I want to create a restaurant franchise. What is the best way to get started?

I have an awesome restaurant idea. I have a huge potential customer base for this idea, which is between 20-60 million Americans who have specific dietary needs that are not addressed on any menu that I have seen. Basically, I have the concepts for the menu items, which I think will really help out this group of people. I don’t really want to run the restaurant myself, mainly because I have never worked in one and don’t want to quit my day job. There are so many millions of people that could be helped by the ideas I have, but it is difficult to know where to begin. Basically, I want to get paid for my intellectual property, so I was looking at the idea of selling franchises. I just don’t know where to begin. Can I sell a menu, or do I need a business plan? How do I pitch my ideas without having them stolen? Do I look for an investment angel, or do I take out a small business loan?

What is the best approach for someone who doesn’t actually want to run the restaurant?

Hi Liz!

As you already realize, the process of actually owning and operating a restaurant is VERY involved and takes a significant amount of experience. There are, of course, restaurant groups (like "Lettuce Entertain You", among others) that own/operate/manage hundreds of various franchises all over the world… and perhaps one of them might be interested in starting a franchise based on your ideas.

The first step, of course, is to memorialize your ideas in some form of "tangible medium of expression". It’s a legal phrase that basically means that you need to write down your ideas and get them onto paper and out of your head. Once you write them down, they’re yours and you automatically hold a copyright in them.

The next step would be to create a business model around these ideas. You need to be able to show the management folks that your idea is a good one… that it would be of interest to a great portion of the population… and how it would be different than what is already available. A Business Plan is the typical method to explain these details. There are even a variety of business schools around the country (check at your local university that offers an MBA program to be sure) that have students who need practice writing business plans and will help you for sometimes no cost at all.

With your business plan drafted, and after practicing your "pitch", you would now be ready to sell your idea to the management company. To protect yourself and your ideas, you’ll want to have a Non-Disclosure Agreement (NDA) drafted and signed by you and the management company(ies) that you talk with BEFORE you share your ideas. The NDA means that each party can share confidential information with the other and that sharing doesn’t give the receiving party the ability to use the idea without compensating the other party.

Hopefully, if your pitch goes well, the management company will like the idea and will want to use it as a way to create a new restaurant franchise.

Alternatively, you could always seek outside investors and experienced restauranteurs and try to open the first restaurant with your new menu… but that is much more risky … even if it might actually be easier to accomplish.

Good luck!