A restaurant can be a great business to run when you have dedication and passion for the work. Becoming a restauranteur can be challenging; there’s a lot that goes into finding a good restaurant to own and the subsequent purchasing process. A restaurant franchise is an option worth consideration, especially for those who might be new to the industry. Let’s take a look at the process and cost of buying a restaurant and see how going with a franchise can help.

1 – The Purchase Process

Buying any sort of real estate is a complicated process. Buying a restaurant is even more complex because you’re buying a commercial business, as well. Here’s a breakdown of the general process:

• Perform an initial search and inquiry. Start by looking in your local market for restaurants for sale, then search for online listings in a wider area. Make sure to consider the type of restaurant you want.
• Get advice from a certified restaurant broker. Make sure the broker you choose has a good reputation and be prepared to sign a non-disclosure agreement to get full listing packages on restaurants, which will include things like gross sales, cost of goods, net income, and other expenses.
• Visit the location(s) as a secret shopper/confidential customer. While there, observe the restaurants’ operations, taking note of things like cleanliness, employee performance, atmosphere, and food quality.
• Meet the seller(s) to ask questions. Make sure to be respectful and professional, and don’t speak negatively about the restaurant.
• Select the restaurant that you are ready to make an offer on, then put together a reasonable offer, considering all the factors you’ve examined. If your offer is accepted, be prepared to sign a letter of intent/purchase agreement, then make use of a standard agreement to make sure you cover important things like restaurant inventory, security deposits, assignment fees, repairs, and equipment transfers.
• Perform the necessary due diligence to make sure there are no hidden surprises in the restaurant. Work with a certified public accountant, landlord, lender, and any other necessary professionals.
• Use a closing checklist to make sure everything is ready, then close on the deal, signing the necessary paperwork.

This process is, as you can see, very involved and can prove imposing, especially for those who are new to the industry. However, when buying a restaurant, if you look for a franchise restaurant instead of an independent one, you can find a lot of this information more readily available. Franchisors will be prepared to share with you through their Franchise Disclosure Document (FDD), and all franchisees are provided with an operation guide, as well as training prior to and after opening.

Information is also available by attending franchising expos, speaking with franchise brokers, and talking to franchisees with the brands you’re considering. Franchise brands also establish a standard onboarding process, so you can know what to expect while learning more.

2 – The Financial Side

Buying a restaurant can be an imposing prospect financially. Your starting costs may include licenses and permits, legal and processing fees, building improvements, equipment, furniture and tableware, and ordering and payment technology. The size and type of restaurant also factor into your startup expenses, as well as whether you wish to purchase property or lease.

The cost of opening a restaurant varies depending on who you ask. Online restaurant supplier WebstaurantStore said in March 2022 it may run between $180,000-$800,000. Meanwhile, restaurant point-of-sale system provider Toast said the cost of opening a restaurant in 2022 ranged from $95,000-$2 million. And in a survey by restaurant industry research firm RestaurantOwner.com, the 350 restaurants responding reported startup costs ranging from $175,500-$750,500, with a median cost of $375,500.

Expensive as this may be, it’s not without the potential for profit. Independent digital financial media company CSIMarket reports that as of Q2 2023, the restaurant industry saw a 15.04% return on investment (ROI). A restaurant franchise cost can be lower than buying an independent restaurant thanks to a franchisor providing purchasing power for its franchisees and having industry connections to help with equipment and recurring costs like ingredients. It also helps with obtaining financing, since lenders and banks are more inclined to provide loans for opening a franchise with a brand that has a proven business model.

3 – The Support System

Finally, when buying a restaurant, it’s important to consider the support system you’ll need to set up. Owning and operating a restaurant requires you to handle things like marketing and advertising, setting up a supply chain, hiring staff, creating the menu, and managing the general administrative tasks like bookkeeping and HR (or hiring someone to do them). If you buy a new restaurant, you’re going to have to do this from scratch. A pre-established restaurant may help with some of this, as many of them will have existing staff and even an existing menu.

A franchise restaurant, meanwhile, provides not only training, but also a range of support services that help franchisees like you get set up. A franchisor may offer guidance in administrative tasks like hiring, market research, advertising, supply chain setup, purchasing power, and more.

A franchisor has years of experience in their industry and a proven business plan, and they’re ready and able to assist you with their advice and input whenever you have questions. Part of the unseen cost to buying a restaurant includes hiring people that may not come with the restaurant, such as consultants and advisors. Franchising will provide you with this input without having to search for and hire your own consultant.

Why Franchising Might Be Right for You

Choosing a franchise restaurant offers numerous advantages over an independent restaurant purchase. Financially, franchises benefit from established brand recognition, with the opportunity for quicker returns on investment and reduced marketing expenses. They also tend to have more secure financing options due to their proven track record.

Additionally, franchises come with robust support systems, including comprehensive training, ongoing guidance, and a network of experienced franchisees to share best practices. These support structures can foster a higher likelihood of success. Moreover, the purchasing process is often smoother for franchises as they provide a standardized approach with well-defined procedures and readily available resources.

Cut the Ribbon with Antioch Pizza Shop

We’re happy to offer you the opportunity to open your own franchise restaurant with us. We’re a quick-service restaurant (QSR) franchise with a vision to make everyone a regular and a mission to feed people goodness. With 46 years of experience in the pizza industry, we’ve learned what it takes to open a successful franchise location, and we want to share that knowledge with you. We’re looking for ambitious entrepreneurs like you, who are interested not only in owning and operating a successful pizzeria, but also becoming a pillar of their local community.

We support community fundraisers, local organizations, and provide charity donations. As a franchisee, we encourage and support any efforts you make to serve your friends and neighbors. Submit a franchise form today to learn more about your franchising opportunity to Antioch Pizza Shop.