Starting a Food Business: How to do it with a Franchise
Orginally posted on 09/10/2018. Updated on 14/03/2019.
If youíre considering starting a food business, you may be contemplating opening a restaurant, launching a new type of takeaway kiosk or investing in a food truck. An online food business is often a franchise opportunity that can forgotten about - and it shouldnít be. Here, we take a look at what an online food franchise is and what steps must be undertaken to prepare yourself for franchise ownership.
Starting a Food Business from Home
When the majority of us think of food franchises, we usually imagine national fast food and restaurant chains. However, thereís a lot more to the franchising sector than brands like McDonalds and KFC. While fast food restaurants are a popular form of franchising, there are a growing number of franchises that specialise in healthier food options and that can be operated from the comfort of your own home.
This exciting opportunity provides scope for a better work-life balance, without having to sacrifice potential profits. For the most part, home-based food franchises offer their customers delivery services. This could involve delivering a variety of delicious cuisines cooked by a range of businesses or it might focus on delivering foodstuffs grown or produced by a single supplier.
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Starting a Food Business Online
Saying that the internet and, more recently, social media have had an overwhelming impact on how we live our lives would be an understatement. With the vast majority of UK consumers having access to the internet 24/7 wherever they go, the business landscape has been revolutionised. 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 talented workers who demand 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 very 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 fresh produce straight from the farm to customers around the country.
Starting a Food Business Checklist
Now that we understand the premise of a home-based food business, letís take a look at seven things youíll need to consider to make sure that youíre all set to become a franchisee.
1. What level of investment can you raise?
Firstly, 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 project youíre really passionate about.
2. What kind of food business do you want to operate?
One of the most fundamental things to get right is choosing the right type of food business for you. You need to consider whether you will offer fast food or health foods, and whether you will run a company thatís exclusively online or which operates both online and from a physical site. Also, you should consider whether you would prefer to manage a small team or are happier working independently. Taking the time to consider these factors should help you make a more informed decision before jumping straight in.
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 the most convenient arrangement possible, it can more difficult than you think. For those who lack self-discipline or find it challenging maintaining motivation all day, working from home can be really difficult. Likewise, some business owners find working from home isolating and need to have people around them to work at their best. Therefore, take some time reflecting on your personality traits to assess whether you are well-suited to working at home.
4. Have you done your research?
As with any business arrangement, it's essential that you do thorough research before making any important decisions. This will involve researching the industry to find out what businesses operate in your chosen sector and what the future of the industry looks like. 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. Have you used 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 too risky. You will need to collect all the relevant financial information available, including forecasts, predicted expenditure and typical start-up costs. Once you've acquired this information, you should be able to calculate whether the business is likely to meet your minimum requirements for profitability.
6. Can you talk to the franchisor and existing franchisees?
All prospective franchisees should talk to both the franchisor and existing franchisees. You'll be working extremely closely with the franchisor and need to make sure you can form an effective partnership that allows for open and honest communication. Talking to franchisees will enable you to establish whether the franchisor is being transparent with the franchise package details and it gives you the chance to ask any questions you may still 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. Have you sought legal and financial guidance?
Before you sign any franchise agreement, itís a sensible idea to seek professional legal and financial advice. All legal documents should be checked by a legal professional who understands franchising, and it can also be beneficial to have all financial projections and data checked over by an accountant.
Becky Martin, Point Franchise ©
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