For aspiring entrepreneurs looking to invest in the ever-expanding food franchise industry, the question of which franchise is the best to open can seem daunting. With so many options – from fast-food to gourmet eateries – understanding the nuances of each potential franchise and selecting the one that aligns with one’s financial goals, lifestyle aspirations and skill set can be overwhelming.
In this article, we provide an overview of the food franchise industry in the United States and offer a comprehensive guide to help you determine which franchise is best to open. We look at the industry’s growth, the different types of food franchises available, the factors to consider when researching and evaluating potential food franchise opportunities, and provide advice from experts in the field.
Thorough research and experienced guidance are the key steps in choosing the best food franchise for you. Knowing and using the right resources and professionals will ensure that you end up with a successful and profitable business. The International Franchise Professionals Group (IFPG), an organization of experienced franchise brokers, can provide invaluable guidance on the process of opening a food franchise. Becoming knowledgeable and comfortable with the business and financial pieces are integral to owning a successful food franchise business.
A Look At The Food Franchise Industry In The US
The US food franchise industry is highly competitive and complex. In 2021, it is estimated that there are approximately 1,700 franchises operating in the United States. This includes quick-service restaurants (QSRs), full-service restaurants (FSRs) and specialty food franchises such as gourmet pizza, ice cream, and bakery franchises.
The restaurant industry as a whole has enjoyed solid year-over-year growth since at least 2003. According to the National Restaurant Association, it’s estimated that the restaurant industry will hit $863 billion in sales by the end of 2021. This steady growth means that there is good potential for profit for food franchise owners. In addition, the food franchise industry in the US has also seen an uptick in the past decade due to the more relaxed regulations surrounding food franchising.
Types Of Food Franchise Opportunities
Food franchises come in all shapes and sizes. The most common types of food franchises in the US are quick-service restaurants, full-service restaurants, and specialty food franchises.
With quick-service restaurants, patrons order and pay for food and beverage at the counter or drive-thru, collect their order, and eat the food on their own, such as McDonald’s and Subway. Full-service restaurants require staff to prepare meals to order, serve them to customers, and handle related services such as taking payment. Examples of full-service restaurants include Applebee’s and Red Lobster.
When choosing a food franchise, entrepreneurs should also consider if they would like to open a “mainstream” franchise, which usually offers a wide variety of food options, or a “niche” franchise, which specializes in only one type of food such as pizza or barbecue.
Finally, there are specialty food franchises. Specialty franchises can include run-of-the-mill baked goods and desserts, coffee, donuts, pizza or gourmet restaurants. With a specialty restaurant franchise, the owner needs to consider what type of food they want to serve and how they can differentiate themselves from their competition.
Factors To Consider When Choosing A Food Franchise Opportunity
Owning a food franchise is an exciting endeavor, but it is important to realize that there are a number of factors to consider when selecting the right franchise opportunity. Here are some important questions to ask yourself when researching potential food franchise opportunities:
– Do you have the skills, knowledge, and experience necessary to manage the franchise effectively?
– Is the franchise a good fit with your desired lifestyle?
– Does the franchise have a proven track record of success?
– Is the franchise well-known and respected in the industry?
– Does the franchise offer any operational or marketing support?
– What are the franchise’s product and service offerings?
– What are the start-up and ongoing costs associated with the franchise?
– What are the profit margins expected?
– Is the location of the franchise business right for your target market?
Investigating each of these factors is essential for determining the best food franchise to pursue. It is also important to talk to franchise owners, franchise specialists, and industry experts who can offer advice on the pros and cons of each franchise opportunity.
Experts’ Advice On Selecting The Right Food Franchise
The experts at the International Franchise Professionals Group (IFPG) emphasize that the most important part of becoming a successful franchise owner is conducting thorough research and selecting the right franchise for your goals. When it comes to food franchises, the IFPG suggests the following:
– Be mindful of the market forces that will impact the profitability of your franchise. Factors such as competition, overall economic climate, consumer spending, and demographic trends can all affect your success.
– Carefully evaluate the franchisor’s operations and consider if their methods and models align with your goals.
– Seek out franchises with strong management teams, proven processes, and incentives for success.
– Consider the level of support offered by the franchisor for marketing, operations, product development, and customer service.
– Have realistic financial goals and understand the costs associated with owning and operating a food franchise.
– Develop a plan to ensure that you deliver a consistent quality experience to attract and retain customers.
At the IFPG, we provide comprehensive franchise consulting services to help our member franchisors make smarter decisions and maximize their franchise business. We offer professional guidance and support throughout the entire process of choosing and investing in the right franchise to ensure their success.