Owning a food franchise can be lucrative and rewarding, providing entrepreneurs numerous advantages in the competitive food industry. From leveraging brand recognition to tapping into proven business models, this article explores the enticing benefits of venturing into the realm of food franchises.
IFA president and CEO Matt Haller said, “Even with today’s economic headwinds, franchised businesses continue to grow, providing more good-paying jobs for their employees and serving their local communities. After a historic year of growth during the post-pandemic recovery. The size of the franchise economy in 2023 will exceed pre-pandemic levels—demonstrating the power of the business model for prospective business owners when franchisors and franchisees work together.”
In its 2023 Economic Franchising Outlook, the IFA reports that service-based industries and quick-service restaurants are projected to grow more than other sectors. The overall number of franchise establishments will increase by nearly 15,000 units in 2023, or 1.9 percent, to 805,000 units in the U.S. The quick-service franchise field is projected to grow by 2.5 percent.
5 Key Benefits of Owning a Food Franchise
Myriad franchise opportunities are available today, and food franchises are among the most popular. So, let’s explore the benefits of owning a food franchise.
1. Brand Recognition
One of the greatest advantages of owning a food franchise is the built-in brand recognition it offers. Established franchises have spent years building their reputation and brand equity. They have a built-in customer base, as their names and logos are instantly recognizable. As a franchise owner, you can tap into the existing brand equity and leverage customers’ trust and familiarity with the franchise name. This significantly reduces the time and effort typically required to establish an independent, new brand and attract customers. Buying a food franchise gives business owners a head start in the market and faster ramp-up time.
2. Proven Business Model
Ask a successful franchisee their secret, and they’ll tell you to follow the business model. When you invest in a food franchise, you gain access to proven processes and systems that have been through trial and error and fine-tuned over time, efficient supply chains, and access to established marketing strategies. Franchisors provide comprehensive training and support, sharing their success strategies and operational procedures. This eliminates much of the guesswork involved in starting a business from scratch, providing you with a roadmap for success. This structured approach allows franchise owners to focus on day-to-day operations and customer satisfaction, fostering long-term success.
The food industry is known for its resilience during economic downturns. People still need to eat and enjoy dining out, even during challenging times. Food franchises often offer affordable options, making them more recession-resistant than other businesses. By providing reasonably priced meals and quick-service options, food franchises can weather economic storms better than other industries, making them an attractive investment opportunity. Additionally, many franchises have adapted by offering innovative drive-through solutions, curbside takeout, delivery, online ordering services, and more—catering to changing consumer habits and ensuring continued revenue streams.
4. Consumer Demand
The demand for convenient and quality food options is a constant in today’s fast-paced society. Whether it’s a mobile food truck, fast-casual dining, healthier options, or specialized cuisines, franchises have become adept at catering to various consumer preferences. Food franchises benefit from a broad customer base and brand loyalty. Franchises often conduct extensive market research, identifying target demographics and consumer preferences. This knowledge allows franchisees to tap into existing demand and serve their customers with products and services that have already been proven to appeal to the market.
5. Emerging Trends
Food franchises are well-positioned to capitalize on emerging trends in the industry. Franchisors invest in research and development to identify and capitalize on market opportunities. As consumer preferences evolve, franchises can adapt their menus, introduce new ingredients, or experiment with innovative concepts such as plant-based options, sustainability, and technology-driven ordering systems. This enables franchisees to adopt changing preferences and appeal to a broader customer base to ensure their business remains relevant and competitive in the ever-evolving food landscape.
Satisfy Your Entrepreneurial Hunger—Buy a Food Franchise
Eric Stites, founder and CEO of Franchise Business Review, points out that franchise owners are often better positioned to weather a setback—even during a recession—over small, independent, mom-and-pop businesses because owners can draw on the support, leadership, and brand recognition of a large franchise organization and a network of fellow franchisees.
“The award-winning food brands that made our 2023 Top Food Franchises List are lauded for their ability to work with franchisees and help them navigate all the challenges in business ownership,” said Stites. “These Top 30 Food brands on our list outrank their competitors in owner satisfaction and provide their franchise owners a higher return on investment. In fact, 91% of food franchise owners surveyed say they enjoy being part of their franchise organization. And four out of five owners would recommend their franchise to others.”
“Things were bad over the past few years in the restaurant industry, but there are food franchise brands, fast-service franchises in particular, that proved to be agile and resilient,” Stites said. “These brands stand stronger today because of their devotion to franchisee satisfaction. That’s really the big advantage of being part of a strong franchise—having that reliable support system behind you through challenges and triumphs.”
For this year’s research, Franchise Business Review asked 10,502 food franchise owners 33 benchmark questions about their franchisor. The survey questions focused on leadership, training, support, financial opportunity, core values, lifestyle, and overall enjoyment of running their franchise. Half of the franchise owners surveyed are multi-unit owners, and 60% plan to purchase and open additional locations.
Of the award-winning food franchises on our list, the average investment levels range from $170K to $4.7M, with a median total investment of $550K and a startup capital requirement of $200K.
Purchasing a food franchise requires an investment in time and money, but it can deliver a wide range of delicious, long-term rewards. These advantages make food franchises attractive for aspiring business owners looking to enter the thriving food industry. If you want to pursue franchise ownership, this year’s Top Food Franchises List is a great place to start.