TANYA RIEMANN

Founder, Platypi Designs Inc.

I believe there is an action plan that Jonathan Merck can follow in order for him to figure out what direction Hill Country Texas Grill needs to, or can, go. If he has a high appetite for risk and is able to secure the $450,000-plus in funds for the commissary and operating costs as he sees fit, then he should pass on part of these costs to the two interested franchisees as well as to the ones he signs later. The commissary is being built to benefit the franchisees and so it is fair to pass part of the costs onto them for a period of time. I suggest that for a certain period of time (maybe one to three years), the franchisees pay their dues plus a commissary fee. After that, the franchisees will only need to pay the required annual dues. This should be applied to all franchisees that benefit from the commissary. Merck needs to have enough funds for the commissary and to continue both the business and onboarding of the two franchisees.

In the event that Merck does not want to go forward with the commissary or cannot secure the funds, he should see what funds he can secure now. It sounds as if he’s almost at his maximum spend and will need funds to continue. Depending on whether he can raise funds, he could then open up the lines of communication with his interested franchisees and let them know that each location is now required to have kitchen facilities and that will come with extra costs. Depending on what Merck has secured in financing, he can then offer to help offset the $65,000 of extra costs that the franchisees would incur — if that is what he would like to do. If all parties agree, then he could move forward, keeping in mind the risk associated with only having two franchisees opening their doors.

In the event that Merck has completely exhausted his avenues for extra funding and is already risking more than he would like to at this time, he needs to let his two interested parties know that store openings must be delayed in order to make sure that the business is set up in a way that is the most cost efficient for both the franchisees and him. At that point, Merck should continue to build brand awareness and interest in this restaurant concept until he has at least three or four interested franchisees in place so that the risks are lessened and the possibility of other avenues funding open up.