, and time-bound. A clear purpose and objectives statement will guide all your subsequent activities towards building a successful franchise.

Another aspect that is critical to the success of your franchise restaurant business is identifying target demographics. Your target demographic refers to the specific group of customers that your restaurant intends to serve. To identify your target demographic, you need to conduct market research, which will help you understand the needs, preferences, and behavior patterns of your potential customers. This demographic information will enable you to design your products, services, marketing campaigns, and overall business strategy to meet the unique needs of your target audience.

Tips & Tricks:

• Clearly define your restaurant's unique selling point (USP) and communicate it to your customers.
• Focus on a specific target demographic whose needs and preferences align with your restaurant's specialties.
• Use a mix of primary and secondary research methods to get a comprehensive understanding of your target market.

2. Establish An Effective Business Plan

Starting a franchise restaurant business can be an exciting and lucrative venture if done correctly. One of the most important steps to ensuring the success of your franchise restaurant is establishing an effective business plan. Here are some key chapters to include in your business plan:

• Executive Summary: This section should provide an overview of your franchise restaurant business and outline your mission statement, goals, and objectives. It is important to keep this section concise and highlight your unique selling proposition.
• Market Analysis: In this section, provide a detailed analysis of your target market, including demographics, location, competitors, and potential opportunities. This will help you identify your customer base and tailor your marketing strategies accordingly.
• Business Structure: Outline the legal structure of your franchise restaurant business, whether it's a sole proprietorship, partnership, or limited liability company (LLC). It is important to consult with an attorney and accountant to determine which structure is best for your business.
• Products and Services: Detail your menu offerings, pricing strategy, and any unique aspects that differentiate your franchise restaurant from competitors.
• Operations Plan: In this section, outline your day-to-day operations, including staffing, training, inventory management, and customer service policies. It is important to provide a plan for ensuring consistency across all franchise locations.
• Marketing and Sales Plan: Outline your marketing and sales strategies, including advertising, promotions, and social media. It is important to allocate a budget and set measurable goals for each strategy.
• Financial Projections: Include a detailed financial plan, including startup costs, projected revenue, and operating expenses. It is important to conduct thorough research and accurately project anticipated expenses to ensure the financial feasibility of your franchise restaurant business.
• Consider getting a business mentor or coach to help you develop your business plan.
• Conduct market research to gather data on consumer preferences and trends in the industry.
• Review and update your business plan regularly to ensure its effectiveness and relevance.

Establishing an effective business plan is critical to the success of your franchise restaurant business. It serves as a roadmap for achieving your goals, identifying potential challenges, and outlining strategies for growth and profitability. Utilize the key chapters outlined above and seek guidance from professionals when necessary to ensure the success of your franchise restaurant business.

3. Create A Financial Model To Support The Business Plan

As you work on your franchise restaurant business plan, it is crucial to create a financial model that supports your vision. This will help you determine the required initial investment, expected revenues, and overall profitability of your business. Here are some important steps to follow when creating a financial model for your franchise restaurant.

• Understand Your Costs: Your financial model should include all the costs associated with starting and running your franchise restaurant business. This includes rent, utilities, licenses, permits, equipment, inventory, marketing, and other expenses. Determine the cost of each item and ensure you have enough financial resources to cover these expenses.
• Create Revenue Projections: Estimate your potential revenue based on the number of customers you expect to serve and the average check amount per customer. This will give you a rough idea of your expected revenues. Adjust your projections based on industry benchmarks and any other relevant factors.
• Consider Operating Expenses: In addition to costs, you should also consider the ongoing expenses related to running your franchise restaurant business. This includes salaries/benefits, advertising, supplies, lease payments, interest on any loans, insurance, and any legal/accounting fees.
• Build A Cash Flow Projection: A cash flow projection shows you when your business will have cash coming in and when it will be going out. It is critical to know how much cash will be needed to fuel your business during the start-up and growth phases.
• Develop A Break-Even Analysis: A break-even analysis shows you the amount of revenue required to cover your total costs and break even. This calculation will help you determine if your franchise restaurant business is financially feasible.
• Be conservative in your revenue projections and aggressive when it comes to costs.
• Consider hiring a professional to help you create a financial model for your franchise restaurant business.
• Regularly review and update your financial model to make sure it accurately reflects the performance of your business.

By creating a financial model that supports your business plan, you will be better equipped to make informed decisions about your franchise restaurant business. It will also help you identify potential issues and address them proactively, before they become major problems. Remember to review and update your financial model regularly to ensure it accurately reflects the performance of your business.

4. Research & Gain Necessary Permits & Licenses

Starting a franchise restaurant business requires certain permits and licenses to operate legally. Don't overlook this important step, as failing to obtain the necessary permits and licenses can result in hefty fines and interruptions in business operations. Here's what you need to do:

• Research the permits and licenses required for your specific location - this can vary depending on the state, city, and county you're operating in.
• Contact the appropriate agencies - once you've identified the permits and licenses needed, reach out to the necessary agencies to obtain the required paperwork and information on how to apply.
• Complete the application process - follow the instructions provided by the agencies, submit any required documentation or fees, and wait for approval.

It's important to note that the specific permits and licenses required can vary depending on your franchise concept and your local laws and regulations. Some common permits and licenses needed for a franchise restaurant business include:

• Business license
• Food service permit
• Liquor license (if serving alcohol)
• Zoning permit
• Sign permit

Tips & Tricks: Obtaining Necessary Permits and Licenses

• Research your permits and licenses early on in the process, as they can take time to obtain and delays can push back your opening date.
• Familiarize yourself with any local health codes and regulations to ensure compliance and avoid any issues during inspections.
• Consider working with a consultant or attorney who can guide you through the process and ensure that you have all the necessary paperwork and documentation to operate legally.

5. Research Franchising & Licenses

When it comes to starting a franchise restaurant business, it's important to understand the ins and outs of franchising and licensing. This will ensure that you're following all legal requirements and that you have a solid understanding of the franchise model you'll be working with. Here are some key steps to follow:

• Research different franchise restaurant options to determine which one is the best fit for you. Look into factors such as brand reputation, training and support offered, and initial investment costs.
• Obtain a copy of the Franchise Disclosure Document (FDD) for the franchise you're interested in. This document will provide important information about the franchisor and its operating procedures, as well as financial statements.
• Consult with a franchise attorney to review the FDD and discuss any legal concerns or questions you may have. This is an important step to protect your interests and ensure that you fully understand the terms of the franchise agreement.
• Determine whether you need any additional licenses or permits to operate your franchise restaurant. This will vary depending on your location and the specific franchise you're working with, so it's important to do your research and consult with local authorities.
• Be sure to fully understand the financial obligations of the franchise agreement, including any ongoing fees or royalty payments. Make sure you have a solid business plan in place to ensure that you can meet these financial obligations while still turning a profit.
• Don't rush the franchising research process. Take your time to fully evaluate all of your options and make an informed decision.
• Be sure to speak to other franchise owners within the same brand to get a better understanding of what it's like to operate a franchise restaurant.
• Consider working with a franchise consultant if you're new to the process and want additional guidance.

By following these steps, you'll be well on your way to successfully researching and launching a franchise restaurant business. Remember that each franchisor will have their own unique requirements and procedures, so be sure to thoroughly review all documentation and seek professional advice when needed.

6. Identify Location & Potential Property Leases

One of the most crucial steps in starting a franchise restaurant business is finding the perfect location and potential property leases . A location that is easily accessible and highly visible can make or break your business. You need to choose a location that is appealing to your target audience and customer demographics. Your franchise’s success can depend on this factor alone.

Identifying the Potential Market and Demographics

Before considering the location for your franchise restaurant, you need to identify your potential market and demographics . Understanding your customer base is essential for providing them with the best service possible. Researching the demographics of the area you intend to setup your franchise in is crucial. You need to know the age, gender, income class, lifestyle patterns, and other vital factors of your potential customers.

Choosing the Right Location for Your Franchise Restaurant

After understanding the demographics of the area, you should consider the location of your franchise restaurant carefully. The ideal location should be easily accessible and visible, with a high level of pedestrian or vehicular traffic. You should also consider the lease or rent of the property. Negotiate the best terms that will work for you in the long run to avoid higher costs that might not reflect on your profit margins.

Desirable Qualities of a Good Restaurant Location

• High Pedestrian Traffic: Your restaurant should be easily accessible
• Good Visibility: Be highly visible to attract more customers
• Low Crime rate: Choose a location with a low crime rate to guarantee your customer's safety while enjoying their meals
• Accessible Parking: Provide adequate parking for your customers to make sure they are willing to return to your restaurant

3 Important Tips to Consider When Finding a Perfect Location for Your Franchise Restaurant Business

• Conduct thorough research on the demographics of the area you’re interested in. Knowing your potential customer base can give you a better understanding of what they want and what you need to provide
• Choose a location that’s easily accessible and visible, with excellent pedestrian or vehicular traffic
• Negotiate the best lease or rent for your franchise restaurant property. Make sure to consider your long-term profitability.

When starting a franchise restaurant business, finding the perfect location is essential for your success. With the right location and the right demographics, you can expect to gain a positive return on your investment. Keep these tips in mind, and you’ll be well on your way to opening a successful franchise restaurant business.

7. Assess Financing Options & Secure Funding

Assessing financing options and securing funding for your franchise restaurant business is one of the most important steps in the process. Without adequate funding, your business may never get off the ground or fail shortly after opening. So, how can you assess financing options and secure funding for your franchise restaurant business? Here are the key steps you need to take:

• Start by identifying all potential funding sources, including banks, credit unions, angel investors, venture capitalists, and crowdfunding platforms.
• Consider the terms and requirements of each funding source, including interest rates, repayment terms, collateral requirements, and application processes.
• Create a detailed business plan that outlines your goals, projections, and budget, and use it to secure funding that aligns with your needs and objectives.

Once you have identified potential funding sources and created a detailed business plan, it's time to start securing funding for your franchise restaurant business. Here are some steps to follow:

• Apply for loans or lines of credit from banks and credit unions that offer financing options for franchise businesses. Be prepared to provide extensive financial documentation, including tax returns, financial statements, and business plans.
• Consider alternative financing options, such as angel investing, venture capital, or crowdfunding platforms like Kickstarter or GoFundMe.
• Explore franchisor financing options, such as financing for franchise fees or equipment leases.

Securing funding for your franchise restaurant business may take time and effort, but it's vital for ensuring the success of your business. Take the time to identify potential sources of funding and create a detailed business plan to increase your chances of securing financing that aligns with your needs and goals.

8. Develop Staff & Build Team

Developing a strong team is crucial for the success of any franchise restaurant business. As a business consultant, I have seen many owners fail because they did not give enough attention to this crucial aspect. Here are some chapters you should consider when building your team:

8.1 Train Your Staff

The first step is to invest in training your staff. This will help you ensure that they know your brand values, understand the menu, and are comfortable using the equipment. You can opt for classroom-style training, one-on-one training, or a combination of both. Continuous training will improve the quality of your food and create a better customer experience.

8.2 Find the Right Talent

When recruiting staff to join your team, it’s essential to consider the skills, experience, and personality of the candidate. You should look for individuals that share the same values as your brand. You can use recruitment agencies or post job listings on social media to attract potential candidates.

8.3 Offer Employee Incentives

Incentivizing your employees is essential to building team engagement and loyalty. You can offer bonuses or commission-based incentives to motivate your staff. You can also organize team-building activities to foster team spirit and create a sense of belonging. Encouraging a positive working environment will motivate your staff, and quality work will follow.

8.4 Communication is Key

Effective communication between you and your team is crucial to ensure that your restaurant runs smoothly. You should encourage open communication both ways and ensure that your staff can ask questions and give feedback. You can use digital software or staff meetings to stay in touch with your team. A happy employee is more likely to stick around and remain dedicated to the brand.

8.5 Invest in Your Staff

Investing in your staff by offering training and development opportunities benefits both the employee and business. Staff will be motivated by the prospect of promotion and furthering their career. This level of commitment to your team will help maintain staff retention for the long-term success of your franchise business.

Tips & Tricks

• Create a detailed employee manual to help in your staff training and development.
• Create an environment in which your staff is at ease to share ideas and concerns.
• Organize regular staff meetings to ensure regular communication, training, and development.

By following these five chapters, you will build a loyal, motivated, and passionate team that will take pride in their role in your franchise restaurant business. Remember that building a robust team takes time and effort, so be patient, lead by example, and you will see success!

9. Execute Operations & Monitor Cash Flow

Opening a franchise restaurant business is an exciting venture, but it requires a lot of work to get started. Once you have secured your funding, found a location, and completed all the necessary paperwork, it's time to execute your operations and monitor your cash flow. Here are the steps you should take:

• Establish your team: Hire an experienced manager to oversee the restaurant's day-to-day activities, and make sure you have a reliable staff to keep your operations running smoothly.
• Order equipment, supplies, and inventory: Stocking up on equipment, supplies and inventory in advance helps avoid delays once you open for business. You'll need to order everything from kitchen equipment, tables, chairs, utensils and more.
• Finalize your menu: Work with your franchisor to finalize your menu and make sure you have all the necessary ingredients and supplies in place. Test your menu items frequently to ensure quality.
• Prepare for your grand opening: Plan your marketing strategy and hold a grand opening event to create buzz and attract new customers. You can offer discounts or promotions to build customer loyalty.
• Monitor your cash flow: Keep track of your expenses and revenue, and compare them with your projections. Identify areas where you can save money or make adjustments to increase profitability.

Here are some tips & tricks for executing your operations and managing cash flow:

Tip #1: Keep track of your inventory

• Use a system to keep track of your inventory regularly and accurately. This will help prevent shortages and waste, which can hurt your bottom line.
• Consider investing in inventory management software to automate the process and make it easier for you to monitor your inventory in real-time.

Tip #2: Control your labor costs

• Overstaffing can lead to high labor costs, which can eat into your profits. Be mindful of your staffing needs, and adjust them accordingly based on demand.
• Train your staff to work efficiently, and consider cross-training them to fill various roles if necessary. It will save you money in the long run.

Tip #3: Focus on providing excellent customer service

• Excellent customer service can lead to repeat business and positive word-of-mouth advertising. Train your staff to be friendly, helpful and responsive to customer needs.
• Encourage your customers to leave reviews online and respond to each review, thanking them or addressing any concerns raised.

10. Embrace Continued Learning & Development

As a business owner, it’s important to recognize that the learning process never ends. To truly succeed in your franchising business, you need to embrace continued learning and development. This means staying open-minded and proactive about expanding your knowledge, skills, and capabilities.

Here are a few tips to help you stay on track with your ongoing learning and development:

Invest in Personal and Professional Development

• Attend industry conferences and networking events
• Read business books and publications
• Take online courses and webinars

There are countless resources out there to help you learn and grow as a business owner. It’s up to you to take advantage of them and invest in your personal and professional development.

Learn from Peers and Mentors

• Connect with other franchisees in your network
• Seek guidance and advice from experienced mentors
• Join a local business networking group or mastermind

Don’t be afraid to reach out to other business owners and industry leaders for guidance and support. There’s no better way to learn and grow than by tapping into the wisdom and experience of those who’ve been there before you.

Stay Up-to-Date with Industry Trends and Best Practices

• Subscribe to industry newsletters and publications
• Follow thought leaders and influencers on social media
• Stay on top of emerging technologies and innovations

Finally, it’s important to stay on top of industry trends and best practices in order to remain competitive and innovative. Make it a priority to stay informed about the latest developments in your industry and be proactive about implementing new strategies and technologies.

By embracing continued learning and development, you’ll position yourself for long-term success in your franchising business. Remember, the learning process never ends – so keep pushing yourself to grow and improve!

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Restaurant Business Plan Template

Written by Dave Lavinsky

If you want to start a restaurant or expand your current one, you need a business plan.

Over the past 20+ years, we have helped over 5,000 entrepreneurs and business owners create business plans to start and grow their restaurants. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a restaurant business plan step-by-step so you can create your restaurant’s business plan today.

Download our Ultimate Restaurant Business Plan Template here >

What Is a Restaurant Business Plan?

A restaurant business plan provides a snapshot of your restaurant business as it stands today, and lays out your projected growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research, information about your target market, and a sample menu to support your winning restaurant business plan.

Why You Need a Restaurant Business Plan

If you’re looking to start a restaurant or grow the existing restaurant you need a business plan. A restaurant business plan will help you secure funding, if needed, and plan out the growth of your restaurant in order to improve your chances of success. Your restaurant business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Restaurants

With regards to funding, the main sources of funding for a restaurant are bank loans and angel investors. With regards to bank loans, banks will want to review your restaurant business plan and gain confidence that you will be able to repay your loan and interest.

To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional restaurant business plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for a restaurant is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding or, like a bank, they will give you a loan. Private equity groups are also a good source of funding for restaurant chains looking to expand further.

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How to write a restaurant business plan.

