For any aspiring entrepreneur, owning a restaurant franchise in Ontario can be very appealing. You have the best of both worlds – you’re your own boss, but can capitalize on the stability, resources and support network of a well-established brand.
Food franchises are big in Ontario. Ontario is the Canadian province with the most number of fast food locations, so it’s a great place to open up shop and the ideal location for your next business venture.
Restaurant franchises in Canada rank in the top 10 business models to invest in, even in today’s pandemic-weary climate, so it’s a very convincing reason to invest in one. The food service industry has and perhaps always will be one of those resilient industries, because let’s face it, people still need to eat no matter the circumstances and they need to socialize, too. Food franchises serve both of those needs and that’s why food establishments will always be around.
Before you jump to make an offer on your favorite diner or pub, you should thoroughly examine what you’d be buying. Just because you have a chance to dodge the difficulties as there is when you open a new restaurant, that doesn’t make buying a franchise restaurant in Ontario an easy ticket to success.
Here are some key things to consider.
What is a franchise restaurant?
Tim Hortons, Montana’s, McDonald’s, Pizza Pizza, are some of the biggest restaurant franchises in Canada. What they have in common is that they operate as franchises.
A franchise restaurant is a unique business model that allows a business owner to grant third-party investors the rights to use the business’s name, branding and model in exchange for an initial investment and ongoing royalty payments. The franchise owner is given access to the proprietary rights such as restaurant POS systems, recipe database, quality control, supplier relationships, software and hardware equipment, real estate knowledge, ongoing support in the form of training, advertising and marketing, business advice and coaching in order to help set you up for success.
In today’s competitive industry, franchises offer the strong brand awareness and security that many budding restaurant entrepreneurs dream of.
Pros and cons of investing in a franchise restaurant in Ontario
The great thing about buying a franchise restaurant is that it’s a smart way to start your own business. Buying into a franchise reduces many of the hurdles that you would have if you started your own business from scratch.
You’re given an already well known, recognized product or service to use or manage so you can easily capitalize on the brand name recognition and built-in support network from a loyal customer base. All that’s left to do is deliver a quality product consistently and manage employees.
Franchising is especially good if you are new to owning a business and don’t have a lot of experience in the industry. You are offered ongoing support and training from the parent company to help you get your franchise business up and running and set you up for success.
You get access to tried and tested systems and processes, recipes, suppliers, equipment, advertising, marketing and so much more. You can just focus on day-to-day operations and continue building the brand.
Location is critical to a restaurant’s success. As Canada’s most populous province, Ontario is jam-packed with potential customers for your business. With a well-established brand awareness and loyal brand following already working for you, tapping into Ontario’s extremely large pool of potential customers should be fairly easy. Whether you buy a restaurant franchise in a major metropolitan area like Toronto or a smaller city like Latchford, there will be no shortage of consumers to attract.
One of the disadvantages to consider is that you do not have complete creative control in a franchise restaurant. With many franchises, you have to follow strict processes for startup, marketing, and day-to-day operations. However, if you look at it as an advantage, the system rigidity eliminates the guesswork, establishes definitive standards for quality control and sets a clear path to profitability.
One of the most common misconceptions about franchising is that you’re confined to using the brand’s rigid operational systems. The fact is, not all franchises are rigid and unwilling to change or compromise. There are many restaurant franchises out there that encourage you to innovate and offer you the freedom you need to make whatever changes you want to see your vision realized.
How much does it cost to invest in a franchise restaurant in Ontario?
Initial investment for start-up franchise restaurants in Ontario can be between $30,000 to $500,000, depending on how recognized and established the franchisor company is.
A franchise fee that needs to be paid at the start of the agreement typically covers costs like support, training, franchisee recruitment, grand opening launch, franchise development and site identification.
On top of initial franchise fees, you may also have to pay on-going royalty fees, a portion of your sales, depending on the level of support and services the franchisor provides to you.
Depending on your franchise agreement, additional costs to keep in mind include advertising fees, equity investment, research and development funds, real estate cost, leasehold improvements, furniture, fixtures, equipment, supplies, employee training and insurance costs.
The number one question you may want to know as a potential franchisee is “How much money can I make as a franchise owner?” Buying a franchise restaurant gives you the framework for a turnkey business that’s already proven to be successful. It’s ready to use and you can begin operations immediately. On the whole, because you have a proven business concept, you’ll likely have a better chance to break even faster with a franchise than if you had opened up your own restaurant.
As with any business investment, it’s important to know if the opportunity is worth the money. It is important to look at a few factors to consider with obtaining a restaurant franchise, including stability, success rate and future growth.
If you’re passionate about opening and growing your own restaurant but don’t want to start from scratch, investing in a franchise restaurant in Ontario can be a great business opportunity for you.
Iron Skillet franchise comes complete with more than 30 years in-depth experience and insight on how to run a highly successful food service operations in Ontario. Whether you’re looking for your next good investment or making your first leap as a franchise owner, Iron Skillet is a perfect choice for a franchise restaurant in Ontario.