How to Franchise a Restaurant: 8 Tips for Success

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5 min read

Mar 25, 2022

How to Franchise a Restaurant: 8 Tips for Success

If you’re considering turning your restaurant into a franchise, congratulations! Expansion means that your business is viable, has surpassed your goals and has gained brand recognition. 

As a franchisor or hospitality group owner, you’re accountable to and responsible for the success of multiple franchisees and restaurants. You need to provide franchisees and your growing corporate team with the guidance, technology and marketing strategies they need to sustain the business.

Follow these tips for how to franchise a restaurant to set your corporate and franchisee locations up for success:

Cross-promote properties
Share customer data across locations
Keep your brand front and center
Ensure your tech stack works seamlessly
Connect your properties through technology
Understand your guests, wherever and however they dine
Make the most of each table
Nurture direct relationships with guests

1. Cross-Promote Properties

Whether you’ve gone the traditional restaurant franchisor-franchisee route or have grown your business from a single venue to a restaurant group, it’s important to leverage your entire portfolio of properties for cross-promotion. After all, the more locations you have, the more opportunities you have to keep guests dining with your brand instead of going to the competition.

For example, if your Williamsburg restaurant is all booked up, send guests to your Bushwick property. Do this by configuring your online reservations pages to show availability at nearby locations. Guests can seamlessly make a reservation or join your engaging, virtual waitlist and stay in the family, rather than dining elsewhere.

2. Share Customer Data Across Properties

When you share customer data across restaurants, each venue and franchisee will be equipped to make every guest interaction a memorable one that will keep them coming back for more.

Let’s say that a guest who is a regular at one of your restaurants books a table at its sister location for the first time ever. Since the guest is already in your customer relationship management (CRM) system, staff at the sister property can see the guest’s dining preferences in their profile. With this knowledge, a server can point out the vegetarian options without being asked, for example, or recommend the best white wines on the menu.

3. Keep Your Brand Front & Center

When you want to know how to franchise a restaurant, you need to choose technology that lets you put your brand in front of customers. After all, when your restaurant has multiple locations and franchisees, it becomes a known brand whose name alone can attract customers.

Look for whitelabeled technology providers, like reservations and online ordering platforms that let you put your logo front and center, instead of making it about them. Doing so can help boost brand awareness and loyalty.

4. Ensure Your Tech Stack Works Seamlessly

As your franchise grows, so will its tech stack. You’ll have to upgrade from technology that serves one location to enterprise-level solutions that can scale with you. Look for solutions that work together and can seamlessly share data across locations and with all of your franchisees. 

Ensure your tech stack promotes growth – instead of hindering it – by using tools that integrate with each other. For example, your guest management platform should be able to communicate with your POS and accounting tools.

Integrations make the whole greater than the sum of its parts. When solutions work together, they should enable powerful capabilities. For example, when you integrate SevenRooms with your POS, you unlock live spend tracking, so you can see how much each party is spending in real time.

5. Connect Your Properties Through Technology

In addition to your tech solutions communicating with each other, they should also be able to connect to your other properties. After franchising your restaurant, opt for enterprise-scale solutions, as these platforms are built to support chains.

The more properties and franchisees in your system, the more knowledge you have at your disposal. When your tools can talk to each other, you can access data about your customers, preferences, transactions and more to reach the right business decisions sooner. Plus, features like group-level tracking help you easily identify trends.

6. Understand Your Guests, Wherever & However They Dine

When you’re learning how to franchise a restaurant, you need to keep guests top of mind. With a CRM, you can automatically build guest profiles with data about order history, preferences, special dates and more. When you know your guests from one venue, you can wow them by using that information to provide a personalized dining experience when they visit your other properties. By giving every guest the royal treatment, you’ll make them brand loyalists, which will drive repeat business

When you track on- and off-premises dining across properties, you can understand guests’ preferences and habits to inform your marketing efforts. Let’s say a guest books a table at one of your restaurants to celebrate their birthday with their significant other and friends. During the meal, the server learns the couple’s anniversary and enters it into the guest’s profile. Then, before the anniversary rolls around, you can use automated marketing to invite them to celebrate at your most romantic restaurant and offer a free champagne toast upon arrival.

7. Make the Most of Each Table

One table may seem like small potatoes when you operate a chain, but when you optimize each cover, your results will grow at scale. After all, the more franchisees in your system, the more tables they have and the more opportunities your business has to earn revenue and delight guests.

Enlist artificial intelligence to make the most of each table. With an AI-powered seating algorithm, you can test thousands of seating options every second to place guests in the best table for business.

And, with live-spend tracking, you can ensure guests reach any table minimums you may have, and keep tabs on big spenders so you can reward them.

8. Nurture Direct Relationships With Guests

Direct guest relationships are even more important for franchises than for independent restaurants because franchises have more opportunities to generate revenue and for third-party platforms to take profits away through commission.

Turn “third-party guests” (those that book or order via third-party reservations sites or delivery apps) into direct guests by sending them a link to place an online order or make a reservation through your website for their next meal.

Wrapping Up: How to Franchise a Restaurant

Being a restaurant owner is an impressive feat. Being a franchisor and operating a hospitality group is an even more formidable accomplishment. While most of the strategies you used as an independent restauranter can transfer over when you become a franchisor and run a chain, our restaurant franchising tips can help your growing business go the extra mile.

Equip your restaurant empire with SevenRooms for enterprises. Book a demo today.

FAQs About How to Franchise a Restaurant

1. How much does it cost to open a franchise restaurant?

There is a wide range of costs when it comes to restaurant franchising. The initial investment starts at around $100,000 and could cost up to several million dollars. On average, the cost to open a franchise restaurant is $500,000. 

2. Is franchising your restaurant profitable?

The average annual profit for a restaurant is $82,000. However, profits depend on many factors, including location and brand loyalty. Following SevenRooms’ eight restaurant franchising tips can help you increase your business’ annual profit.

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