Use the following restaurant business plan template which includes the 10 key elements for how to write a restaurant business plan that will help you start, grow, and/or secure funding for your business.

Executive Summary

Your executive summary provides an introduction to your restaurant business plan, but it is normally the last section you write because it provides a summary of each key section of your business plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of restaurant business you are operating and the status; for example, are you a startup, do you have a restaurant that you would like to grow, or are you operating a chain of restaurants?

Next, provide an overview of each of the subsequent sections of your business plan. For example, give a brief overview of the restaurant industry. Discuss the type of restaurant you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer a financial analysis of your business.

Company Overview

In your company analysis, you will provide a brief description of the type of restaurant you are operating.

For example, are you writing a small restaurant business plan or a business plan for a restaurant franchise. Further, you might operate one of the following types:

• Fine Dining : characterized by the fancy decor, a dress code, and high prices
• Casual Dining : offers waiter/waitress service in a nice (but not overly fancy) atmosphere with moderate prices
• Fast Casual : characterized by quality food (close to the quality of casual dining) but no waiter/waitress service in an accessible atmosphere
• Fast Food : quick service style provided at the counter or via a drive-through. Lowest quality food and lowest prices
• Steak Restaurant : focuses on steak entrees and is usually a higher priced and fancier restaurant
• Buffet Restaurant : may or may not offer waiter/waitress service. Patrons serve themselves from buffet food selection
• Ethnic Restaurant : focuses on a specific ethnic cuisine such as Indian food, Mexican food, or Moroccan cuisine.

Within these types of restaurants, there are also ethnic food specialties such as American, Italian, Japanese, Chinese, Indian, etc.

In addition to explaining the type of restaurant you operate, the Company Analysis section of your restaurant business plan needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• Your mission statement and how it connects to your restaurant’s brand.
• What milestones have you achieved to date? Milestones could include sales goals you’ve reached, new restaurant openings, etc.
• Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, also called a Market Analysis, you need to provide a market overview and an overview of the industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the restaurant industry educates you. It helps you understand the target market in which you are operating.

Secondly, research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards speedy restaurant services, it would be helpful to ensure your business plan calls for take-out or other quick-service options.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your business plan, you achieve just that.

The following questions should be answered in the industry analysis section of your restaurant business plan:

• How big is the restaurant business (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your restaurant? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your restaurant business plan must detail the customer base or target market you serve and/or expect to serve.

The following are examples of customer segments: business executives, college students, sports enthusiasts, soccer moms, techies, teens, baby boomers, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of restaurant you operate. Clearly, baby boomers would want a different atmosphere, pricing and sample menu options, and would respond to different marketing promotions than teens.

Try to break out your customers in terms of their demographic and psychographic profiles. With regards to diner demographics, include a discussion of the ages, genders, locations, and average income levels of the new customers you seek to serve. Because most restaurants primarily serve customers living in the same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. This should also include how your customers choose where they should eat, their dining habits, and how much they are willing to spend on a meal.

The answers to the following questions should be included in your customer analysis:

• Who is your target market?
• What are their needs and wants?
• How do they make dining decisions?
• What motivates them to choose one restaurant over another?

The more you can understand and define these needs, the better you will do in attracting and building customer loyalty.

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With Growthink’s Ultimate Restaurant Business Plan Template you can finish your plan in just 8 hours or less!

Competitive Analysis

This competitive research should help you identify the direct and indirect competitors that your business faces and then focus on the latter.

Direct competitors are other restaurants.

Indirect competitors are other options that customers have to purchase from you that aren’t directly competing. This includes restaurants, supermarkets, and customers preparing dishes for themselves at home. You need to mention such competition to show you understand that not everyone frequents a restaurant each day.

With regards to direct competition, you want to detail the other restaurants with which you compete. Your greatest competitors will be restaurants located very close to your specific location, who are of the same type (e.g., fine dining, casual dining, etc.) and who offer the same cuisine (Japanese, Italian, etc.).

For each such competitor, provide an overview of the other businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of repeat customers do they serve?
• What menu items do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the existing customers’ perspective. And don’t hesitate to find out this information from customers by reviewing your competitors’ Yelp listings and other review pages.

The final part of this section is to document your areas of competitive advantage. For example:

• Will you provide superior food items?
• Will you provide menu items that your competitors don’t offer?
• Will you make it easier or faster for customers to acquire your meals?
• Will you provide better customer service?
• Will you offer better pricing?

Think about your unique selling points that will help you outperform your competition and document them in this section of your business plan.

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Marketing plan.

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a restaurant business plan, your marketing plan should include the following:

Product : in the product section you should reiterate the type of restaurant that you documented in your Company Analysis. Then, detail the specific menu items you offer/will offer.

Price : Document the prices. Essentially in the product and price sub-sections of your marketing plan, you are presenting the menu items you offer and their prices.

Place : Place refers to the location of your restaurant. Perform a location analysis and mention how the location will impact your success. For example, is your restaurant located next to a heavily populated office building, or gym? Discuss how your location might provide a steady stream of customers. Also, if you operate or plan to operate food trucks, detail the locations where the trucks will operate.

Promotions : the final part of your restaurant marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Making your restaurant’s front store extra appealing to attract passing customers
• Search engine marketing and optimization
• Social media posting/advertising
• Advertising in local papers and magazines
• Reaching out to local bloggers and websites
• Local radio advertising
• Banner ads at local venues

Operations Plan

While the earlier sections of your restaurant business plan explained your goals, your operational plan describes how you will meet them.

This section of your restaurant business plan should have two key elements as follows:

• Everyday short-term processes include all of the tasks involved in running your restaurant such as serving customers, procuring supplies, keeping the restaurant clean, etc.
• Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 1,000th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new location.

Management Team

To demonstrate your restaurant’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in the restaurant business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience operating restaurants and/or successfully running small businesses.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Pro-Forma Profit & Loss Statement / Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows how much revenue you expect to earn or have earned, and then subtracts your costs to show your actual or projected profit.

In developing your income statement, you need to devise assumptions. For example, will you serve 100 customers per day or 200? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Pro-Forma Balance Sheets

While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities.

For instance, if you spend $250,000 on building out your restaurant, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Pro-Forma Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

For example, let’s say a company approached you with a massive $100,000 catering contract, that would cost you $50,000 to fulfill. Well, in most cases, you would have to pay that $50,000 now for ingredients, supplies, equipment rentals, employee salaries, etc. But let’s say the company didn’t pay you for 180 days. During that 180-day period, you could run out of money.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a restaurant:

• Location build-out including design fees, construction, etc.
• Cost of equipment like stoves, refrigerators, blenders
• Cost of ingredients and maintaining an adequate amount of supplies
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections, detailed cost analysis and/or break-even analysis in the appendix of your business plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint, location lease, or initial menu design.

Taking the time to write your own restaurant business plan for your business is a worthwhile endeavor. It will help you communicate your ideas and provide potential investors with the information they need to make an informed decision about investing in your restaurant.

A well-crafted business plan will also give you a road map for growing your business and achieving your long-term goals. So, while it may take some time to put together, it will be well worth the effort in the end.

If you follow the restaurant business plan template above, by the time you are done, you will truly be an expert. You will really understand the restaurant business, your competition, and your existing customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful restaurant concept.

Want more tips? Check out our related articles:

• How to Start a Restaurant
• Restaurant Startup Costs: How Much Does It Cost To Start a Restaurant?
• How To Write a Restaurant Marketing Plan + Template & Examples
• How To Get Funding To Start and/or Grow Your Restaurant

Restaurant Business Plan Template FAQs

What is the easiest way to complete my restaurant business plan.

Growthink’s Ultimate Restaurant Business Plan Template allows you to quickly and easily complete your restaurant business plan.

Where Can I Download a Free Restaurant Business Plan PDF?

You can download our restaurant business plan PDF template here . This is a restaurant business plan template you can use in PDF format.

Where Can I Find a Small Restaurant Business Plan PDF?

Our small restaurant business plan PDF is a free resource to to help you get started on your own small restaurant business plan.

Don’t you wish there was a faster, easier way to finish your Restaurant business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how Growthink’s business plan professional services can help you create a winning business.

Other Helpful Business Plan Articles & Templates

Restaurants | How To

How to Franchise a Restaurant in 11 Steps

Published January 9, 2024

Published Jan 9, 2024

REVIEWED BY: Mary King

WRITTEN BY: Ray Delucci

This article is part of a larger series on Restaurant .

• 1. Assess If Franchising is a Fit
• 2. Craft A Franchise Business Plan
• 3. Create a Franchise Disclosure Document
• 4. Build Out an Operation Manual
• 5. Establish Your Legal Structure
• 6. Determine Fee Structure
• 7. Build Out Financial Targets
• 8. Market Your Franchise Availability
• 9. Select Your Franchisees
• 10. Support & Train
• 11. Monitor Your Locations
• Why You Should Franchise
• Examples of Franchise Costs
• Pros & Cons of Franchising

Bottom Line

Some of the most successful food businesses in the restaurant industry come in the form of franchised restaurants. The franchise model allows the owner of a food business (the franchisor) to grow their brand and revenue while a third party (the franchisee) undertakes the operational management of the franchised business. If your restaurant concept is streamlined, easily replicated, appeals to a wide customer base, and is profitable, you might be wondering how to franchise your restaurant.

In this article, I break down the steps it takes to franchise a restaurant and go into detail on the process you can expect, plus how to tell if your restaurant is one that would do well with the franchise model. I also give the pros and cons of restaurant franchising and give insight into the best practices you should adopt. Let’s dive in.

Step 1: Assess If Franchising Is a Fit

Knowing if your restaurant can be a franchise is the first very important step in this process. Franchising is not a model for every restaurant, and this is for good reason. Answering a few questions can help you determine if franchising your restaurant is a good idea.

Is your restaurant profitable?

The first step in knowing if you should franchise your restaurant is if it is profitable and successful financially. Profit margins between 5%–8% are usually a good indicator your restaurant is performing well, especially closer to 8%. That being said, when you are successful as a restaurant, and there is demand for more of your product, then that is when you should feel comfortable branching out.

Can your concept scale?

The next part in assessing if a franchise model is right for you is your ability to scale your food. The most successful franchise models serve the same great quality food consistently across various locations. This could be one of the biggest struggles in making a franchise restaurant business, as it takes time, organization, and an operator who is very in tune with why the restaurant does well. So having standardized recipes, replicable systems of managing the business and serving guests, and access to comparably sourced ingredients are just a few of the many aspects you need to replicate your restaurant.

Do you have the funds to franchise?

Lastly, being liquid enough to cover your bills and support expanding into another location is absolutely vital to whether you can franchise or not. The costs to build out a restaurant are still there, albeit supplemented by the franchisee you bring with you. But there will still be financial obligations, and you will need to help fund the new business as your franchisee works on getting it up and running.

Step 2: Craft a Franchise Business Plan

Your franchise business will be a separate entity from your original restaurant. So you’ll still have your original business (i.e., “Awesome Restaurant, LLC”), and you’ll add a separate business to handle the franchising aspect (i.e., “Awesome Restaurant Franchising, LLC”).

The next step to creating your franchise business is writing a franchise business plan . This business plan articulates the overall vision of your franchise model and gives your franchisees a blueprint for financial success. A franchise business plan is also how you will ensure that you, as an operator, have thought of everything and are not making this decision on a whim.

Your franchise business plan should include:

• The structure of your franchise, including leadership as the business grows
• Target market
• Key demographics
• Regions expected to branch out into
• Supporting data for key expansions
• Growth projections
• Final expectations

The final step in the business plan should be articulating how you can support your franchise owners when they come under your network. Often, franchisees are people with capital and a willingness to start in the food industry but many lack the basic knowledge to open a restaurant on their own. With a solid business plan in place, you offer not only confidence but the guiding documentation they will use to understand and execute your concept’s goals and the brand vision you may have.

Step 3: Create a Franchise Disclosure Document

The Franchise Disclosure Document (FDD) is a legal document that provides information to potential franchisees. The FDD describes the terms of the relationship between the franchisor (you) and future franchisees.

Your FDD should include:

• Details about the franchisor (you)
• Details about the management team that prospective franchisees can expect to interact with
• Required start-up costs needed to start a franchised restaurant, along with
• A list of royalty percentages and other licensing fees

This FDD will also contain the relevant trademarks, patents, and other company information that is specific to your business that franchisees would be privy to. Sourcing restrictions, territory expansion, public figures related to the restaurant, and any other item that could have financial implications in owning a business are also typically included.

As you can imagine, this legal document is extensive and is key for doing business within the law and with good standing. If you didn’t consult with a franchise attorney when writing your business plan, you absolutely need one to help create your FDD. You can find franchise attorneys from a simple internet search, or find attorneys that specialize in business formation and franchise disclosure on legal services sites like LegalZoom.

Step 4: Build Out an Operation Manual

When you first started your restaurant , you likely wrote an employee handbook and recipe book to ensure consistently great quality in your food and service. Take this same mindset and apply it to your franchise business. You’ll need to create a guide for franchisees to ensure consistency and lay out the expectations for anyone running a business with your brand name attached.

An operations manual that is intensive, easy to follow, and offers guidance on the major tasks a franchisee will perform is something that will help elevate your business and determine how well you grow and succeed at gaining multiple franchise locations.

Your operations manual should be able to share how exactly to perform certain tasks and the philosophies behind why you approach problems and other tasks within the business, including:

Staff Management

• Hiring, onboarding, and training staff
• Performance expectations
• Promotion expectations
• Management hierarchy for each location
• Termination process
• Any other relevant employee-specific information

Food & Beverage Handling

• Food preparation
• Vendors and vendor sources
• Standardized recipes
• Philosophies on the overall guest dining experience

Operational Proficiency

• Specific contracts with repair services
• Equipment maintenance
• Safety system checks (such as fire suppression)
• Opening and closing the restaurant
• Inventory and ingredient tracking
• Performing restaurant forecasting
• Performing restaurant audits

You basically want to give your franchisees the playbook of success that you had with your guests in your first restaurant. This manual is the key to how your restaurants will function, so being as detailed as possible in how the people leading these businesses should perform is vital.

Step 5: Establish Your Legal Structure & Other Items

Establishing how your franchise business is legally set up is key. Standard practice in the industry dictates that you often will have your own parent company that establishes the franchise network. You then want to have each business be its own legal entity—for example, having your own original restaurant and the newly expanded restaurant separate. This helps protect each individual business and keeps them all in standing order financially in case one business is confronted with a difficult situation.

The legal structure is important as it allows your businesses to operate with peace of mind while also protecting each of them in their own right as operating businesses.

Other documents you may want to file for are trademarks and restaurant-specific patents you may come up with. These specific legal filings keep the successful parts of your business that drive business yours and help avoid any bad faith actions in regards to copying or taking away from your business. All of this should be done with the oversight of a lawyer or someone familiar with restaurant and individual property law.

Related: LLC vs S corporation vs C corporation: Which Is Best for Your Business?

Step 6: Determine Fee Structure

The next step is to determine the fees and other charges the franchisee will incur and pay you while operating. You need to be able to decide whether you will charge your franchisees only a royalty on top-line sales, for marketing support, or just an upfront fee. This is very important, as it gives you the game plan on how you will make money in the franchise process.

In this process, you will also look at some other important criteria. Many franchise programs require an individual franchisee to have a net worth of a certain amount to qualify. This would mean their cash and assets minus any debt they may have. For example, Subway requires a franchisee to have a net worth of $80,000 to participate in their franchise program. They also require applicants to have $30,000 in liquid assets alone to be given a shot at owning and operating their own location.

It is important to note that the percentage of top-line sales requested may change by concept. For example, Taco Bell has a 5% rate for monthly fees to operate, and this is built into the contract your franchisee will sign when starting out. It is up to you to determine the rate you would like to charge, but do note higher rates may make some franchisees wary. So, a rate that financially makes you a profit but also gives the franchisee a chance to make money is what you should aim for.

Step 7: Build Out Your Financial Targets

Knowing the financial goals you will have for your franchisee leaders is key to their success and your ability to track them. The good news is that the basis of franchising restaurants is the success of your own business, so copying this over should not be too difficult of a task. But you do need to be aware of the costs of goods, the market pricing that you will have on items, and how much it will cost to operate based on that individual location and the geographical location it sits in.

With franchised restaurants, it is very common to perform restaurant audits and have monthly financial goals that involve profit and loss (P&L) . So having targets on food cost , liquor cost, labor cost , total sales, and any other important financial markers you value is essential to ensure your restaurants perform to where they need to.

You also need to have a plan on how to support your franchisee partners to hit these goals. You need to remember that some franchisee partners are joining your brand because they want support and guidance on how to build a successful restaurant. Having clear financial goals and a roadmap on how to support their ability to achieve them is key in order to find success for all parties involved.

