Starting a Food Business: How to do it with a Franchise
If youíre considering starting a food business, you may be thinking about opening a restaurant, launching a new type of takeaway kiosk, or investing in a food truck. It's unlikely that you will have considered an online food business. Here, we take a look at what an online food franchise is and what you need to do to prepare yourself for franchise ownership.
Starting a food business from home
When most people think of franchising, they think of fast food and national restaurant chains. However, thereís a lot more to the franchising sector than McDonalds and KFC. While fast food stores are a popular franchising, thereís a growing number of franchises who specialise in healthier foods and that are set up to be run from home.
This unique opportunity allows for greater freedom and a better work/life balance, without having to sacrifice profits or take a pay cut. For the most part, home-based food franchises offer their customers delivery services. This could involve delivering food cooked by a variety of other businesses, or it may involve delivering products grown or produced by a single supplier.
Starting a food business online
The importance of the internet in our everyday lives cannot be underestimated. The fact that the vast majority of UK consumers now have access to the internet 24/7, wherever they go, has revolutionised the business landscape. Food franchises are just one sector that has benefitted enormously from the ubiquitous nature of digital technology.
By allowing franchisees to manage their business online, food franchises can attract a new generation of talent that demands flexibility and versatility in their work arrangements. Online food franchises also benefit from lower overheads and much more reasonable investment costs, making them an attractive prospect for those who donít want or canít afford to invest too much.
Examples of popular online food businesses include One Delivery, a fast food delivery business that works alongside some of the top fast-food franchises to ensure that food is always delivered on time. At the other end of the scale, Wiltshire Farm Foods and Riverford both specialise in bringing farm fresh produce to customers around the country.
Starting a food business checklist
Now that we understand what a home-based food business looks like, itís time to examine seven things youíll need to do to ensure that youíre ready to become a franchisee.
1. What level of investment can you raise?
First things first, it's important to know what kind of capital you have at your disposal and what you're willing to invest. This will determine what options are open to you and what type of franchise you'll be able to afford. However, it's also essential to ensure that you don't rush into things. If you've got a particular franchise in mind but canít afford it at the moment, donít settle for second best. Bide your time and wait until youíre able to invest in a real passion project.
2. What kind of food business do you want to operate?
Do you want a business that deals in fast food? Are you interested in health foods? Could you run a company thatís exclusively online or would you like to split your time between a brick and mortar premises and the computer? Would you prefer to manage a small team or are you happier going it alone? Answering these questions should give you a better idea as to what kind of business you want to operate and help you make a more informed decision.
3. Do you want to work from home?
Working from home and working remotely are not necessarily the same thing. While working from home can often seem like it's the best arrangement possible, it's often more difficult than you think. For those who struggle with discipline or find it challenging to self-motivate, working from home can be a real challenge. Likewise, some business owners need to have people around them to work at their best and find working from home isolating. This means that it's a good idea to try and make sure you're well suited to working from home before you make the leap.
4. Do your research
As with any business arrangement, it's essential that you do your research before making any decisions. This will involve researching the industry as a whole, what businesses operate in your chosen sector, and what the future looks like for the industry. It's important not to rely on information provided by franchisors and to perform independent research, as you'll need to confirm everything yourself.
5. Do your due diligence
Alongside research, it's necessary to carry out thorough due diligence. Due diligence processes are used to ensure that a business venture is financially viable and not overly risky. It will require you to collect all the relevant financial information available Ė including forecasts, predicted expenditure, and typical start-up costs. Once you've acquired this information, you should be able to calculate whether or not the business is likely to meet your minimum requirements for profitability.
6. Talk to the franchisor and existing franchisees
All prospective franchisees should talk to both the franchisor and other existing franchisees. You'll be working extremely closely with the franchisor and need to be sure that you'll be able to form an effective partnership that allows for open and honest communication. Talking to franchisees will enable you to establish whether the franchisor is being honest about the franchise package and gives you the chance to ask any questions you may have. This is the perfect opportunity to double check the financial performance projections provided by the franchisor and to establish whether thereís anything you should know before signing the franchise agreement.
7. Seek legal and financial guidance
Before you sign any franchise agreement, itís a good idea to seek professional legal and financial advice. All legal documents should be checked by a legal professional who understands franchising, while itís also beneficial to have all financial projections and data checked over by an accountant.
The Editorial Team, Point Franchise ©
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