To folks unfamiliar with the true scope of franchising, fast food restaurants are the cornerstone of franchise ownership. Not surprisingly, we receive many queries about specific fast food brands from the ubiquitous McDonald’s, Subway, and Dairy Queen to more regional favorites like White Castle, Culver’s and Aroma Joe’s.
When you see these restaurants with frequent TV ads and regularly full parking lots, it might be difficult to imagine how they could be possibly be anything less than cash cows. In all businesses, and especially restaurants, the cost of running a business can quickly become a strain on profitability, and franchises are no different.
Beyond the “simple” matter of maintaining a customer base that provides a steady revenue stream, fast food franchisees are faced with a number of concerns and expenses involved in keeping the store running smoothly. Some of the more obvious ones are property leases, utilities (refrigeration can make the electric bill VERY expensive), and inventory. Franchise royalties take a good chunk out of the profit as well, although good franchise companies are able to show their franchisees how those royalties are a worthy investment into their own growth.
Labor is another obvious expense, although those waters are constantly murky with the ongoing joint-employer legislation battle. It’s difficult to project your finances when you don’t know what changes are in store for wages, healthcare, etc.
So, to the question at hand: How do you find the right fast food chain for you?
First, know that there is no brand that is perfect for everyone. Some are consistently stronger opportunities than others, but none has found a system that fits with everyone’s goals, local market, and culture. Don’t commit yourself to a specific brand without doing your due diligence and comparing it to others.
If you’re not sure where to start, good news! You’re already here. Our Top 40 Food & Beverage Franchises guide is a free download that lists the top brands for the year. Several brands, which you'll see listed beneath the guide, are actively looking to add new franchise owners (in addition to having been rated highly by current franchisees in our most recent research). Reach out to a couple of them and decide if there’s a potential match.
Second, if you do happen to have a specific brand in mind and they’re interested in selling you a franchise, make sure you speak extensively to their current franchisees before making a decision. Ask about the customer base, the product quality, the franchisor support, how many hours they have to work each work, and anything else you may be wondering.
Finally, make sure your family is on board. That doesn’t mean your spouse will need to be scooping ice cream at your Baskin Robbins or your son frying chicken at your Popeye’s. Just making sure they understand the financial and personal implications of starting a franchise business will go a long way in preventing frustration down the line.
These tips are certainly not a complete list of steps you need to take before starting your fast food business, but we do recommend you take each of them seriously. Good luck!