Step 8: Market Your Franchise Availability

Letting people know that you are offering a franchise opportunity is key to attracting potential franchisees. You will also want to highlight and champion why it is such a good prospect to franchise out a piece of your business. Some of the items below I have seen in the market are examples of what you should do to make potential franchisees more interested in your brand:

• Add a franchisee information page to your website. This page will sell the reason why choosing your business model to franchise is a good decision. Take, for example, Tim Horton’s page , where the coffee giant sells the perks of franchising out a location.
• Advertise in franchise industry publications (franchise listing websites, Franchise Times , Franchising Magazine USA , etc.).
• Consider social media marketing. Targeted ads on Facebook , Instagram, and other social media sites will allow you to reach your desired demographic while spreading the word more organically. Another site to share your opportunity is LinkedIn. Consider a post on the franchise opportunity and share it within your network to get possible leads.
• Publishing a press release on your franchise opportunities is another great way to get the word out. Local newspapers and online journals can share this as well, so having a formal announcement for traditional media centers to publish is key.
• Share the word at industry nights, local culinary American Culinary Federation meetings, and other events where industry and business professionals will gather. Work on your franchise pitch and be comfortable sharing it with others in the food space.
• Learn How to Write a Press Release in 6 Steps
• Demystifying the Press Release Format (+ Free Template)

Step 9: Select Your Franchisees

Maybe one of the most important steps, if not the most important step, in franchising restaurants is finding leaders who will take the reins and help grow your brand. The people you choose to franchise your restaurant to are literal extensions of your brand. They represent your food, your image, and how your product is sold to customers and are in control when you are not around. Your vetting process for choosing who gets to franchise your restaurant needs to be one that is intentional and finds the best candidates.

First, being enthusiastic about your business and wanting to grow it is the first aspect you should look for in someone. You will want your first franchisees to also have a proven track record in restaurants and food business management, as it is these first few that will lay the groundwork for the rest of your franchise network. They should meet all capital and asset requirements that we discussed earlier, and finally, should be able to prove a track record of good business practices.

Step 10: Support & Train

Training your franchisees will allow you to get their businesses running in the quickest time possible. It will also allow you to instill the methods, practices, and philosophy you have when running your restaurant. The training for franchisees should be in-depth and offer them the ability to truly learn how to run your restaurant concept. It would be wise to have a training program laid out by the time you’ve selected your partners. This program should be able to detail their daily tasks, expectations for customer experience and end product, and how to manage higher-level tasks for the businesses they run.

You can start with support by helping with hiring and training staff and teaching your franchise partners how to vet and hire employees. You should also teach them and support them in marketing and how they can get their business out there. Helping set up systems— point-of-sale (POS) systems , audio systems, security systems, staff and customer safety systems—and ensuring their facility is in working condition is vital in this process as well. While some franchise programs do not offer this level of in-depth training, you should definitely consider it for your first few franchises.

Your goal is to replicate the dining experience that has made you so successful that you can actually begin to franchise out. Do not waste the opportunity with a lack of support, especially when franchising your first few locations.

Step 11: Monitor Your Locations

The last step in franchising your restaurant is monitoring each location for success. This can be done by requiring restaurant monthly audit reports by each franchisee, reviewing sales, and also by reviewing customer reviews. Additionally, performing in-person visits and sitting down to dine as a customer lets you see how your locations are doing.

The more effort you put in, the more you can catch, and the better you can help build out the number of franchise restaurants you have to offer. While franchising your restaurants takes the pressure of managing multiple locations, your involvement in guiding all of your franchisees is what will determine the amount of success you have overall.

Why You Should Franchise Your Restaurant

Many popular restaurant and food businesses are actually franchises; McDonalds, Subway, Coffee Bean & Tea Leaf, to name just a few. Plenty of new businesses—like Crisp & Green and Big Chicken —start franchising every year. In a franchise restaurant system, the franchisor offers up their brand and proven business model for a franchisee to use to set up their own business. The franchisor benefits from franchising fees and increasing market expansion while the franchisee benefits from starting a a business that has already proven to be successful.

A financial benefit of franchising your restaurant is that, as the franchisor, your royalty payments and franchise fees typically come from top-line sales. This means you receive your fees from the overall sales of your franchises, not the bottom-line profit; you will be paid your fees no matter how well (or poorly) the franchise is managed. Finally, if you plan on exiting your business, you’ll be able to sell a business that has the added revenue stream of franchise royalties, not just the profit margin of a traditional restaurant. The upside for franchising your restaurant is very high, and when done right, it can be financially lucrative.

Examples of Restaurant Franchise Costs

There are many examples out there of popular restaurants that have gone on to franchise and expand their brands rapidly. The common denominator is that these restaurant brands have been able to offer crave-able dining experiences that are consistent in each location, no matter how large the growth has been. Check out the real-world cost examples for these popular restaurant brands.

These are the big, recognizable brands. But every day smaller brands choose to expand via franchising. If you are considering converting your successful restaurant into a franchise business, you can look at franchise brands like Toastique or Crisp & Green for inspiration.

Pros & Cons of Franchising Restaurants

While franchising a restaurant can be lucrative, there can be some drawbacks to the process if you are not careful. It can also be a challenge if the right systems are not in place to manage the growth you will experience when franchising your restaurant. Below we share some of the pros and cons of making the decision to franchise your business.

Pro: Exponential Growth Options

The ability to grow your brand and increase your sales with the help of other food business professionals is why franchising your brand is such a popular option in the first place. One only has to look at any major national brand that employs the franchise method to see how lucrative it can be. By expanding your business at a much faster rate than you would on your own, you get to introduce your brand to more customers and create a larger customer base to sell to. This will lead to more sales and more opportunities to grow as your brand is recognized more and more.

Con: Lack Of Consistency

While this con can be avoided with the right process in place, if your consistency in great products is not there, then your brand’s image can be put in a negative light. Your business is ultimately in the hands of another. With this decision comes a risk that you need to decide to take.

If you are not able to effectively lead your franchisees into a space where they can effectively replicate the product you sold originally, then the risk of failure and alienating customers is high. It only takes one bad experience to drive a customer away, and if word gets out that the food and drink being served is not good, then customers will be wary to show up and support your brand.

Pro: Lower Cost for Brand Growth

Another great reason to franchise your restaurant is the fact that it will cost less with the funds from the franchisee that joins your program. You are relying on using some capital from the franchisee when building out the space, and they will often be responsible for a sizable amount of the cost it will take to get the business off the ground. This allows you to open up new units or locations with less of a cost barrier and can prove to be very useful if demand for your restaurant is high and you need to open more locations in a shorter time window.

Con: Large Time Investment Upfront

While the goal of franchising your restaurant concept is to relieve the workload of growing your brand, it will require a lot of time upfront. This can be a challenge for restaurant operators who are already running their own business. The process of franchising a restaurant is its own full-time job, as you can see from the steps we laid out above. To make your new locations succeed, you need to ensure they are running efficiently and delivering quality products. This takes away time from other tasks and can be a large lift for single operators who are already very busy with their original concept.

Pro: Major Profit Opportunity

The last big pro to franchising your restaurant is the fact that over time, with the right growth plan and success, you can make a large amount of profit off your restaurant brand. Not only will this come from increased exposure, but the more units you open, the more royalty fees you collect. Earning off of a set royalty fee is a much more efficient way to bring in a profit, and it also makes exiting your restaurant brand much easier if you ever decide to sell the company you have built. The long-term gains of franchising a restaurant brand can be very lucrative when done right.

Franchising a restaurant that has high demand from a local customer base is a great idea if the concept can be replicated and deliver consistently great customer experiences. That being said, there is a lot of effort that goes into franchising a restaurant and ensuring that the partners you bring in to run your concepts have the tools they need to succeed. Use the 11 steps above to understand the franchise process and what you can expect to do if you decide your business is ready to take this exciting next step in its evolution.

About the Author

Ray Delucci

Ray Delucci is a graduate of The Culinary Institute of America with a Bachelor’s in Food Business Management. He has experience managing restaurants in New York City, Houston, and Chicago. He is also the host of the Line Cook Thoughts Podcast, where he interviews and shares the stories of foodservice workers. Ray currently works in food manufacturing and food product development.

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How to Write a Restaurant Business Plan: Complete Guide

• January 31, 2023
• Food & Beverage

👇 Check all our resources on restaurants 👇

Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) to open a restaurant , you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in the business plan of your restaurant . Use this template to create a complete, clear and solid business plan that get you funded. Let’s dive in!

1. Restaurant Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it will have the summary of different sections included in the entire plan.

Why do you need a business plan for a restaurant?

The purpose of a business plan is to secure funding through one of the following channels:

• Obtain bank financing or secure a loan from other lenders (such as a SBA loan )
• Obtain private investments from investment funds, angel investors, etc.
• Obtain a public or a private grant

How to write your restaurant’s executive summary?

Provide a precise and high-level summary of every section that you have included in your business plan. The information and the data you include in this segment should grab the attention of potential investors and lenders immediately.

Also make sure that the executive summary doesn’t exceed 2 pages in total: it’s supposed to be a summary for investors and lenders who don’t have time to scroll through 40-50 pages, so keep it short and brief.

The executive summary usually consists of 5 major sub-sections:

• Business overview : start by introducing your restaurant and the products and services that you intend offer. Mention the type of restaurant you intend to open (such as fine dining, casual dining, fast casual, ghost restaurant, café, pub, etc.), the menu and prices. Also add here the total number of customers your restaurant can host at once, its location, and some details on the surface and the design layout
• Market analysis : summarise the market where you will operate and provide a brief about the target audience, market size , competitors, etc. No need to provide granular data here, save it for the Market Overview section later on (or the appendix)
• People : introduce your restaurant’s management and employee structure. Provide a brief (no more than a couple of sentences each) of the knowledge and experience of the team. Also, speak about your hiring plans.
• Financial plan : how much profit and revenue do you expect in the next 5 years? When will you reach the break-even point and start making profits? You can include here a chart depicting your key financials statements
• Funding ask : what loan/investment/grant are you seeking? How much do you need? How long will this last?

Restaurant Financial Model

Download an expert-built 5-year Excel financial model for your business plan

2. Restaurant Business Overview

This is the section where you will provide details about your restaurant and the chosen business model. You must address some important questions that lenders and/or investors generally ask .

Here is a quick list of some of those questions you must address:

• What is the rationale behind you opening this type of restaurant today?
• What’s the restaurant’s location and why did you select that location?
• Why did you select the type of restaurant you want to open?
• What will be the products and services you will offer?
• What will be your pricing strategy and why?
• What will be your opening days / hours?
• How many customers can you serve at once (capacity)?
• What is the surface of your restaurant? How is the restaurant designed (incl. dining rooms and kitchen area)?
• What will be the legal structure of your company?

a) History of the Project

Any business must have two components:

• Passion & experience of the business owner
• Rationale behind starting this type of business today

Passion & experience

You may or may not have prior experience. If you have experience, speak about it and how it will help you to run your business. For instance, you may have been a restaurant manager in a popular restaurant for 6 years, and now you want to start your own restaurant and use your knowledge to run it more efficiently.

However, if you don’t already have experience, that’s fine. You must demonstrate your passion and some industry knowledge (you may have conducted thorough research).

What is your restaurant’s mission?

For example, there may not be any fine dining restaurant in your area where wealthy residents or tourists can enjoy an upscale meal experience in a sophisticated and elegant environment.

But that’s not all: your market must be suitable for your business to thrive.

For instance, if you are planning to open a fine dining restaurant in a low-income area, it is probably not going to attract many customers. Similarly, if the population of the target market has a high percentage of people preferring takeaway/delivery food options because of their busy lifestyle, a fine dining restaurant may not be a good idea.

b) Business Model

This sub-section of the Business Overview will explain your business model. Describe the following points briefly:

• Will you buy an existing restaurant and do some remodeling, or will you start a new restaurant and design it from scratch?
• Will you buy a franchise or do you plan to open an independent restaurant instead?
• The type of restaurant you want to open and why

What are the different types of restaurants?

There are multiple types of restaurants. Some of them that you may consider include, but are not limited to:

• Fine Dining : They provide upscale meal experience with several courses. The atmosphere is sophisticated and classy. They can be franchises or individually owned. Of course, they are quite expensive.
• Casual Dining : This type of restaurants serve customers at their tables and the food prices are moderate. The atmosphere is not very sophisticated. Though the décor is often unique, it can be based on the type of food a restaurant serves.
• Fast Casual : These restaurants will make your food available quickly, but the food is healthier than fast food. Also, food is cheaper than casual dining. They have a counter service (you must collect food from the counter) and the décor is more contemporary.
• Ghost Kitchens : ghost kitchens (or “dark kitchen”) restaurants do not have a storefront, a dining room, signage, or décor. They operate using food delivery partners and take orders through online ordering or phone ordering.
• Fast Food : Think of Taco Bell , KFC, Burger King, etc. The food is relatively cheap and is served quickly. Food ingredients are usually preheated or precooked, and food delivery happens over the counter or via a drive-through window.
• Buffet Style : These restaurants are similar to the Family Style restaurants but with a fundamental difference. People get to select from a selection of food that are made available against a fixed price. However, customers need to serve themselves and they are allowed to return to the buffet for as many times as they want.

c) Products & Services

Of course, the products you will offer in your restaurant will depend on the type of restaurant you are opening. A Buffet Style restaurant, for example, usually prefer specialty cuisines like Indian, pizza, home cooking, Chinese, etc. Similarly, if you are opting for a Diner, you will most likely offer fried foods (fish & chicken), breakfast items, burgers, etc. at a low cost.

It is a good idea to give a list of food and drinks that you want to sell. Depending on the scale of your operations, you may have too many menu items. It is not possible to list every item on your menu, but make sure that you are listing the most important ones. If you specialize in one or a few specific dishes, mention that, too.

d) Pricing Strategy

In this sub-section, you must explain the pricing strategy of your restaurant. If you have multiple competitors (in the same niche) in the vicinity, you cannot have huge pricing variation, especially for the similar food items. Pricing will, of course, depend on the type of restaurant you are opening, and the food items you are offering.

For example, if you are sourcing the raw materials only from organic farms that do not use fertilizers and pesticides, your menu items will have a higher price tag.

Similarly, you cannot expect to charge expensive Fine Dining-like prices if you are opening a Casual Dining restaurant instead.

Create a pricing table and ensure to provide an average price range for your products. You don’t need to provide exact pricing for each product. Use price ranges instead.

Offering a pricing table is important because your pricing strategy will allow investors to tie your pricing strategy with your financial projections .

e) Legal Structure

Finally, your business overview section should specify what type of business structure you want. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?

3. Restaurant Market Overview

A complete understanding of the market where you want to operate is important for the success of your business.

For example, if your intentions are to open a classy Fine Dining restaurant in a low-income area, you will not attract enough customers. Similarly, if you want to open a fast-food restaurant in a place where family dining is more popular, it will be a disaster.

Therefore, you must cover here 3 important areas:

• Market size & growth : how big is the restaurant industry in your area? What is its growth rate (or decline rate) and what are the factors contributing to its growth or decline?
• Competition overview : how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?
• Customer analysis : who is your target audience? What type of restaurants do they prefer? How regularly do they visit restaurants for dining? What type of food do they prefer? How much do they spend at restaurants on average?

a) Restaurant Industry Status Quo

How big is the restaurant industry in the us.

According to Finance Online , there were over 1 million restaurants (all types combined) in the US in 2021. The industry recovered post a 60% drop in sales in April 2020 due to the pandemic, and recorded an annualised market size of over $1 trillion dollars in July 2022 ($1,033 billion)..!

How big is the restaurant industry in your area?

Once you provide the overall picture of the US, divert your attention to the area where you want to operate. It might not be possible to find region or area-specific studies, and hence, you must estimate the market size .

For example, if there are 1,000,000 restaurants in the country with total annual revenue of $1 trillion, the average annual revenue for each establishment is around $1 million.

Therefore, if the area where you want to open your restaurant has 30 restaurants, you can safely assume that the restaurant industry in your area is worth approximately $30 million.

How fast is the restaurant industry growing in the area?

You must show the expected growth rate of the restaurant industry in your area. This information may not be available via online research papers. However, assessing the growth rate will not be difficult as you can use metrics such as the number of competitors in your area.

For instance, if there were 25 restaurants in 2018 and 30 restaurants in 2022, the average annual growth rate would be 5%.

What are the current restaurant market trends in your area?

It is vital to understand the trends of the restaurant industry in your area. Understanding trends will allow you to devise marketing strategies.

Understanding trends won’t be easy. You must conduct research and talk with your target audience. Additionally, you must also study your competitors to understand their target audience, the products they sell, etc.

Some common questions you may ask the target audience include:

• What type of restaurants do they prefer?
• At what time of the day do they prefer to visit a restaurant (breakfast, lunch, dinner)?
• How frequently do they visit restaurants?
• What type of foods do they usually order?

You can ask as many questions as you need to understand the evolving trends.

b) Competition Overview

Studying your competitors’ business models is vital. You need to understand what makes them successful or why they fail. A clear understanding of their food offerings, marketing strategies, etc., will allow you to provide a better service.

