How to Open a Restaurant or QSR Franchise in Canada
Are you in the market to build your dream Quick-Service or Casual Restaurant-based business in Canada this year? Before you do, be sure to read this guide on the exact steps required for a new restaurant launch to get you and your business on the path to success faster.
With over 60% of Canadian adults eating out at least 1-2x per week (Pre-Covid), the restaurant / food service industry is one of the fastest growing industries in Canada today. While restaurant trends typically come and go, it is doubtful Canadians will stop visiting eating establishments anytime soon. If you are interested in starting your own QSR-franchise, restaurant, commercial kitchen or food service business- you’ve come to the right place. Below we will go over the top things that every restaurant needs before opening their doors to the public or taken the dive into their 1st entrepreneurial food venture.
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What to know before starting a restaurant in Canada
Starting your own restaurant is not for the “faint of heart”, it takes alot of expert planning, dedication, and strong will to open a successful restaurant in Canada.
It requires the ability to juggle many moving parts to streamline operations and can sometimes feel like the most difficult undertaking. With that said, when you work with restaurant professionals the process can be a lot more manageable and under control. Having helped many restaurant owners open their 1st, 2nd, 3rd or 10th location, we have created The Ultimate Guide to Opening your Own Restaurant in Canada for you to use as your go-to guide to navigating the challenging, yet, rewarding path of the food-serviceindustry.
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1. Choose your Restaurant Idea, Concept or Brand
Before you start a restaurant in Canada, you should have a clear idea or understanding of your restaurants concept and brand. A restaurant concept includes your style of service, type of food available, and the look/feel of your restaurant. Your restaurants brand is one of the most important aspects of your business, and is the image you will use to attract potential future customers.
Based on your chosen restaurant brand, the interior and exterior of your restaurant should be easily recognizable to customers and effectively communicate who you are. Designing a restaurant in a way that effectively showcases and matches your brand will leave a lasting memory with your customers, raising the likelihood of repeat business. Choosing a functional, memorable concept/design that targets a specific local demographic is a key factor to a successful restaurant in Canada.
Do you plan on having a bright and energetic atmosphere, or an upscale lounge with a dimly lit – laidback style? This is a crucial step in planning the future of your restaurant.
2. Decide on What Items to Serve
Before you open your doors to the public you’ll need to know what you will serve and be known for. Deciding what will be on you restaurant menu is another key aspect of restaurant ownership, this will also tell you what commercial food equipment you will need, what staff to hire and what customers you hope to attract. For the more serious entrepreneurs, a good suggestion would be to meet with a restaurant consultant with experience in your style of cuisine. A restaurant consultant can navigate you towards popular and trendy dishes that will drive more customers in your restaurant.
Right now, your menu does not need to be 100% complete, however, you should have a good idea of the type of food you will serve in your establishment. Later on, in the restaurant development process you should create and design your menu based off which food items sell well and which don’t. As mentioned before, a restaurant consultant can be an effective resource for this part of the process.
3. Create a Restaurant Business Plan
Creating a solid business plan is essential to your restaurants success. In order to receive funding or external investments, financial advisors, lenders, and venture capitalists will want to see a well-thought out and strategic plan for the future. It will also help you develop your brand into a regional or national powerhouse which will attract a lot more customers and take out the guesswork.
Below are the main aspects to include when creating a restaurant business plan (in order):
- Executive Summary
- Description and Overview of your Company
- Market Analysis
- Business Offerings
- Management / Organization
- Marketing / Social Media Strategy
- Financial Projections
3. Obtain Funding or Pitch to Investors
You should then create a budget and financial projections in order to receive the commercial loans / financing needed to begin construction on your new restaurant. This is also a good point to add any additional costs you expect your business will need to stay in business until your business grows to profitability. Also, you should include the costs you expect to incur for any licenses/ certifications and permits such as building permits, liquor licenses, etc.
If you are still unsure what is needed consider contacting a commercial financing expert for more information. A Canadian financing expert can evaluate what type of funding that you need in order to fully build and open your restaurant. They can also find any government grants available which can help alleviate any additional financial burden off your business.
5. Buying a Location or Commercial Leasing
Ah, Commercial Real Estate! This is where we really shine! This part of the process is best left to the professionals . Call or meet with a commercial real estate expert who knows the specific area you’re interested in, they can help find the perfect location for you for maximum business exposure within your budget.
If you do choose to find a location yourself, or are picking out ideal real estate locations for your commercial real estate agent, below is a list of things to keep in mind and a list of aspects we put a large focus on during the real estate consultation process.
Visibility and Accessibility – Look for spots that have good street visibility and are easily accessible for patrons in wheelchairs. It’s easy to choose a busy main road in your hometown, however, with a busier road typically you will pay a little bit more for the prime location. Another thing to look at is available parking – your potential customers need somewhere to park, right?
