BusinessesForSale.com
By Bruce Hakutizwi
BusinessesForSale.com
For many, working part time at a fast food restaurant is their introduction to working life. Others decide to pick up some extra hours at the local fast food joint in the evenings to make some spending money or after classes as a way to help support college.
For most of these individuals, working in fast food is a temporary means to an end. But for a rare few, it becomes a fun and lasting career. These people find they thrive on the continual fast pace of the job. There are unique challenges that come with managing a large staff handling a disparate group of tasks, often for more than the usual restaurant hours.
If that describes you, and you’re yearning for the next career goal to establish and conquer, you’re going to want to seriously consider buying a fast food restaurant or franchise location of your own.
A busy restaurant that’s run well and serves quality food consistently can be extremely lucrative. The possibility of future expansion is very good, especially on the franchising end of the spectrum.
But it’s also important to note that most fast food restaurants require a significant up-front investment and take at least a few months to ramp up to self-sustaining revenue levels, so it’s going to be a serious financial responsibility, and it’s not a decision to take lightly.
One of the first keys to success is choosing the right restaurant to buy in the first place. For the sake of this article, we’re going to assume you are interested in either purchasing a privately-owned independent fast food restaurant or taking over an existing franchise location from it current franchise owner. Building a brand new location – whether independent or franchise – is a topic for another article.
The following three tips will help you make sure the restaurant you choose to purchase is giving you the best opportunity for success:
1. Start as a customer
Before making yourself known as a potential buyer, scope out the location that’s for sale as a customer. This will give you valuable insight into the existing business that you really can’t get any other way. From the moment you see the restaurant from your car window, start paying close attention to the following:
- What is the condition of the neighborhood and surrounding buildings? Is it attractive or in need of repair?
- What is the condition of the restaurant’s property, parking lot, exterior, and signage? Does it give off a fun, cheerful, inviting vibe, or the opposite?
- What does the entranceway and interior look like? Is it clean and presentable or does it look like it’s been let go?
- How is the service while you’re waiting in line, as you place your order, and as you wait for your order to arrive? Is it quick, efficient, and friendly? Or is it slow and frustrating?
- What is the quality of the food itself? Does it make you want to finish the meal, or is it disappointing?
- Finally, as you leave, would you honestly want to return?
By analyzing an existing location in this manner, you should get a very clear picture of what kind of job the current owner is doing in creating the atmosphere and qualities that promote high revenues, loyal customers, and eventually success for a fast food restaurant.
If you come away with a positive impression on nearly all counts, you can be fairly sure that the restaurant can succeed if it’s managed properly, and that stepping into that role as a new owner probably won’t be a huge difficulty because you likely won’t need to change very much at all.
On the other hand, if you come away with a negative impression, you’ll need to analyze a little further to determine to what extent you may be able to fix the issues you saw if you took over as owner. What would it take to do so? How much would it cost? In some cases, you may see these as simple bumps in the road as you take over the business. But in other cases, they may be enough to convince you to look elsewhere for a potential restaurant to buy.
2. Focus on the financials
While an initial analysis based on being a customer can give you a lot of valuable information, it really doesn’t offer any in-depth data about the business itself. If a particular location passes that first test, you’ll likely want to express your interest in buying it so you can get access to those important details.
The most important records you’ll want to review are the financials. Even a beautiful-looking restaurant could be balancing on the brink of collapse. More rarely, a location that didn’t impress you as a customer may be raking in profit which the owner just isn’t reinvesting wisely. In either case, a thorough review of the financial records will tell a very clear story you need to know if you’re going to purchase this restaurant.
It’s best to employ the help of a professional business accountant with experience in auditing fast food accounts in order to get the clearest picture from this analysis.
Other important records to review include legal, real estate, regulatory, employment, equipment service, and any other business records that can have an impact on the value of the business and any obligations you may be taking on as the new owner. In all these cases, getting assistance from an accountant, attorney, or real estate specialist who knows the fast food industry is your best bet.
3. Work there for a month
Once you settle on a location that seems to be just right for you, one more important step can mean the difference between long-term success and failure:
Arrange with the current owner to allow you to work at the location for at least a month. This should be unpaid, of course, so that there’s no conflict of interests involved. While you’ll want to use this time to get some in-depth training in how the location is currently managed and operated, you’ll also want to get to know the current staff, learn the basics of what it takes to do each task that needs to get done, and get some face time with the customers as well.
Immersing yourself in the experience this way provides that final check in the process of buying the right fast food location: can you see yourself spending 12-15 hours a day, every day, in this place without losing your mind? Can you actually enjoy the experience?
Unfortunately, many entrepreneurs buy a fast food location without testing their own staying power in this unique, fast-paced environment. The end result is either failure or a long and depressing stint in yet another “job” that the individual hates.
By carrying out these three simple but vital steps, you will be in the very best position to choose a fast food restaurant or franchise location that offers you, personally, the best chance of success.
Author Bio:
Bruce Hakutizwi is the U.S. and international manager of BusinessesForSale.com, a global online marketplace for buying and selling small- and medium-sized businesses. With more than 60,000 business listings, it attracts 1.4 million buyers every month.
Twitter: @BizForSaleUS
LinkedIn: https://uk.linkedin.com/in/brucehakutizwi
Articles published by Bruce:
http://www.restaurantmagazine.com/restaurant-trends-all-the-worlds-a-social-media-stage/