If your competitors are offering nearly the same products & services, then what is their market share and how do they market their products & services to attract new customers?

It is always a good idea to do some research (if necessary, physically visit your competitors without revealing your business intentions) and create a comparative table summarizing their product & service offerings, marketing strategies, target audience, etc.

Here is a sample table that you can use:

The table you will create will depend on what information you need and want to include based on your proposed business model.

Restaurant SWOT Analysis

Try to provide a SWOT analysis . It must be crisp and highly focused. SWOT stands for Strength, Weakness, Opportunities, and Threats.

Here is a sample that you can use as a reference:

• Strength: 8 years of senior manager experience in a reputed Michelin Star Fine Dining restaurant operated & owned by a renowned chef and a master’s degree in Hospitality management, experienced senior chef with 22 years of experience
• Weakness: Startup cost, zero reputation
• Opportunities: An affluent neighborhood with a rising demand for fine dining establishments, only one fine dining restaurant in the 3-mile radius
• Threats: Increasing cost of raw materials because of geo-political turmoil restricting international trade routes

A clear understanding of your strengths and weakness along with opportunities and threats in the real market can help you to design your marketing strategy. It also helps potential investors to assess the risk and reward profile of your business.

c) Customer Analysis

This is the sub-section where you will provide a detailed analysis of your target audience.

Some important points that you must include in your customer analysis include:

• Age and gender distribution (you can get local demographic data from census.gov )
• Per capita expenditure on dining
• Frequency of restaurant visits
• Average monthly income and disposable income
• Average bill size per visit
• Average yearly or monthly spending on food at restaurants
• Type of restaurants preferred
• The expected price range for food
• Inclination towards loyalty programs & free perks
• Things they dislike about existing restaurants and what they expect to be improved

You can add as many data points as required to validate your business decision. The idea here is to display your deep understanding of the target audience and their needs, preferences, and expectations. This knowledge can help you to tailor your products & services to attract new customers and increase sales .

4. Sales & Marketing Strategy

This is the segment where you outline your customer acquisition strategy. Try to answer the following questions:

• What is your USP ?
• What are the different marketing strategies you will use?
• How do you intend to track the success of your marketing strategy?
• What is your CAC or customer acquisition cost ?
• What is your marketing budget?
• What introductory promos and offers do you intend to provide for attracting new customers?

Let’s expand a bit on a few questions below:

What marketing channels do restaurants use?

A few marketing channels that restaurants typically use are:

• Word-of-mouth, recommendations,
• Local listing & reviews (e.g. Google reviews)
• Online booking platforms (e.g. TheFork , Opentable , etc.)
• Influencer marketing
• Print media, etc.

It is not necessary to use all channels. You can start by focusing on a few of them and include other marketing strategies later instead.

What is your unique selling proposition?

In other words, how do you differentiate yourself vs. competitors? This is very important as you might need to win customers from competitors.

A few examples of USPs can be:

• Organic raw materials : we source organic farm fresh raw materials from local farmers
• Authentic Indian food : prepared by a Michelin Star chef from India
• Family run restaurant : run by a family, helping families connect over delicious food
• Price : affordable food & menu for the quality vs. competitors
• Location : the restaurant is located in a busy street, thereby attracting many customers who can easily glance over the menu
• Uniqueness : you may be the only tapas-style restaurant around, in an area where people are fond of this type of restaurant

5. Management & People

You must address 2 things here:

• The management team and their experience / track record
• The organizational structure : different team members and who reports to whom?

a) Management

Small businesses often fail because of managerial weaknesses. Thus, having a strong management team is vital. Highlight the experience and education of senior managers that you intend to hire to oversee your restaurant business.

Describe their duties, responsibilities, and roles. Also, highlight their previous experience and explain how they succeeded in their previous roles.

It is also important that you explain how their experiences and qualifications help you in implementing the restaurant you are proposing. If they have specialized training, achievement, and experience (such as a degree in hospitality management, 3 Michelin stars, experience in developing menus for 5-star hotels, etc.), add that information.

b) Organization Structure

Even if you haven’t already hired a restaurant manager, server, chef, head cook, busser, cashier, bartenders, and other relevant staff members, you must provide here a chart of the organizational structure defining the hierarchy of reporting.

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan for a restaurant.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your restaurant is an attractive investment.

There should be 2 sections to your financial plan section:

• The startup costs of your project (if you plan to start a new restaurant, renovate your restaurant, etc.)
• The 5-year financial projections

a) Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your restaurant . For a restaurant, startup costs are all the expenses you incur before you open your restaurant and start making sales . These expenses typically are:

• The leasing deposit for the space (if you rent) or to buy the real estate (if you buy)
• Renovations and improvements
• Equipment & appliances
• Furniture & tableware

Of course, the startup costs depend on a number of factors, like the size of your restaurant, its location, the facilities, the menu, etc.

On average, it costs $484,000 to $685,000 to open a casual restaurant with 150 seats (2,500 sq. ft.) in the US.

Note that these costs are for illustrative purposes and may not be fully relevant for your business. For more information on how much it costs to open and run a restaurant, read our article here .

b) Financial Projections

In addition to startup costs, you will now need to build a solid 5-year financial model for your restaurant.

Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in the business plan of your restaurant.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

• How much revenue do you expect to generate over the next 5 years?
• When do you expect to break even ?
• How much cash will you burn until you get there?
• What’s the impact of a change in pricing (say 15%) on your margins?
• What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

• The number of covers (customers or orders) over time ;
• Your expected revenue ;
• Operating costs to run the business ;
• Any other cash flow items (e.g. capex, debt repayment, etc.).

When projecting your revenue, make sure to sensitize pricing, cost of raw materials (food supplies) and your sales volume. Indeed, a small change in these assumptions may have a significant impact on your revenues and profits.

7. Use of Funds

This is the last section of the business plan of your restaurant. Now that we have explained what your restaurant’s business model and concept are, what is your menu, your marketing strategy, etc., this section must now answer the following questions:

• How much funding do you need ?
• What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
• How long will this funding last?
• Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

If you raise debt:

• What percentage of the total funding the loan represents?
• What is the corresponding Debt Service Coverage Ratio ?

If you raise equity

• What percentage ownership are you selling as part of this funding round?
• What is the corresponding valuation of your business?

Use of Funds

Any restaurant business plan should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment in paying your employees’ salaries? Or will it cover mostly the cost for the lease deposit and the renovation?

Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our restaurant financial model template , you won’t have any issues answering these questions.

For the use of funds, we also recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.

Privacy Overview

Restaurant Business Plan Template

Written by Dave Lavinsky

Restaurant Business Plan

You’ve come to the right place to create your restaurant business plan.

We have helped over 100,000 entrepreneurs and business owners with how to write a restaurant business plan to help them start or grow their restaurants.

Below is a restaurant business plan template to help you create each section of your business plan.

Restaurant Business Plan Example

Executive summary, business overview.

Bluehorn Restaurant & Steakhouse is a new restaurant and steakhouse located in Oklahoma City, Oklahoma. The menu of Bluehorn Restaurant & Steakhouse will include bistro-type dishes that are authentically created and crafted by acclaimed Chef Peter Logan. It will be located in the trendy part of town, known as the Plaza District. The restaurant will be surrounded by classy art galleries, live theater, high-end restaurants and bars, and expensive shopping.

Owned by emerging restaurant operators Chef Peter Logan and Anastasia Gillette, Bluehorn Restaurant & Steakhouse’s mission is to become Oklahoma City’s best, new restaurant for patrons to celebrate their next big event, have a nice date night, or gather with friends or family for a fun evening while dining over finely crafted entrees, desserts, and cocktails.

Products Served

The following are the menu items to be offered by Bluehorn Restaurant & Steakhouse:

• Soups & Salads
• Gourmet sides
• Wine, Beer & Spirits

Customer Focus

Bluehorn Restaurant & Steakhouse will target adult men and women between the ages of 21 – 65 with disposable income in Oklahoma City, Oklahoma. Within this demographic are millennials, young professionals, newlyweds, young families, more established families, and retirees. Because of the pricing structure of the menu, the patrons will likely be upper middle class to the wealthy population of Oklahoma City.

Management Team

Bluehorn Restaurant & Steakhouse is owned and operated by fellow Oklahoma City natives and culinary enthusiasts, Chef Peter Logan and Anastasia Gillette. Both come with a unique skill set and complement each other perfectly. They formerly worked together at another OKC fine dining establishment and made a great team for serving guests delectable food and wine while ensuring the highest level of customer service.

Chef Peter will manage the kitchen operations of Bluehorn Restaurant & Steakhouse, while Anastasia will oversee front of the house operations, maintain and ensure customer service, and manage all reservations.

Financial Highlights

Bluehorn Restaurant & Steakhouse is seeking $300,000 in debt financing to open its start-up restaurant. The funding will be dedicated for the build-out and design of the restaurant, kitchen, bar and lounge, as well as cooking supplies and equipment, working capital, three months worth of payroll expenses and opening inventory. The breakout of the funding is below:

• Restaurant Build-Out and Design – $100,000
• Kitchen supplies and equipment – $100,000
• Opening inventory – $25,000
• Working capital (to include 3 months of overhead expenses) – $25,000
• Marketing (advertising agency) – $25,000
• Accounting firm (3 months worth and establishment/permitting of business) – $25,000

Company Overview

Bluehorn Restaurant & Steakhouse is a new restaurant and steakhouse located in Oklahoma City, Oklahoma. Bluehorn Restaurant & Steakhouse will serve a wide variety of dishes and beverages and will cater to the upper middle class to wealthier population of Oklahoma City. The menu of Bluehorn Restaurant & Steakhouse will include bistro-type dishes that are authentically created and crafted by acclaimed Chef Peter Logan. It will be located in the trendy part of town, known as the Plaza District. The Plaza District is one of Oklahoma’s trendy neighborhoods and is considered the “it” area for newlyweds, millennials, professionals, and young singles. The restaurant will be surrounded by classy art galleries, live theater, high-end restaurants and bars, and expensive shopping.

Owned by emerging restaurant operators Chef Peter Logan and Anastasia Gillette, the restaurant’s mission statement is to become the best new steak restaurant in OKC. The following are the types of menu items Bluehorn Restaurant & Steakhouse will serve- shareables, steaks, soups, gourmet sides and salads.

Bluehorn Restaurant & Steakhouse History

Bluehorn Restaurant & Steakhouse is owned by two Oklahoma City natives, Chef Peter Logan and Anastasia Gillette. They have both worked around the country in fine dining establishments and have a combined twenty years in the restaurant industry. Upon working alongside each other at another fine dining establishment in Oklahoma City, the two of them became good friends and decided to venture into owning their own restaurant.

Chef Peter is the kitchen guru and critically acclaimed chef, while Anastasia manages the front of the house and is a certified Sommelier. Together, with both of their expertise and knowledge, Bluehorn Restaurant & Steakhouse is destined to become Oklahoma City’s next big restaurant.

Industry Analysis

The Restaurant industry is expected to grow to over $220 billion in the next five years.

Consumer spending is projected to grow. The Consumer Confidence Index, a leading indicator of spending patterns, is expected to also grow strongly, which will boost restaurant industry growth over the next five years. The growth in consumer confidence also suggests that more consumers may opt to segment their disposable income to eating outside the home.

Additionally, an increase in the number of households earning more than $100,000 annually further contributes to the industry growth, supporting industry operators that offer more niche, higher-end products.  This group is expected to continue to grow in size over the next five years.

The urban population represents a large market for the industry. Specifically, time-strapped individuals living in urban areas will likely frequent industry establishments to save time on cooking. The urban population is expected to increase, representing a potential opportunity for the industry.

Customer Analysis

Demographic profile of target market, customer segmentation.

Bluehorn Restaurant & Steakhouse will primarily target the following customer profile:

• Upper middle class to wealthier population
• Millennials
• Young professionals
• Households with an average income of at least $75k
• Foodies and culture enthusiasts

Competitive Analysis

Direct and indirect competitors.

Bluehorn Restaurant & Steakhouse will be competing with other restaurants in Oklahoma City. A profile of each competitor is below. The Press Located in the trendy area known as the Plaza District, The Press has reimagined our favorite foods of the surrounding regions through the lens of home.

The menu consists of appetizers, soups, burgers and sandwiches, bowls, main dishes, sides, desserts, and a large selection of alcoholic beverages. The Press serves craft beer, domestic beer, wine spritzers, house cocktails, wine, and mimosas. They also offer brunch. The menu of The Press is affordable with the most expensive dish being $16. The wine menu is also not pretentious as the wine is sold either by the glass or bottle, with the most expensive bottle being $52 for the Gruet Sparkling Brut Rose. Oak & Ore Oak & Ore is a craft beer and restaurant in OKC’s Plaza District. They have a 36-tap beer selection and offer vegetarian, vegan, and gluten free dining options. Oak & Ore offers a rotating, 36-tap selection of their favorite brews from Oklahoma and around the world. Each beer is thoughtfully paired with a craft beer-inspired dining experience.

The food menu of Oak & Ore offers starters, salads, wings, fried chicken, sandwiches, tacos, banh mi, and sides. They also have a selection of kids dishes so the whole family can enjoy comfort food while sampling one of their delectable beers.

The Mule OKC The Mule is a casual, hip restaurant offering a large beer and cocktail menu plus sandwiches and more. Located in the constantly growing and buzzing hub that is the Plaza District, The Mule takes the timeless favorite and contorts it into a whole menu of wild offerings.

There is also a fantastic assortment of soups offered and The Mule shakes up a seasonal list of cocktails designed by their bar staff. During the winter months, patrons can stave off the cold with their versions of hot toddies and buttered rum. For the beer drinkers, they always have a reliable line-up of fresh cold brews on draft, as well as a wide selection of can.

Competitive Advantage

Bluehorn Restaurant & Steakhouse offers several advantages over its competition. Those advantages are:

• Gourmet dishes elegantly prepared to the finest standard.
• Selection of steaks sourced from local Oklahoma farms.
• An exclusive and unique wine menu that includes a wine selection of all price points.
• Highly sought after location: Bluehorn Restaurant & Steakhouse will be located in the trendy and attractive neighborhood known as The Plaza District.
• Trendy, welcoming, and energetic ambiance that will be perfect for a night out or a celebration.

Marketing Plan

Promotions strategy.

The marketing strategy for Bluehorn Restaurant & Steakhouse is as follows: Location Bluehorn Restaurant & Steakhouse’s location is a promotions strategy in itself. The Plaza District is a destination spot for locals, tourists, and anyone looking for the trendiest food fare in Oklahoma City. The Plaza District is home to OKC’s most popular bars and restaurants, art galleries, theaters, and boutique shopping. The millennials, young professionals, and foodies will frequent Bluehorn Restaurant & Steakhouse for the location itself.

Social Media Bluehorn Restaurant & Steakhouse will use social media to cater to the millennials and Oklahoma City residents. Chef Peter and Anastasia plan to hire an advertising agency to take professional photographs of the menu items and location to create appealing posts to reach a greater audience. The posts will include pictures of the menu items, as well as upcoming featured options. SEO Website Marketing Bluehorn Restaurant & Steakhouse plans to invest funds into maintaining a strong SEO presence on search engines like Google and Bing. When a person types in “local fine dining restaurant” or “Oklahoma City restaurant”, Bluehorn Restaurant & Steakhouse will appear in the top three choices. The website will include the full menu, location, hours, and lots of pictures of the food, drinks, and steaks. Third Party Delivery Sites Bluehorn Restaurant & Steakhouse will maintain a presence on sites like GrubHub, Uber Eats, Doordash, and Postmates so that people looking for local food to be delivered will see Bluehorn Restaurant & Steakhouse listed near the top.

Operations Plan

Operation functions:.

The company will hire the following:

• 4 sous chefs
• 2 bartenders
• 2 hostesses
• The company will hire an advertising agency and an accounting firm

Milestones:

Bluehorn Restaurant & Steakhouse aims to open in the next 6 months. The following are the milestones needed in order to obtain this goal.

7/1/202X – Execute lease for prime location in the Plaza District.

7/2/202X – Begin construction of restaurant build-out.

7/10/202X – Finalize menu.

7/17/202X – Hire advertising company to begin developing marketing efforts.

8/15/202X – Start of marketing campaign

8/22/202X – Final walk-thru of completed restaurant build-out.

8/25/202X – Hire team of sous chefs, servers, and bussers.

9/1/202X – Decoration and set up of restaurant.

9/15/202X – Grand Opening of Bluehorn Restaurant & Steakhouse

Bluehorn Restaurant & Steakhouse will be owned and operated by Chef Peter Logan and Anastasia Gillette. Each will have a 50% ownership stake in the restaurant.

