• Wed. Nov 30th, 2022

Architecture of a Restaurant Franchise Business

ByStephanie M. Akbar

May 21, 2021

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It’s no wonder restaurant franchising is so popular – franchisees adhere to a proven business model with built-in branding, training and production methods, and (hopefully) a solid customer base. Although restaurant franchising helps circumvent many of the difficulties of building a new business from scratch, it is not without its own challenges and hidden costs.

This is why having an experienced architect who has delivered numerous restaurant projects is an invaluable asset in the process of opening a new restaurant franchise. Their perspective and experience will help overcome some of the hidden hurdles to prepare the business for a smooth opening and long-term success.

In my time designing many restaurant projects, I have found a few critical factors that can make or break a successful franchise location.

Franchisor support

Since each chain supports its franchisees differently, you’ll want to find out what you, the future owner and franchisee, can expect from a potential franchisor before moving into high gear to open a restaurant.

To truly understand franchisor support, you need to research:

The new franchisee

Speaking with an owner who has recently opened a location with the same franchise you are considering will give you access to new first-hand knowledge about the ups, downs, and pitfalls of working with the franchisor. They may also offer little tips and tricks they found along the way that could save you time, money, and stress.

The veteran franchisee

Someone who owns multiple locations will have a deeper knowledge base based on experience and repetition that comes from the process of opening multiple times. These veteran owners will be able to come up with ideas to shorten lead times, ease the opening process, and improve overall restaurant operations.

More importantly, they provide a model of success to follow when beginning the daunting task of opening a restaurant, especially for the first time.

Know the true cost

There are a number of hidden costs associated with the professional services required in the process of opening a franchise. In order to set accurate business goals and milestones, you need to understand the true cost of the whole business.

Throughout the process, several contracts will need to be negotiated and signed, so it’s a good idea to retain the services of legal counsel from the outset to ensure smooth navigation. A few of these contracts could include:

  • Franchise contract
  • Space contract/lease
  • Contract with the general contractor
  • Contracts/leases of equipment and services
  • Contract with the architect

Be sure to factor architectural costs into your budget. An architect will help guide the process from start to finish, creating a functional space for your business. There are a number of roles they can play to protect the homeowner, and you should take the time to find out about the full scope of services an architect can offer.

An architect can guide you through building selection and design, while sorting out the inevitable code issues that arise during restaurant design and construction. They will quickly identify immediate issues and potential concerns in a built environment that might not be apparent to the untrained eye.

However, of all the costs associated with opening a restaurant, construction will be the biggest expense. Although not a hidden expense, the costs of labor and building materials can be shocking to the uninitiated. New homeowners who might reflexively compare the cost of a home renovation to building a restaurant are comparing apples to oranges – they’re just different worlds.

Training and soft opening are costs that can vary wildly depending on the level of training required by your franchise. Be sure to include these costs in your budget.

The lease: understanding what it says and what it doesn’t say

There are a number of questions you should ask yourself to understand your real estate obligations before signing a lease:

  • What does the owner provide?
  • Does the lease include an allowance to offset construction costs?
  • What utilities (water, electricity, etc.) are provided to the space? Do they meet the needs of the establishment?
  • Is the space watered? If not, who covers the installation cost if the code requires a sprinkler system?
  • Is there a grease interceptor, if required?

Keep in mind that building envelope requirements can vary from homeowner to owner, but the three most common industry standards are Cool Dark Envelope, Warm Dark Envelope, and Warm Dark Envelope. vanilla envelope, as shown below.

Dark and cold shell

  • No HVAC
  • No lighting/electricity, with panel installed in space
  • The concrete slab can be fully in place or partially left out
  • No ceiling, floor or wall coverings (structure is exposed)
  • Utilities sunk in space

Dark and warm shell

  • HVAC installed with stamped duct (no distribution)
  • No lighting/electricity with panel installed in space
  • The concrete slab can be fully in place or partially left out
  • No ceiling, floor or wall coverings (exposed structure)
  • Utilities sunk in space

vanilla shell

  • HVAC installed with ducted distribution
  • Toilets installed with walls
  • Ceiling installed with lighting
  • Exterior walls can be finished with drywall
  • No interior partition installed

Know when your first rent check is due

In order to understand everything that needs to happen to have your doors open before the first rent check is due, make sure you know what type of grace period the lease provides. A 90-day grace period may be enough to build and open a restaurant, but the tighter the grace period, the more important it is to have everything in place at the start of the project.

Establish a work schedule

Throughout the many restaurant projects I have worked on, I have found that establishing a timeline to guide the process from site selection to opening day is a beneficial factor in maintaining the project on the right track.

A general overview of the process should look like this:

  • Site Selection and Negotiation: The process begins with signing the franchise agreement and negotiating the lease with your landlord. You should also find an architect during this stage to help you choose the right location and guide you through the rest of the construction.
  • Design and permission: The architect will design the space and request the appropriate permissions for the restaurant.
  • Select a Contractor: With a design in hand, select a contractor to build the space. After negotiating the total construction cost, get to work!
  • Training and Opening: The final step is to prepare staff for opening day and plan for the official opening of the franchise.

This schedule seems simple enough, but there are a number of processes that can become time-consuming or complicated if not planned properly. You should spend time talking with relevant stakeholders to identify areas that may need additional attention.

Ask your franchisor

  • Will they provide a floor plan specific to the space you choose as part of the franchise agreement? If so, what is the delivery time of the floor plan?
  • What kitchen items will they provide? (interior elevations, lighting layout, kitchen equipment layout, etc.)
  • Do they require a final design review? If yes, how long will it take?

Ask your landlord

  • Are there as-built plans for the space to be rented? How accurate are they? If there are no as-built plans, who will pay to collect this information? (tip: negotiate this as part of your landlord’s liability in the lease)
  • Does your landlord require a review of your design? How long does this exam take?
  • Are there any restrictions on when construction can take place (i.e. nights only, no weekends)?

Ask your architect

  • How long will it take them to complete the design?
  • What is the typical time frame for obtaining a building permit in your municipality?

Ask your contractor

  • How long do they expect construction to last?
  • When can they start the project?
  • What is the work schedule?
  • What kind of things can impact this timeline? Do they experience complicated delivery times for products that must be ordered in advance?

Starting a restaurant franchise can be a daunting process with many moving parts to follow that can affect business success down the road. This article provides you with a roadmap to follow, but having a qualified architect on your side is the ultimate guarantee to make sure the plan is executed correctly.

Top photo by Brian Erkens. If a franchisor does not draw a floor plan as part of the franchise agreement, a designer can create a functional and aesthetic layout.

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