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In-N-Out Burger is known nationwide for its Instagram-worthy burgers, fries and shakes. The brand has a cult following and is a popular destination for both domestic and international tourists traveling to California. Since it was founded in 1948, In-N-Out Burger has not expanded any farther east than Texas, and the majority of their 313 company-owned locations reside throughout California. A big reason the company chose not to franchise? Management&#8217;s concerns around upholding the level of quality and customer service as the number of In-N-Out restaurants would exponentially increase in a short timeframe. Steve Beagelman, the founder and CEO of SMB Franchise Advisors, says that maintaining control is a big reason that brands, despite having the criteria to succeed at franchising, decide against the business model. &#8220;Some brands like having control and they want to control everything. The employees that work in a franchisee&#8217;s locations work for the franchisee and don&#8217;t work for the franchisor, so it&#8217;s difficult for some people to give that up to a franchisee in a local market,&#8221; says Beagelman. Beagelman says that handing over the reins of day-to-day operations and entrusting someone else is a large obstacle for franchisors and can hold a company back from growing into new markets. For any brand thinking of franchising, Beagelman says to make sure to check these boxes off: revenue must be on the rise, the concept needs to be easy enough that it can be replicated by store employees, the idea is able to work in other geographical regions and a desire to study up on how to succeed in franchising. &#8220;You really have to commit yourself to understanding franchising and wanting to learn everything about the industry. Go to free events through the International Franchise Association, attend trade shows,&#8221; says Beagelman. Shake Shack is another company-owned burger chain. Serving up mouthwatering burgers and frozen custard, the straightforward concept and commitment to perfection has led to incredible growth with almost 100 locations worldwide and three venues right in the heart of Chicago. Adam Shapiro is the Marketing and Communications Manager for Shake Shack and he says that the brand has no plans to franchise anytime soon in the U.S. &#8220;Shake Shack is not currently franchising; rather, our growth strategy lies in seeking locations in thriving, bustling communities near key business drivers like parks, cultural institutions, schools and residential/commercial hubs,&#8221; says Shapiro in an email. Shake Shack is publicly traded and its revenue forecast is predicted to reach up to $242 million for 2016, according to the company. The chain has hefty plans in coming years with a goal of 450 total Shake Shack locations in the U.S. Another prime example of a company-owned brand is Chipotle. Founded in 1993, it has grown to become a staple in towns and cities across the United States. While it&#8217;s had a tough year dealing with the E. coli outbreak and food safety concerns in some restaurants, Chipotle is still regarded as one the nation&#8217;s most popular fast-casual chains with quality food and a simple menu that works. The brand has been growing steadily the past eight years topping off last year with 2,010 company-owned locations worldwide. A reason that Chipotle didn&#8217;t need this initial capital investment to increase its number of locations is partly due to the hamburger giant, McDonald&#8217;s. In 1998, the dominant chain invested in the brand and helped it inflate from 14 locations to almost 500 locations in a span of seven years. At one point, McDonald&#8217;s owned 87% of Chipotle&#8217;s common stock until it decided to cut ties and sell its shares. Interestingly, some of Chipotle&#8217;s restaurants were franchised for a short period of time, but converted back to a company-owned model after McDonald&#8217;s parted ways with the establishment. Beagelman says a company&#8217;s lack of funds for expansion is typically what turns them towards franchising. &#8220;The reality is that if you can go and raise a hundred million dollars and you have great systems and processes in place, and you can hire the right people, everyone would have company-owned stores,&#8221; says Beagelman. &#8220;Most people franchise their business because they want to expand outside of their immediate area but they don&#8217;t have the capital.&#8221; Whether a chain chooses to franchise or not, one of the most important pieces of advice is to keep your brand focus and culture intact as you expand and grow into new territories.

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We take a look at some of the fast-food industry's biggest chains to determine why they decided to forgo franchising. 

