The Best Food Franchises to Buy in 2018 - Reviewed, Ranked, Recommended

Table of Contents

1. The Data Behind the Ratings
2. The List - The Top 30 Food and Beverage Franchises
3. FBR’s Survey and Research Methodology
4. Food Franchise Models and Concepts
5. Investment Ranges and Capital Requirements
6. Profitability and Income
7. Quick Facts About Food and Beverage Franchises

The Data Behind the Ratings

This year, we surveyed over 4,200 franchisees from many of today’s leading franchise brands to determine the best food and beverage franchises, based 100 percent on franchisee satisfaction. Each survey participant was asked 33 benchmark questions about their franchisor that focused on areas such as leadership, training, and core values as well 16 more personal questions concerning their business lifestyle and overall enjoyment of running their franchise. This year 30 brands made the FBR’s top-rated list! You can learn more about each top-rated food and beverage opportunity in the list below.

The List - The Top 30 Food and Beverage Franchises

To learn more about each brand simply click on the view link. Once you are on a franchise brand’s page, you can opt to receive additional details directly from the franchise by entering your email into the contact form.

FBR’s Survey and Research Methodology

Every year, Franchise Business Review surveys thousands of franchisees from hundreds of leading franchise brands to gauge franchisee satisfaction and performance — and to compile our lists of the top-rated franchise brands. Our independent franchisee satisfaction reviews measure the health of franchise systems that participate in our research based exclusively on the feedback of franchise owners... the real franchise experts!

Not all brands willingly open their doors to an independent research firm like Franchise Business Review, but those who do can offer investors, like you, a wealth of information on the system’s leadership, culture, training and support, financial outlook and franchisee community.

Learn more about FBR’s survey and research methodology.

Food Franchise Models and Concepts

As a prospective franchisee, you can choose to run anything from a van-based, delivery business to a full-service restaurant—with dozens of other business types in between.

The four primary food franchise models are:

Quick Service - Most people associate quick service restaurants (QSR) with concepts like Wendy’s, Checkers & Rally’s and Church’s Chicken. Commonly referred to as “fast food,” speed of service and low price-points are the focus of QSRs. Meals are more often than not taken out, although people can dine on-site, and delivery service may be provided.

Fast Casual. The concept unites the quality of casual dining with the speed of fast food. Culvers, Captain D’s, and Fazoli’s are fast casual concepts you’ve likely seen. Typically, the food is more customized, freshly prepared, and higher quality and the environment more upscale and inviting than QSRs. Just like QSRs, customers typically order and pay at a counter, and then take food out or grab a tray to sit and eat, although sometimes minimal table service is provided.

Full Service. Full service restaurants serve food and drinks directly to the customers at their tables. They may sell alcoholic beverages; provide takeout, delivery or live entertainment. The term full service entails a wide array of concepts from family-style to upscale dining such as East Coast Wings & Grill, Eggs Up Grill, and Fuzzy’s Taco Shop.

Retail. Retail food concepts include everything from ice cream and treat shops, to coffee shops, bakeries, convenience stores, and even vending machine businesses. Examples include brands like The Haagen-Dazs Shoppe, Nothing Bundt Cakes, Brioche Doree, Kona Ice, and Happy and Healthy Products.

Investment Ranges and Capital Requirements for Food Franchises

The food and beverage services sector offers a wide range of investment options for prospective franchisees. Some concepts require less than $100,000 to get started, while others can cost millions.

It’s critical that you go into a new business being properly capitalized. That being said, it’s important to emphasize that the figures listed above are the total initial investment, but with financing and lease options, the typical upfront cash requirements tend to be much lower.

Using the example of buying a home, the total value of a house might be $300,000, but you’re only required to put down $30,000 cash, or even less. Investing in a franchise business is similar.

For example, a Donatos Pizza franchise costs $375,000 - $699,900 “all in,” but the liquid capital requirements (the cash you need to invest) is $200,000, with the balance being financed through business loans.

The size of the initial investment typically depends on the real estate and equipment needed to run the business. Businesses that are delivery-based and do not require a large physical footprint are generally far less expensive. A business based in a retail strip center can cost less than $250,000, depending on square footage, build-out, and equipment needs. On the other hand, a full-service restaurant, which requires a large, stand-alone site (and more employees and overhead for day-to-day operation), typically starts at over a million dollars.

The time investment for a food service franchisee varies as much as the monetary investment, depending on:

• the size and capacity of the franchise concept

• the number of locations

• how long the franchisee has been in business.

Obviously, the more employees a business has, the more management is required on the part of the franchisee. Distributor-type concepts can sometimes be run on a part-time basis, and some of the snack/pizza/ice cream concepts offer more flexibility. Full-service and breakfast-to-dinner QSR concepts, on the other hand, require considerable night and weekend involvement. Even franchisees with onsite managers to handle day-to-day operations must invest a lot of time promoting and marketing their businesses.

Profitability and Income of Food Franchises

While food franchises are one of the most popular sectors in franchising, profitability can be an issue. Food and beverage businesses commonly operate on razor thin margins. It takes a seasoned business owner, who can carefully manage costs, to turn a decent profit.

Our research shows that 37 percent of food franchise owners earn less than $50,000 per year, and just 16 percent – the “top performers” – earn more than $200,000 per year. The average annual income reported by all food and beverage operators that we surveyed is $120,000 for businesses open at least two years. Not bad, until you factor in the long hours and high initial investment that come with many food businesses. The good news is that our top food franchises report average earnings 15 to 20 percent higher than their competitors.

Learn more about food franchise profitability.

Quick Facts About Food and Beverage Franchises

1. Food and beverage represents 37 percent of all franchise establishments. (IFA)
2. The food and beverage industry represents roughly five percent of GDP (CED)
3. In 2017, the industry brought in total sales of $1.4 trillion and employed roughly 1.46 million workers. (CED)

Facts about the franchisees surveyed for this report:

4. Seventy-three percent of food franchisees surveyed were male, while 17 percent were female. Eleven percent are male/female partnerships.
5. Multi-unit owners make up more than half of all food franchisees surveyed. Twenty-eight percent own three or more locations.
6. Sixty-four percent of franchisees surveyed have a bachelor’s degree or higher.
7. Nearly a third of all franchisees surveyed have been in business 10 years or more.