How to Start a Fast Food Restaurant

How to Start a Fast Food Restaurant
When it comes to starting any new business, preparation is key – and starting a fast-food restaurant is no exception. Here's what you need to know about how to start a fast-food restaurant.
by Square Nov 23, 2024 — 8 min read
How to Start a Fast Food Restaurant

The fast-food industry is looking healthy in more ways than one. As consumer preferences and dietary needs shift, fast-food providers have adapted their menus, introducing healthier alternatives alongside their classic offerings. And it’s paying off in sustained growth, with the Australian industry projected to grow at 1.6% per year over the next five years to reach a value of $25.1 billion by 2028.

When it comes to starting any new business, preparation is key – and starting a fast-food restaurant is no exception. Those owners who invest the time and energy as they prepare to launch stand to reap the rewards. 

Before you begin, there are several steps fast-food restaurant owners should consider so they’re ready to put their best foot forward. 

Starting a restaurant checklist

1. Define your concept

Defining the concept of your new restaurant should be your first step. It’s essential for establishing a clear identity, which will ultimately help you achieve long-term success in a competitive market. Your concept has three main components: your format, your model and your menu

Your format might be a traditional brick-and-mortar restaurant, a pop-up or even a food truck. There are pros and cons – and costs – associated with each format, so it’s important to understand all the restaurant formats out there. Next, you should consider the model for the delivery of your food. You might have a drive-thru, tables for in-house dining or be a purely takeaway offering. You might solely deliver meals out of a ghost kitchen.

Both your format and model will likely be influenced by your menu. Pizzas, burgers and salads are common fast-food options but are by no means the only possibilities. For example, some restaurants specialise in niche products and cuisines, like Hugo’s Deli in Melbourne, which serves New York and Japanese-inspired sandwiches. 

2. Develop a comprehensive business plan

Developing a business plan is essential for the articulation of your vision and goals. It will help guide your decisions and will be important when it comes to securing funding and finance. The plan should include market research on customer trends and competitors, estimated startup costs considering purchasing or hiring equipment and securing a location, projected revenues, and details on your brand identity and business name. Your business plan should be developed early and should be as comprehensive as possible.

3. Select an ideal location

Location is a crucial consideration for new fast-food restaurants. Unless you’re planning on running a ghost kitchen, you’ll need to be visible, accessible and in a space that’s fit for your purpose. A careful consideration of your ideal location will contribute to your success and sustainability.

Whether your sights are set on harbour views or back-alley nooks, you should consider foot traffic, proximity to competitors, and space for waiting customers or – if you plan on having tables – those dining in-house. You’ll also need to consider costs associated with rent, utilities, insurances and taxes.

For brick-and-mortar restaurants, you’ll also need to obtain the necessary permits and ensure you comply with council zoning laws. 

4. Obtain licences and permits

Obtaining the right licences and permits is not just a legal requirement but also a practical necessity for ensuring compliance with health and safety standards, and avoiding potential legal and financial liabilities down the line. The permits you might need to consider relate to the establishment of your business, the service of food and alcohol, and building permits if you have a physical location. You’ll also need to ensure you’re ready to comply with health and safety regulations from the moment you open for business. 

The licences and permits you’ll need will differ depending on a range of circumstances, including your business concept, location and what you plan to sell. To learn more, check the Australian Business Licence and Information Service (ABLIS).

5. Set up your business entity

Choosing the right legal business structure is a crucial decision that can impact the restaurant’s operations, taxation, liability and long-term growth prospects. First, you should understand the common legal structures that exist for businesses in Australia.

A sole trader is an individual who operates the business, owns all the assets and is personally liable for debts. A partnership, on the other hand, involves two or more individuals or entities operating the business together, sharing profits, losses and liabilities. A private company (we’ll assume you’re not launching a company publicly listed on the share market) may provide limited liability protection to its owners, while a trust is a legal entity where a trustee manages assets for the benefit of beneficiaries. You should seek legal and financial advice as to which structure will work best for your restaurant.

Before you can operate, you’ll also need an Australian Business Number (ABN), and you’ll need to register your business name with the Australian Securities & Investments Commission (ASIC). You may also need to register for goods and services tax (GST) and other taxes. If you’re not sure what other registrations you need, take a look at this Australian Government tool.

6. Craft a strategic marketing plan

Effective marketing can make a significant difference in your restaurant’s profitability and longevity. Your marketing plan is your blueprint for success. Developing a strategic marketing plan will help you establish your initial market presence. That’s the first step in getting customers through the door. From there, consider how you’ll retain them to drive word-of-mouth and revenue growth. 

First, you’ll need to define and understand your target audience. Market research and competitor analysis will help. With this understanding, your marketing strategy can come to life. For most fast-food restaurants today, this will involve the establishment of your online presence with a website. You can build one yourself, but first, check out other restaurant websites for ideas on what kind of website and content will best market your brand.  

Your local community may become your greatest customer base, so your plan should include local marketing efforts and promotions to attract these customers. You might offer vouchers or discounts to households in your neighbourhood or establish a weekly locals’ night. 

7. Secure financing

To cover your initial setup costs and to ensure you have adequate capital to invest in marketing and hiring staff, you may need to secure finance. By this stage, you should have already completed your business plan and determined how much funding you’re going to need for equipment, inventory and operating expenses. You might consider a loan, securing grants, enticing investors or even crowdfunding. Whichever method you choose, this initial source of funding will give you the foundation to establish and sustain a successful fast-food business. 

