According to the International Franchise Association, the franchise industry is well-positioned for economic growth, with the largest sector being the food industry. Even with a tough economy, the average U.S. household spends approximately $3,000 per year on eating out. People simply love eating out and statistics prove they are willing to spend their disposable income on food and entertainment.
Fast food is the top franchise industry. Fast food franchises offer a proven business model. When located properly, a fast food franchise can be an excellent source of ongoing revenue. Costs of obtaining a fast food franchise vary widely. For a minimum initial investment of $80,000, you can start a Papa Murphy’s Take-n-Bake or Cousins Subs franchise. Franchises like Church’s Chicken offer 55 years of experience in the market and over 1600 locations in the world. Because it is a more established franchise, minimum initial investment starts at $300,000. If you are looking for a mid-range investment of just over $100,000, Sarku Japan is an outstanding choice. It has become a worldwide fast food success that is starting to grow rapidly here in the United States.
Mobile Food franchises are less expensive to buy into than fast food or casual dining franchises. For example, a Kona Ice franchise requires a minimum investment of $20,000. Benefits of mobile franchises like Kona Ice are a lower initial investment, lower overall establishment cost, lower overhead, and fewer employees. Before selecting a mobile franchise, find out if your service area is exclusive and protected, or you could be competing for profits with other franchisees. Another potential risk of investing in a mobile franchise is not performing independent research on household demographics in the service area.
Casual Dining Franchises offer individuals and families an alternative to fast food and formal dining. Combinations of pubs, restaurants and sports bars have become increasingly popular all over the United States. Boston’s Restaurant & Sports Bar is one such example. At a minimum investment of $300,000, it boasts 40 years of experience as a successful franchise. Boston’s appeals to families, with a great kid’s menu and family style pizzas. It has equal appeal for adults with collections of sports memorabilia on display, flat-screen TVs and a bar atmosphere that is open late.
Regardless of the type of food franchise you select, you need to know if the franchisor protects your territory. This is important because competing food franchises may be allowed to be located within a small radius of your business. Find out about territory protection by requesting information from the franchisor and networking with current franchise owners. If the franchise does not readily have this information, you should be able to obtain it from the Federal Trade Commission’s Franchise Disclosure Document.
Managing a food franchise requires long hours and hard work. Some successful franchisors have made it a fun family business, involving parents, siblings and cousins as part of the management and operations team. The wide variety of fast food, mobile food and casual dining franchises means there is a business opportunity waiting for you.