Guide to Family and Casual Restaurant Chains Basics

Identify important family and casual restaurant chains basics before you buy

By Sherril Steele-Carlin, Freelance Writer

Action Steps
The best contacts and resources to help you get it done

Look for casual restaurants to invest in

Investing in casual restaurant chains isn't rocket science, you just need all the information available to help you make your decision. Since restaurant chain prices can vary, you need to know what the company expects up front in franchise fees and other costs. A start-up can cost anywhere from $10,000 to $2,000,000 or more in franchise fees and capital, so it pays to check out all the costs and fees in your initial research.

I recommend: BusinessMart.com offers a list of franchise and other restaurants for sale with sales prices. Restaurant Franchise offers several categories of franchises by state or by investment capability.

Learn more about family and casual restaurant chains from reliable sources

Every family restaurant is a little bit different in what they offer customers and what they offer owners. If you want to know about all the restaurant franchise, read industry reports and visit local franchises in your area to learn as much as you can about your chosen casual restaurant chains.

I recommend: Red Hot Franchises.com lets you click on franchises for information specific to that chain. You can even see a list of the most popular franchises. QSR Magazine offers the 2008 QSR Top 50 report, with links to information by chain, sales and segments, so you can decide which family dining chain is right for you.

Research a variety of casual restaurant chains online through franchise listings and services

Many online resources offer detailed information on your chosen restaurant chains, from how many locations they offer worldwide to how much they charge for advertising fees, yearly franchise fees and royalties. You can also use a franchise service to help you pick just the right franchise for your needs and wallet.

I recommend: World Franchising lists restaurant chains by type and segment, and includes information on franchise fiscal requirements and what you need to qualify as a franchisee, including net worth and amount of investment. Chain Leader offers a franchise developer to help you learn more about franchises in your area, and what it takes to become a franchisee. Seaboard Franchise Services Company will help you through the entire franchise process to help you purchase the casual restaurant chain of your dreams.

Helpful advice for making the most of this Guide

• •  Try to bring a new concept to your area when you invest in family and casual restaurant chains. Many casual restaurants offer new concepts, like breakfast specialties (think IHOP), desserts (think Marie Callender's) or special ambiance (think Rainforest Café). Instead of bringing just another family dining experience to your area, bring something new and different to attract even more families you your casual dining chain.

Guide to Family and Casual Restaurant Chains

Find franchise opportunities with family restaurant chains

By Lori Carver

Action Steps
The best contacts and resources to help you get it done

Check availability and pricing for local family restaurants

Not every franchise has openings in your area. Once you have decided on a chain, contact them to find out if you can open a store in your area. If they have no need in your local area, they will send you a list of close areas that need a local restaurant. You can check your state to see which restaurant chains have openings.

I recommend: Beef O'Brady's offers franchise opportunities. Check to see what availability they have in your area. Friendly's has immediate needs for franchisees in many states. Check to see if there is a current need in your state.

Ask the restaurant chain about initial investment

Initial investments for restaurant chains are usually high, however some cost less than others. Before you decide, find out exactly what monetary commitments you will need to make upfront. Also remember that the initial investment for the franchise fee only covers the franchise itself and you will still need working capital for such expenses as electricity, phone and payroll.

I recommend: Yum! offers A&W franchises with a total initial investment of $1,290,000 to $3,088,000. This includes the franchise fee and real estate investment. Village Inn offers franchises with an initial $40,000 franchise fee to investors with $250,000 in liquid capital provided the investor has a net worth in access of $750,000.

Open a casual restaurant chain for immediate business

When you open a chain store, you are cashing in on the name of the franchise. People know that whether your store is in Maine or California they will get the same menu and service when they stop at a familiar place. This is why you buy a franchise, but the down side is there are tight regulations on franchises. You will get your operating schedule, menu and décor from the company. If you fail to meet your obligations, which usually include buying all of your supplies from them, you will lose your franchise.

I recommend: Food Franchise provides franchises available in every state. You can also check franchise availability based on total price. Look up the obligations for the franchise you are considering and know your opportunity before you invest. Franchise Opportunities offers listings for all available franchises at the current time. Click on the opportunity of your choice to find out exactly what requirements that franchise has. Restaurant Franchise provides a list of franchises available state by state. Click on your state to see which franchises are available, and then click the restaurant name. Review all obligations carefully, including initial investment, operation of the restaurant and penalties for non-compliance.

