Focus on Franchising
This month, with the premiere of our special report that highlights “The Best Franchise Deals” for the full-service restaurant market, Restaurant Management is offering readers the opportunity to purchase information they can’t find anywhere else.
In the coming months, this addition to rmgtmagazine.com will feature in-depth reports that will cover a myriad of topics vital to full-service restaurateurs. So keep an eye out for these special one-of-a-kind offerings and let us know what you think.
This month’s report looks into franchises that offer great track records, solid returns, and opportunity for entrepreneurs looking to add to their franchise portfolio or for first-time entrants into the foodservice industry.
The report, which was researched, reported, and written by Daniel Smith, looks at franchises that vary in size, cuisine, range of service, investment costs, and return. There are a few stalwarts on the list and a couple of franchises that are not household names but bring something unique and compelling to their marketplaces.
Franchisees, who are entrepreneurs at the heart of it, by any measure, are a big factor in the restaurant industry. This year, the number of franchise establishments will increase by about 2 percent to an estimated 749,500 establishments, according to the International Franchise Association.
As far as how franchises contribute to the overall economy, the numbers are equally impressive. Steve Caldeira, who is the chief executive of IFA, notes that the output of franchise businesses increased 5.3 percent in nominal dollar terms in 2011. “Output will grow by 5 percent in 2012, from $745 billion to $782 billion, and that’s an increase of $37 billion,” Caldeira says.
In the restaurant industry, many franchises have amassed great wealth for the entrepreneurs behind them. In several instances franchisees have ultimately ended up running or even owning the company.
Franchise Business Review, which is a national market research firm that performs independent research of franchisee satisfaction, says prospective franchisees must perform the proper due diligence before signing on the dotted line. It offers this advice:
“Prospective franchisees must do their homework and compare brands side by side, looking at both well-known food franchises and some of the smaller, lesser-known opportunities. Every food franchise has its own culture, and franchisees should carefully consider how that culture fits with their own business goals before committing to a brand.”
In addition to the 2 percent increase in the number of franchise restaurants, franchise business employment will increase by about 2 percent, to 8.1 million jobs. So clearly the franchise industry is keeping pace with the rest of the economy and, in some ways, surpassing it.
Many of the first-time franchisees will be reinventing their careers because of downsizing or other factors prompting a change. Often these decisions are emotional and fraught with worry.
Starting any new business venture is risky business and choosing a franchise brand is a personal choice, one that requires the proper amount of vetting, soul-searching, and counsel.
If you are looking to expand your business portfolio or sign on to the restaurant industry for the first time, I wish you great joy, success, and safe travels on your franchise journey.