How to Buy a Restaurant Franchise

Are you interested in buying a restaurant franchise? While franchises can be an excellent way for new entrepreneurs to enter the food service industry, you need to make sure the franchise is a good fit for your circumstances.

To help you with this momentous undertaking, we present this guideline of how to buy a restaurant franchise that you will enjoy for years to come.


  1. Decide if a franchise is the right choice for you. Franchises offer several benefits: name recognition, the support of franchisors and fellow franchisees, better buying power, and easier financing. There are downsides to consider as well: a large up-front investment, on-going fees, and strict rules. If you are opening your restaurant to be your own boss, a franchise may not be your best option.
  2. Determine which franchise you want to open. You need to consider your needs as well as the requirements of franchisors to come up with the perfect fit.
  • Evaluate the Market Look at local demographics (population density, age, income, etc.) and competition to determine which restaurant would be best for your area.
  • Consider your finances Many franchises have sizable net worth, liquidity, and investment requirements; some require owners to open several units at a time or to commit to open more units in a set number of years.
  • Assess your qualifications Each franchise has its own requirements as to the amount of necessary experience. Some are perfect for novices, but many of them require franchisees to have a certain amount of food service experience.
  • Establish your commitment Some franchisors require owners to be full-time managers; others permit you to hire a manager. Carefully consider the time commitment you are willing to make.

3. Review the Financial Disclosure Document (FDD) The FDD will provide you with information on a franchise’s finances, viability, the support the franchise provides, territory size, and more. Make sure the company has sufficient strength and viability to justify your involvement.
4. Speak with Current Franchisees Ask if the franchisor provides agreed upon support, if the restrictions have proven onerous, and if they would recommend this franchise to others.
5. Write Your Business Plan Provide an overview of your restaurant, including location, estimated income, and costs. The FDD will provide much of the required information.
6. Obtain Financing While most franchises require a large initial investment from your personal funds you will most likely need to finance the rest of your restaurant expenses through private investors, partners, family members, or a bank loan.
7. Consult a Business Attorney Before you sign your Restaurant Franchise Contract, have an attorney go over every provision with you. Make sure you understand all the fine print, and have a clear idea of your responsibilities. Some of the important questions you need answered are:

  • Can you sell your business?
  • Do you own the equipment?
  • What is your financial obligation if your franchise fails?
  • Can you get a refund of your investment money?

Now that you know the basics of how to buy a restaurant franchise, the next step is to get out there and find your franchise! Once you do, Pinnacle Hospitality Systems will make sure you always have the support you need to keep your operation up and running. Pinnacle’s POSitouch POS backs up its reputation as the best software for restaurants by providing access to outstanding tech support on a continuous basis, 24/7/365. Live, bi-lingual POSi touch support representatives can troubleshoot your POS system online instantly; if you need further help, field support technicians are always on-call. Contact Pinnacle today at 800-771-7100 for more information on how Pinnacle’s POSitouch system can help your restaurant franchise succeed!

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