Youâre already a customer of this type of franchise business. That means you know itâ¦from a customer perspective. Youâve also probably heard thatâs itâs a âtough business.â And, youâd be right.
It Always Wins The Popularity Contest
Almost 50% of the people that contact me are interested in buying one. Hands-down, itâs the most popular sector in my industry. Itâs also very visible.
If you guessed that Iâm referring to food serviceâ¦mostly restaurants of the QSR (quick service restaurant) variety, youâre right.
Before I get into why the food-service business is the toughest around, I want to share some industry data and trends:
- Fast-food restaurants, categorized as limited service restaurants by the Census Bureau (which did an economic survey of the franchise industry in 2007), topped the list of all franchise operations with 125,898 establishments.
- If youâre thinking about opening up a food franchise, the location you choose is crucialâ¦even the city in which you set-up shop. Here are some great places to start a business.
- Todayâs consumers are on all sorts of schedules. Itâs rare to see an entire family sitting down for a meal at the same time anymore. Thatâs why more and more food franchises are developing bite-sized meals for people on the go. Itâs really a growing trend, and one that wonât be going away anytime soon.
- Did you know that there are 20 countries that make up the Mediterranean? According to Mary Chapman, director of product innovation for Technomic, Mediterranean food is a next-step type of cuisine. Thatâs why franchises like Zoës Kitchen and Roti Mediterranean Grill are gaining interest.
- Fast food franchises have been adding healthier items to their menus for years. But, consumers still order a significant amount of less-healthy food according to this New York Times article.
Owning A Food Franchise
If youâre seriously considering becoming the owner of a fast food franchise, you need to make sure that you know exactly what your role is going to be as the franchisee.
For example, if you wanted to own a McDonaldâs franchise in your area, not only would you have to have deep pockets; youâd also have to be prepared to be an owner-operator. In other words, if you have visions of opening up a McDonaldâs restaurant and managing it from afar, you had better adjust your lenses.
Thatâs because McDonaldâs expects you to be there. They also have a serious (and ongoing) training program, and itâs not one of those 2-week ones.
Another thing thatâs worth asking (yourself) is what type of lifestyle it is that you want to have as an owner.
For example, are you looking for a franchise opportunity that will allow you to have a lot of flexibility when it comes to the hours youâll be working? If so, the food-service business may not be right for you. In most cases youâll need to be working in the business. In other words, youâll be there a lot.
And, while youâre thereâ¦working in your food service franchise, youâre going to have to be a Jack or Jill of all trades. Youâll need to be flexible. If an employee doesnât show up for work, you may have to drop what youâre doing and fill-in yourself. I was in food-service and employee no-shows are very common.
Why Itâs A Tough Business
In a nutshell, itâs the absolute lack of control that makes owning a QSRâ¦or any food-service establishment, very challenging.
Now, I donât want you to feel that Iâm trying to deter you from going after your dream. If youâve âalways wanted to own a restaurantâ by all means investigate the opportunities that exist today. Just know that:
Youâll be Spending a Lot of Time Recruiting, Hiring, and Firing Employees
Turnover rates in food service can be as much as 50% annually. So, be prepared to go through a lot of employees.
Youâre Going to Have a Total Lack of Control When it Comes to Food Costs
They vary tremendously. A lot of things can affect your food costs. Things like fuel prices (which affect delivery costs), natural disasters (which can wipe out crops) and other assorted maladies can and do affect food costs -Â your food costs.
Translation: your profit margins can drop quickly.
Your Restaurant Equipment Can Go on the Fritz
In my experience, this tends to happen on your businesses busiest days and times.
For example, if you own a full service restaurant and the dishwasher breaks, plan on experiencing one of the grossest jobs imaginable in food service; washing dirty dishes by hand. If you donât have clean dishes available, you canât serve your food.
Websites like Yelp Can Sometimes Make or Break Things for Your Franchise
On a positive note, a series of lousy reviews can help you figure out whatâs wrong quickly so you can address it. And, if you canât your franchisor can. Of course great reviews are just that; great.
Youâll be Working Harder Than You Ever Have in Your Life
It was true for me during the many years that I was in the food business. Of course thereâs nothing wrong with hard work, but talking about having to work really hard and doing it 15 hours a day, 7 days a week, are two vastly different things.
If you want to become the owner of a food franchise, start your search for the right one with your eyes wide-open. There are great opportunities in food service these days. You should be able to find one that suits you. Just talk to a lot of existing franchisees before you become one yourself.
That way, youâll know what to expect as an owner.
Fast Food Collage Photo via Shutterstock