Starting a business can be very exhausting and stressful. There are so many elements involved in starting a business aside from the know-how and the mindset of becoming a successful entrepreneur. You have to know all the strategies involved in marketing your products; that is if you already know which products you want to sell. What if you don’t?
Yes, it is normal to go through a phase where you really want to start your own business but you just can’t get your head on what specific business you want to do. You have all the means and your capital is ready, but there’s a lot to consider in starting the business – the location, products, permits, branding, construction of the store, training of personnel, suppliers, and the time and effort that you need to exert in all of these. You don’t even have any customers yet, and you still have to make your brand known.
Just thinking about all these things can make you tired already. Good thing, you don’t have to worry about all of these anymore. Food franchising is the answer.
What is food franchising?
Food franchising is when a business owner (franchiser) allows a third party (franchisee) to use its trademark, systems, and processes to produce and sell food products a certain standard that the brand is known for. The franchisee pays the franchiser a franchise fee and a percentage of the sales revenue as royalty. In this way, the franchisee does not have to worry about starting his own brand because a franchise is usually a known and well-established brand that is already a big name in the food industry. Training of personnel is included in the contract to ensure that all branches of the business are on the same page. All products will come from a single supplier for uniformity. The physical store, which is similar in all other branches, is also provided.
Which food franchise is the most profitable?
Take this list as your guide to know which food businesses are the most profitable food franchises nowadays.
A Subway franchise is somewhere between $116,000 and $264,000. This includes everything that needs to be done in setting up a Subway store and the operating expenses for the first 3 months. The royalty fee is 8% of the total gross sales.
The startup cost to franchise Pinkberry depends on the location. The initial investment can range from $310,000 to $615,000. The franchisee must have $200,000 minimum liquidity and $400,000 net worth. The royalty fee is 5% and another 2% for marketing.
For you to be able to franchise a McDonald’s store, you need a whopping $955,000.00 in funds to be considered. You have the option to purchase an existing restaurant that requires a 25% down payment or purchase a new facility for 40%. The corporation will take care of the extensive training of your staff and the management of the store’s operation.
Franchising Wendy’s is not available locally, though. Multi-unit franchisees or franchise groups can franchise Wendy’s internationally if they have $2 million in liquid assets and $5 million net worth. Royalty is 4% and another 4% for advertising.
To franchise Dunkin Donuts, you need to have at least $250,000 liquidity and net worth of $500,000 per unit.
Taco Bell are opening more franchises to spread restaurants all over the world. A stand-alone restaurant costs between $1.2 million and $2.5 million. The land or lease costs are excluded in this amount. It has a royalty fee of 4% and another 4% for advertising.
You need to have between $1.3 million to $3 million and a net worth of $1 million with $360,000 in liquid assets. The franchise fee is $25,000. The service fee is 6% and the advertising fee is 2.5%–3% of the gross sales. Moreover, you must build at least three restaurants in a span of three years.
There are two types of franchises offered by Domino’s: internal and external. An internal franchisee has worked as a general manager before in a Domino’s store, and an external franchisee is someone who has not been a Domino’s general manager. The difference is in the franchise fee, which is 0–$25,000 for internal and $25,000 for external.
You can franchise a KFC restaurant if you have a $1.5 million to $2.5 million net worth and $750,000 minimum liquid assets. The franchise fee is $40,000 with a 4% royalty fee.
The list above is in no particular order. They are the food chains that can give you a guaranteed cash flow over the years. This list could change anytime with the influx of food businesses every year. The amounts discussed may also change and vary according to the location. The good part is that you only need to have the funds and you don’t need to worry about the rest. All training will be provided by the company, including how you as the business owner can make your franchise successful. Good luck in your franchising endeavor!