How To Open A Brewery Franchise: A Detailed Step-by-Step Guide
Franchising allows you to leverage a proven business concept and an established brand image. Learn how to launch your own brewery franchise location here.
Caroline PriceAuthor
Opening a Brewery Checklist
So many things go into opening a brewery. With this free PDF checklist, you'll set your new business up for success.
Get free downloadIf you’re an entrepreneur with a passion for craft beer, starting your own brewery franchise could be the perfect business venture.
According to Statista, as of 2022, craft beer accounted for nearly 25% of the retail beer market. Another report found that the craft beer industry has reached “an all-time high in brewery facilities.”
However, the overall popularity of craft beer has been stagnating. Fortunately, with franchisor support, you’ll have the resources of an established brand to help you succeed.
So, in this article we’ll explore all the key aspects of how to launch your own brewery franchise location.
Key takeaways
Before selecting a brewery franchise, be sure to conduct market research, review each Franchise Disclosure Document (FDD) carefully, and consider which works best with your personal goals and finances.
Create a comprehensive business plan and estimate all of your expenses before exploring financing options like SBA loans, crowdfunding, Toast Capital, and others.
Be sure to visit each potential location, conduct local market research, and consider lease terms and zoning regulations before committing to a specific location.
Continually look for ways to refine your operational procedures, whether through quality control, inventory management, or customer engagement.
How to open a brewery franchise
Opening a brewery franchise requires careful research, planning, and financial management. Below we discuss some of the most important elements you’ll need to consider as you create your business.
Evaluate the franchise opportunity
Research the craft beer industry
Before diving into a brewery franchise, it's crucial to understand the broader craft beer industry:
Industry Trends: Examine how consumer preferences are evolving in the craft beer industry. The rise of unique flavors, low-alcohol options, and sustainable brewing practices are shaping the market.
Franchise Categories: Brewery franchises can range from microbreweries and brewpubs to taprooms and distribution-focused models. Determine which craft beer franchise or brewpub franchise aligns with your vision and business goals.
Market Understanding: Analyze the demographics of your target area. Is there a strong craft brewing culture? Who are your potential competitors? Understanding your market will help shape your franchise business strategy.
Assess your personal goals and finances
Before committing to a brewery franchise, evaluate your motivations and financial readiness:
Why Franchise?: Consider why you're interested in a brewery franchise rather than starting an independent craft brewery. Do you value the established brand, operational support, or reduced risk?
Financial Capacity: Brewery franchises often require significant investment. Beyond the franchise fee, you'll need capital for brewing equipment, taproom build-out, and initial inventory. Franchisors typically have minimum net worth requirements for potential franchise owners.
Time Commitment: Running a brewery franchise can be demanding. Will you be hands-on in daily operations, or do you plan to hire experienced brewers and a management team?
Review franchise options
Selecting the right brewery franchise is crucial, so evaluate available opportunities by considering:
Alignment with Personal Values: Consider how well the franchise's brewing philosophy resonates with you. Are you passionate about experimental brews, traditional styles, or sustainable practices?
Market Position: Some franchises may dominate certain regions, while others are expanding into new territories. Research which ones have the strongest market share or growth potential in your area of interest.
Brand Reputation: Is the franchise well-established in the craft beer community? For example, Voodoo Brewing Co. has gained recognition for its unique brews and successful franchise model.
Conduct due diligence and select a franchise
Study the Franchise Disclosure Document (FDD)
The Franchise Disclosure Document (FDD) is a critical resource when evaluating a brewery franchise. Focus on these key areas:
Initial and Ongoing Fees: Understand all financial obligations, including franchise fees, royalties, and marketing contributions.
Support Provided: What kind of training, marketing, and operational support does the franchisor offer? Look for franchisors that provide comprehensive brewing training and equipment maintenance support.
Financial Performance Representations: Review the financial performance of other franchise locations. While past performance doesn’t guarantee future success , it can provide insight into potential profitability.
