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5 Requirements You Need to Start a Franchise Business

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Often, people who want to start a company, such as restaurant business, are motivated but don’t know what to do. Instead of starting from scratch, one option is buying a franchise as this is an excellent way to increase distribution. Also, you get the support and guidance from the parent company in exchange for royalties, which is a percentage of your sales. Are you thinking about starting a franchise business but are unsure about what’s required? Here are five of the basic requirements for starting a franchise company, along with a few considerations and warnings.

What Is a Franchise?

Maybe you’ve heard of this term but aren’t quite sure what it is. Put simply, a franchise is a business that’s owned and run by a franchisee or individual but is overseen and branded by a larger parent company or franchisor. Common examples include restaurants and hotels, such as Subway and Hilton Hotels.

1. Money for Getting Your Operation Off the Ground and Running

Before you can get your operation going, you’ll need to have enough initial capital as well as an overall net worth before even considering starting a franchise. Unless you’re independently wealthy, you may have to borrow money. Start with commercial banks since they fund many types of franchises. You could also use equity raised by other people.

2. A Business Plan

One of the main requirements for starting a franchise is a business plan, which you’ll also need to present to a lender. Before writing your plan, go over all the data you’ve been offered from a prospective franchisor, in addition to your own personal research.

Your plan should include details, such as estimated investment expenses, besides projected returns. Most importantly, be sure your business plan is well written because this can make a difference in whether a lending company approves your loan.

3. Exceptional Management Skills and Experience

For your franchise to succeed, you’ll need to possess the right skills and management experience. Therefore, be sure you have the right set of skills that meet a franchisor’s requirements before trying to buy the franchise.

4. Regulatory or Legal Requirements

A fourth requirement is satisfying any regulatory or legal requirements that the parent business mandates. While sometimes the requirements are simply obtaining permits and a lease, in other situations, it could involve educational requirements or specific licensing.

5. A Good Accountant

You’ll also need a skilled, experienced and highly qualified accountant for creating audited financial statements. Another reason for hiring an accountant is for giving you sound advice on your business’s financial structure.

Other Considerations

  • How much you can earn depends on several factors. For example, as a Twin Peaks franchisee, some of these variables include your management skills, business location, market conditions, traffic, operating costs and other factors.
  • Do as much research as possible to see how franchising works so that you can know your options and what to expect.
  • Take advantage of seminars that can give you tips for succeeding in your franchise business.
  • Consider your interpersonal skills. Are you able to comfortably interact with both employees and customers? Besides being energetic, you also need to pay close attention to details and be exceptionally disciplined.
  • Another helpful trait is having a management style that’s hands-on or self-motivated.

The Bottom Line

  • The process of starting a franchise business isn’t cheap or easy, so it’s important to partner with a reputable parent company.
  • There are several requirements you must satisfy before starting your business.
  • Franchising is one of the most flexible ways you can distribute goods and services.
  • A franchisor can give you the needed training and support for starting a restaurant franchise business.

Partnering with a fun and successful brand, such as Twin Peaks, which is a unique sports bar and restaurant, is a smart move. Please contact us to learn more about the franchise process and apply today.

Have More Questions For Us?

Open the FAQs below to find out more about the franchise process. Don’t see the question/answer you’re looking for? Email us for more information.

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Where can I obtain more information?

Contact our Franchise Development Department for availability in your trade area:

Franchise Development (972) 941-3160 franchise@twinpeaksrestaurant.com

What is the availability of opportunities in my area?

Currently, we are evaluating only the best applicants in many new territories throughout the U.S., due to the overwhelming amount of interest in Twin Peaks franchises.

What is the term of the franchise agreement?

The initial term of your Twin Peaks franchise agreement is 15 years.

How much can I potentially make as a Twin Peaks franchisee?

Your earnings capability will depend on a number of factors, such as ability to manage your restaurant and lead the team, market conditions, location, traffic, operating costs and financing terms. While there is no guarantee of success, Twin Peaks gives the tools and opportunities to positively affect your profits.

What are the site requirements for a Twin Peaks restaurant?

Restaurants are 6,000-8,000 square feet with outdoor seating and 150+ parking spaces. Prime locations are located in high traffic areas with above-average daytime and residential demographics and have excellent visibility with easy access.

What is the franchisee training process?

There is an initial 7-week training program at the Twin Peaks Training Center located in Dallas, Texas. Additionally, we provide on-site pre-opening and opening training for a minimum of 14 days as well as periodic on-site visits and operation reviews.

How long does it take to open a Twin Peaks restaurant?

While it varies per location, launching a store typically takes about 9-12 months, from signing the franchise agreement to opening day at your Twin Peaks restaurant.

What are the minimum financial qualifications?

Groups and/or individuals are required to display a minimum of $1,750,000 in liquid assets combined with an overall net worth of $5,000,000, as well as ability to secure third party financing

What is the cost to open a Twin Peaks restaurant?

The initial cost of building a Twin Peaks restaurant ranges from $1,434,200-$3,633,400. This includes all start-up expenses as well as the $50K initial franchise fee. The total cost of each restaurant varies by size, age and location. Find out more here.

What are the operations and management requirements?

Twin Peaks is actively seeking highly qualified existing multi-unit restaurant developers and operators to become franchisee brand partners. We take several important factors into account during the selection process.