Aspiring business owners looking for time freedom and flexibility may find owning a food franchise to be a great career pathway. Thanks to the International Franchise Professionals Group (IFPG), there is now a wide range of franchising opportunities to consider. Still, the process of selecting and investing in a franchise business can be intimidating. Below, are some of the most frequently asked questions about food franchises, so individuals can approach this investment with clarity and confidence.
What Are Some Popular Food Franchises?
When it comes to food franchises, the options are vast. Some of the most popular choices include fast-food joints like Burger King, McDonald’s, and KFC. There are also sandwich shop franchises like Subway, Saladworks, and Jersey Mike’s, which have grown in popularity over the years. For a more casual vibe, there are pizza joints like Papa Johns, Dominos, and Pizza Hut. Additionally, donut chains like Dunkin’ Donuts, Krispy Kreme, and Tim Hortons have also risen in popularity over the years and remain expansive even during pandemics.
Are Food Franchises Successful?
Food franchises are some of the most successful business models in the US. According to Time.com, the top 50 food chain franchises earned over 70 billion in 2020. It’s worth noting, that even during the pandemic, food business franchises remained resilient. Moreover, the annual growth rate for the restaurant franchise industry is estimated to be 4.8% throughout 2020-2024. Plus, franchises that focus on convenience such as the meal delivery business are estimated to see an annual growth of 5.6% during the same period.
What Are the Benefits of a Food Franchise?
In addition to the admirable success rate, setting up a food franchise offers aspiring business owners various benefits. For one, it’s far less risky than it would be to launch a non-franchise business. That’s because franchisees are not responsible for developing, marketing, or managing the brand, but will instead get business assistance from the franchisor. Moreover, because of the name recognition that comes with food franchises, these businesses often get a head start in success. Lastly, due to the franchise support, investors don’t need any prior business or restaurant training to get established in franchising.
Are There Any Risks Involved in Owning a Food Franchise?
Generally, the risks when owning a food franchise are low, as long as an individual follows the franchisor’s guidelines. A few potential risks worth considering include market saturation. When multiple franchises of the same concept exist in the same area, it will create a higher level of competition and can affect the business’s performance. This can mean tougher margins, which could interfere with an individual establishment’s value. A franchisees’ success also depends on the quality of franchise support from the franchiser. To mitigate the risk, aspiring business owners ought to research the franchisors’ track record before investing.
What Are the Cost Considerations?
The cost of a franchise varies widely and depends on the concept and investment requirements of the franchiser. The average franchise fee the franchisor will require ranges from ten thousand to thirty-five thousand dollars. Additionally, many franchisors will require start-up costs, such as equipment or inventory purchases. Unfortunately, these extra costs are rarely included in the initial franchise cost, but most franchisors should provide a detailed list of franchise fees before you sign a contract.
How Do You Identify the Right Franchise?
Achieving success when investing in a food franchise depends on finding the ideal one for an individual’s specific needs. Many factors will factor into this important decision, nonetheless, before investing, potential business owners should consider their capital, background, values, interests, and short-term and long-term goals. Plus, it’s important to make sure that the franchise offer is legally sound and that the franchiser has an established track record. Franchisors are also required to provide a Franchise Disclosure Document (FDD). This will provide further information about the franchise, such as the associated fees and liabilities, training and support, terms of the agreement, and more.
Owning a food franchise can be a fulfilling and successful pathway for aspiring business owners who want time freedom and flexibility. Despite the various risks and cost considerations, the wide variety of franchising options, the strong resilience of the food franchises industry, and the various support programs from franchisers are all promises of promising success for the right investor.