Legal Considerations: Carefully review legal obligations and terms in the franchise agreement, including the duration, renewal terms, and any territorial restrictions.
Consult with current franchisees
Speaking directly with current brewery franchise owners can offer valuable insights:
Day-to-Day Operations: Ask about daily responsibilities, challenges in brewing operations, and what surprised them about running a brewery franchise.
Franchisor Support: Get an honest assessment of the franchisor's support level. Are they responsive to issues? Do they provide effective marketing campaigns or ongoing brewing education?
Seek professional advice
Before making any final decisions, consult with professionals, such as:
Franchise Attorney: Have a lawyer specializing in franchises review the FDD and franchise agreement to ensure you understand all obligations and potential risks.
Financial Advisor: Discuss your financial situation and business goals with an advisor. They can help you evaluate the franchise's long-term profitability and ensure you're making a sound financial decision.
Secure financing
Estimate total startup costs
The costs of starting a brewery franchise can be substantial, with common expenses including:
Franchise Fees: These are upfront costs to secure the rights to operate under the franchise's name and use their brewing recipes. Some franchises may also charge an advertising fee.
Real Estate: Whether leasing or purchasing, securing a suitable location for your brewery and taproom will be a significant expense.
Equipment and Build-Out: Brewing equipment, fermentation tanks, kegging systems, and taproom fixtures are major investments.
Working Capital: Ensure you have enough capital to cover operating expenses, including ingredients, utilities, and payroll, for at least the first few months of your startup.
Explore financing options
Once you've calculated your total startup costs, explore financing options like:
Bank Loans: SBA loans are popular for franchisees, offering favorable terms. Traditional commercial loans are another option, especially if you have a strong credit history.
Franchisor Financing: Some brewery franchisors offer in-house financing or partnerships with third-party lenders, which can streamline the process.
Alternative Financing: Consider other avenues like crowdfunding or securing private investors, particularly if your local community is enthusiastic about craft beer.
Toast Capital: Toast Capital offers eligible Toast customers access to loans from $5,000 to $300,000 to help with startup costs.
Prepare your business plan
A detailed business plan is essential for securing financing and guiding your operations. It should detail key aspects of your business, including:
Vision: Clearly define your vision for the brewery franchise, including your brewing philosophy and business objectives.
Market Analysis: Provide a detailed analysis of your target market, local craft beer scene, and competition.
Financial Projections: Include realistic financial projections, detailing anticipated expenses, revenues, and break-even timelines.
Not only is your business plan vital for securing loans and investments, but it’ll also serve as your roadmap to success.
Pick a site and build your brewery
Choose the right location
Location is a key consideration when opening any type of brick-and-mortar business. When asked how The Brass Tap selects franchisee locations, Chris Elliott, CEO of FSC Franchise Co. (which owns the Brass Tap franchise), told Forbes:
“It’s a kind of technical question. We have an outside third party that did a statistical analysis of the market where beer bars do well and that created a formula we use. We go to the market and see the competition. We have a formula that puts all the numbers in, we’ve discovered that second-tier markets do really well. Not a big city, but a suburb of a large city or a good-sized town. Part of that is because there’s much competition in big cities.”
When selecting the location for your franchise, be sure to consider:
Zoning and Regulations: Ensure the location is zoned for brewing operations and alcohol sales. Check local regulations regarding on-site consumption and distribution.
Foot Traffic and Accessibility: Look for areas with good visibility and foot traffic. Proximity to other entertainment venues or dining establishments can be beneficial.
Space Requirements: Consider both production needs and taproom space. Ensure there's room for brewing equipment, storage, and a welcoming customer area.
Negotiate your lease
Negotiating your lease can significantly impact your profitability, as rent costs will be an ongoing, monthly expense. To keep this cost down, consider these tips:
Favorable Terms: Aim for flexible lease terms with reasonable rent escalations. Long-term leases can provide stability, but ensure the terms allow for potential expansion.
