Why is it time to invest in a fast food franchise?
Prior to 2020, those looking for a wise investment sought recession-proof franchises to get the best value. Now, the standard by which entrepreneurs measure success should add the caveat, “pandemic proof.” Which means looking for that golden ticket for franchise businesses that have not only survived the global health and economic crisis, but are being taken to the next level and thriving as a result. All arrows point to quick service restaurants.
Here’s why. As full-service restaurant concepts struggled to stay alive during the crisis, quick service was uniquely positioned and persevered. The fast food franchise model easily pivoted to adapt to customer needs. In fact, this pattern is why the restaurant industry is bouncing back with great vigor. Items such as takeout, delivery, curbside, outdoor dining, meal prep kits, and drive-thrus have been the saving grace of the industry. They were an integral part of the model. Previously in place at the heart of their operations, Quick Services have dug in and improved services and convenience factors to better serve their customers.
Having these services despite closures, increased cleaning protocols, social distancing, mask mandates, proof of vaccinations, fluctuating COVID-19 infections, a labor shortage, and health issues. supply chain were certainly difficult. But they gave a taste of normality to customers tired of cooking at home and whetted the appetite of investors who noticed the profit potential.
For good reason. The fast food market was valued at $125.6 billion in 2019 and is expected to reach $209.1 billion by 2027, a CAGR of 10.6% from 2021 to 2027. Anticipated growth means investment opportunities boost restaurant sales.
As a franchise coach who analyzes market trends, I believe now is a great time to invest in a fast food franchise. There are currently many outstanding opportunities with new units and resale of franchises. At the height of the pandemic, the fast food model revealed that it was not just about keeping its head above water. Technology and innovations have been accelerated, accelerating the pace of improving efficiency to better serve the customer. The old adage rang true that necessity is the mother of invention as the restaurant industry accelerated progress. Inventions that may not have been incorporated for years were transferred within months.
The industry also needed a solution to the ever-increasing mass exodus of restaurant workers. At some point during the pandemic, the National Restaurant Association reported that four out of five restaurant operations were understaffed. What would normally have been a red flag for a franchise prospect has been resolved through increased automation methods. This has essentially neutralized staff shortages through revolutionary mechanization like contactless payments, streamlined ordering kiosks, artificial intelligence and robotics.
Not only has the quick service model proven its adaptability and durability in the market, but so has the franchise model. Franchises in the industry had more money, more resources and a superior support system to help their franchisees during the pandemic. They provided the power advantage of many minds using quick thinking abilities to adapt to the curveballs thrown their way almost daily during the Crisis.
Unlike many other industries, quick service restaurants have proven their resilience. The model has adapted and set new standards like closing their doors to help overworked staff members and shifting to new technologies to support business. Franchises have proven themselves as business think tanks. There were many owners, managers and workers in the trenches who found solutions to problems on the fly. These insights have been shared across the brand and made available to all franchisees to help stay afloat. The same cannot be said for independent sole proprietors who lacked networking capabilities like their franchise counterparts. Franchise owners were scrappy and open-minded. They have embraced new technologies to stay in business and set the tone for the future, emerging from the crisis.
The fast food franchise model is well positioned for future growth. We have seen the strength of the model put to the test. What the results prove is that the team approach works. Having a network of franchisees to lean on is essential to success. Communication is the key to sharing best practices and innovative ideas to weather the storms, and the power is in the numbers. Bottom line, if you’re an entrepreneur ready for a profitable business, the franchise model has more than proven itself.
Rick Bisio is nationally recognized franchise trainer and author of the bestselling book “The Educated Franchisee, 3rd Edition.