Food Franchises – Tap Into This Multi Billion Dollar Business

Ask anyone which business is the most popular franchise business and they will immediately name various food franchises. Food franchises are very famous and successful for the simple reason that people need to eat. Food is a necessity and busy lifestyles and cultural changes over the years have meant that huge amounts of money are being spent on eating out.

Here are some mind blowing facts about the restaurant business and food franchises in America. These figures are based on the estimates provided by the NSA or the National Restaurant Association, a not for profit organization that is involved with research and analysis of the restaurant business in the United States.

• Expected sales in the United States. in 2011 - $604 Billion

• Estimated number of restaurant locations in the United States – 960,000

• Employees to be hired in this sector – 12.8 Million

• Restaurant industry’s share of the food industry’s $1 – 49%

As you can see, it is only natural that food franchises are so popular. However, it will cost quite a pretty penny if you want to sign up as a franchise for one of the large, established brands in the United States. Below, you will find the typical investments you will have to make to don a large franchise name.

McDonalds Franchise – You will need a minimum of $300,000 in personal resources if you are going to be able to own a restaurant that will sport the gold arches in the front. McDonalds does not offer financing although it works with various established lenders who offer some of the lowest interest rates in the country.

Dunkin Donuts Franchise – Dunkin Donuts has very demanding requirements in that they will require you to already own at least 5 restaurants with about a Million dollars in cash reserves.

Taco Bell Franchise – The Taco Bell franchise agreements states that you will have to open at least 3 additional Taco Bell franchises in a year. It will cost you about $1.2 Million to $1.7 Million to become a Taco Bell franchise.

Advantages of opening up a food franchises business

The advantages are that a food franchise will already have a good in built demand that comes with it. As the saying goes “Build it and they will come” It Is very rare to see an established franchise fail miserably which means that the amount of risk with food franchises is quite low. The second main advantage related to food franchises is that bank financing is more easily obtainable for business in the food industry as banks are well aware of the lucrative nature of the food market.

Disadvantages of opening up a food franchises business

The biggest obstacle to running food franchises is that the success of the restaurant will often depend on labor management. A restaurant will often hire low skilled labor that typically has a very high attrition rate. If the workforce is not managed properly, the restaurant can suffer quite badly. Secondly, the food business is one that has very low margins. Profits are made with high volumes of sales rather than high profit margins. If the business is not managed properly, profit margins can quickly take a tumble and end up in losses for food franchises.