My brother, who operates a very successful restaurant in Tucson called Bistro 44 called me this week to discuss opportunities to become a franchise restaurant operator. He was just beginning to check into what the opportunities might be, and he had recalled that I had performed some restaurant franchise valuation work earlier (a long time ago!) in my career.
I was able to pass on some thoughts about some of the less obvious considerations around how to develop a top-performing franchise operation, which include finding great operations management (usually 1-2 experienced managers) and leveraging them across several restaurants, pricing considerations, and some other issues. One of the other issues we discussed is how, as a potential franchise operator, he should review a variety of franchise agreements to better prepare him for the negotiations with the restaurant chains. I pointed him to some actual Franchise Agreements from various public restaurant companies, ranging from a Krispy Kreme Donuts Franchise Agreement to a major restaurant chain’s (Applebee’s Franchise Agreement) to what I believe is a Haagen Dazs Franchise Agreement. Franchise agreements, and many other types of actual agreements and clauses prepared by top law firms, are available in their entirety at www.RealDealDocs.com.