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  • Writer's pictureTim Parmeter

Food Franchises: Industry Spotlight


italian pizza - find the best food franchise to own

When people think of franchises, food is usually the first industry that they think of. While the world of franchising is so much broader than just food, today these delicious franchises are our focus. Our team at FranCoach has helped clients find success in many different industries, including restaurants and quick service dining. 


In this article, we will cover why owning a franchise in the food industry might (or might not) be right for you. There is never one best franchise or one best industry, but there are some amazing possibilities out there that you should be aware of when thinking about pursuing franchising. 


Franchising in the Food Industry

When people think about franchising, they often think of businesses like McDonald's, Subway, and Taco Bell. Within the realm of food and restaurants there is a huge range of business opportunities – but overall, it is still probably the most common industry that people equate to franchising. Why is that? Because a lot of the restaurants we frequent are franchises, whether we realize it or not. 


Food Franchising Options

There is a wide range of restaurants to choose from when considering franchising. At the top of the food chain, you have full-service restaurants that require investments of millions dollars. These are big, brand-name restaurants. Everybody knows them, but they also have huge footprints and what we like to call “two comma” investments (i.e. they will cost you upward of $1 million). This is one end of the extreme. 


Now, start thinking about everything that is in a strip mall. These are fast casual places to grab a sandwich, a burger, a slice of pizza, or some Asian or Mexican. These are usually 2,000- to 2,500-square-foot locations with pretty simple buildouts. These spots capture a niche market. Your customer is going there because they specifically want a sandwich or a burrito. Whatever it might be, they know what they are getting. 


These fast casual restaurants are a little higher quality than perhaps a McDonald's or a Taco Bell. You are usually going to pay a little bit more for a meal, but it tends to be healthier and more customizable than fast food. Think smoothie or acai bowl places – or, in the other direction of health, ice cream, cookies, and frozen yogurt. Sweet treats and coffee shops fit easily into this category. 


Different pieces come into play with different niches. Although the consumer might assume that every industry is more or less the same, in most cases, the difference between a burrito stand and a cheeseburger joint can range somewhere between different and vastly different from one another.


Behind-the-scenes matters are huge differentiators when it comes to determining what type of restaurant would be the right fit for somebody… But some things are not Google-able. So how do you know if the food industry is right for you? 


Is a Food Franchise Right For Me?

There are a few things to keep in mind when considering whether or not to consider owning a franchise in the food industry. Let’s dig a little bit deeper into these criteria.


Money

If you want to own a food franchise, you have to be coming to the table with some money. Anything that has a retail component, even if it is in a strip mall, typically requires liquidity ranging from $100,000 to $150,000 cash. As a total investment, if you are not cooking, sometimes you can buy a franchise for under $500,000… But what does that really mean? 


Total investment is a very important phrase that involves three things: 

  1. Your franchise fee

  2. All of the costs to get the business open on day one

  3. Three to six months of operating capital once the business is open


Some restaurants are okay with you owning a single unit, while others are going to want you to do multiples, from a scalability standpoint. 


So why might food be a good fit for you, despite the cost component? To put it simply, no matter what the niche is, we are always going to have to eat. Think about whether you like the physical space of a restaurant and customers coming to you, even if it means a big cash investment. If you are comfortable with that, you might just be in the right place.


Staffing

Owning a franchise also means being responsible for your staff. As a restaurant owner, you are going to have a largely unskilled staff that might be mostly high school and college kids. You will have to teach them how to make sandwiches, roll burritos, and so on. You will have a lot going on, and you are going to have to teach your staff easy, tradable, repeatable things. You will have to teach them how to do inventory and how to keep the place looking amazing. Consider whether this sounds doable for you.


Your Role as Owner

Some franchises require a hands-on owner. Other places may allow you to be semi-absentee. As a semi-absentee owner, instead of being there in person and running it yourself, you are going to spend maybe 10-15 hours a week managing your managers. No matter what, you have to keep your finger on the pulse of what is going on.


On the marketing and financial side of things, including the inventory, you have to stay aware of whether everything is being run as efficiently as possible. Odds are, if you are full-time, you are probably going to want to grow your business and have multiple locations, which means you will likely have lots of different responsibilities. 


Running the Numbers on a Food Franchise

If one franchise costs you $500,000, three of them will eventually cost you $1,500,000, give or take. With food, you have to have that growth mindset. The good news is, the need is never going away. We are always going to go eat. People will always come to you. And with a franchise, you have brand awareness already.


You are going to have a big staff, and, most likely, some turnover. Do not take this personally. Anytime you are dealing with unskilled labor, even if you are the greatest leader and building an amazing culture, you are going to have a little bit of turnover – and you need to be comfortable with that. 


Also remember that some of this “turnover” you have will be positive – you gave someone a job and they rose through the ranks, eventually outgrowing any job you had and moving on to something bigger and better. These people become great examples and success stories to share with new team members who come on board. 


As a food franchise owner, you have to be able to stay on top of all the moving parts, down to the bread, the meat, and the cheese.If that sounds like a job where you will be excited to get out of bed in the morning, this might be the right fit for you – especially if you have the financial capabilities. If you are not excited about this idea, even if you have the financial side of things covered, then owning a food franchise may not be the best fit for you. 


Your Next Steps as an Aspiring Franchise Owner

At FranCoach, our clients often become franchise owners in an industry they have little to no experience in, buying a franchise that was not on their radar when we started working with them. Many times, our clients buy franchises they did not even know existed before we got started on the Discovery Process


So maybe you are excited to work with us. You have the financial means necessary and you have some experience working in the food industry. It sounds cool and exciting. Could it be the thing for you? Absolutely. Could it not be right because of the financial, time, or management elements? Absolutely. 


Again, this is all about what is best for YOU. Keep in mind the “Get Out of Bed Test.” You're the one who has to get out of bed tomorrow and go run this business. Are you cut out for a food franchise? Do you have everything that it is going to take to be able to manage an operation with multiple different moving parts? Are you in a position financially to pull it off? 


If so, let's talk. Let's find the perfect food franchise for you. On the other hand, if you have the financial means to buy a food franchise but it seems a little overwhelming, that is what we are here for. We will work with you to determine your ideal role as an owner and your perfect business model to find your franchise match. 


Who Are We Anyway?

FranCoach is a national search firm dedicated to working with individuals who are interested in owning a franchise. We've partnered with over 600 of the top franchisors in the country, spanning nearly 70 industries.


Our number one goal with our clients is to help them find the absolute best franchise for them to own. Our goal with our Franchising 101 podcast series and this series of informational articles is to help educate people on all aspects of franchise ownership.


Reach out to us to learn more about potentially becoming a franchise owner. There’s never any fee for our service, so why not take the first step today toward your better tomorrow?


Find out if you are ready for franchise ownership with our quick, 5-minute assessment

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