Ready to launch your own quick-service restaurant franchise and certain you have the next brand with hundreds of units on your hands? Not so fast. Here are some thoughts on what you should do before, during, and after franchising your brand.

Before Franchising a Quick-Service Concept

The single biggest mistake restaurant brands make in deciding to franchise sounds suspiciously like the title of a one-hit wonder song from the eighties “It Takes Two” and the similarity does not end there. It is difficult to establish proof of your concept with one unit. Too often, excited entrepreneurs are ready to franchise as soon as their single one-hit wonder is launched.

Examples do exist where a single corporate store led to a “can’t miss concept” in the making but that is the exception rather than the rule. For most operators, you should first justify the investment of other people’s money and effort in your brand. Demonstrate the concept’s viability in multiple scenarios before having others, especially in today’s high construction cost and rich capital cost environment, spend money building out stores.

Prove Your Concept in Multiple Contexts:  Planning up front and providing validation across multiple dimensions provides greater security to scale the brand to dozens and then hundreds of units. The last thing you want to create is a “failure to launch” where the hype doesn’t meet the reality and the ubiquitous “sold but not open” count sitting on your FDD tells everyone you weren’t ready to scale up this business venture.

Size and Diminishing Returns: What dimensions should you test? Try them all. Remember, you are not the only one competing for real estate. Test to see if that drive through or patio is essential before locking out other options. Confirm if the revenue per square foot is consistent if you shrink the design from 3,000 square feet to 1,200. Overall, you must test to determine the ideal size and beyond that, the point at which return on invested dollars begins to slide. Confirming these answers up front will attract more investors confident in investing in your brand. While this may slow your development, testing the concept at different size boxes can lead to the ultimate success or failure of the quick-service restaurant brand.  

Geographical Testing: Your concept should also be tested across different states. Local tastes or proximity to a demographic group favoring your flavors could be accounting for outsized success. Try a launch in a similar size market but vastly different region to determine if the flavor profile still resonates. You also want to launch across multiple time zones to assess your ability to deliver products and services across a supply chain that is more than a few miles from home base. Replicating the “secret sauce” from your own commissary is very different from outsourcing it and the costs may also be prohibitive for shipping to stores too far to service. This can impact how you grow the franchise model over the short and long term.

Assemble Your Team: While testing, you also want to hire all-star team. Bring in expert help from legal, accounting, operations, and marketing. These are vital skills. Legal is necessary to secure a federal trademark and register the FDD in all states where you plan to sell. Marketing must develop brand standards for consumer and franchise sales along with store design. Operations should partner with legal on the manual and documentation of processes. Lastly, your finance team must provide systems that provide financial reporting for both the corporate and store level economics. Planning at the outset for future growth will provide continuity for growth and operations.

During the Franchise of a Quick-Service Concept

Standardization and Benchmarking: If you worked carefully to establish common design standards and accounting standards up front, then the next phase of your franchise is easier. If not, then this is the time to standardize and create companywide benchmarks. Standardize when you have just a few stores and be certain everyone is on a common chart of accounts so key metrics can be easily measured across multiple locations.

Structured Training and Support: Develop training and support for your growing chain but be open to adjustments at this phase of growth. This is the point at which some owners are wearing every hat in the business. You cannot adequately train while also handling development and strategy for your brand. Address your real staffing needs early and bring in the necessary support.

Cultivate Brand Culture: Your operations manual should give each franchisee a true picture of their procedures. At the same time, as you are building out units, you are, through your actions, defining the culture of the brand. Be sure that your quick-serve’s vision, mission, and core values are clearly defined as new franchisees are added.

Responsible Growth Management: This is also the phase of growth where responsibility kicks in. To this point, costs generally exceed royalty revenue and it’s tempting to finance your growth through new franchise sales. That is not the responsible approach to growth, however, and may lead to a brand with larger issues such as franchisees who are not well capitalized, operate absentee, fail to open, or simply work against the overall vision of the brand. This is the stage where you must have a trusted executive team who is willing to say no to candidates that are shaky due to their commitment, their capital, or their character.

Establish a Transfer Process: Lastly, go into franchising with eyes wide open knowing that not every single new franchisee will lead to success. Establish a resale program early. When you begin franchising, it is natural to focus solely on opening new units. While you are selling new franchises and opening units, don’t forget about your existing units. Franchisees may want or need to sell their units for a variety of reasons. Developing a transfer plan for these situations will keep units open that are at risk of closing. Consider bringing in a franchise resale partner early in the development of the brand.

After Franchising a Quick-Service Concept

Maintain Momentum: After the first two stages, it may feel like time to relax but you can’t take your foot of the gas yet. The final stage is after franchising, and this is where real growth happens. Stay true to your original vision for the brand, continue to build consistent results, and trust the process. You have now proven you are not a one-hit wonder and will be breaking records.

Franchising a quick-service restaurant is a complex and multi-faceted endeavor. From rigorous testing and concept validation to maintaining brand integrity and fostering responsible growth, each phase requires careful planning and execution. By addressing each phase of growth carefully, your restaurant can transition smoothly through the stages of franchising, positioning it for long-term success and scalability.

Robin Gagnon is the cofounder of We Sell Restaurants and, the nation’s largest restaurant brokerage firm and the only national franchise specializing in restaurant sales. One of the most prolific restaurant brokers in the industry and a franchise resale specialist, she holds the Certified Business Intermediary (CBI) designation from the International Business Brokers Association or IBBA and is an MBA. She has also achieved the Certified Franchise Executive (CFE) designation from the International Franchise Association.

Franchising, Outside Insights, Story