Every virtual brand and brand licensing pitch sounds similar: use the kitchen you already have, add a menu people are searching for, keep most of the revenue. The differences live in the agreement. Here are ten questions to ask before signing any of them, including ours. If a salesperson cannot answer one clearly, that is the answer.
1. Who pays whom, how much, and when?
Get the full money flow in writing: what the delivery platform keeps, what the brand keeps, what you keep, and whether the brand pays you or you pay the brand. Ask for the payout schedule and what happens if a payout is late. Complaints about delayed payouts were a recurring theme in the first wave of virtual brands. The right answer fits in one sentence.
2. Is this a franchise, a license, or something else, and what does that mean for me?
Under the federal Franchise Rule, whether an arrangement counts as a franchise depends on what it is, not what it is called. If it is a franchise, you are entitled to a disclosure document before you sign or pay. Some states, including Maryland and Virginia, have their own franchise laws on top of the federal rule. Ask the brand which structure it uses and have your own attorney confirm what protections apply to you. We cover the difference in Restaurant Licensing vs Franchising.
3. What exactly do I have to buy, and from whom?
List every required purchase: food, packaging, equipment, software, marketing contributions. Ask whether you can source any of it elsewhere, and whether the required items are priced at a normal wholesale rate. Required purchases are where thin economics hide.
4. Can I pause it, and can I run it only during certain hours?
A brand that forces you to stay live during your own dinner rush will produce late orders and bad reviews. Ask whether you can set hours, pause during a slammed service, and come back online without a penalty.
5. Who owns the reviews, and do they touch my restaurant's rating?
On most delivery apps the virtual brand is its own storefront with its own rating. Confirm that in writing, and ask who responds to reviews, who handles refunds, and what happens if the brand's rating drops below the platform's threshold. Uber Eats removed thousands of virtual storefronts in 2023 largely over ratings and duplicate menus (NBC News).
6. What training, specs and quality standards come with it?
Ask to see the bake chart, the packaging spec and the training materials before you sign. Then ask what happens to a partner kitchen that does not follow them. A brand that will not remove a bad operator is a brand whose rating you do not control.
7. Where do orders actually come from, and who markets the brand?
Separate the brand-level marketing (social, press, digital) from what you are expected to do on your own delivery listings. Ask what the brand does in your specific market, and treat any promise of a specific order volume as a reason to walk away. No brand can guarantee what customers in your zip code will do.
8. Does it conflict with my lease, my permits or my insurance?
Many commercial leases restrict use or require landlord consent for a new concept. Your health permit, liquor license conditions and liability coverage may also need a look. The brand should be able to tell you what other operators have had to update.
9. What is the term, and how do I get out?
Ask for the initial term, renewal terms, what notice you need to give, what you owe on the way out, and any non-compete. Note that some states have started restricting post-termination non-competes in franchise agreements. Have your attorney read this section twice.
10. Who owns the customer data?
If the brand runs the storefront, it likely owns the customer relationship. Ask what data you receive, whether you can market to those customers, and what happens to the data when the agreement ends.
A short way to score the answers
- Money flow explained in one sentence: good sign.
- Written specs, training and a real quality process: good sign.
- Hours you control and a pause button: good sign.
- Any promise about your revenue, orders or payback: walk away. Honest brands do not make it, and in most states the law does not allow it.
MOLTN's brand licensing program is described here only at a high level. It is offered solely under a written agreement, only to qualified applicants, and only where it may lawfully be offered. Nothing in this article is an offer to sell, or a solicitation of an offer to buy, a franchise or license, and nothing here is a representation about the revenue, sales or profit any operator may achieve. Talk to your own legal and financial advisors before signing any brand agreement.
Add MOLTN to the kitchen you already run
A delivery-first cookie brand that runs alongside your menu on the oven and freezer you already have. Read the program details, then apply if it looks like a fit.
See the licensing program