One of the most important questions we ask folks who are on the journey to buying a restaurant is, “What kind of concept are you planning?” Some people don’t have a firm idea yet and are simply looking through our listings, gathering ideas and fueling their dream. But when ideas start to coalesce with types of food, style of ambience, and a workable budget, a concept takes shape. Finalizing essential details like location, size, and improvements come with the search for just the right space. Before you know it, your sign is up, the doors are open, and customers are posting rave reviews with their selfies.
Two ownership options in the restaurant industry easily direct your preliminary concept considerations: franchise versus independent. Concepts crystallize faster if you’re a franchise-minded entrepreneur; though opportunities vary greatly in food and style, you won’t need to decide things like the theme or menu. Conversely, independents maintain full control over creativity, resulting in concepts as unique as the individual owners.
Franchise restaurants come with a proven concept formula, brand recognition, training, and support network. Franchisees pay for such benefits through royalty (and often marketing) fees, established as a percent of gross sales. Up-front costs to start a new franchise can total hundreds of thousands of dollars, whereas purchasing a franchise re-sale is a frequent ‘short-cut’ into the partnership. One of several caveats to look for is called a refresh — updating your restaurant after it’s been open awhile so it adheres to the franchises new design theme changes. While it does keep your business fresh, it can cost unexpected thousands.
Though franchise owners operate with autonomy, they’re always part of a family-centric model that lends to higher success rates. According to SBDCNet, National Information Clearinghouse of the U.S. Small Business Administration, the first-year franchise survival rate is about 6.3% higher than the survival rate of independent businesses.
Despite the many franchise perks, independent ownership still represents over 50% of all US restaurants, according to the NPD Group’s 2021 ReCount® Survey. Though independents assume full responsibility for all operations, and the risk for failure is slightly higher, the flexibility for decision-making and 100% profit retention are worthy trade-offs.
Location, location, location. It must be right for the concept, fit in the budget, be easily accessible for patrons, and distant from competitors. While it’s obvious a casual café located on a busy pedestrian corner with parking garage across the street will do much better than one on a side street with limited pedestrian traffic, some lessor known location caveats include:
Don’t let these basics overwhelm you. You’re embarking on a fantastic journey that can lead to the most satisfying years of your life! The more you understand your choices, the more confidently you can embark on your dream.
An important step in buying a restaurant, take time to consider your strengths, weaknesses, goals, and challenges. Then, think about who your restaurant will cater to. Be honest with yourself over some basic questions early in the process; it will simplify your search for the right space and lend greater success to your new restaurant!
How well do you work with others? Are you comfortable as a group leader or do you prefer an independent work style? Only you know if you’re happier creating culinary masterpieces in a kitchen with a sous chef, prep staff, and expediter, or if engaging with customers, managing the dining room, and assisting wait staff is more your forte. It’s also important to acknowledge your strengths, and weaknesses: are you tech-savvy enough to operate modern POS systems, or is pencil and paper still your go-to?
Once you’ve narrowed things for your initial concept choice, it’s critical to know what type of customer you want to serve. Blue collar workers hungry for meatloaf, mashed potatoes, and gravy, or young professionals seeking seared ahi over quinoa and greens? A new mother grabbing a morning snack and chai latte after yoga, or couples on a date who want wings, burgers and beer?
Restaurant styles are nearly as varied as the ingredients that comprise its dishes. Traditional concepts are simpler to pinpoint than 21st century restauranteurs’ amorphous styles. Such modern-day owners are answering to a vast, growing audience: foodies with adventurous taste buds ripe for international flavors and eclectic dishes. An equally tall order is the trend of diners seeking locally and regionally sourced food that result in shorter, more transparent supply chains. Think community gardens, sustainable seafood, and clean eating.
No matter whether you dream of a mom-and-pop style diner or art gallery-esque theme serving seasonal Middle Eastern street foods, here are some basic concepts to get you started:
Now that you know more about restaurant concepts and have made a few preliminary decisions, it’s time to go shopping. The Certified Restaurant Brokers at We Sell Restaurants are highly trained to help you navigate the varied listings, negotiate an offer, assist through Due Diligence, lending, franchise application and training if applicable, and close on the deal. There’s nothing quite like the thrill of watching your sign go up, preparing for your opening night, and seeing folks enjoy your concept, yes, YOUR concept!
Download our free guide to Buying a Restaurant or start browsing hundreds of restaurants for sale online to take the next steps towards restaurant ownership.