Fast Food Franchise Agreement Tips

Are you considering becoming a fast food restaurant franchise owner? If so, you’re probably getting ready to sign a franchise agreement. This is a huge commitment that can affect your life and your finances going forward. (You already know this, but it’s worth repeating.) Before you sign, Signal Connect has some tips for you to consider. If you’ve already signed your franchise agreement, this advice is still helpful for anyone in the fast food business.   

To help you make the best buying decision, here are seven tips for buying a fast food franchise:

Analyze the Franchise Document

Common sense dictates that you scrutinize anything that you’re going to sign your name to.  The Federal Trade Commission requires that certain information must be disclosed to prospective franchisees 10 days before signing. These things include any bankruptcies or legal problems that the franchisor has experienced. It also includes the specific responsibilities of each franchisee. Pay close attention to all these details and more because it shows you what you’re getting into. If you don’t feel 100 percent comfortable with the document, don’t sign it.     

Talk to Other Franchisees

Franchise agreements typically include the names and numbers of other franchisees in the system.  It’s a very good idea to talk to these folks before signing your document.  Here are just some of the things you should ask other franchisees:

  1. Ask them about their experiences with the franchisor?
  2. Do they think of themselves as successful as part of the franchise?
  3. How long did it take them before they began to show a profit?
  4. What kind of problems and challenges did they face after joining this franchise?

Pay close attention to what these franchisees tell you about their experiences with the company.  Your success might very well be dependent upon the information these folks are willing to share!

Failed Franchises

Are there any failed restaurants in your prospective franchise?  Just because you can find them doesn’t mean they’re not out there. When franchisees fall on hard times, the parent company might take ownership of the failing business. To some franchisors, it’s better to keep up appearances than close a location. This is another reason to talk to other franchisees in the system. If corporate has had to take over any stores, fellow franchisees might be the only ones to tell you about it.   

Territorial Exclusivity?

Some would-be franchisees assume that the franchisor will give them this.  The truth is that many franchisors have multiple stores scattered throughout an area. This might be a boon for the franchisor but it can leave franchisees scrambling to earn their piece of the pie. If you have concerns about owning a fast food franchise in a saturated market, pay close attention to your agreement.  You’ll only get territorial exclusivity if it’s written into the contract.

Financial Assistance for Franchisees

Some franchisors offer financial assistance to help get their franchisees up and running.  It’s always good to look into what the franchisor has to offer in these regards.  You might get good rates from your franchisor or the lending institution that it works with.  On the other hand, take note if your future franchisor doesn’t work with a business lending institution to help finance new franchises.  This could be a red flag regarding that fast food business’s earning potential.      

Mandatory Remodeling

Does your franchise agreement require mandatory remodeling of your store within a certain time frame?  Look closely, because this is important.  Remodeling can cost a business up to one hundred thousand dollars or more, depending upon the job.  This isn’t a huge deal if you’re fast food franchise is earning money hand over fist.  But if you have a bad year, you might not have the funds for that fancy remodeling job that you’re obligated to do.  Refer to tip No. 1 and read every line of your franchise agreement before you sign anything.

Bonus Tip: DIRECTV for Fast Food Franchises

DIRECTV is probably the best thing you could add to your fast food restaurant’s dining area. It encourages dine-in customers to stay at your restaurant longer. When they do, they’re likely to order more food, drinks, and desserts, which boosts your profits. DIRECTV attracts more diners during your off-peak hours.  It also encourages some drive-thru customers to dine inside. Again, this leads to increased your profits for you and your business.

Signal Connect is Your DIRECTV Dealer

If you want DIRECTV for your fast food restaurant, Signal Connect is your No. 1 source.  We’ve delivered DIRECTV to many fast food restaurants.  We can help you with a few commercial DIRECTV account options that offer tremendous value to fast food franchisees.  In some cases, we’re able to offer reduced pricing, a two-year rate lock, and free equipment and installation.   Our concierge-level customer support is another reason why you should trust us with your DIRECTV.  Our sales reps are happy to help you with the following:

  • Choosing a DIRECTV programming package
  • Providing the best satellite dish and other equipment
  • Matching you with a local DIRECTV installer
  • Quickly and easily activate your account
  • Providing free customer service for the lifetime of your plan.

Signal Connect is a fast food restaurant owner’s source for DIRECTV commercial programming.  If you have any questions about how this satellite TV programming can play its part in your restaurant’s success, call us at 888-233.7563.

About the Author

Stuart Sweet
Stuart Sweet is the editor-in-chief of The Solid Signal Blog and a "master plumber" at Signal Group, LLC. He is the author of over 10,000 articles and longform tutorials including many posted here. Reach him by clicking on "Contact the Editor" at the bottom of this page.