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How much can franchisees make? It’s a question many prospective owners ask before investing in a franchise. While earnings tend to be driven by variables such as industry, location and general management skills, a proper understanding of the key factors driving profitability can help franchise owners develop expectations that are realistic.&nbsp;Multi-unit franchisee&nbsp;<a href="https://www.linkedin.com/in/mangesh-patel-9368569/">Mangesh Patel</a>, who’s readying the launch of six&nbsp;<a href="https://www.beefobradysfranchise.com/">Beef ‘O’ Brady’s</a> restaurant locations in the Macon, Georgia area, shares insights from his franchising experience.<h2>Understanding Franchise Income</h2>Keeping operational costs in check can have a major impact on overall earnings. Taking a proactive approach to expenses such as food and labor, as well as payroll and scheduling, can help align actual franchise income with general expectations for the business.“I just had a meeting with a couple of people, and they said, ‘You talked about a 25% profit margin, but I’m only doing 12%.’ So, I looked at the figures they sent me,” Patel said. “Their&nbsp;<a href="https://1851franchise.com/calculate-restaurant-franchise-profit-2730476">restaurant</a> food cost was running at 37%, which should be around 30%. The national average is about 32%. If I do things correctly, my average food cost needs to be at or below 30%. And payroll should run around 18%. But many people run 25 to 28%.”So,&nbsp;<a href="https://1851franchise.com/unraveling-franchise-earnings-how-much-can-you-really-make-2723935">how much can franchisees make</a>? Here are five areas to consider.<h2>Practical Tips for Prospective Franchisees</h2><ol><li>Control Costs From Day One:&nbsp;It’s important to monitor payroll, food and supply costs closely. Overstaffing and inefficiencies can quickly reduce profits.</li><li>Plan For The Opening Surge:&nbsp;Traffic within the first few months of opening is likely to be higher. It’s important to adjust staffing and inventory accordingly, and pay close attention to how those levels change as time goes on.</li><li>Invest In Training:&nbsp;Properly trained workers can help reduce waste and improve overall service, which has a direct effect on net income.</li><li>Understand Your Market:&nbsp;Each market is unique and revenue potential will vary depending upon location, demographics and competition.</li><li>Track Metrics Regularly:&nbsp;Food cost percentages, labor ratios and weekly sales data act as key indicators operations may need to be adjusted.</li></ol><h2>What Profitability Really Comes Down To</h2>Patel notes that if franchise owners manage labor and costs properly, it’s not impossible to achieve strong cash flow even in the first year, bucking some franchising trends.So,&nbsp;<a href="https://1851franchise.com/how-much-can-you-make-as-a-franchise-owner-2724761">how much can franchisees make</a>? While results tend to vary, careful planning, disciplined operations and a proactive approach to assessing initial costs are essential. But by grasping and guiding the elements that drive franchise profitability, franchise owners can maximize overall business earnings, scaling a business that’s sustainable financially over the long term.Want to learn more about franchise opportunities on 1851 Franchise? Be sure to visit our&nbsp;<a href="https://1851franchise.com/power-rankings">Power Rankings</a> to read more on brands making moves.

How much can franchisees make? This guide explains what drives franchise earnings and how to manage costs, with expert tips from multi-unit owner Mangesh Patel on maximizing your franchise income.

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Building&nbsp;<a href="https://1851franchise.com/how-do-you-build-a-franchise-business-plan-2717037">a business plan</a> is a crucial operational step for any entrepreneur. But how do I build a business plan for a franchise that complements the franchisor’s system while addressing the unique needs of a given location? In this guide with expert tips, you’ll learn how to craft a thoughtful, actionable franchise business plan.<h2>Start With The Franchisor’s System In Mind</h2>So, how do I build a business plan for a franchise? Well, avoiding repetition is a good start.“You specifically don’t want to duplicate what your franchisor is doing,” said long-time multi-unit&nbsp;<a href="https://www.solafranchising.com/">Sola Salons</a> franchise owner,&nbsp;<a href="https://www.linkedin.com/in/haynes-chidsey-6a36a06/">Haynes Chidsey</a>. “There’s a reason why you join a franchise system and why you pay the fees and costs associated with it.”A strong franchise business plan should take advantage of the resources, marketing and operational systems that the franchisor provides (while utilizing daily experiences at the local level to help fine-tune what matters locally).<h2>Focus On Local Priorities</h2>A franchise business plan should be&nbsp;<a href="https://1851franchise.com/strategicfranchising/how-to-build-a-strong-franchise-brand-presence-in-your-local-community-2729771">locally focused</a>. It should reflect the unique characteristics and needs of each local market. It’s essential to identify opportunities to attract local customers, build relationships within the community at the local level and tailor services to the regional preferences required by each market.“Be complementary to what your system provides,” said Chidsey. “Stay locally focused. That’s what I would say is key. Avoid mistakes by focusing on the magic.”<h2>Practical Steps For Building Your Plan</h2><ol><li>Assess Both Market And Competition – Build a thorough understanding of local demand, competitors and potential customer base. This will lead to more informed projections. &nbsp;</li><li>Define Financial Goals – Include startup costs, ongoing fees and revenue expectations in the business plan. Staffing, rent, marketing and working capital should all be factored in. &nbsp;</li><li>Leverage Franchisor Resources – Incorporate the systems, training and support offered by the franchisor (instead of reinventing processes). &nbsp;</li><li>Set Operational Priorities – Decide which areas require hands-on local management (as opposed to areas guided by the franchisor). Focus energy where it’s most impactful. &nbsp;</li><li>Review And Adjust – A business plan shouldn’t be static. So, track performance, adjust strategies and refine priorities as the franchised business scales.</li></ol><h2>The Takeaway</h2><a href="https://1851franchise.com/chapter-3-developing-a-franchise-business-plan-2722586">Creating a franchise business plan</a> is about balance. With a clear plan that integrates franchisor resources and local insight, franchisees can confidently move forward, knowing their businesses are structured to thrive. Leveraging a proven franchisor system to make smart, locally relevant decisions is key. By slowing down to go fast, and catering to the local trends or demands unique to each market, zees can more effectively build a roadmap and franchise business plan capable of delivering long-term success.Want to learn more about franchise opportunities on 1851 Franchise? Be sure to visit our&nbsp;<a href="https://1851franchise.com/power-rankings">Power Rankings</a> to read more on brands making moves.

How do I build a business plan for a franchise?

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