Hungry for a new opportunity? Let’s dive into the sumptuous world of food franchises.

From French pastries to chicken teriyaki to French fries beneath golden arches, food franchises account for 36-percent of all franchise establishments and 48-percent of the annual financial output of the U.S. franchise industry, according to the 2018 Franchise Direct Food Franchise Report.

Of the 1,023 companies that applied to be on entrepreneur.com‘s annual Franchise 500 list, almost a quarter were food-based, and half of the companies that ranked in the top 10 were quick service restaurants. Food franchises, they said, can be some of the most challenging to build, but also some of the most rewarding.

A well-known food franchise has built-in product demand and recognition, proven success and marketing power. You, as a franchisee, bring to the table skills such as multi-tasking, the ability to manage your employees, as well as teach them the importance of good customer service skills.

While fast food franchises are estimated to make up 25-percent of franchises in the country, they are not the only entrée on the food franchise menu. There are also coffee, smoothie and juice franchises; full service franchises; pizza franchises; corporate catering; and vending machine franchises, to name a few.

Here’s a sampling of a few of those categories:

Coffee franchises

Next to water, coffee is the most consumed beverage in the country, with no signs of slowing down – must be all that caffeine. According to www.researchmarkets.com, the U.S. coffee franchise market is expected to reach $13.96 billion by 2025. These franchises also rely on baked goods or sandwiches as another source of revenue. You know I love multiple income streams!

Full service franchises

This category includes casual family eateries and upscale restaurants. Food is usually eaten on-site, although delivery and takeout may be available.

The full-service restaurant industry has experienced steady growth over the past five years, writes IBISWorld, adding that the fine dining segment has done especially well due to an increase in the number of wealthy consumers and a growing corporate sector. With revenue of $312 billion, annual growth is projected at 4.1-percent.

Fast food franchises

Also known as Quick Serve Restaurants (QSR), food is supplied for immediate consumption, whether inside the building, in your car or through delivery. The fast food industry in the United States is worth about $198.9 billion, reports statsta.com. By 2020, this figure is forecasted to exceed $223 billion. Brings a whole new meaning to the tag line have to your way.

Pizza franchises

Pizza franchises are also part of the QSR industry, but have their own distinct categories, including full service, limited service where customers order then collect their food at the counter, non-traditional locations which usually offer take-out or delivery, and take-and-bake options. The pizza restaurant industry will continue to grow over the next five years as the economy improves and customers spend more on eating out, reports IBISWorld.com.  

Retail food franchises

In 2017, U.S. retail food franchise establishments had an estimated output of $37.62 billion U.S. dollars, according to statistic.com. That number is projected to grow this year to $38.96 billion. This category includes food and beverage stores; food-service contractors and caterers; retail bakeries; beer, wine, and liquor stores; and, of course, gas stations with convenience stores.

Vending machine franchises

Did you know there are franchise options in the world of vending machine food? Although it’s a catch-all category that includes sodas, snacks, smoothies and more, this is an up-and-comer. The latest market research report by Technavio reports the global vending machine food and beverages market is expected to grow at a compound annual growth rate of more than 3% through 2022.

From a franchise perspective, what makes food franchises so appealing is that – well, everyone eats! According to statistic.com 20% of American’s visit a QSR one time a week and 72% of us visit at lunch. Love it or leave it, there’s non denying that food franchises are popular, mostly proven and hear to stay.

Listen to Lisa:

When considering a food franchise, there’s a few specific things to keep in mind.

First of All – Are YOU a “fit” in the restaurant ownership world. Let’s talk about your lifestyle design; hours you want to put in at the restaurant; your role in your business. Several very popular chains will NOT allow anything less than 40-50 hours a week of ownership management, others are fully fine with you managing a manager. Don’t waste your time, until you know what is allowed and what you have to give.

Do you understand the concept of a “fluctuating inventory cost”? Otherwise known as food costs? Food cost is one of the larger portions of your investment when starting a restaurant, and wasted food cost can be exorbitant. If you don’t have food or restaurant experience in your background, is the franchisor who is training you and your staff prepared to help you with this portion of your budget from day 1?

Are you someone who is comfortable dealing with quite a few employees in an industry that employee turnover, training and fluctuation of staffing are a regular occurrence?

Explore several options in multiple categories. Once you know your budget, I’d suggest speaking with at least 4 brands in different categories to really get a firm understanding of the food industry and food franchising in general. Of the 60 different industries that I’ve worked with, I’ll honestly say food probably is the most diverse from everything to franchise fee, policy, penalty, expectation from franchisee and franchisor, training, etc. It’s a fabulous proven industry with multiple success stories – just go in with eyes wide open.


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