The food, beverage and restaurant franchises has always been an attractive investment for many franchise seekers. The reason: everyone needs to eat. Additionally, busy schedules are forcing families to eat out more. Sixty years ago, the average family time was 90 minutes now we spend less than 12 minutes eating together as a family. Finally, eating with others has become a social event and this trend is likely to grow.
While there are several items to consider before exploring a food, beverage and restaurant franchise, here are several reasons to evaluate this sector:
The industry is recession resistant.
With most restaurants offering value menu options, families can afford to treat their families on a regular basis, which can save parents a lot of time preparing meals. According to a recent study, Americans now spend a higher percentage of their food budget on restaurants (50.3%) than they do on groceries (49.7%). Additionally, in 1970, Americans spent 26% of their total budget on eating out; by 2010, that number has risen to 41%.
The demand continues to be popular.
A new survey shows that people who eat out, tend to eat out quite often. 56% say they dine at a restaurant, order take out or have a meal delivered 2-3 times a week. With busy work schedules and children’s extracurricular activities, most parents rely on quick service restaurants to provide their family meals. Having a variety of restaurants offering a several options that appeal to every family member, makes family dining very enjoyable, social and affordable.
There is opportunity for growth.
The F&B&R industry is the largest franchise segment and it outperforms any other sector with steady growth and employment. This sector also has approximately 194,000 establishments in the U.S. and employs around 4 million individuals. McDonald’s is the most valuable fast food franchise with a value of approximately $22.04 billion.
Shown in the table are some very well-known and tenured Food, Beverage and Restaurant franchises. They have proven systems that have been successful for hundreds of franchisees throughout the decades.
| Franchise | Liquid Capital | Ramp Up Time | Additional Information |
| McDonald’s | $750K | Varies based on location |
Financing is available, but 25% cash down is required Rent Fee: Base on percentage of monthly sales Service Fee: 4% |
| Chick-Fil-A | $750K | Varies based on location |
You can request a Franchise Disclosure Document for full details |
| Subway | $30K | 2 – 12 months | Total Investment: $100K – $342K Royalties: 8% 4.5% Advertising Fee |
| Dairy Queen | $400K | 90 days+ | Franchise Fee: $35,000 Royalties: 4% Marketing Fee: 5 – 6% |
| Dunkin Donuts | $125K – $250K | 90 days+ | Franchise Fee: $40K – $90K Royalties: 5.9% National Ad Fund Fee: 5% |
| 7-11 | $50K – $150K | 6 months – 2 years |
Royalty is paid as a variable percentage of gross profits National Ad Fund Fee: 1% of Gross Profits |
*Numbers may vary based on location and unit size; the figures in this chart can be obtained by requesting a current Franchise Disclosure Document from the franchisor.
Before investing in any franchise, it is very important to complete all due diligence before you invest in any business. You need to carefully consider all funding options, build out costs, analyze labor, food and real estate costs. This sector has always trended positively, due to the work lives of many Americans and their family’s activities, and the demand is likely to continue to grow. For more information contact Sue Bennett at FranFinders: https://www.franfinders.com
*All franchise information provided was obtained from the individual company’s website and the references include: FranchiseGator.com, National Restaurant Association, Statista, Wikipedia, thebalancesmb.com; Subway.com; The Scramble; Franchise Business Outlook 2018
– Sue Bennett, Certified Franchise Consultant
Sue Bennett, CFE, CFC; Co-owner of FranFinders, a Franchise Consultancy and Funding Company, with her husband Rob, since May 2008. They have helped hundreds of clients create wealth through franchise ownership. For more information, visit www.franfinders.com.