Chef Peter Logan, Co-Owner

Chef Peter Logan is an Oklahoma City native and has been in the restaurant industry for over ten years. He was trained in a prestigious Le Cordon Bleu Culinary Academy in San Francisco and has worked in some of the nation’s most prestigious fine dining restaurants. His tenure has took him from the west coast to the east coast, and now he’s back doing what he loves in his hometown of Oklahoma City.

Chef Peter will manage the kitchen operations of Bluehorn Restaurant & Steakhouse. He will train and oversee the sous chefs, manage inventory, place food inventory orders, deal with the local food vendors, and ensure the highest customer satisfaction with the food.

Anastasia Gillette, Co-Owner

Anastasia Gillette was born and raised in Oklahoma City and has garnered over ten years in the restaurant industry as well. While in college, Anastasia worked as a hostess at one of the area’s most prestigious restaurant establishments. While there, she was eventually promoted to Front of the House Manager where she oversaw the hostesses, servers, bussers, bartenders, and reservations. Her passion always led to the beverage portion of the restaurant so she obtained her Sommelier certificate in 2019. With her wine education, Anastasia is able to cultivate an interesting and elegant wine selection for the restaurant.

Anastasia will oversee front of the house operations, maintain and ensure customer service, and manage all reservations. She will also be in charge of the bar and wine ordering, training of front of the house staff, and will manage the restaurant’s social media accounts once they are set up.

Financial Plan

Key revenue & costs.

The revenue drivers for Bluehorn Restaurant & Steakhouse will come from the food and drink menu items being offered daily.

The cost drivers will be the ingredients and products needed to make the menu items as well as the cooking materials. A significant cost driver is the fine dining equipment, serving dishes, and beer and wine glasses. Other cost drivers will be the overhead expenses of payroll for the employees, accounting firm, and cost of the advertising agency.

Funding Requirements and Use of Funds

Bluehorn Restaurant & Steakhouse is seeking $300,000 in debt financing to open its start-up restaurant. The breakout of the funding is below:

Financial Projections

Income Statement

  Balance Sheet

  Cash Flow Statement

Restaurant Business Plan FAQs

What is a restaurant business plan.

A restaurant business plan is a plan to start and/or grow your restaurant business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can  easily complete your restaurant business plan using our Restaurant Business Plan Template here .

What Are the Main Types of Restaurants?

There are many types of restaurant businesses. Restaurants can range in type from fast food, fast casual, moderate casual, fine dining, and bar and restaurant types. Restaurants also come in a variety of different ethnic or themed categories, such as Mexican restaurants, Asian restaurants, American, etc.  Some restaurants also go mobile and have food trucks.

How Do You Get Funding for Your Restaurant Business Plan?

Restaurant businesses are most likely to receive funding from banks. Typically you will find a local bank and present your business plan to them. Another option for a restaurant business is to obtain a small business loan. SBA loans are a popular option as they offer longer loan terms with lower interest rates.

What are the Steps To Start a Restaurant Business?

1. Develop A Restaurant Business Plan - The first step in starting a business is to create a detailed restaurant business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your restaurant business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your restaurant business is in compliance with local laws.

3. Register Your Restaurant Business - Once you have chosen a legal structure, the next step is to register your restaurant business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your restaurant business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Restaurant Equipment & Supplies - In order to start your restaurant business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your restaurant business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful restaurant business:

• How to Start a Restaurant Business

Where Can I Get a Restaurant Business Plan PDF?

You can download our free restaurant business plan template PDF here . This is a sample restaurant business plan template you can use in PDF format.

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10 Top Restaurant Franchise Opportunities

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

If you want to start a restaurant and are interested in franchising rather than building a brand from the ground up, there are a variety of flavors, brands, and styles to explore.

In this guide, we’re listing some of the top restaurant franchise opportunities to consider.

1. Panera Bread

Panera Bread’s humble roots began in 1980 when they opened a single 400-square-foot cookie store in Boston, Massachusetts. Since then, they have expanded to over 2,300 bakery-cafes across the United States and Canada. Panera Bread has developed a loyal customer base with its freshly baked cookies and pastries, delicious salads, and hearty soups.

More than food, Panera Bread is dedicated to delivering a dining experience. They want guests to feel like they’re choosing a healthier lifestyle when they chow down on their antibiotic-free chicken and zero-trans-fat selections. They also want guests to linger and chat or read next to their built-in fireplaces and free WiFi.

If you’re interested in franchising with Panera Bread, you’ll need to meet certain requirements. First, Panera Bread does not sell single-unit franchises. Rather, they require their franchisees to open multiple locations, usually 15 bakery cafes within six years.

Also, interested franchisees should expect to have a net worth of at least $7.5 million and $3 million in liquid assets. Since franchisees are expected to open multiple units, they encourage entrepreneurs with a track history of success and aggressive marketing experience to apply. If you fit what they’re looking for, visit their website to inquire further.

How much do you need?

with Fundera by NerdWallet

We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

2. Fuddruckers

Fuddruckers was founded in 1980 in San Antonio, Texas, and their goal is to deliver an irresistibly delicious burger. This single-minded goal has paved the way for them to deliver an extensive burger chain that reaches North, Central, and South America.

Moreover, Fuddruckers has earned some impressive rewards, including 2010: Better Burger in R&I Magazine Menu Trends and making the Franchise Times Top 200 list.

Fuddruckers is currently looking for entrepreneurs to open multiple locations. Franchisees should have a net worth between $750,000 and $1 million before applying to become a franchisee. Depending on the site and size of your restaurant, the total investment ranges between $490,000 to $1.56 million. To learn more about franchising, visit their website.

3. PITA Mediterranean Street Food

If you’re looking to open a restaurant franchise with a Mediterranean focus, consider PITA Mediterranean Street Food. Founded in 2012, this chain has been expanding its locations in California, Georgia, South Carolina, and more.

PITA Mediterranean Street Food is dedicated to serving delicious and authentic Mediterranean food to its customers. Their handmade falafels, shawarma, and gyros keep hungry customers coming back for more.

If you choose to franchise with PITA Mediterranean Street Food, you’ll enjoy extensive franchisee support. Their team will help you choose the right location and will even assist with the architectural design. Moreover, their training program in management and operating POS systems help you learn the ins and outs of how to run a smooth business.

PITA Mediterranean Street Food requires their franchisees to have at least $100,000 in liquid assets and a net worth of $300,000. Depending on your location, the total investment (including a $35,000 initial franchise fee per location) can range from $175,000 to $350,000, making the cost significantly lower than other restaurant franchisees. If you’re ready to bring delicious Mediterranean food to your customers, apply to be a franchisee through their website.

4. Johnny Rockets

Johnny Rockets opened their first restaurant in 1986 in Los Angeles, California, and has since expanded its reach to 25 countries. This franchise doesn’t reinvent the wheel or serve up the newest trends. Instead, they capitalize on what works—a timeless all-American brand that serves classic burgers and hand-spun milkshakes.

Johnny Rockets has changed its infrastructure throughout the years, offering different ways to create a diner experience. Their Johnny Rockets Drive-Thru is excellent for customers who want to satisfy their burger and shake craving on the go. Their Johnny Rockets Express locations are larger locations often found in malls and airports. Finally, their Johnny Rockets Kiosks are compact enough to serve customers in high-traffic areas, like amusement parks.

Depending on the type of location you’re looking to open, you can expect a total investment of $650,500 to $1,098,500. The initial franchise fee is $49,000, and you should have at least $1 million in liquid capital. If you’re ready to partner with this beloved brand, you can complete a Consideration Request on their website.

5. The Melting Pot

The Melting Pot creates a unique dining experience with its fondue-style cooking. Their first location opened in 1975 in Florida, offering only cheese, beef, and chocolate fondue. Brothers Mark and Bob Johnston discovered the potential of this little restaurant, and in 1985, they purchased the brand to begin The Melting Pot Restaurants, Inc. franchise. The Melting Pot’s menu has evolved with its rapid expansion. From artisan cheeses to delicious meat cuts to dessert dipping sauces, guests enjoy a full-course meal—fondue-style.

The initial franchise fee to open your own location costs $20,000. The total investment cost can range from $1,391,820 to $1,774,210, making this restaurant franchise on the pricier side. To learn more about the various investment costs and to become a franchisee, you can check out their website.

6. Another Broken Egg

Another Broken Egg’s story started in 1966 when founder Ron Green opened the first “Broken Egg Cafe” in Louisiana. The astoundingly positive response from the local community encouraged him to open a second restaurant in Florida: Another Broken Egg Cafe. Since then, this franchise has opened more than 69 cafes and has made the Top 500 Growth Franchises three years in a row. Plus, Another Broken Egg attracts many tourists, earning it a spot on Trip Advisor’s Top 10 Best Restaurant Chains in America 2018.

Their menu is one reason why customers return to this cafe. Another Broken Egg serves your traditional breakfast items—pancakes, omelets, etc.—but also caters to the more adventurous foodies with crab cake benedict and chilaquiles. Guests can also enjoy a Bloody Mary or mimosa with their breakfast, creating a bubbly breakfast experience.

If Another Broken Egg has piqued your interest, here’s what you need to know about becoming a franchisee: A $50,000 franchise fee applies for your first cafe and drops to $35,000 for any subsequent locations opened. After you sign your franchise agreement, you will pay a 5% royalty fee, a 1% advertising fund, and a 2% local store marketing fee. For more information, visit their website to submit an inquiry.

7. Gyu-Kaku Japanese BBQ

“Gyu-Kaku” translates into “Horns of the Bull” in Japanese, which testifies to this franchise’s unique and edgy restaurant experience. Gyu-Kaku Japanese BBQ is one of the largest restaurant chains in Japan and is expanding to the United States.

Gyu-Kaku creates an immersive dining experience—the guests are also the chefs. Customers request cuts of beef, pork, and seafood and cook them on their in-table smokeless grills. This interactive dining experience breaks the mold of your typical restaurant and is one of the reasons this restaurant franchise has grown to over 650 locations worldwide.

Franchisees should have a net worth of $1,000,000 and at least $500,000 in liquid capital before applying. The total investment to open your own Gyu-Kaku Japanese BBQ ranges from $781,793 to $2,110,500 and charges a franchise fee of $50,000. To learn more about applying to become a franchisee, visit their website.

8. Quaker Steak & Lube

The Quaker Steak & Lube franchise was founded in 1974 and is the original motor-themed restaurant of Sharon, Pennsylvania. For 40 years, they have been serving bone-in wings, nachos, burgers, and more to their hungry customers. Keeping in theme with the Quaker Steak & Lube brand, their locations feature motorsports-themed decor: gas station memorabilia and even race cars hanging from the ceiling. Quaker Steak & Lube also holds special events such as bike nights, car meets, and more.

When franchising with Quaker Steak & Lube, expect to receive tons of support. Their site modeling tools reveal market hot spots that help you choose your location. For two weeks, you will receive a full support team of 14 franchise experts who will help you customize your marketing strategy, prepare for a smooth grand opening, and teach you how to run a successful restaurant.

If Quaker Steak & Lube aligns with your interests, keep the following financial requirements in mind. Franchisees should have $500,000 to $1 million in liquid capital, depending on if you want to open a single location or develop multiple units. They charge a franchise fee of $40,000 and a development fee of $20,000 per unit. The total investment can range between $463,500 to $3.57 million, making this franchise one of the more costly investments. You can check out their website to find out more about franchising.

Wow Bao was founded in 2003 and is a great franchise opportunity if you have a love of Asian flavors and baos. If you’re unsure what a bao is, it’s a “soft, fluffy dough filled with savory or sweet flavors and steamed.” In addition to baos, Wow Bao serves other fast Asian street food, including potstickers, dumplings, and soups.

Wow Bao’s locations are concentrated in the Midwest and East Coast, and they also sell their bao and potstickers in grocery stores to be cooked and served at home.

If you want a franchise that focuses on tasty Asian flavors, here are a few things to know about becoming a franchisee. Wow Bao does not offer any single unit franchises—franchisees must apply with at least a three-unit commitment. On their website, they recommend that you have a company net worth of at least $6 million, as well as real estate experience. They don’t offer many other specifics, such as a total investment estimate or franchise fee, so be sure to inquire through their website.

10. Saladworks

Saladworks was founded in 1986 by John Scardapane and has expanded to over 80 locations in New Jersey, Virginia, Texas, and more. Saladworks focuses on offering a healthier alternative to traditional fast food and burger joints with their king salads, sandwiches, and pinwheel wraps. As more people aim to eat more nutritious foods, even on the go, Saladworks is a franchise that can capitalize on this movement.

If you want to open your own Saladworks location, you can expect a total investment ranging from $163,724 to $452,292. You should have at least $100,000 in liquid capital. To learn more about franchising with Saladworks, submit an inquiry form on their website.

Start Your Dream Business

Final thoughts

Joining a franchise is an excellent option for entrepreneurs who want to follow a proven business plan and gain access to a team of business experts. When opening your own restaurant franchise, you enter an industry that enjoys year-round demand and is relatively recession-resistant. Of course, there are both advantages and disadvantages to consider. Starting a restaurant franchise often demands a significant investment in the form of franchise fees. Luckily, you don’t have to come up with all that capital on your own. There are several franchise financing options to help you fund this business endeavor.

Restaurants are only one type of franchise you can purchase. If you’re interested in exploring franchise opportunities that require fewer upfront costs, read our recommendations for the best low-cost franchises .

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

On a similar note...

• Business Plans Handbook
• Business Plans - Volume 02
• Restaurant Franchise Business Plan

Restaurant Franchise

BUSINESS PLAN

STEPHENSON'S, INC., dba REUBEN'S DELI

413 S. Kraut Ln. Akron, OH 43905

Stephenson's, Inc. operates Reuben's Deli, a franchise delicatessen. This business plan features a discussion of factors unique to a franchise, such as the history of its performance in other areas, the applicability of the concept in the new area, special trademark and image issues, and the advantages of a franchise as opposed to an independently-owned restaurant.

RISK FACTORS

Company status, proprietary features, community benefits, the product, competition, planned development, sales and advertising programs, management duties and responsibilities, financial estimates, the company.

Stephenson's, Inc. was formed as a Delaware Corporation in July of 1995. The Company was formed to establish operating Reuben's Deli restaurants in Akron, OH. The Company will develop this concept, which currently has a time-tested, proven market acceptance of its food and beverage group(s). In addition to other considerations, the Company in its evaluations elected to execute this concept based upon the simplicity of the concept overall, the training by the Franchisor, the support offered by the local area developer group, and the ease and costs of entry and the likelihood of success at the store level under the various market conditions and environments. Initial efforts in this development shall be primarily focused upon the commitment and execution of an initial Reuben's Restaurant located in the Akron, OH area. It is the intention of the company to establish its headquarters in Akron, OH during its first year of operation.

Company History

Stephenson's, Inc. was co-founded by Caren and Eddie Stephenson. Mrs. Stephenson acts as President and Mr. Stephenson acts as Executive Vice President. Both are Directors of the Company. The Company is a start-up situation, however, and it should be recognized that it also represents an extension of a successful 23 year-old chain of more than 400 operating restaurants. Further, the company will have very effective guidance provided by the local Area Developers who will be working day to day with the Company to help insure its success. The Area Developers are Mr. Wilson and Mr. Jones. Mr. Wilson has extensive experience in the food and beverage industry. Mr. Wilson was formerly with Wendy's International Inc. of Columbus, OH and worked for its chairman Mr. Dave Thomas for over five (5) years. He was also Co-Founder and President of Calibre Inc., a publicly held company in the business of building and operating various restaurant concepts. These concepts include Chuck E. Cheese Pizza Time Theaters, RAX Restaurants, and G.D. Ritzy's. In addition, Mr. Wilson began his restaurant career with his family as they owned and operated one of the first Kentucky Fried Chicken restaurants and a full-service family restaurant known as Wilson's Drive-In located in Lima, OH. Mr. Jones has over 15 years' experience in developing startup and ongoing businesses. Mr. Jones has worked closely with successful entrepreneurs, including the nationally recognized billionaire and insurance magnate Clement Stone; America's leading real estate educator and author, Dr. Albert J. Lowry; and others, including Charles J. Givens, ZigZiglar, and Mr. Bob Harrington (Chaplin of Bourbon Street). Mr. Jones spent six years doing national platform speaking engagements on investment strategies, business management, and motivational topics. He has extensive experience in formulating and executing start-up businesses for others as well as himself. He has spent the past eight years involved with law firms specializing in tax planning strategies to high net worth individuals and clients of these law firms. Additionally, Mr. Jones taught attorneys and CPAs methods of tax and estate planning with the use of both domestic and off-shore trusts.

Company Objectives

The Company's first priority is to establish its first operating Reuben's Deli restaurant. Prior to opening the first restaurant, the principals shall obtain complete training from both the parent company, Reuben's Inc. of Boise, Idaho, and the local Area Developer, Yukon, Inc. Second, it will continue to pursue sites for the future development of subsequent restaurants. The Company has entered into an Agreement with Reuben's Inc. to build and develop additional franchise units.