Helpful advice for making the most of this Guide

• •  Franchises have many rules so be sure you know what operating hours you must keep and other rules you must follow for your casual restaurant chain. If you fail to meet the terms of the contract you signed, you can lose your franchise and pay penalties to the franchise company.

Action Steps
The best contacts and resources to help you get it done

Find out if the restaurant chains offer in-house training

Many casual restaurants require any employee or potential management applicant to take in-house training programs. This allows the organization to ensure the teaching of its concepts. It also encourages company loyalty and brand protection. An individual trained by the company performs as the company wishes them to.

I recommend: Look for a casual restaurant chain for this type of training and education. One example of this is the well-established management program at Bob Evans Restaurants. This is a 14-week program teaching the National Restaurant Association Educational Foundation's ServSafe training, plus much more. Another chain offering such management training programs is LongHorn Steakhouse. Their training program is located in Orlando, FL, and encompasses a variety of programs to teach students management skills.

Learn through trade programs teaching restaurant chain management

Trade programs are ideal for family restaurants and some chain restaurant management positions. Trade programs may be available through local centers and high schools. Most programs have a design for high school graduates. They are also highly affordable programs compared to college education.

I recommend: Locate trade programs locally or countrywide. For family dining, upscale dining, bakery training and more, consider the Scottsdale Culinary Institute, located in Scottsdale, AZ. This full, hands-on training program provides an in-depth training program that takes up to two years to complete. Another option is the International Culinary Schools at The Art Institutes. A top performing school, this school teaches culinary arts management, restaurant management and catering management.

Invest in a college education in management of family dining

Many family and casual dining chains are happy to accept applicants who already have an education through a college or university program. The most common of these is a Hotel and Restaurant Training degree, offered by various schools. This degree is not brand specific, but does give a complete overview of restaurant management, including upper level management and ownership.

I recommend: Seek out casual restaurant management training through an approved college or university. San Francisco State University offers a program teaching food management, services and production. Pennsylvania State University also offers a fully accredited management program.

Helpful advice for making the most of this Guide

• •  Education for casual dining may be quite similar to training for five star restaurants. The only difference is where obtaining the job happens. Many individuals use their knowledge and skills to open their own restaurants.

Action Steps
The best contacts and resources to help you get it done

Franchise

Although some family or casual restaurant chains are owned by one owner or corporation, most major restaurant chains offer franchise opportunities. Advantages of a franchise are that the parent company usually provides the business plan and advertising, establishes the brand, and buys supplies and uniforms in bulk.

I recommend: Franchising.com discusses the basics of franchising.

Fast-casual chains

A growing market has opened for fast-casual restaurant chains that, like fast-food fast-food restaurants, do not include table service, but they offer better quality food and more of a restaurant atmosphere for their diners. Prices are also higher than those charged by fast-food chains. This newer breed of chains fills the gap for customers who want a casual dining experience with faster service and no tipping.

I recommend: Foodservice Equipment & Supplies discusses the growing popularity of fast-casual restaurant chains.

Branding

Branding is key to a family or casual restaurant chain's sales. When customers travel to another state, or even sometimes to another country, and they enter a familiar family or casual restaurant chain, they know they can count on getting the same service and quality as well as many of the same menu items. By establishing a certain image in a customer's mind, chains can ensure that diners will trust their brand and continue to come into their restaurants.

I recommend: Zagat shares how one graphic designer helped to build a restaurant brand. AllBusiness.com presents the results of a study on chain restaurant branding.

Fixed-price menus

Family-style restaurants sometimes offer fixed-price menus, which can include a choice of several entrees and side dishes for one price. Often these are advertised to draw in more customers. Fixed-price menus can be good for restaurant chains as they can help limit costs because they can buy the menu items they're promoting in bulk.

I recommend: National Restaurant News discusses how restaurants are using fixed-price menus to gain more customers.

Reinventing

Faced with a declining customer base, many casual dining chains are seeking to reinvent themselves to change market position and attract new customers. This reinventing, or repositioning, can often change customer perceptions about the business and draw in a different clientele.

I recommend: USA TODAY highlights the ways some casual restaurant chains are reinventing themselves and their images to appeal to the public.

Outsourcing partnership

One trend in the family or casual restaurant chain industry is developing an outsourcing partnership. A family or casual restaurant chain partners with a hotel or opens in a mall or a store to increase both businesses. The hotel, store or mall benefits by having an in-house restaurant without the expensive overhead and staffing issues.

I recommend: Hotel Online delves into outsourcing partnerships and their benefits.