I’ve mentioned several times that franchising is a diverse field. In fact, it covers 29 industries and 226 sub-sectors of the U.S. economy. That means you can find a franchise for just about any interest or background. However, if you prefer tried-and-true options, there are some clear winners: quick-service restaurants, retail/automotive shops, personal services, and business services. Over the next couple of months, I’ll be highlighting each of these franchise types, explaining how they work, and sharing what you should know before committing to one.
Quick-Service Restaurants: Big Brands, Big Money
When people think of franchises, they probably think first about quick-service restaurants. The phrase “fast-food franchise” is part of the American lexicon. Not all the quick-service restaurants you can think of are franchises. Some companies prefer to keep their locations corporate-owned, so they can maintain more control over their brand and keep all their profits. However, if you were to name 10 fast-food brands off the top of your head, odds are good that several franchisors would be on the list.
Among the most popular franchise types, this one is the clear winner in terms of economic output. Quick-service restaurants currently contribute $268B per year to the economy, more than double the output of the next-biggest category. This is not surprising, considering that more than one-third of Americans eat fast food daily. And it’s a common habit for almost every American household. Even in this time of pandemic, quick-service restaurants are staying in business, thanks to their existing drive-through and takeout capabilities. In other words, quick-service dining is a resilient industry with a massive customer base.
Quick-Service Restaurants: The Disadvantages
That’s a good thing, because quick-service food franchises tend to be among the most expensive out there. Their big-time brand recognition and huge customer base let franchisors command high franchise fees. They also have high total startup costs, sometimes running into the million-dollar range. You can’t open a restaurant without building out a space, acquiring specialized equipment, laying in a large amount of supplies, and hiring several employees. Quick-service restaurants also must stay open long hours. Some even require a 24-hour schedule. That means long work hours for you, plus the need to hire managers and pay wage premiums for second- and maybe third-shift workers.
Finally, quick-service dining is all about consistency and efficiency. Customers expect uniformity and speed, whether they’re dining at a franchise in their hometown or across the country. To meet this expectation, quick-service franchisors typically exercise tight control over every aspect of the business, from restaurant layout to signage to ingredients. Owners of quick-service restaurants often play a role that’s more managerial than entrepreneurial. Some first-time business owners welcome this kind of structure, but others may find it frustrating.
Quick-Service Restaurants: The Advantages
The flip side of this systematic approach? Food franchisors have had plenty of opportunity to work out the kinks in their systems. You probably won’t experience a lot of surprises or be expected to help problem-solve this franchise concept. You’ll likely receive a clear, detailed rulebook that guides you through the basic day-to-day business operations. The franchisor may even provide extensive support to help make sure you follow the company plan. As a result, you’ll be able to save your mental energy for more complex decisions, such as how to handle personnel issues or whether to expand your business.
In addition to the big customer base, the popularity of quick-service restaurants brings you another major advantage: a big support network. These kinds of franchises tend to have small territories, so your town or city (or even your neighborhood) may have several other owners nearby. If you sign on with a national or even global brand, you’ll have the opportunity to learn from and collaborate with a very large network indeed.
Quick-service dining is also a diverse industry. Long-gone are the days when fast food just meant burgers and fries. Franchises now include sandwich shops, gourmet salad bars, Mediterranean kitchens, juice bars, and vegetarian options. Many franchisors are also trying to be more socially responsible. They’re sourcing sustainable ingredients, incorporating eco-friendly practices, or implementing better pay and benefits for workers. So if you’re passionate about healthy food, international cuisine, or certain social issues, you can probably find a franchise that fits your values.
The Inside Tip
Three common objections often come up regarding fast-food franchising: the high startup costs, the uniformity or control imposed by the franchisor, and the anonymity of dealing with a huge corporation. If you really love food service but share these concerns, I’ve got an inside tip for you. Look into local or regional quick-service restaurants. Eighty-four percent of franchise concepts are local or regional, and there are plenty of good restaurant options among them. When you work with a smaller franchisor, you’re likely to have lower startup costs, get more personal support, and even have the opportunity to influence the business.
Want to own a quick-service restaurant, but not sure where to get started? Schedule a call with me. I’m here to help you research your options, find the right fit, and get off to a successful start. And my services are always free to you!
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