8. Design your menu

Designing the menu is just as important as your restaurant’s concept or business plan – you’ll want to give it plenty of thought well before you open. The menu should fit hand-in-glove with your concept. For example, Sydney’s Blackbear BBQ specialises in smoked meats, while Kelso’s in Melbourne claims to be the “Home of the Sandwich”. Whatever your culinary focus, your menu should not only appeal to your target market but also be priced competitively while ensuring profitability. 

You should also consider customer convenience through digital menu options like QR codes.  

9. Source reliable food suppliers

From maintaining consistent food quality to securing access to specialty ingredients, choosing the right food suppliers is a decision that will impact every aspect of your fast-food restaurant’s operations – and your ability to deliver a positive dining experience.

You’ll need to select your suppliers based on the quality and cost-effectiveness of their product and the reliability of the supplier. It’s also important to consider how your brand aligns with the supplier’s. If sustainability or using local produce is a core principle for you, you might want to consider partnering with a supplier with the same values. 

When you find reliable suppliers, you might negotiate terms for bulk purchasing and delivery schedules. You might even look at complementary marketing so you and your supplier can both showcase your commitment to the finest products.

10. Acquire necessary equipment

Acquiring the necessary equipment for your fast-food restaurant is a critical investment. Cooking equipment, refrigerators and any specialty products relevant to your restaurant concept will need to be purchased or hired. A point of sale (POS) system such as Square is a vital piece of equipment and will make your business more efficient. 

The placement of your equipment and POS and the design of your restaurant layout will be important for optimal workflow and customer comfort. You can even build your floor plan in your Square Dashboard to mirror the physical layout of your space. 

11. Recruit and train your team

With the right people and the right training, your great fast-food product will be delivered by a capable and cohesive team. You should recruit staff based on operational needs and the customer service standards they can deliver. Above all, friendly, competent staff might be the key to converting a first-time customer to a loyal one.

New staff will need to be trained in food preparation and customer service. When it comes to workplace health and safety, Safe Work Australia is a good place to start. 

It’s important to keep some best practices in mind to keep your front-of-house ticking. And when it comes time to open, Square Shifts will give you the flexibility to seamlessly manage your team scheduling.

Of course, once you find the right team, it’s important to retain them. By fostering a positive work environment and investing in staff training and incentives, you’ll demonstrate your commitment to their growth and boost their workplace satisfaction.

12. Conduct a soft opening

A soft opening with friends, family and local influencers is a great way to test your staff and your systems, gather feedback and iron out any creases before you officially launch to the public. You could even use your soft opening as a marketing opportunity to build anticipation.

But before you embark on your test run, there are a few considerations as to how you might stage it. Like any event, you’ll need to consider pricing and format, and come up with strategies for when things don’t quite go to plan. While a soft opening is a chance for you to learn what works and what doesn’t, it’s also your first chance to set the tone for your business. 

13. Establish your online presence

Your online presence is fundamental to your marketing strategy. You’ve already landed on a website that showcases your brand. Now, with the right search engine optimisation (SEO), you’ll be able to boost your visibility even before you open the doors. Taking the time to finesse your SEO will not only allow you to outrank competitors in search engine results but also allow you to analyse customer behaviour by seeing data on how they found you – search, social media or online advertising, for example. 

You’ll need to think about how you use social media to engage with customers and promote your brand. Research shows that 87% of Australians have visited a restaurant because they found it on social media, and Square Online makes it easy for your potential customers to order directly from their social media apps as well as from more traditional online sales funnels like your website.

With so many people discovering fast-food restaurants on social media, it’s no wonder places like Sydney’s Epic Pizza are investing in their social strategies.

14. Launch and promote your restaurant

After the success of your soft opening and now that you’ve addressed any feedback from your first customers, it’s time for the main event! Your grand opening is your chance to showcase your brand and your product to the world. Your marketing strategy and new online presence should be used to generate buzz and attract customers. 

You can even partner with other local businesses that complement your product, or you could use social media influencers or content creators to reach their followers and even more potential customers. 

Now is the time to encourage customer loyalty through promotions, reviews and referral programs. Square Loyalty gives you a customer rewards program that integrates seamlessly with your marketing software and third-party apps.

15. Monitor performance and adapt

Once you’ve launched, it’s important to continue monitoring your performance and that of your staff so you can adapt your strategies to improve efficiency and customer service. Doing so will help you maintain your competitive edge in the ever-changing fast-food industry.

You’ll want to consistently monitor business elements including sales and customer feedback using tools such as Square Feedback, and operational metrics using analysis and reporting software like Square Analytics.  

With this data you can adjust your menu offerings, marketing strategies and operations to better meet customer expectations, and you can start to plan for long-term growth and scalability as your restaurant gains traction in the market.

How to grow your fast-food restaurant

Once you’re up and running, you’ll need to turn your attention to your restaurant’s growth. In an increasingly competitive market, business owners are employing all sorts of creative strategies to stand out and give their customers an experience they’ll remember.

From refining your marketing strategy and enhancing your customer feedback capabilities, to deepening your community roots and exploring collaboration and partnership opportunities, there’s a whole world of avenues you can explore. As a starting point, check out these tips for growing your restaurant sales.   

Square
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