Buildout Allowances: Negotiate for landlord contributions to the buildout, especially given the specific requirements of a brewery.
Build your brewery
Lastly, remember that your brewery's layout and design must align with the franchisor's standards and local regulations:
Franchise Design Guidelines: Follow the franchisor's design standards to ensure brand consistency. This may include specific requirements for the taproom's look and feel.
Brewing Area Setup: Work with the franchisor and equipment suppliers to design an efficient brewing area that meets production needs and safety standards.
Taproom Design: Create an inviting taproom that reflects the brand's identity while appealing to local tastes.
Undergo training and set up operations
Complete franchisor training
Most brewery franchisors offer comprehensive training programs covering key topics like:
Brewing Operations: Learn the franchisor's brewing processes, recipes, and quality control measures. This may include hands-on training at an existing franchise location.
Business Management: Training should cover financial management, inventory control, and compliance with alcohol regulations.
Customer Service and Taproom Management: Learn best practices for running a successful taproom, including staff training and creating a positive customer experience.
Set up your brewery operations
Once you complete your training, you can focus on getting your brewery ready to open by:
Hiring and Training Staff: Hire experienced brewers and knowledgeable taproom staff. The franchisor may provide training materials to help you onboard your team.
Implementing Systems: Set up inventory management systems, point-of-sale systems, and quality control processes as specified by your franchisor.
Market your grand opening
As you prepare to open, be sure to work closely with your franchisor to market the launch of your business:
Local Marketing: Leverage social media, partner with local businesses, and participate in community events to generate buzz.
Soft Opening: Consider a soft opening for friends, family, and local beer enthusiasts to test your operations and gather feedback.
Grand Opening Event: Plan a grand opening celebration featuring your flagship beers and special releases to attract attention and build a loyal customer base.
Manage your brewery franchise
Refine your management procedures
While setting up your business requires quite a lot of work, actually running your brewery franchise also requires continuous attention and improvement:
Quality Control: Maintain consistent beer quality by following the franchisor's recipes and processes. Regular quality checks are crucial.
Inventory Management: Efficiently manage ingredients, packaging materials, and finished products to minimize waste and ensure consistent supply.
Customer Engagement: Build a community around your brewery through events, loyalty programs, and engaging taproom experiences.
Focus on growth and expansion
As your brewery franchise matures, consider long-term growth opportunities:
New Product Development: Work with your franchisor to introduce seasonal or limited-edition beers that cater to local tastes.
Distribution Expansion: Explore opportunities to distribute your beers to local restaurants, bars, or retail outlets, if allowed by your franchise agreement.
Multi-Unit Opportunities: If your first franchise location is successful, consider opening additional locations or satellite taprooms. Many franchisors offer multi-unit development opportunities for successful franchise owners.
Restaurant Business Plan Template
No matter where you’re at in your restaurant ownership journey, a business plan will be your north star. Organize your vision and ensure that nothing is overlooked with this free template.
Launch your brewery franchise now
Opening a brewery franchise can be an exciting and rewarding venture for those passionate about craft beer and entrepreneurship. By following this guide and leveraging the support and know-how of an established franchisor, you can tap into the thriving craft beer industry and build a successful business.
Remember, this guide is for information purposes only. Always consult with legal and financial professionals before making any business decisions.
However, if you're ready to take the next step, get in touch with potential franchisors to request more information, as requirements and expectations can vary depending on the franchise. Many have dedicated franchise development teams who can discuss opportunities in detail.
Finally, if you’re ready to explore funding options to get your brewery franchise off the ground, be sure to check out Toast Capital, which provides loans of $5,000 to $300,000 in loans to eligible Toast customers.
Is this article helpful?
DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.
Subscribe to On the Line
Sign up to get industry intel, advice, tools, and honest takes from real people tackling their restaurants’ greatest challenges.