Opening a New Franchise Location: Part 4, Permitting

This is part 4 of a 6-part series on opening a new franchise business. For part 1, Finance, click here. For part 2, Real Estate & Site Selection, click here. For part 3, Construction, click here.

The last two installments will dig into training and marketing.

Construction and permitting of your franchise location often will happen on concurrent timelines. When selecting a site, you must investigate local zoning regulations and verify that your chosen spot complies. Certain areas may restrict the type of businesses allowed or the construction of specific structures. To accurately build out your construction schedule, it is vital to research how long the various permitting processes take, especially if you aren’t experienced in this work.

Many brands have general contractors they have worked with in the past who also should have individual market or municipality knowledge, says Craig Dunaway, Chief Operating Officer at Penn Station East Coast Subs. “This can be invaluable to the franchisee,” he says. “While it’s the franchisee’s responsibility, they do receive counseling and guidance from the franchisor throughout the process.”

Before breaking ground on a site, you must obtain all the necessary permits and approvals from your local authorities — from permits for construction and signage to health and safety, among others. This also means ensuring that the construction plans adhere to all relevant building codes and safety regulations. Failing to do so can result in delays, fines, or even see the location shut down — all of which will affect your income and bottom line.

Rob Branca, a Dunkin’ multi-unit franchisee and president of Branded Management and Branded Realty Group, advises franchisees to investigate the rules and regulations for their local municipality and be certain of the permitting levels they may need to obtain from their city, county, state, or federal governments.

“Get a local lawyer who knows the boards and commissions and who you need to get approval from for your project,” says Branca. “That’s invaluable, because they can predict how things will go.” For instance, some towns don’t have a quorum at every board meeting, which can result in your permitting approval being continued. Or you could experience opposition to your project. Board members may ask questions that, if not answered correctly, could jeopardize the outcome of your proposed business. While much depends on how sophisticated your local board is, having a professional with experience in all the necessary rules and regulations can help you handle these issues and others.

Dunaway adds that the permitting process in 2024 continues to take longer and cost more these days. “Ten years ago, it was simpler, cleaner, and less time-consuming,” he says. “As municipalities have struggled with their budgets, the timeline has expanded, there are more fees, and the existing fees have continued to rise.”

Going in, franchisees must understand the nuances of any municipality they’re entering or seeking to build and do business in, because the approval process can be costly and time-consuming. Some towns are more business-friendly than others, and this can change over time. So keeping current is imperative as you choose where to open a franchise location.

To find the right professional help in your area, Branca suggests asking other franchise owners or your franchisor for referrals. Other outlets that can advise you include the local chamber of commerce, the engineer or architect you are working with, and your existing or local attorney. Don’t be afraid to contact any associations, organizations, or other groups you may belong to for local contacts.

While previous experience can be an advantage for managing all the nuances of permitting, the process can be managed, even if you are new to the franchise game. Start by getting to know the neighborhood where your proposed location will be. This means paying attention to the traffic patterns and to whether the locals, especially your new neighbors, may have concerns about any aspect of your business or its construction.

As with everything related to the economy these days, permitting a new franchise establishment may be a slower and more complicated endeavor than in the past. Branca finds that new rules and regulations present some of the biggest challenges today, particularly those pertaining to the environment. “Those are all new, and even fewer people know how to comply with them,” he says.

Finally, getting all required inspections performed promptly matters, but it can be a challenge if your town doesn’t have the capacity to do them when you need them. Ask about this in advance and plan accordingly.