Well-known franchise brands like McDonalds, Wendy’s and Chick-Fil-A have helped propel the food and beverage industry to the most popular franchise segment on the market today, representing 37 percent of all franchise establishments.
The food and beverage industry plays a critical role in the U.S. economy, accounting for roughly six percent of GDP in 2022. According to the same report, the industry will have made a total contribution of $3.5T to the U.S. economy in 2024.
Healthy market growth in both food and franchising makes a franchise restaurant or franchise food concept an appealing option for aspiring entrepreneurs looking to grab their slice of this popular sector. But with competition fierce in food and beverage, it is not the right move for everyone. Is it right for you?
Opening a Franchise Restaurant: Pros and Cons
Owning and operating a food franchise is not for the faint of heart. The food and beverage industry is very competitive, trend-driven, and affected by global market factors such as climate change and politics. There is also high employee turnover in the industry and fluctuating food costs to contend with. Not to mention, if you want to be successful, you’re going to have to put in long hours, day in and day out. Did we mention that the cost of entry and ongoing expenses are high when compared to other sectors?
Well, that’s the “sour” of the food industry. Ready for the sweet?
There’s a reason so many people open franchise restaurants and food businesses every year. The industry is ever-changing, fast-paced, and exciting. There is something special about food and beverage establishments; about a business that can make you feel so good, a place that people can’t wait to return to, where they can relax after a long day or celebrate with their closest family and friends. Remember Cheers — the hit sitcom and famous Boston restaurant with the catchy jingle? “Sometimes you want to go; Where everybody knows your name; And they’re always glad you came; You want to be where you can see; The troubles are all the same.”
Plus, it’s an industry that will be forever in demand and is not easily outsourced like so many other sectors. While you will put in long hours as a food franchise owner, the potential for a rewarding and satisfying career is high.
Here’s how it breaks down.
The Sweet
Demand
There will always be a demand for food. “It takes a lot of hard work and tenacity to make it in the sector but one thing that never changes is people keep eating!” joked Tony Lamb, CEO and founder of Kona Ice.
Relationships
It’s hard to think of a business that is more relationship driven — or dependent —than the food and beverage industry. Bartev Avakian opened a Pizza Factory in Paradise CA in January of 2025. The town is still recovering from a devastating wildfire in 2018. He says, “The restaurant has fostered connections with lifelong friends and neighbors, strengthening our ties to and furthering our investment in Paradise CA. Creating a welcoming, family-oriented space that contributes to the town’s recovery is a source of immense pride.”
High Satisfaction
Food franchise owners are generally very happy business owners, reporting high levels of satisfaction. When surveyed, 88 percent of food franchisees agreed that they enjoy operating their business.
The Sour
High initial investment
Getting started in the food sector typically requires a large investment. Early profit margins can be much lower than some other service industries—especially for operators of a high cost, single-unit business. It can take a long time for a new operator to recoup start-up costs. Many franchisees choose to open multiple locations, so they can gain operational efficiencies and turn a higher profit (i.e., sharing employees across locations reduces training costs, buying products in larger quantities reduces per unit costs, etc.). Still, operating multiple business locations significantly increases your investment and the overall complexity of the business, and is only recommended for experienced, well-financed candidates.
Labor challenges
Finding and retaining quality staff is one of the greatest challenges for restaurateurs. As reported by the New York Times, 37 percent of National Restaurant Association members said labor recruitment was their top challenge, up from 15 percent two years prior. Low unemployment rates and increasing wage pressures have left restaurant owners scrambling to find the help they need.
Low margins
While many food franchises report relatively high unit-level sales, it is important to look at the whole picture when considering a franchise investment. Food businesses are well known for their low margins, and many struggle to make a profit. Successful franchise operators must manage their expenses very carefully – especially labor and food costs.
Long hours
If you’re looking for a business that does not require too much attention – that you can “set and forget” – the food industry is definitely not for you. Hours are long, and the work is often exhausting. But it can also be exhilarating and as an owner you have more flexibility as to how you schedule your day.
Trends and competition
Let’s face it, the food industry is a trendy one. You can probably think of at least five different diet fads that have swept the country in just the past few years. As a restaurant owner, these fads can, at times, help your business — but they can also hurt it. Not only that but competition in this industry is fierce.
“There is so much competition out there that it is mind boggling!” said Lamb. “Everyone is competing for your mouth and stomach! There better be something that sets you apart. Fads come and go, and trends change continually. Even changing traffic patterns can ruin a thriving restaurant.”
The Future of Food
If you’re considering opening a franchise restaurant, it is important to understand the long-term viability of the brands you’re interested in. What concepts are best for today’s consumer and what brands will be able to match consumer demands into the future?
If you take a look at the makeup of FBR’s top food franchise brands list, you’ll see that convenience and health are two trends that are taking shape with growing momentum.
While the 1950s witnessed the rise of the convenient TV dinner and frozen food, today’s consumers are seeking convenience but with a twist. They don’t want sodium laden freezer food; they want healthy options. And they’re willing to pay. A 2015 study, conducted by Nielsen, found that 88 percent of respondents were willing to pay more for healthier foods.
Thinking About Opening a Franchise Restaurant? Exploring the Top-Rated Food Brands
When you’re ready to compare your options, there are hundreds of food franchise brands to choose from, which is why it is so important to do thorough research. Ultimately, you want to find a brand that will meet your expectations and help you achieve your dream of business ownership while giving you the lifestyle you desire.
Examining the reviews and feedback from other franchise owners is one way to get unbiased advice from other entrepreneurs who have already made the leap into franchise ownership and have first-hand experience with the brands you are considering.
To assist you in this process, Franchise Business Review surveyed over 10,502 franchisees from many of today’s leading franchise brands. FBR asks each survey participant 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.
Franchise restaurants offer an exciting environment to business owners who don’t mind making a bigger financial investment, working long hours, and managing a large and diverse workforce. Food operators remain some of the most passionate in all of franchising. While the investment is higher, so is the potential for returns. If you are interested in pursuing franchise ownership in the food sector, this year’s list of the top 30 food franchises is a great place to start.