Demographics – Another thing to consider is the local demographic. If your business caters to a younger population, you should look for trendier areas in town or areas frequented by younger people. This will have a higher likelihood your business will be frequented by your chosen demographic and be, ultimately, more successful.
Staffing Costs and Wages – It’s important to take into consideration the cost of staffing your new restaurant. You need to figure out how many people you will need at certain times such as dinner or lunch. This includes kitchen staff, waiters/waitresses, hostesses, etc. If you know dinner will be your busiest time, you should alter your employees hours to fit that demand. You also need to think about the local minimum wage or what the typical restaurant in your area pays their employees.
Competition – A little competition can actually have its benefits, but you should be wise enough to have enough of a distance away that you can still attract a local following of customers who won’t be “stolen” away to your competition.
When it comes to finding a space, we at Abeco Group strongly recommend commercial leasing. Leasing a commercial space allows you more flexibility should you choose to expand down the road or have issues when you first start out.
6. Permits, Licenses and Certifications
To open a restaurant in Canada you need to apply for specific Canadian licenses, and permits to be able to serve to the public. This can include food vendors license, liquor license, business license, building permits, certificate of occupancy, etc. It could be worthwhile to work with a legal counsel to make sure all applicable paperwork is filled out correctly.
7. Find a Local Commercial Equipment Supplier
Finding a reputable, reliable source of quality commercial equipment fixtures at a reasonable price can make the world of difference for your restaurants profitability. Working with a wholesale commercial equipment supplier, can help you find everything you need at good prices. From Kitchen Equipment to utensils and more! If your budget is more on the smaller side, most commercial equipment suppliers also can provide used equipment cost which can help save more costs for future expenses.
8. Designing & Building Your 1st Location
8. Designing & Building Your 1st Location
9. Hiring Proper Staff and Employees
The next major step of opening your own restaurant is hiring the correct staff to work there. Hiring experienced restaurant workers can help smooth any hiccups in daily operations and can provide great advice to business owners regarding service, branding, and efficiency. All employees should have a proven track record of teamwork and are able to stay calm under pressure. Front-of-house staff should provide warm, cheery, professional service to customers at all times.
Some examples of potential restaurant roles include the following:
- Executive / Head Chef
- Sous Chef
- General Manager
- Hosts/ Hostesses
- Waiters / Waitresses
- Food Runners / Bussers
9. Hiring Proper Staff and Employees
Advertising and Marketing your business is crucial for success. 20-30 years ago you could post an ad in your local newspaper and/or buy billboard space, however, these days you need to be a bit more creative. First, your customers should be easily able to locate your basic information online. Second, they should feel excited to visit your new restaurant.
Below, are some ideas to help you achieve both simultaneously.
- Leverage the Power of Social Media – The first thing you should do is create social media pages for your business filled with bright pictures showcasing the most important aspects of your business. Common social media platforms for business include Facebook, Instagram, Twitter, etc. When posting pictures you should consider spending a little bit of money to have quality, professional pictures taken of the food, kitchen, dining area that effectively showcase your brand to the world.
- Build a Yelp and Yellowpages Account – Allowing customers to leave you reviews can greatly boost your restaurants reputation. Since, the internet plays such a big role in our day-to-day lives, research has shown more than 85% of Canadians research your business before visiting. That means they will judge your business based off online reviews. Also, since Yelp and Yellowpages are such authoritative websites, it can actually help boost your website ranking on Google.
- Build a Captivating Website– Your official website should be both; mobile friendly and easy to navigate. It should include basic information about your business including an About page, Menu, Contact Information, Good Quality Pictures, Other Locations (if applicable), etc.
- Local Newspaper Ads – Believe it or not, the newspaper is still a strong way to reach a local audience. We recommend contacting a local newspaper and asking about having your restaurant featured as an article. Examples such as the Toronto Star, Vancouver Sun, Montreal Gazette, etc. A journalist will come out, ask you some questions and do a quick walkthrough to build an article introducing people to your new restaurant. There are also other local and National digital blog sites such as Blog T.O, Narcity, Toronto Life, Taste Montreal, and Curiocity Vancouver which put a large emphasis on Local food hot spots. These types of websites have a large regional/national following and would be an excellent way to let the world know who you are and what you offer.
- Loyalty / Reward Programs – Depending on the size of your restaurant, loyalty programs can be a great way to build a strong following. Pizza shops like Domino’s, Pizza Hut, and other local Pizza shops typically offer deals or cards where you could buy “5 Large pizzas get a Medium Free” for example. These types of programs reward repeat customers with items that make it beneficial to be a customer and leaves them coming back time and time again.
11. Plan a Soft Opening Event
Another thing you should do is host a soft opening for a few key individuals such as journalists, bloggers, Instagram influencers, neighboring businesses etc. These people have extensive authority locally, regionally, and sometimes nationally which can give your restaurant a much needed boost in local or regional popularity. This strategy also allows you to hone in on which times are more popular and find potential issues before they become problems.