It is the long-term objective of the Company to obtain adequate financing for the project, identify sites, and develop successful Reuben's Deli restaurants. The selection of this specific concept was made as a result of the likelihood of success in a new business venture of this type. Significant risks that are usually inherent in start-up businesses are reasonably mitigated as a result of Reuben's history and track record. Reuben's Inc. has developed a 24-year track record of success and profitability with over 400 operating franchises. The Company believes that the timing of this sector of the food market is most desirable. Food industry experts agree that a specialty sandwich with unique flavors offered at competitive prices will be the fastest growing segment for the next ten (10) years. However, in all events, there are certain risks that need to be addressed appropriately since the Company is directly competing for transactions with other existing restaurant chains as well as independent operations.

Operating History

Stephenson's, Inc. is in its first year of operation. It has located and established its headquarters in Akron, OH. The Company has submitted a lease proposal on a site located at_____________________. Further consideration is under evaluation for a site in___________, OH. It is anticipated that construction and completion of the initial company store shall be not later than_______________. Stephenson's, Inc. will expedite additional efforts during 1995 and into 1996 to build and operate additional company-owned stores and increase the depth and strength of management of the company.

Dependence on Management

The success of the Company will depend on the ability of management to operate daily. The Company plans upon growing its base of management as needed and when it becomes financially feasible. There is no assurance that management can do this in a timely or profitable manner.

Competition

All aspects of the retail food industry are highly competitive, but the competition in the quick serve food segment is particularly intense. The Company will be competing with a large number of other quick serve food stores. Some of the competitors have greater financial resources and more established reputations that this company. However, the Reuben's chain does have a 24-year successful operating history.

Dependence on Company Support Personnel

The Company's ability to develop and manage franchises will require significant time commitments from management. The Company intends upon staffing two persons by the end of the second year to manage the franchise with its owners. The placement of these persons will be difficult in light of the competition. Therefore, no assurance can be given that the Company will attract or be able to retain qualified individuals to satisfy the Company's requirements for such personnel. In such an event, the management may need to continue to maintain and operate the stores and their growth.

Dependence on Manufacturers and Suppliers

The Company has no production facilities for food and equipment and is dependent upon obtaining the services of outside manufacturers. Although the Company anticipates that it will be able to purchase sufficient products, equipment, and agreements with approved manufacturers, no assurance can be given that the Company will be able to always obtain such products, equipment, or agreements.

The Company has entered its first full year of operations and has started to develop relationships with area professionals to advise the Company in the areas of Real Estate, Banking, Accounting, and Legal needs. Its activities include the establishment of initial store financing. The Company has also recently submitted a proposal to acquire a lease in Akron, OH. Upon obtaining a commitment for financing for its first store, the Company will then execute a Franchise Unit Development Agreement with Reuben's, Inc. Currently, the Company has executed a Unit Development Agreement with Reuben's and has paid $_____.00 in franchise fees to the franchisor. The Company anticipates building a minimum of_____units.

Capitalization

The Company is currently seeking to obtain a loan of $ 170,000 to develop the first store. The terms of that loan shall be determined when management has negotiated what is going to be realistic to offer based upon projected earnings. Further, the Company anticipates providing an additional amount of cash between $75,000 and $90,000 towards its first store development.

Use of Proceeds

The amounts set forth in this business plan represent the Company's present intentions with respect to promised expenditures. Actual expenditures may vary substantially, depending upon future developments such as marketing, sales activity, corporate opportunities, and certain other recognized or unforeseen factors. Any change either in the allocation of funds or in the order of priority will be at the discretion of the Company's Board of Directors.

The Company may utilize trade and other commercial credit, if available. Working capital, lines of credit, secured by orders and accounts receivable, will likely be used during the routine course of its business.

The Company and Reuben's Inc. intend to mutually protect all patents, trademarks and other proprietary rights to the extent such action is feasible. The packaged goods, advertising, logos, recipes, local promotions, and any other product, service or idea deemed proprietary will also be protected appropriately. The intent is to preserve the integrity of the concept and to hold the protected property to certain standards and monitor use of these trademarks as they are supposed to apply to certain promotions and products as directed by the parent company. The Company and Reuben's Inc. rely upon certain recipes and proprietary products to present a unique atmosphere, ambiance, aroma, food taste, and overall consistent presentation to the customer. Any representation of these items or trademarks should only be as directed by Reuben's Inc. and the Company as an area developer. The Company primarily relies upon the laws of unfair competition and confidentiality agreements to protect its designs and other proprietary information.

The Company believes it will be an asset within its development area as it will generate new job opportunities for the residents of the respective communities in which it builds stores. The Company plans to hire as many employees as possible from the local community residents for each store. It will also give the cities increased revenues through payroll and sales taxes and increased consumer spending by employing the local residents. The Company believes that as a franchise owner for Reuben's Inc., that Reuben's Deli will become a well-known brand name nationwide and create a company that the local communities will be proud to have. Further, Reuben's has established a tradition that the Company plans on supporting along with other area franchise owners and the Area Developers for the benefit of local charities. For the past several years Reuben's Inc. has sponsored a 5K race to benefit various charities by raising significant dollars through the participation of the public. It is noted to be one of the most successful 5K races in the U.S. Stephenson's Inc., in cooperation with other franchise owners plans on co-sponsoring this race in the greater Akron market.

The Company together with Reuben's Inc. is providing an opportunity designed to fulfill the needs of an active population who find themselves in a busy working environment with schedules that are pressing because of circumstances which cause them to have their time restrained for various reasons. Therefore, this population who appreciates a quality product at a fair price will use their disposable income to eat at a quick service restaurant offering outstanding customer service in an effort to obtain both convenience and entertainment. Reuben's Deli enjoys a base of customers that have traditionally developed during the past 24 years, into a heavy user profile (more than 4 visits per month). This allows for a solid customer base. Therefore a Reuben's franchise fulfills a need for a small business owner of a single unit or a larger business organization which would include multi-unit operations. The franchise provides a time-tested business opportunity with a successful track record and products proven to be widely accepted.

Customer Response

The Company has observed and spoken with customers of other Reuben's Deli franchise units who have indicated their overwhelming acceptance of the products in this market. Indications are strong that as the Reuben's system grows nationally and internationally, the recognition will continue to cause further interest in the concept. Many studies point out that if you' re interested in operating a restaurant your odds of success are greatly enhanced with a concept that has been in business for at least 10 years and offers a unique product. In fact, it has been statistically shown that the odds are that if you start your own restaurant without any history, it will fail 85% of the time, while if you develop afranchise with a proven track record, like Reuben's Deli, you will be successful 85% or more of the time. Reuben's Deli certainly is a proven entity. The customer responds for the following reasons:

The wide appeal and the quality of Reuben's Deli products. Reuben's enjoys one of the highest customer responses in the food industry today. The average customer visits a Reuben's Deli 4-6 times per month.

• The universal acceptance of the old and especially new restaurant designs.
• The affordable price of the products as compared to other competitive food operations.
• The cleanliness of the overall operation.

Any restaurant is certainly considered competition in this industry. However, the food segment that we are in, the specialty deli type sandwich is rapidly becoming the fastest growing segment in the food industry. Reuben's Deli and similar food operators in this category are showing impressive results as featured in various industry publications like "Restaurant News."

Competitive Advantage

The Reuben's restaurant concept has a 24-year operating history which gives it a vast amount of past operating history and proven stability. The products in a Reuben's Deli have stood the test of time. The quality is unequaled and truly unique and that is why so many franchise owners already operating in this system have experienced success. The new updated building layouts and designs, together with the quality of the product and expanded menu is encouraging a very high level of repeat business. The addition of many new store, approximately 15-20 per month, is creating an awareness of Reuben's Deli nationwide and will fuelits popularity through this growth. In 1993, system-widesalesexceeded$71,000,000.00, an increase of over 20% from the previous year. In 1994, sales reached in excess of $100,000,000.00 system-wide. Itis anticipated that by 1999, there will be in excess of 3800 stores producing almost two (2) billion in annual sales. The Area Developer program has further enhanced this growth and success of the nationwide development of the Reuben's Deli system due to the increase in support to the local franchise owners by their area developers.

Industry and Market Overview

The Reuben's Deli restaurant concept is involved in one of the largest dollar volume industries in the world. However, those who excel in this category are generously rewarded both personally and financially. The largest cross section of population in the world spends money daily in this industry and those trends are continuing to increase rapidly. Reuben's Deli has a 24-year operating history and has now entered the mature growth stage of their development. This is the time in the development history when restaurant chains historically experience explosive growth and effective market penetration. The markets are growing nationally and internationally, and the specialty sandwich segment is viewed by experts in the industry as the segment clearly offering the most dynamic opportunities. The blended flavors of the sandwich menu and the popular gourmet pizza products, together with the new flavored coffee program, have combined to attract industry attention. "Entrepreneur Magazine" again recently named the Reuben's Deli concept as the Number 1 franchise in the sandwiches, soups, and salads category, representing the second consecutive year that award has been won by Reuben's. This is an impressive list to be on at any level and to be named Number lisa tribute to the concept. Reuben's Inc. and Yukon, Inc. (Area Developers) have been the focus of several national and local periodicals.

Yukon, Inc., Area Developer, anticipates and estimates that the territories under their control for development will support over 667 Reuben's Deli restaurants. The minimum development contract demands that at least 317 stores be developed over the next five years. This growth is affected by seasonality, market share achieved, market trends, pricing strategies, and product line strategies. Management has determined that after evaluating all of these criteria and spending valuable due diligence time, that the growth in our respective areas will significantly enhance the credibility and visibility of Stephenson's, Inc. in its efforts to develop.

Stephenson's, Inc. plans on using several methods of local store marketing as suggested by the Reuben's, Inc. marketing department and the area developer. The primary method for obtaining sales is initially contacting surrounding businesses and residents and inviting them to visit the store through special local store promotions. Coupons, radio, and frequency cards will be utilized early as pre-opening sales tools. Reuben's has also contracted a number of national magazines and/or newspapers to continuously prepare and run advertising for exposure of the concept. Stephenson's, Inc. will contribute 1% of total gross store sales to the national marketing fund for the overall corporate wide system marketing program. Additionally, the Company will spend at least 3% annually of its gross revenues of Companyowned stores on local advertising and promotions and will participate with these funds in the area co-op programs. The Company will develop working relationships with various advertising agency's and will receive quality guidance from the co-op members and its area development company, Yukon, Inc., in choosing the most effective advertising.

The Company consists of a Board of Directors and two (2) full-time management employees including Mr. Eddie Stephenson and Mrs. Caren Stephenson who are also officers of the Company. The principals will be managers in these stores. The functions of managements are structured according to the operating requirements for the successful execution of the business. These functions include but are not limited to corporate strategic planning, sales and marketing, implementation and updates of operations, advertising and promotions. Additionally, management currently is responsible for the daily operations of Companyowned stores. Outside professional services will support the needs for legal and accounting functions. Also, the Company will utilize the services of a life insurance professional and an advertising and public relations firm based in the greater Akron, OH area.

Major Management Objectives

The Company has outlined as its 1995 major management objectives the following points in order to continue to successfully execute its business plan:

• Complete the Company's need for financing
• Locate, negotiate, obtain, develop, and open store #1
• Complete training in operations at Boise, Idaho, per Reuben's, Inc. requirement
• Increase the depth of knowledge in management of the Company organization
• Participate closely with Reuben's Inc. to further enhance the overall improvement of the Reuben's Deli concept
• Promote awareness of the Reuben's Deli in the local trade area through in-store promotions
• Select and hire quality employees who appropriately represent the image of the success of Reuben's Deli
• Operate a clean profitable store

Projected Statement of Earnings

For years ending December 31, 1996-1998

Projected Balance Sheet

Adjusted Projections: Cash Flow Only

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Ever Dreamed of Owning Your Own Restaurant? These Top Full-Service Restaurant Franchises Are the Best in the Business Serving up everything from delectable pizza to sizzling Japanese BBQ, discover the top 15 full-service restaurant franchises, according to the 2024 Franchise 500 Ranking.

By Clarissa Buch Zilberman • Apr 1, 2024

Key Takeaways

• This list showcases a wide range of culinary styles, from classic American diner offerings to French-style pastries and baked goods.
• Several franchises on this list have had significant recent growth rates.
• These franchises have shown adaptability in their business models and innovation in their offerings.

In today's dining scene, it's not just about grabbing a bite — it's about creating lasting memories with every meal. That's why the demand for top-notch, full-service restaurant franchises continues to soar. Whether you're an experienced restaurateur or a newcomer to the industry, there's plenty of room to grow and thrive.

Now, let's dig into the good stuff: The best full-service restaurant franchises of 2024, straight from our 2024 Franchise 500 Ranking . From cozy spots where locals gather to high-end eateries perfect for special occasions, these restaurant franchises cover a wide range of tastes and styles. So if you've ever dreamed of owning your own slice of the restaurant biz, these options might just be your recipe for success.

Related: Considering franchise ownership? Get started now to find your personalized list of franchises that match your lifestyle, interests, and budget.

• Overall Franchise 500 rank: 19
• Founded: 1958
• Franchising since: 1960
• Number of units: 1,832
• Change in units: +3.4% over 3 years
• Initial investment: $1,200,000-$6,600,000
• Leadership: Jay Johns, President
• Parent company: IHOP Franchisor LLC

Since its humble beginnings in 1958 with the inaugural IHOP in Toluca Lake, California, IHOP has expanded to more than 1,900 franchised locations worldwide, consistently making it one of the best restaurant franchises to own. What started as a pancake-centric menu has evolved to offer a diverse array of options, including waffles, French toast and omelets, as well as lunch and dinner favorites like hamburgers, salads and pastas. Now part of Dine Brands Global Inc., alongside brands such as Applebee's (with which IHOP is planning joint restaurants later this year) and Fuzzy's Taco Shop, IHOP continues to delight diners with its iconic breakfast offerings served any time of day.

Related: Are Denny's Corporation Investors Due For A Grand Slam?

• Overall Franchise 500 rank: 121
• Founded: 1953
• Franchising since: 1963
• Number of units: 1,588
• Change in units: -5.0% over 3 years
• Initial investment: $1,00,000-$2,300,000
• Leadership: Kelli Valade, CEO & President
• Parent company: DFO LLC

Established in 1953 as "Danny's Donuts," Denny's quickly evolved into one of America's largest full-service restaurant chains, known for its around-the-clock service and delicious meals. With locations in Canada, New Zealand, Mexico, the UAE and beyond, Denny's serves millions of customers daily, offering affordable, family-style dining in a casual atmosphere.

Leveraging its strategic positioning along interstate highways, Denny's has become synonymous with accessible, quality food and consistently ranks as one of the best restaurant franchises while remaining a prominent fixture across the United States.

Related: See Who Made This Year's Franchise 500 Hall of Fame

3. Walk-On's Sports Bistreaux

• Overall Franchise 500 rank: 134
• Founded: 2003
• Franchising since: 2015
• Number of units: 73
• Change in units: +82.5% over 3 years
• Initial investment: $1,300,000-$5,00,000
• Leadership: Christopher Dawson, CEO
• Parent company: Walk-On's Enterprises

Since their chance encounter as walk-ons (unrecruited athletes) for the Louisiana State University basketball team, Jack Warner and Brandon Landry have shared not only a love for the game but also a vision for business. This dream culminated in the founding of Walk-On's Sports Bistreaux in 2003, where they combined their passions for sports and dining to create a unique experience. Walk-on's Sports Bistreaux has quickly emerged as a favorite among family sports bars, building a strong brand presence. Since launching franchising operations in 2015, Walk-On's has experienced rapid growth, with over 70 locations now open and operating across the United States — and no signs of slowing down.

Related: This Founder Walked-On to a Top College Basketball Team in the '90s. Today, He and Drew Brees Are Bringing the 'Walk-On Mentality' to Franchising.

4. Gyu-Kaku Japanese BBQ Restaurant

• Overall Franchise 500 rank: 188
• Founded: 1996
• Franchising since: 1997
• Number of units: 783
• Change in units: -2.0% over 3 years
• Initial investment: $1,200,000-$2,600,000
• Leadership: Ryo Tozu, CEO
• Parent company: Reins USA Franchise Co.

Meaning "horn of the bull" in Japanese, Gyu-Kaku is an international yakiniku (grilled meat) restaurant chain known for its interactive dining experience. Established in 1996 and franchising since 1997, Gyu-Kaku Japanese BBQ Restaurant empowers customers to cook their food at their tables using convenient, self-venting in-table roasters. Adapted for the U.S. market by Reins International USA, the brand has grown rapidly since its stateside debut, boasting more than 750 locations worldwide and a commitment to expanding across more U.S. states and regions in the future. With a proven track record and a unique dining concept, Gyu-Kaku continues to captivate diners with its innovative approach to Japanese barbecue .

