As more people choose to secure their future through business ownership, joining the restaurant industry is appealing in many ways. Restaurants bring people together and with the right concept in the right market, it can be a profitable venture.
If this is something you’re thinking about, you may be starting a restaurant checklist to determine if this industry is the right fit, especially if you have limited experience in food service or business management. Freddy’s Frozen Custard & Steakburgers has helped franchisees launch 450 locations across the U.S., so we know a thing or two about opening a restaurant. We are serving up this checklist as a guide to what it takes to open your restaurant.
Establish a Concept
Your restaurant startup checklist begins with choosing a concept – and there are a few options:
- Quick service: A quick service restaurant (QSR) is most commonly known as a fast-food restaurant.
- Full service: Full-service restaurants (FSR) provide table service to customers. Customers are seated, wait staff takes orders, and food is brought to them. Restaurants can be casual, family-oriented, or fine dining.
- Fast-casual: This type of restaurant is a mix of fast-food and full-service options. They offer a higher quality of food from QSRs, but don’t usually have table service.
The concept you choose should be based on what is likely to thrive in your marketplace. Consider factors such as the current competition, the type of people you will be attracting, and how people patronize restaurants in the area.
You must choose a concept that will be supported by your ideal customer base. Everything you do moving forward will be directed to attracting this type of customer, so you want to have significant research that they exist in your market.
At Freddy’s, we evaluate locations for our fast-casual restaurant franchise based on population and income levels, competitors in the region, and available locations to ensure viability. Knowing the concept will work in the community is the very first element on the opening a restaurant checklist for any potential franchisee.
Creating a Restaurant Menu
Once you’re confident about the restaurant concept, design your menu. The menu determines the type of food you will serve, how you will serve it, and the ambiance you are going to create for the restaurant. The menu decides the following:
- Equipment: What will you need to make the food? Will you need ovens, freezers, fridges, slicers, etc.?
- Dining Area Fixtures: To create the ambiance for the concept, you need to choose the right tables, tablecloths, chairs, lighting, dishes, decor items, and more.
- Marketing: To sell your restaurant to customers, your marketing needs to match the experience you will provide, which is led by your menu. Signage, menu boards, gift cards, delivery options, and even the name of the restaurant must be aligned with your concept.
The basic elements of a business plan for a restaurant include:
An overview of your entire business plan (Tip: It’s easiest to write this section last)
- Describe the type of restaurant you will open
- List the services you will provide such as dining and delivery
- Include a sample menu and describe the ingredients
- Define the customer you are targeting
- Include your competition and how you’re different
- Statistics and figures that support the market or site chosen
- Include key members of the management team
- List advisors you will rely upon (accountant, lawyer, etc.)
- List the employees you will hire and their roles
- The physical location of the business and why you chose it
- Primary and secondary suppliers you will use
- Equipment needed to start a restaurant
- Your POS and business operations software
- Other aspects that will be part of operating your restaurant
- How you will promote your business
- Online infrastructure: website, social media
- Offline infrastructure: signage, menus, promotions, gift cards, brochures
- Groups you will join or memberships you will pursue
- Startup costs: The costs associated with starting the business such as a starting inventory, deposits, working capital, etc. Some of these expenses may also be regular expenses in your income statement. Include a contingency fund as well.
- Income statement: A list of your recurring expenses and projected revenues.
- Break-even analysis: Based on your income statement, show exactly what you would need to sell in order to break even.
- Cash Flow Projection: Using your income statement, project your profits for the next five years.
- Any documents that support your business plan such as a sample menu, management resumes, quotes/estimates, etc.
Financing the Restaurant
A critical step on your opening a restaurant checklist is obtaining financing. The amount of money you need to finance will be comprised of your startup costs plus the funds you need to pay the bills before you are generating sufficient revenues. When deciding how much financing you require, always err on the side of caution. Inadequate financing is a key reason why restaurants fail.
Spending the Money
Once you have financing in place, you need to start purchasing the items noted in your business plan. This part of the opening a restaurant checklist includes:
- Securing real estate and making any renovations
- Obtaining permits and licenses
- Ordering equipment
- Setting up business operations
- Establishing training programs
- Putting a marketing plan into action
Opening a Restaurant Checklist for Franchising
It’s estimated there are more than 107,541 franchise restaurants in the U.S. and the growth of franchise restaurants was around 4.1% in 2022. A franchise restaurant can make a great investment because a proven business model takes the guesswork out of creating a profit-generating restaurant.
In addition, franchises have more security with suppliers and marketing which makes operations easier to manage than with a non-franchised restaurant. Franchises also come with a support team who will be your strongest advisor throughout your career as a restaurant owner.
The Freddy’s Advantage
Freddy’s Frozen Custard & Steakburgers has a lower investment level than the industry average and franchisees have an average unit volume of $1,897,647 million*. We’re different from our competitors because we provide a simple menu with multiple dayparts, use premium ingredients, and cultivate a world-class culture.
The fast-casual franchise segment is the fastest-growing within the restaurant industry and Freddy’s has three operational models to choose from that suit a variety of locations. Begin your franchise journey with us by completing a short inquiry form so we can reach out and start the conversation. You might find that Freddy’s is the opportunity you’ve been craving!
*Please refer to Item 19 of our FDD.