Is owning a food franchise worth it?

If you want to know if owning a food franchise is worth it, consider these pros and cons

Owning a food franchise may seem glamorous, but it is not for everyone. There are many challenges, and we have seen some huge ones this past year. The pandemic hit the restaurant industry especially hard. Even with programs like the Restaurant Revitalization Fund helping restaurant owners financially, there are still pandemic-related struggles including worker shortages and supply chain issues.

But even before the pandemic, owning a food franchise has never been easy. For some people, it’s a labor of love. But for others, the challenges are not worth the effort. There are many struggles, long hours, and sacrifices in the food business. Here is a list of the pros and cons to consider.

The pros of owning a food franchise

Mass appeal

Quite literally everyone eats! There is a giant customer base to pull from. The options are endless, and food will always have mass appeal. 

Fun business

Each restaurant and food franchise has its own style and its own feel. It’s fun to be immersed in an environment that makes your customers feel welcome and provides a positive experience. Some newer brands require less equipment and are easier to operate. This includes smoothie and juice bars since there is no need for industrial-sized kitchens. 

Brand recognition

When people are traveling, they know what they will get from a known food franchise versus an unknown. Customers from all over the country — and the world — are familiar with franchised restaurants and the experiences they provide.

Buying power 

A major plus of being part of a franchise is buying power. Franchisors are able to secure certain discounts for their entire systems, can buy in bulk, and can pass along these savings on to franchisees.

The cons of owning a food franchise

Labor issues

Currently, worker shortages are a huge problem. It’s always been hard for restaurant owners to retain employees, but now it’s also difficult to recruit. Some fast-food brands are even offering signing bonuses. The turnover rate is usually high during normal times, But now, there is less incentive to work, with so many people collecting unemployment.

Restrictions

Restaurant franchises come with a lot of rules and regulations. Although these rules are meant to keep the customer experience consistent, they can be pretty restrictive. This is bad news for any potential franchisee who wants to get creative and work outside the normal structure. Food franchises are typically too rigid for entrepreneurial investors who want creative control. 

High overhead

Owning a food franchise can be expensive — especially ones with larger and more complicated buildouts. Between leases, equipment, salaries, and inventory, food franchise owners have a lot to manage.

Supply chain issues 

According to CNN Business, shortages in crucial supplies such as chicken — and even ketchup packets — are on the rise. Lately, major franchises have been paying excessive prices for chicken, which for some brands, has become a huge problem.

Food franchising is not for everyone, and it is not one size fits all. Every brand and opportunity is different. In order to find something that suits your lifestyle and interests, make sure to ask the right questions. Do your due diligence. It’s worth the effort. After all, if you’re going to make a change, you should make it count!

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Isabella Stier is a freelance writer who has a love for storytelling and entrepreneurship. She contributes to FranchiseWire.com and entrepreneurship-interviews.com, reporting on industry news and franchise trends.
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