What should I check when buying one location from a multi-unit fast food franchisee?

A store inside a group rarely runs on its own. Staff move between locations, one office handles the paperwork and a supervisor visits all of them. When one store is carved out, those shared pieces have to be replaced or paid for. This page covers what to look at, whereas buying several locations is a different task.

People who float between stores

Ask which managers and crew work only at this store and which split their time. A manager who spends part of the week elsewhere may leave with the seller. Meet the people you will rely on and ask what they plan to do. Then check the staffing review to see how much of the roster you can count on.

Shared costs in the statements

Group owners often pay for an area supervisor, an office and bookkeeping once and spread the cost across stores. Ask how each cost was allocated to this unit and whether the split is fair. Then work out what you would pay to replace each service on your own. Your accountant can help you rebuild the statements as a stand-alone store.

Stock, prep and accounts

Check whether a sister store supplies prepared food, borrows stock or lends equipment. If so, you need a plan for the day that stops. Ask which supplier and delivery accounts are in the seller’s name and whether you can open your own on similar terms. Ask the franchisor what it will need to see.

The seller’s other stores

If the seller keeps stores nearby, ask how they relate to yours. Customers may move between them, and the seller may run offers that affect your sales. Ask the franchisor how it handles territory and whether the seller’s stores could compete with yours. Get any promise from the seller in writing, through your lawyer.