How to open a new franchise location: the first 90 days

Opening weeks are often not a store's real level. Launch marketing and curiosity bring people in, then sales settle. Labor runs heavy while the crew learns, waste runs high while prep pars are guesses, and the first reviews set a rating that can take months to move.

This guide covers what the first 90 days commonly look like, how to plan cash for them, what to measure each week, and what a franchisor should give a new owner before the doors open.

What the first 90 days often look like

Most openings follow a rough shape, though the size of each phase varies by brand, format and market.

• Weeks 1 to 3: the launch. Sales are high, lines are long, and the crew is still learning the menu and the stations. Labor is often well above normal because trainers and extra crew are on every shift.
• Weeks 4 to 8: the settle. Curiosity fades and launch marketing ends. Sales step down toward the store's real level, sometimes sharply. This is where cash plans built on launch weeks start to hurt.
• Weeks 9 to 13: the baseline. Sales flatten, the crew is faster, and the store starts to look like itself. This is the first fair read of what the location can do.

A settled level well below week one is normal. Treat it as the starting point for the store's growth, not a failure.

Plan cash for the settle

Build the opening budget on a settled level, not the first week. An owner who spends against launch sales can reach the settle short of working capital.

A simple way to size the cushion is to estimate how much the store will lose, or fall short of plan, during the weeks it runs below its settled cost structure:

• Opening shortfall = sum over the opening weeks of (weekly cash costs − weekly cash from sales)

For example, if a store's cash costs run $27,000 a week while its sales bring in $24,000 a week from week 5 to week 12, the shortfall is $3,000 a week, or $24,000 over those eight weeks. That money has to be in the bank before opening, not found in week six. Rent, loan payments and payroll do not wait for sales to recover.

In practice, most owners use the franchisor's guidance in Item 7 of the FDD for additional funds, then add a margin of their own. If the brand publishes an opening curve, plan against the median, not the best openings.

Measure by week since open

• Weekly net sales and orders against the brand's other openings at the same week since open, not against mature stores.
• Sales per labor hour, stepping down the training crew as the team gets faster.
• Waste logged per shift, with prep pars reset weekly from what actually sold.
• Ticket times at the peak hour. Slow service in week three tends to show up in reviews in week five.
• Every review answered, for the first three months.

Sales per labor hour is net sales divided by total labor hours. It is a fair measure of crew speed because everyone on the clock belongs in the denominator, including salaried managers.

• Sales per labor hour = weekly net sales ÷ weekly labor hours

Sales fell by about 31% from week one to week twelve, and the owner who planned on $28,500 had no surprise. Labor hours fell faster than sales because the crew got faster and the trainers left, so sales per labor hour rose from $30 to $40. If hours had stayed near 1,300 into week ten, the store would have carried roughly 575 extra hours a week.

Labor during training

Training labor is a cost of opening, not a sign the store is overstaffed. The question is whether it steps down on a plan. Set target hours for each week before opening, with trainers leaving on a schedule and crew hours falling as speed improves. Review the plan weekly against sales per labor hour and ticket times, and keep enough people on the peak hour to protect service. Cutting peak coverage to save a few hours often costs more in reviews. How to reduce labor cost.

Remember that POS labor is hourly labor. It leaves out payroll taxes, benefits and salaried pay, so it will read lower than fully loaded labor on the first P&L.

Waste and prep pars

New stores guess at prep pars, and guesses run high to avoid running out. Reset pars weekly from what each item actually sold on that daypart, and log waste by shift so you can see which station and which item drives it. Expect waste to fall over the first six to eight weeks as pars settle. How to lower food cost.

The first reviews

The first few dozen reviews carry a lot of weight because there are so few of them. Answer every one, thank people who left praise, and respond to complaints with a specific fix. Most early complaints are about speed and order accuracy, which the crew can improve each week. Read the week's reviews with the GM every Monday, pick the one problem that came up most, and fix that before the next weekend. A store that answers well in its first month often recovers from a rough opening rating faster than one that stays silent. How to improve online reviews.

A step-by-step checklist

1. Get the brand's median opening curve and plan the budget against the settled level.
2. Confirm working capital covers the opening shortfall, with a margin of your own.
3. Set weekly target labor hours for the first 12 weeks, with trainer exits dated.
4. Set starting prep pars and a weekly time to reset them from sales.
5. Track net sales, orders, sales per labor hour, waste and peak ticket times every week.
6. Compare each week with the brand's openings at the same week since open.
7. Answer every review for the first three months.
8. At week 12, set the store's first real targets from its own settled numbers.

Common mistakes

• Budgeting against launch-week sales.
• Comparing a week-six store with mature stores and panicking.
• Keeping trainers and launch staffing well into the settle.
• Cutting peak-hour coverage to hit a labor target and losing speed.
• Leaving prep pars at opening guesses for months.
• Ignoring early reviews because the store is busy.
• Setting annual targets before the store has settled.

For franchisors: share the opening curve

One of the most useful things a development team can give a new franchisee is the system's median opening curve: weekly sales by week since open, with the middle half of openings shaded. It sets expectations, tells an owner in week six whether they're typical, and shows the field team which openings need a visit. If you share performance figures with prospective franchisees, make sure what you share is consistent with your FDD and reviewed by counsel. How to read Item 19.

To build it, line up every opening from the last few years by week since open, not calendar date. For each week, take the median and the 25th and 75th percentiles. Exclude openings with unusual disruptions only if you say so. Update it once a year. An opening tracking below the shaded band by week six is a good reason for a field visit. How to improve franchisee profitability.

Where Franlever fits

Franlever starts reading a new store from its first synced day once its POS is connected, and its owner and GM get the same daily brief as every other store. Each store is measured against its own normal range and the brand median, so some mornings the brief says nothing needs attention.

General information for restaurant and franchise operators, not legal, tax, accounting or financial advice. Figures in examples are illustrations, not predictions or promises of results. Laws and platform policies change and differ by location, so check the current rules and talk to a qualified advisor about your situation.