Revel Blog

What To Consider Before Franchising Your Restaurant

Revel | May 2, 2017 |

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What To Consider Before Franchising Your Restaurant

The opportunity to grow your business, tap into new markets, and build upon your brand identity is appealing to many restaurant owners. If you want to create a food empire, franchising may be the next step, and if done right, this can be a lucrative business venture. Pursuant to launching a franchise, there are a number of critical factors to consider. Keep your doors from closing with a well researched and thought out franchise plan. While there is no script for success, you can mitigate the risk of franchise failure by identifying how your restaurant can thrive as a franchise.

Here is what you should consider:

Unique Selling Proposition

Your pizzeria may be a hit in your local town, but why? Is it specific to your local town or are you offering a unique selling proposition that can be applied globally?

There are over 4,500 active franchisors in the US, and in order to stand out from the crowd, you need to establish a unique selling proposition that will give you the competitive advantage. Examine the marketplace to identify where you can differentiate. From pricing and menu items to customer service and ambiance, there are a number of small ways you can make a major difference in how you differentiate your restaurant.


When examining your unique value in various marketplaces, it is important to identify where you want to expand your restaurant. Be sure that your current offerings are relevant in the locations you are considering. To do so, perform research into geographic-specific dining patterns, upcoming trends, and local competitors.

In addition to adapting to different cultural norms, there could be new and unfamiliar tax liabilities, fees, and licenses you’ll need to understand and comply with.

Customer Demand

Assess your customer traffic “staying power,” which is the ability to maintain foot traffic in all locations—what may be self-sustaining in one city, can be a fad in another.

Identify your current diners with advanced Customer Relationship Management tools to get a snapshot of the demographics and psychographics of your customer base. Then, do your market research to see if there are enough potential diners in your interested locations who mirror the demographics and psychographics of your current customer base.


Measure the “clone-ability” of your restaurant. To expand successfully, your restaurant should be structured so that it is easy to duplicate to maintain consistency across your menu offerings, pricing, and branding.

On the backend this requires a lot of coordination and structure to quickly and affordably replicate your concept across locations. For example, you will need to be able to easily work with your supply chain vendors to expand your offerings and hire a marketing professional to ensure brand consistency.


The final but obvious consideration is, do you have the capital to franchise?

Beyond having a track record of sales and profitability at your existing restaurant, you will need additional financial capital to support expansion. To launch your franchise operations, there are significant up-front costs, which is estimated to start at around $100,000 to $150,000 and go up from there.

Weigh your loan options, investment opportunities, and existing capital to ensure that you will get an adequate return and your franchise can keep the lights on.

While there is a lot to consider when thinking about franchising your restaurant, you can stay one step ahead of the game by outfitting your existing restaurant with scalable technology. Revel System iPad POS System replaces bulky, expensive legacy solutions with a quick, intuitive iOS-based POS platform, that is designed to help you future-proof your operations. Revel’s technology makes franchising a simple, seamless process.