Related: This Entrepreneur Is on a Mission to Eradicate Generational Poverty in the Black Community — And She's Using Franchising to Do It.

5. Buffalo Wild Wings

• Overall Franchise 500 rank: 195
• Founded: 1982
• Franchising since: 1991
• Number of units: 1,252
• Change in units: -1.0% over 3 years
• Initial investment: $2,500,000-$4,800,000
• Leadership: Lyle Tick, President
• Parent company: Inspire Brands

If you're craving wings, beer and sports, Buffalo Wild Wings might be the franchise opportunity you've been looking for. Established in 1982 and franchising since 1991, Buffalo Wild Wings has cemented its status as a global leader in casual dining . With a presence in numerous countries including the U.S., Canada, India and more, they're dedicated to spreading the joy of casual dining worldwide, specializing in wings and specialty sauces. With more than 500 franchises in the U.S. and 60 more internationally — along with 650-plus company-owned locations — Buffalo Wild Wings offers ample opportunities for franchisees to make their mark. Ideal candidates are passionate about great food, fostering community and building a successful business while providing quality meals to their local neighborhoods .

Related: Applebee's and IHOP are Launching Joint Restaurants in the U.S.

6. Boston's Pizza Restaurant & Sports Bar

• Overall Franchise 500 rank: 196
• Founded: 1963
• Franchising since: 1968
• Number of units: 425
• Initial investment: $1,000,000-$2,800,000
• Leadership: Jeff Melnick, President
• Parent company: N/A

Looking to score big with your own sports bar and pizza joint? Boston's Pizza Restaurant & Sports Bar combines delicious pizza, a lively sports atmosphere and a commitment to customer satisfaction. With a robust franchise system established since 1968, Boston's has expanded across the United States and internationally, offering a winning combination of quality food and entertainment. With this full-service restaurant concept, franchisees have the opportunity to tap into a proven business model and become part of a successful brand.

Related: This Marine Turned Around Two Businesses Through Exceptional Leadership. Now They're Approaching a Combined $1 Million in Revenue.

7. The Toasted Yolk Café

• Overall Franchise 500 rank: 285
• Founded: 2010
• Franchising since: 2016
• Number of units: 40
• Change in units: +185.7% over 3 years
• Initial investment: $927,000-$1,500,000
• Leadership: Chris Milton, CEO
• Parent company: The Toasted Yolk Franchise Co. LLC

Ready to crack into the breakfast and brunch scene? The Toasted Yolk Café offers a golden opportunity to do just that. Since its inception, The Toasted Yolk Café has been delighting diners with its innovative menu, inviting atmosphere and commitment to serving up the most important meal of the day with a twist. Founded in 2010, The Toasted Yolk Café has quickly established itself as a favorite breakfast and brunch destination, earning a loyal following along the way. With a franchising program launched in 2016, the brand has expanded rapidly, bringing its unique blend of comfort food and hospitality to communities across the United States.

Related: One Entrepreneur's Journey From Golden Arches to Lash Extensions

8. la Madeleine

• Overall Franchise 500 rank: 320
• Founded: 1983
• Franchising since: 2011
• Number of units: 89
• Change in units: +1.1% over 3 years
• Initial investment: $370,000-$3,100,000
• Leadership: Christine Johnson, COO
• Parent company: Le Duff America

Looking to bring a taste of France to your community? Consider joining the la Madeleine French Bakery & Cafe family. Founded in 1983 and franchising since 2011, La Madeleine is a bakery and restaurant chain renowned for its French-style pastries and delectable cuisine. With more than 85 locations nationwide, including more than 60 franchised locations, la Madeleine offers a diverse menu featuring delicious pastries, sandwiches, entrées, salads and all-day breakfast options.

Related: This Entrepreneur Built and Sold a Franchise for Millions. Now He's Betting Big on a $1.38 Billion — and Growing — Industry.

9. California Pizza Kitchen

• Overall Franchise 500 rank: 333
• Founded: 1985
• Franchising since: 1989
• Number of units: 181
• Change in units: -15.0% over 3 years
• Initial investment: $3,500,000-$6,700,000
• Leadership: Giorgio Minardi, EVP of Global Development
• Parent company: CPK Holdings Inc.

Looking to turn up the heat in the pizza game? California Pizza Kitchen has been crafting innovative pizzas and California-inspired cuisine that has captivated taste buds since 1985. Since launching its franchising program in 1989, California Pizza Kitchen has expanded its footprint to more than 180 locations. With a commitment to using fresh, locally sourced ingredients and embracing culinary creativity, California Pizza Kitchen delivers a dining ex`perience that's as fresh and vibrant as the California sunshine. As a franchisee, you'll have the opportunity to join a trusted brand known for its quality food, welcoming atmosphere and dedication to customer satisfaction.

Related: Don't Have Time to Start a Business? This Doctor, Lawyer and Now Part-Time Franchisee Would Disagree.

10. Black Bear Diner

• Overall Franchise 500 rank: 344
• Founded: 1995
• Franchising since: 2002
• Number of units: 156
• Change in units: +11.4% over 3 years
• Initial investment: $1,500,000-$2,100,000
• Leadership: Anita Adams, CEO
• Parent company: BBD Holdco LLC

With more than 150 locations spread across the United States, Black Bear Diner offers a rustic yet inviting atmosphere, reminiscent of crisp mountain air and vibrant autumn foliage. Franchisees have the opportunity to tap into a brand that captures the essence of mountain living and embraces the spirit of the season.

Related: How Immigrating from Argentina to the Bronx Prepared Her for Life as a Franchisee

11. Golden Corral

• Overall Franchise 500 rank: 346
• Founded: 1973
• Franchising since: 1987
• Number of units: 362
• Change in units: -13% over 3 years
• Initial investment: $3,500,000-$9,200,000
• Leadership: Lance Trenary, CEO
• Parent company: Golden Corral Corp.

Golden Corral , established in 1973, is an American restaurant chain famous for its extensive all-you-can-eat buffet and grill. Offering over 150 food choices, including salads, hot dishes and desserts, it caters to diverse tastes . With a welcoming atmosphere and more than 360 locations, Golden Corral prides itself on serving quality meals in abundant portions. Ideal for franchisees with a passion for exceptional food and hospitality, it provides opportunities to delight customers and foster community connections.

Related: Don't Make These 5 Risky Franchise Ownership Mistakes

12. Eggs Up Grill

• Overall Fracnhise 500 rank: 379
• Founded: 1986
• Franchising since: 2005
• Number of units: 67
• Change in units: +55.8% over 3 years
• Initial investment: $611,000-$935,000
• Leadership: Ricky Richardson, CEO
• Parent company: WJ Partners

Eggs Up Grill is a thriving franchise specializing in delicious breakfast and lunch options, perfect for starting the day right or enjoying a midday treat. From fluffy omelets to mouthwatering sandwiches, each dish is prepared with care and attention to quality ingredients. With a welcoming atmosphere and a commitment to customer satisfaction, Eggs Up Grill franchises offer entrepreneurs a rewarding opportunity to bring joy to their communities through the simple pleasure of a great meal.

Additionally, the lower initial investment — typically under $1 million — makes Eggs Up Grill one of the cheapest full-service restaurant franchises to start up.

Related: This Sleep Company Is Combining 2 Key Factors to Transform the $40 Billion Mattress Industry — And It Just Made Another Major Move

13. Wings Etc.

• Overall Franchise 500 rank: 383
• Founded: 1994
• Number of units: 80
• Change in units: +6.7% over 3 years
• Initial investment: $344,000-$2,800,000
• Leadership: Rob Hensmann, CEO
• Parent company: Wings Etc. Inc.

Step into the ultimate sports and family hangout at Wings Etc. , where every visit promises a winning combination of mouthwatering cuisine and laid-back vibes. Established in 1994 by Jim Weaver, this grill and pub franchise has perfected the art of serving up hearty fare, including their famous jumbo wings, burgers, wraps and more. Whether you're catching the game on one of the many flat-screen TVs or challenging friends to arcade-level video games, there's something for everyone to enjoy. With more than 50 U.S. franchises and 25 corporate-owned locations, Wings Etc. continues to be the go-to destination for families seeking wholesome fun and delicious eats.

Related: Is Franchising Right For You? Ask Yourself These 9 Questions to Find Out

14. Tony Roma's

• Overall Franchise 500 rank: 404
• Founded: 1972
• Franchising since: 1979
• Number of units: 57
• Change in units: -46% over 3 years
• Initial investment: $1,700,000-$2,900,000
• Leadership: Mohaimina Haque, CEO
• Parent company: Romacorp Inc.

Tony Roma's is a household name celebrated for its legendary secret BBQ sauce. Since its inception in 1972 in Miami, Florida, Tony Roma's has expanded worldwide, venturing into international markets with its first franchise opening in Tokyo in 1979. Now, as they continue to expand, this restaurant brand continues to set the standard for unforgettable dining experiences infused with flavor and flair.

Related: From Coding to Creole Cooking — Here Are 5 Inspiring Success Stories of Black-Owned Businesses

15. Perkins Restaurant & Bakery

• Overall Franchise 500 rank: 429
• Franchising since: 1958
• Number of units: 272
• Initial investment: $1,500,000-$3,300,000
• Leadership: James O'Reilly, CEO
• Parent Company: Ascent Hospitality Management

Bring the timeless appeal of Perkins Restaurant & Bakery to your community as a franchisee. Since 1958, Perkins has been a cherished destination for families craving top-quality American fare served with a side of warmth and hospitality. As a franchise owner, you'll have the chance to offer beloved classics like all-day breakfasts and a diverse range of home-style favorites, all crafted with care and tradition.

Entrepreneur Staff

Freelance Writer, Editor & Content Marketing Consultant

Clarissa Buch Zilberman is a writer and editor based in Miami. Specializing in lifestyle, business, and travel, her work has appeared in Food & Wine, Realtor.com, Travel + Leisure, and Bon Appétit, among other print and digital titles. Through her content marketing consultancy, By Clarissa , she leverages her extensive editorial background and unique industry insights to support enterprise organizations and global creative agencies with their B2B, B2C, and B2E content initiatives. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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Higher prices on the menu as fast-food chains brace for California’s big minimum wage jump

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Chipotle, McDonald’s, Starbucks, Jack in the Box and Shake Shack are planning to raise menu prices. Fast-food franchisees are laying off employees or cutting their hours. Smaller independent business owners, meanwhile, worry their workers will bolt unless they also increase wages.

With California’s mandatory minimum wage for fast-food workers set to jump to $20 an hour on Monday, major restaurant chains are scrutinizing every aspect of their businesses to find ways to offset the extra money they will soon be spending on labor. In many cases, customers will end up eating the cost.

“It’s going to be a pretty significant increase to our labor,” Jack Hartung, Chipotle’s chief financial officer, said of the new law during the company’s third-quarter earnings call. He estimated that the burrito chain would boost prices by “a mid-to-high single-digit” percentage as a result. “We are definitely going to pass this on.”

The pay increase established by Assembly Bill 1228 applies to California fast-food workers employed by any chain with more than 60 locations nationwide, and covers corporate-owned and franchised locations. The state has more than 540,000 fast-food workers, about 195,000 of them in Los Angeles and Orange counties, according to the latest May 2022 figures from the U.S. Bureau of Labor Statistics.

The current minimum wage in California, regardless of industry, is $16 an hour, meaning many cashiers, line and prep cooks, counter attendants and baristas will see as much as a 25% raise overnight.

Jaylene Loubet, 25, has worked as a cashier at a McDonald’s in Cypress Park since 2017, initially making $16.25 an hour.

Since then her hourly pay has only risen to $17.50, she said, the same amount that her mother, a longtime cook at the same location, makes. The two live with Loubet’s father in a one-bedroom apartment in Glassell Park, unable to afford a bigger place.

“When you’re in a tough financial situation, even though it’s not enough to be comfortable, it does help,” Loubet said of her upcoming raise. That said, “food is going up as well, rent is going up as well, bills are going up as well. Even with the $20, money is still going to be tight.”

With the federal minimum wage stuck at $7.25 an hour since 2009, many states and cities have taken it upon themselves to lift the pay floor. But the California bump for fast-food workers is unusual for targeting a specific business sector and adjusting the minimum rate by so much at once.

“This is such a dramatic increase on a state minimum wage that was already quite high,” said Harry Holzer, a Georgetown University public policy professor and the Labor Department’s chief economist in the Clinton administration. “The workers who keep their jobs will be happy — they will be better off.”

Less so for consumers of fast food, who will undoubtedly pay more for their burgers, tacos and fried chicken. David Neumark, a minimum-wage expert at UC Irvine, estimated that overall prices will rise between 2.5% and 3.75%.

California fast-food workers form an unusual union in a bid for higher wages, better working conditions

The California Fast Food Workers Union gives increased clout to employees scattered across multiple chains.

Feb. 9, 2024

That’s relatively small, but comes on top of the steep inflation that customers have faced at fast-food establishments in the last few years. Nationally, prices at limited-service restaurants are up almost 30% from February 2020 levels, according to the Bureau of Labor Statistics. And more fast-food price increases will hit lower-income households harder because they spend a larger share of their income on food and consume disproportionately more fast food.

A spokesperson for McDonald’s said the company was exploring several ways to counterbalance the increase in labor costs and has yet to decide how much it will raise the price of menu items at its corporate-owned stores. At franchise locations, which account for 95% of the brand’s U.S. portfolio, McDonald’s provides “informed pricing recommendations” but final pricing is at the discretion of franchisees, the spokesperson said.

Starbucks said it had elected to raise the pay floor for all levels of employees in California to retain workers and to combat wage compression — when there is little difference in pay between experienced workers and entry-level ones. It plans to offset the increased labor expenditure “through a variety of levers — including near-term pricing as well as other efficiencies,” a spokesperson said.

The economic effects of such a sharp and sudden pay hike are unclear. In general, raising the minimum wage helps large swaths of low-wage workers, bringing some out of poverty , but others will lose out as employers scale back through layoffs, shorter shifts, reduced hiring and other cost-saving measures.

“Where they can automate, they will automate more,” Holzer said. “Maybe some franchises will move out of state.”

The COVID-19 pandemic has already spurred more fast-food operators to install self-service ordering kiosks, and the industry is looking at other ways to depend less on human labor, including the use of robots.

Proponents of the new law say fast-food corporations can afford to pay up. The industry has flourished since the pandemic began as customers sought cheap and quick meals, leading to billions in sales and record profits.

But the brands say they, too, have had to contend with high inflation for ingredients and supplies and have already raised wages for their workers without government prompting. Between 2019 and 2022, the average weekly wage for employees at limited-service restaurants jumped 26% to $501.

Franchise owners in particular are anxious about their ability to shoulder the extra costs; labor accounts for roughly a third of a typical fast-food operator’s expenses.

Shortly after Gov. Gavin Newsom signed the pay increase legislation into law in September, hundreds of Pizza Hut franchises in California moved to lay off more than 1,100 delivery drivers , federal and state filings show.

The affected Pizza Huts are run by franchise operators and located from Orange to Stanislaus counties, according to the California Employment Development Department. The layoffs were expected to go into effect in February.

Fast food is tightly woven into the history, cultural life and economic growth of Southern California.

Brothers Richard and Maurice McDonald opened a drive-in restaurant in Pasadena in 1937, a few years before starting the first McDonald’s in San Bernardino. Another pioneer, Carl Karcher , bought a hot dog cart in L.A. in 1941 and went on to found Carl’s Jr.

Taco Bell, In-N-Out Burger and Jack in the Box also come from the region.

Collectively, their explosive growth across the U.S. and sustained success over the decades symbolized the busy American life, the rise of the baby boomer generation and California’s love affair with cars.

Yet the industry has come to be seen as the stereotypical low-wage sector where millions of workers make minimum wage and toil under tough and sometimes unsafe conditions, making it a prime subject of the Fight for $15 movement and such books as “Fast Food Nation.”

The passage of AB 1228 represented a significant win for fast-food workers who for years have organized for better wages and protections. Along with the higher minimum, the new law established a Fast Food Council — composed of business and labor representatives — that has the authority to set future pay increases (at a maximum of 3.5% a year) and develop standards on working conditions and employee safety and training.

‘This is such a dramatic increase on a state minimum wage that was already quite high.’

— Harry Holzer, a Georgetown University public policy professor

Employees at fast-food or limited-service restaurants nationwide work about 25 hours a week on average. Many face unpredictable hours with some called in on short notice or required to work split shifts — two separate periods in one day.

Angelica Hernandez, who works as a cook trainer at a McDonald’s in Monterey Park and was appointed to the Fast Food Council, called the $20 minimum wage “good progress.” But she worries that the restaurant will respond by slashing employee hours, which she said it has done in the past after increasing wages.

“They’re utilizing one person to do the job of two, three or four people,” she said.

Earlier this year, workers formed the California Fast Food Workers Union , which is part of the Service Employees International Union, to bargain with the council. The union has said it plans to push for annual wage increases, predictable schedules and just-cause protections.

