Investing in Restaurants

Investing in restaurants.

For many entreprenuers restaurants seem to be the the business of choice. With so many franchise opportunities it also proves to be the easiest to model as well. Have you ever wanted to start a business and didn’t know just how to run one? Investing into a restaurant could be the way to go. However there is a lot to think about when investing into a restaurant. For example is it going to be fast food, casual dining, or gourmet dining. Each model has it’s own model.

– Fast Food

The number one company that comes to mind is McDonald’s [MCD]. With franchising opportunities in domestic and international locations, it provides great opportunity especially in today’s economic environment. There are several others to invest in but make sure you understand the role you want to play. Fast food could be the easiest to invest in as well as the most involving because you using more younger people than the other types of restaurants. Each franchise will take different amounts to invest in but will also help train you and have direct contact with you in running the business without any guess work. That’s the reason it is the most attractive type to invest in.

– Casual Dining

One of the biggest casual dining chains is Applebee’s. It’s own by Dinequity [DIN]. When moving up the “chain” it will require more investment. For instance, your net worth needs to be higher in addition to your liquid assets. Like with any investment the more it requires the more the chance for a higher return. In a casual dining restaurant you might not need to be directly involved. At this point you could have management available to handle day to day operations and your involvement might be more oversight. This is a spot if you are trying to be an owner that if run right, you can do just that. Be an owner.

– Gourmet Dining

Gourmet dining is more for the connoisseur. It’s for the one who wants more than just a restaurant. This type of restaurant you’ll see a graduated chef running the restaurant. This type demands fine dining and attire to match. For those wanting to invest into a gourmet dining restaurant you’ll see the owners directly involved with every aspect because of their meticulous nature. This will also make or break the restaurant as well. This is the epitome of the restaurant community.

This might have only mentioned a few restaurant types to invest in, it will give you start. A few others to look into are bistro, bar and grill, and sushi bars. All have there own quirks but in this economy the best time to invest is when everything is on “sale”. Smart investors know Warren Buffet’s quote very well ” When others are greedy be scared and when others are scared be greedy.” Whether you invest into restaurants by franchising one, opening up a new idea, or by good old fashioned stock market now might be the best time to do it.