Food Franchises: The Good, the Bad, and the Ugly

This site offers a multitude of franchising opportunities: home improvement, computer solutions, health care, service, and retail businesses among many others. Still, most people tend to think of restaurants-especially fast food chains-when they think of franchises. This isn't surprising when you think of the number of these businesses that are raking in the profits all over the world.

If you're considering a restaurant franchise, it's important to understand both the ups and the downs. Food-based businesses can be very versatile and full of perks, but they come with their own set of challenges, as well.

Advantages

Built-In Demand

New franchises for established fast food companies are already a step ahead. Customers already know what to expect from your business. If you choose a food franchise with a strong presence in the market rather than a "flash in the pan" fad, you'll do well.

Good Financing Terms

Lenders understand that food-based businesses require equipment and that these businesses usually enjoy high revenues. The more potential for profit a business shows, the more likely lenders will be to provide funds.

Established Record

Franchises like Wendy's or KFC have units all over the United States (and other countries, as well) that have been operating for years. Fast food customers like consistency and a franchise with a solid track record is much more likely to be successful. The fact that there are so many other stores like yours out in the market actually works to your advantage.

Prestige

Within the franchise world, fast food franchisees are respected business people. It feels good to know that people are looking up to you.

Disadvantages

High Startup Costs

Because of the all the equipment a fast food restaurant needs (grills, refrigerators, trash disposal, vents, tables and chairs, etc., etc.) along with the daily requirement for fresh food and ingredients, starting a fast food franchise can be expensive.

Zoning Regulations

Communities have strict regulations regarding health and food safety. Fast food franchisers expect this, so part of your training includes understanding the building codes and zoning issues you'll face and the permits you'll need. If your franchise company doesn't provide this training, sign up with someone else!

Labor Cost and Quality

Food businesses rely on low wage employees. However, this also means you should expect a lot of turnover. You should assume that hiring and training costs will be a regular part of your fast food franchise budget.

Long Hours

It takes a lot of work to run a fast food restaurant-hiring and training employees, caring for equipment, taking in and disposing of perishable food, and of course, making sure your customers are satisfied. Most fast food franchisees can expect to put in more than an eight-hour day, and to go home with the smell of the kitchen clinging to their clothes.

Before you sign on to run a fast food business, be sure to evaluate the pros and cons of this kind of business. Do some soul-searching to determine if this is the right kind of franchise for you. If you're sure that this is what you want-then go for it!