Workers can expect to maintain some leverage in future negotiations as growth slows. There is still tight competition for fast-food workers, though not as stiff as at the height of the Great Resignation in 2021-22, when many people quit their jobs and rethought their work and life priorities after COVID-19.

A guaranteed $20 an hour could lure people on the sidelines into the fast-food job market, including teenagers who once dominated the fast-food workforce, economists said.

Over the years, the average age of fast-food workers in the U.S. has been rising gradually as many teens have instead sought enrichment jobs to prepare for college. The median age for fast-food workers is now 22.1, according to the Bureau of Labor Statistics.

Zev Brown, a senior at Eagle Rock High School, has worked government jobs and on political campaigns since his sophomore year, earning $18 to $25 an hour.

Although he knows classmates who have jobs at Starbucks, McDonald’s and Burger King, he said most of his friends prefer to work for local mom-and-pop businesses or start their own money-making ventures.

“People want to work in the neighborhood they call home and the neighborhood in which they go to school,” Brown said. “Side-hustle culture and entrepreneurial culture are really big.”

That said, $20 an hour makes a fast-food job “more enticing for a student,” said his friend, 17-year-old Sawyer Sariñana, who has been making money through photography work.

“I would definitely consider it now — I think that’s a big jump and makes a big difference,” said Sariñana, also a senior at Eagle Rock High School.

It’s been the year of the worker. West Hollywood employers are so over it

Organized labor has been having a moment in L.A. But in West Hollywood, which has the nation’s highest minimum wage, it’s the business owners who’ve been marching.

Dec. 4, 2023

Fast-food locations in grocery stores, airports, hotels, theme parks, sports venues and other businesses are exempt from the minimum-wage increase, as are employers that operate a bakery on the premises — a loophole that has raised questions about whether Panera Bread and others like it must comply.

At first, it might seem that restaurant employers not covered by the mandate now have an advantage: As the big fast-food chains lay off or hire fewer staff, that could expand the pool of available workers — who could be paid less than $20 an hour. But owners of independent fast-casual and full-service restaurants aren’t sure that will be the case, and anticipate having to raise wages to keep pace.

“Every bump in the restaurant labor market raises the prices for everyone, period. It doesn’t leave us out,” said Jeff Strauss, owner of sandwich counter Jeff’s Table in Highland Park.

West Hollywood’s and Seattle’s experiences with rapidly increasing their minimum wages provide a look at how things might go in California after the April 1 wage hike kicks in.

West Hollywood raised its minimum wage to $19.08 an hour in July after vehement opposition from business owners, and just days before chef Josiah Citrin opened his steakhouse and seafood restaurant Charcoal Sunset.

Over the next several months, Citrin said he did everything he could to make it work, including cutting his staff from 50 employees to 30 and rolling out a more limited menu.

‘At a point, you can’t trim anymore. When I closed at the end, there was no more money to operate.’

— Chef-owner Josiah Citrin, who closed Charcoal Sunset shortly after West Hollywood increased its minimum wage to $19.08 an hour

But the high wages and a severe pullback in customer spending due to the Hollywood strikes were too much for the fledgling restaurant to overcome. Citrin closed Charcoal Sunset in February.

“At a point, you can’t trim anymore,” he said. “When I closed at the end, there was no more money to operate.”

Seattle, one of the first in the national Fight for $15 campaign, lifted its minimum wage from $9.47 an hour in April 2015 to $13 in January 2016 — a 37% jump over a nine-month period.

Researchers at the University of Washington found that businesses overwhelmingly survived, said Jacob Vigdor, a University of Washington public policy professor who directed the minimum-wage study.

But overall employment at eating and drinking establishments in Seattle grew at a notably slower pace after 2016, and there was another downside: Employees saw fewer hours of work — on average by about 10%.

In 2017, Seattle made it more costly for restaurant and retail employers to send workers home early and make other scheduling changes. Labor union officials in California are hoping to do the same at fast-food restaurants.

“It was never just about wages,” said April Verrett, the SEIU’s national secretary-treasurer. “This is about empowering workers.”

Times staff writer Suhauna Hussain contributed to this report.

More to Read

Letters to the Editor: Upset over California’s $20 wage? Wait until you see what fast-food CEOs make

April 4, 2024

Fast-food wage hike puts Democrats on defense as Californians worry about cost of living

April 3, 2024

Your guide to California’s new $20-an-hour minimum wage for fast food workers

April 1, 2024

Andrea Chang is a wealth reporter for the Los Angeles Times. She was previously a Column One editor, the deputy Food editor and an assistant Business editor, and has covered beats including technology and retail. Chang joined the paper in 2007 after graduating from the Medill School of Journalism at Northwestern University. She grew up in Cupertino, Calif.

Don Lee writes economic stories out of Washington, D.C. Since joining the Los Angeles Times in 1992, he has served as the Shanghai bureau chief and in various editing and reporting roles in California. Lee previously worked at the Kansas City Star. He is a native of Seoul, Korea, and graduated from the University of Chicago.

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McDonald's is reclaiming all its Israeli restaurants, exposing the cracks in its global-franchise model

• McDonald's plans to buy back all 225 of its restaurants in Israel from its long-standing franchisee.
• Its Israeli franchisee firmly backed the Israeli military, which sparked boycotts in some markets.
• It highlights a flaw in the global-franchise model, where local strategies can become a liability.

McDonald's announced on Thursday that it would buy back all 225 franchise restaurants in Israel and take direct control of them.

The company said in a news release that it had reached an agreement with Alonyal, the franchisee that has run its Israeli stores for the past 30 years.

The intervention is meant to blunt the impact of a global boycott of McDonald's and other Western corporations that are perceived to support Israel's military action in Gaza.

Israel's invasion was launched after the October 7 terror attacks, when Hamas militants killed about 1,200 Israelis and took around 250 hostage.

Since then, over 33,000 Palestinians have been killed in Israel's military campaign , Gaza's health ministry has said.

In October, the McDonald's franchisee in Israel caused controversy by giving thousands of free meals to Israel Defense Forces personnel participating in the conflict.

Although McDonald's doesn't have a formal position on the war, some observers took it as a sign that McDonald's was taking Israel's side.

Related stories

This prompted McDonald's franchisees in other countries, such as Saudi Arabia, Oman, Kuwait, the United Arab Emirates, and Jordan, to distance themselves from the Israeli operation, per Reuters.

The pro-Palestinian Boycott, Divestment, and Sanctions movement, known commonly as BDS, called for a global boycott of McDonald's until it severed ties with the Israeli franchisee.

McDonald's has said the boycott hit its bottom line. In February, it reported missing a key sales target, attributing it partly to events in Israel.

Blowback from the conflict "meaningfully impacted" performance in France, Indonesia, and Malaysia, CEO Chris Kempczinski said in February.

A month prior, Kempczinski sought to defend the company, saying the backlash was "ill-founded" and based on "misinformation."

He defended McDonald's approach of giving leeway to local operations, saying the company was "proudly represented by local owner-operators" globally.

However, the situation in Israel exposed a flaw in a franchise model that spans more than 100 countries.

Franchisees like Alonyal have the autonomy to make decisions tailored to the local market while still representing the world-famous brand.

This makes room for crucial concessions to local tastes and customers.

For instance, Indian franchises don't sell beef burgers, and bacon isn't on sale in Israel and majority-Muslim countries like Saudi Arabia.

On the flip side, consumers generally don't differentiate between the various operations and may take one franchisee's actions as a global stance and punish the brand accordingly.

(Likewise, McDonald's taking back the Israeli stores may not make much difference to the people who are boycotting.)

In the statement announcing the Alonyal deal, Jo Sempels, the head of McDonald's international developmental licensed markets, said that the company was still "committed to the Israeli market."

Watch: US vs India McDonald's | Food Wars

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‘Winners and Losers’ as $20 Fast-Food Wage Nears in California

The nation’s highest state minimum wage for fast-food workers takes effect on Monday. Owners and employees are sizing up the potential impact.

By Kurtis Lee

Reporting from Lancaster, Calif.

A decade ago, Jamie Bynum poured his life savings into a barbecue restaurant now tucked between a Thai eatery and a nutrition store in a Southern California strip mall.

As a franchise owner of a Dickey’s Barbecue Pit, Mr. Bynum is pridefully particular about the details of his establishment — the size of the hickory wood pile on display near the entrance, the positioning of paper towel rolls on each table, the careful calibration it takes to keep his restaurant staffed 10 hours a day with a small crew.

The staffing, he said, has become harder in recent years, as the state’s minimum wage has steadily increased since 2017, often rising by a dollar per year. Today, it’s $16 an hour.

But on Monday, it will jump to $20 an hour for most fast-food workers in California, propelling them to the top of what minimum-wage earners make anywhere in the country. (Only Tukwila, Wash., a small city outside Seattle, sets the bar higher, with a minimum wage of $20.29 for many employees.)

The ambitious law, which supporters hope to see replicated nationwide, has been characterized by opposing sides in stark terms. To backers, it is a step toward fair compensation for low-wage workers who faced significant risk during the pandemic. To opponents, it is a cataclysmic move that will raise food prices, lead to job losses and force some franchisees to consider closing.

“People don’t understand that when wages rise, so do the prices,” Mr. Bynum said.

Mr. Bynum has, in recent years, raised prices to try to maintain profit margins — and each time, he said, he has noticed a drop in customers. That, in turn, forced painful decisions about cutting staffing and trimming hours.

The new minimum wage will add $3,000 to $4,000 to his monthly expenses, he said, and while he hopes to keep all eight of his employees, he doesn’t know if he can make the numbers add up.

One employee, Josue Reyes, has worked at the restaurant on and off over the past decade.

He works the evening shift, often taking the bus and then riding his hybrid bike the rest of the way to the restaurant. Mr. Reyes, 35, said the consistent pay raises through the years — he now makes $16 an hour — had helped him significantly. He puts much of his paycheck toward assisting his mother pay the rent at their trailer park and tries to save where he can.

While another pay increase will help him, Mr. Reyes, who has worked in fast food for much of his life, said he feared that before long, jobs would become more competitive and harder to keep.

“There can be job losses because restaurants close,” he said on a recent weekday, dressed in jeans and a T-shirt for his shift. “No one wants that, but it seems very possible.”

The potential ripple effects of the law weighed by Mr. Bynum and Mr. Reyes at this fast-food restaurant in Lancaster, a high desert city at the northern edge of Los Angeles County, mirror conversations that will play out across the state as owners and employees — and eventually consumers — adjust to the new reality.

Championed by powerful labor organizations, including the Service Employees International Union, the law will lift pay for more than half a million California employees who work for fast-food chains with 60 or more locations nationwide. It also creates a council comprising, among others, workers, franchise owners and union representatives who will oversee future increases to the minimum wage and devise workplace standards.

In an interview, Mary Kay Henry, president of the S.E.I.U., said the law was long overdue. “We are talking about a billion-dollar industry that can and should afford this raise,” she said, noting that most workers are Black and Latino. “Raising pay improves employers’ ability to hire and retain workers.”

The potential beneficiaries include Anna Velazquez-Cruz, who has worked at a Papa Johns in the East Hollywood neighborhood of Los Angeles for a year.

Ms. Velazquez-Cruz, 19, lives with relatives in an apartment a short walk from the shop, where she makes around $18 an hour. “The internet bills, the rent, it gets higher,” she said on a recent evening.

But Matt Haller, president of the International Franchise Association, said he expected the new law to significantly harm many small businesses.

“Local restaurants will face hundreds of thousands of dollars in increased operating costs,” Mr. Haller said. “Customers will face higher food prices, and restaurant owners will have to cut costs to keep their doors open.”

Economists are divided over the merits and pitfalls.

Ismael Cid-Martinez, an economist at the Economic Policy Institute, a think tank partly funded by labor unions, said the law would help lift wages for workers in other low-paying industries in the state.

“These workers are also consumers,” he said. “Any increase in earnings for them means additional resources that they use to feed their families, bolster small businesses and strengthen their state economy.”

David Neumark, a professor of economics at the University of California, Irvine, said the impact would be more nuanced. “A higher minimum wage creates winners and losers,” he said.

The winners will be workers who keep their jobs and at most have a modest reduction in hours, he said, while the losers will be those whose hours are substantially cut or who lose their jobs — along with smaller franchise owners who were already struggling to make much of a profit.

“They make more than minimum-wage workers,” he said. “But lots of them are not high-income.”

That is the case for Mr. Bynum, whose path to franchise ownership started with a career change 10 years ago.

He and his wife, Liza, who both then worked in the information technology sector, noticed a dearth of barbecue restaurants near their home in Lancaster and used all of their $150,000 in savings to open a Dickey’s Barbecue Pit.

The chain, based in Dallas, operates more than 400 restaurants, and Mr. Bynum said he pays 9 percent in royalties to the headquarters. He has cut his staff by half over the past decade and trimmed hours. He has raised prices: A loaded baked potato cost $8 when he opened; now it’s almost $20 when ordering at the restaurant.

That’s a significant increase for his customers in Lancaster, a city 70 miles north of downtown Los Angeles where about 15 percent of residents live at or below the poverty line — and where higher pay and higher costs will both be keenly felt.

Most days in recent years, Mr. Bynum and his wife have run the restaurant with help from their two adult children.

“What started as a dream has slowly faded,” Mr. Bynum said.

Joe Marques is another owner wondering how to navigate the months ahead.

He became the owner of a Wienerschnitzel restaurant in San Jose, Calif., in the early 1990s and now has two other locations in the area. He employs around 45 people at the three stores combined. As an owner, he said, he is surviving week to week and has little money for capital improvements, such as repaving parking lots and painting.

“There is a lot of perception that we are a big corporation simply because of the name,” he said. “In reality, I am essentially an independent small-business owner.”

At current staffing levels — 60 percent of his employees work full time, the others part time — it will cost him an additional $4,500 to $5,000 a month per store to remain open, he said. Mr. Marques, 64, had wanted to permanently hand his businesses over to his son. That hope, he said, seems more and more fleeting these days.

“It’s not like we are getting rich on this,” he said. “We are trying to make a living.”

For Mr. Reyes, the longtime Dickey’s employee, his job has given a sense of stability that he worries may soon shatter.

He likes that the job is close to home, Mr. Reyes said, so someone in his family can pick him up and he can avoid taking a late-night bus. While welcoming the higher pay that the law will mandate, he expressed sympathy about the financial strain on Mr. Bynum.

“There has been a type of companionship,” he said. “He’s given me consistent work.”

What Mr. Bynum sees on the horizon concerns him. For months, he and his wife have thought about what they might do next — perhaps, he said, go back to I.T. — but he fears his options would be limited. At 51, he’s not sure who would hire him. He worries, too, about what would happen to Mr. Reyes and his other employees.

“We’re all in this as a team,” he said. “I care about my people and have given people a lot of opportunities over the years.”

And singling out the fast-food industry for a higher minimum wage, Mr. Bynum said, “all just seems targeted and like an attack.”

“I am a small-business owner at the end of the day,” he added, “just scraping along.”

Kurtis Lee is an economics correspondent based in Los Angeles who focuses on the lives and livelihoods of everyday Americans. He has written about income inequality for nearly a decade. More about Kurtis Lee

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McDonald’s to buy back all franchises in Israel

M cDonald’s announced Thursday that Omri Padan, the CEO and owner of Alonyal Limited, would be selling its franchises in Israel back to the corporation.

Alonyal began its McDonald’s operations in Israel more than 30 years ago and now has “grown the business to 225 restaurants and more than 5,000 employees.” The employees and restaurant operations will be retained on equivalent terms, McDonald’s said in a statement.

“For more than 30 years, Alonyal Limited has been proud to bring the Golden Arches to Israel and serve our communities. We’ve grown the brand to be the leading and most successful restaurant chain in Israel and are grateful to our management, employees, suppliers, and customers who made this possible,” Padan said in a statement. “We are encouraged by what the future holds.”

Jo Sempels, the McDonald’s president of international developmental licensed markets, said in a statement that the company was grateful for Alonyal’s business and brand in Israel for the past 30 years.

“McDonald’s remains committed to the Israeli market and to ensuring a positive employee and customer experience in the market going forward,” Sempels said.

McDonald’s did not give a date for the purchase but said the closing date is subject to certain conditions and will be completed in the coming months.

In February, McDonald’s said the ongoing tensions in the Middle East were putting a dent in its business . In its fourth quarter and full-year 2023 report, the company said its licensed markets business, which includes most of its Middle East locations, increased by only 0.7 percent in the last quarter.

The company said the low number is a reflection of the “impact of the war” between Israel and Hamas. The fast-food chain came under scrutiny after McDonald’s Israel gave away thousands of free meals to Israeli forces and citizens following Hamas’s surprise attack Oct. 7.

The move prompted boycotts to the company in protest of Israel’s counteroffensive and continued bombardment of Gaza, which has killed more than 32,000 people.

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