Why Are Food Franchises So Popular?

I’d like you to grab a pen and paper and quickly write down the first three franchises that come to mind.  When you’re done, look below to see if any of these iconic franchise brands are on your list:

  • Subway®
  • McDonald’s®
  • Dunkin Donuts®
  • Pizza Hut®
  • Burger King®

If any of them are on your list, you just helped answer one of the reasons why food franchises are so popular. If none of them are on your list, I’m surprised. That’s because those franchises have incredible brand recognition, which is one of the reasons food franchises are so popular. Now, let’s see if the next reason makes sense.

People Need to Eat

It’s true—people do need to eat. That’s another reason why food franchise opportunities are so popular. People figure they can’t lose if they buy a food franchise.

But in this case, it’s where they eat along with how they eat that matters. Both of those things have a lot to do with the revenue you’ll be bringing in if you own a food franchise.

For example, sometimes consumers need a fast meal. Many food franchises can capitalize on that type of consumer. As a matter of fact, there’s an entire segment that targets busy consumers who need a quick meal: QSR, or Quick Service Restaurants. To see just how dominant food franchises are in this segment, check out the Top 50 Quick Service Restaurants.

However, not all consumers need to eat fast. These consumers tend to go with healthier choices when they aren’t eating at home. But there are plenty of food franchises that cater to people who are trying to eat better.

Now that you know that brand recognition and market need are two reasons why food franchises are popular, let’s see if a food franchise could be in your future.

Owning and Operating a Food Franchise

Food franchise ownership is not for the meek.  Reasons include:

  • Extremely long hours
  • High employee turnover
  • Expensive real estate
  • Fluctuating food costs
  • Extremely long hours*

*That’s not a misprint. I wrote it twice as a way of emphasizing the fact that you’ll be at your business a lot. And how do I know? Because I worked in food-service for 15 years.

There’s something to be said about working a 14-hour day, sleeping for 5-6 hours, and then coming back the next day to do it all over again. Six days a week.

But on a positive note, when it’s your business, you’re probably not going to mind the long hours as much.

Employee Turnover

As the owner of a food franchise, there’s going to come a time when you’ll ask yourself this question:

Why does it seem that whenever I get a good, hard-working employee, they end up leaving?

Unfortunately, I don’t have an answer for you. And believe me, it’s a question that’s been asked hundreds of thousands of times over the years.

The bottom line is this: The food-service business has extremely high turnover. If you choose to become a part of the industry, it’s something you’ll always have to deal with.

But, here’s the good news: If your franchise business is thriving, the high-turnover rate will be a little easier to swallow.

Your Location

The importance of having a great location for your food franchise can’t be overstated. It will have to be in a high-traffic area. And it will also have to be located in a spot that’s visible from the street.

You’ll also need to have ample parking for your customers, and enough space where they won’t feel closed in. As a result, the space you rent will cost a pretty penny in most cases.

Having said that, the law of supply and demand—combined with your specific geographical area—will end up determining the price you pay. Generally speaking, a retail space in a Boston-area shopping center is going to cost more than one in Midland, Texas.

Owning a food franchise means you’ll work really hard, you’ll go through a lot of employees, and your operating costs could be high.

But, if you’re prepared for some of things you’ll have to deal with in food service, the rewards can be high. This is especially true if you’re able to secure more than one location.

About the Author:

The Franchise King®, Joel Libava, is the author of Become a Franchise Owner! and recently launched Franchise Business University.