Franchising opportunities are an option for business expansion. Recent reports note that a popular gourmet hot dog restaurant is expanding in Louisiana and another neighboring state. It was also reported that the restaurant chain has an eye on expansion into Baton Rouge and the entire south over the next five years. The restaurant chain intends to expand through franchises and corporate-owned restaurants. The CEO and president of the company, who is a certified franchise executive, noted the importance of the Baton Rouge market to the restaurant chain.
The CEO also noted that franchising is a great opportunity to have someone locally involved in running the restaurant and helps build wealth and grow the brand. The restaurant chain currently has 4 locations prior to its planned expansion, and the CEO stated that a franchise requires a $450,000 investment. The company noted it is looking for good franchise partners over specific markets for expansion.
When conducting a business expansion, there are many important considerations to be aware of. Whether the expansion is through franchising or otherwise, such as a merger or acquisition, there are commercial real estate implications and important legal considerations related to contracts, purchase and sale, taxes, compliance, regulatory and other issues that the business owner should clearly understand and be prepared to address. A variety of contract relationships, including important franchise contracts, will be involved in any expansion and the acquisition of commercial real estate may also be necessary.
Business expansion is typically a positive move for most growing businesses to consider. To ensure the greatest success possible, business owners should fully understand the legal requirements and resources associated with their chosen method of expansion.
Source: The Advocate, “Dat Dog plans expansion beyond New Orleans, specifically in Gulf South,” Timothy Boone, Jan. 20, 2017