Fear Not Franchisee! Perils and Pointers Of Starting A Franchise
“Opening up a franchise, or any business is scary – but it doesn’t have to be – if you choose a partner that will give you their full support.” So says Nick Crudo, CEO and Co-Founder of the AMORE Group, who leads the charge of all daily operations, build outs, contractors and negotiating leases.
The Amore Group developed the “Create Your Own Pasta” concept where patrons can see custom creations being crafted in plain view. The Amore Pasta concept now has three locations in Edmonton, in addition to Papa Giuseppe Kitchen & Catering and Black Pearl Seafood Bar.
Nick Crudo says, “You see what you just chose being cooked right in front of you. Through the process of seeing your food – if there is any cross contamination, if there is any dietary restriction that can be dealt with at that point, seeing the freshness and quality of your food not shifted behind some closed door like many kitchens out there.”
Melissa Crudo, Amore’s Chief Operations Officer, who oversees human resources and training systems of their franchising enterprise, added that, “our guest can see the quality freshness on the line, you can see who’s cooking the food. You do get a show, customers love to watch their food being cooked with all the fire and drama, especially kids.”
Nick & Melissa both pride themselves on being transparent with their franchisees, putting the focus on protecting the brand before their profits. In an exclusive interview, Canada Takeout caught up with both Nick and Melissa and got a peek behind the (clear) curtain to debunk a few myths and farm some tips and advice for prospective franchise owners.
Put Food First
When asked what advice he would give to a prospective franchisor during the negotiation phase, Nick says it’s best to take it easy, stay calm and collected and ensure that the parties involved are interested in a career in food. He said without that, there is no need to go any further.
Meanwhile, Melissa says beside maintaining a positive outlook – urges both parties to obtain pre-approval from their banks to ensure the correct cash flow can be accessed and nobody’s time is wasted.
Fear Not And Find The Right Partner
Look, it’s scary to open up a franchise, there are rental lease agreements, equipment costs, staff management, legal and financial hurdles to overcome, and the pressure to maintain franchise standards. Nick states that to bypass the fear – you must find the appropriate franchisor that will give you the right support, “As far as product, support on administration, support on how the business should roll, that’s what a franchisor responsibility is for a franchisee.
Myth: Brands Make All The Money
“There is a common misconception that brands make all the money at the end of the day, but that’s not true” says, Melissa Crudo, adding that while the Amore Group does have royalties, they are not the main focus. The priority for Amore is building the brand. So much so, Amore franchise holders enjoy a one-year royalty free period, which gives them the ability to build up much needed cashflow to reinject into the business.
Prepare for the Unexpected
When opening any business, restaurant or franchise, Nick encourages new owners to withhold a 10% backup fund. This is for any mismanagement or misdealing that could arise through the course of the opening of a new franchise, such as equipment failure, inspections or permits.
That being said, it is paramount that you understand your franchise agreement inside out, Melissa advises new franchisees to understand with clarity that the responsibilities are for both parties. This could certainly minimize any potential conflict or unexpected expenses on your end.
The Amore COO went on to say that while restaurant experience is important, other specific skillsets/factors that appeal to franchisors are a business acumen, where persons have managed staff, money and day-to-day problem that do arise and how you overcome those things as well.
Red Flags to Avoid
Hidden costs in franchise agreement should set off alarm bells in your brain. These could include something like mandatory renovations down the timeline which you never know fell under your purview. The Amore Group Executives say the best way to avoid red flags are to ensure that your lease is thoroughly conducted with your lawyer, as failure to do so, could land you in hot water down the road.
Nick says that through the last few years, they experienced a big introduction to the quick service restaurant (QSR) model and realized the ability to move product faster due to novel delivery and third-party apps. He said creating more volume through QSR was the biggest thing that helped see them through.