Why Food Franchises Remain Successful Despite Economic Obstacles

It’s no secret that food franchises are often the most searched for and requested on franchise directories and portals. It’s what we all think of when someone says “franchising.” Despite the popularity of food franchises– the how is that sector of the industry doing?


Why do I ask? Well, maybe you heard of this little thing called “The Great Recession” and, in its wake, the tightening of our collective belts. How have food franchises fared? Has development for food franchises slowed? If not, how is that possible when food costs have risen and disposable income has decreased for most families?


Fast-Casual Food Franchises Are On the Rise


Research suggests that fast-casual franchise restaurants, which are a subset of quick-service restaurants, rank as one of the five best franchises to open due to high demand. Presumably as a result of the Great Recession, consumers are concerned with maximizing their time and money when it comes to eating out. Eating establishments that are less expensive but still allow consumers the ability to escape the kitchen and feel as though they’re treating themselves.


The number of quick-service restaurants are expected to grow 1.7% in 2013, the third largest growth percentage according to the International Franchise Association.


The Franchising is On the Rise– How? Why?


A recent study by the IFA shows that the number of franchise establishments increased by 1.5% last year.


Why? How? Simply, the economy is why and how.


Unemployment and underemployment (taking lower pay and lower-level jobs) are still unfortunate realities for the U.S.’ economy. As such, more Americans are mindful of their spending. Dinners at high end dining establishments have become increasingly rare. In addition, many individuals and families are working multiple jobs or longer hours resulting in a need for fast, inexpensive meal options– especially if you’re traveling between places of employment. This increased demand for quick-casual and quick-service establishments (think Panera and McDonald’s respectively) has permitted the franchise industry a growth coveted by many other economic sectors.


Exiled corporate executives and those who lost a substantial portion of their savings due to the Great Recession face the unfortunate reality of a shortened or no retirement at all. In order to earn a living, many entrepreneurs have chosen franchises as a means of business because of each concept’s proven track record.


What’s Behind Rising Food Costs?


Despite a reputation for quick and inexpensive meals, franchises are facing rising food costs because of four important reasons: increased fuel and transportation costs, reduction of food availability, and a continuation of economic circumstances that created 2011’s food price inflation.


  • The U.S. government’s subsidization of corn for bio-fuels has removed substantial amounts of the grain from the food supply, increasing overall prices.
  • The World Trade Organization limits the amount of stockpiling the U.S. and the European Union may do of corn and wheat in case of extenuating weather circumstances. As such, the price of corn and wheat remains volatile. (Note: wheat prices in 2011 more than doubled.)
  • As more of the global population becomes affluent, the demand for meat increases. In accordance with this demand, the need for animal feed– primarily grains– increases driving up the cost of both items.
  • The increase in oil prices means high food prices, as much of our food isn’t grown locally but shipped across oceans and nations.

Read more:

Why Are Food Prices Rising?, About.com

5 Best Franchise Opportunities For 2013, TheStreet.com

As more entrepreneurs pick franchising, sector grows, Charlotte Observer

Make 2013, You 2.0: The Entrepreneur’s Source Hosts “Start a Business Weekend” Virtual Franchise Expo January 24-26

Mark your calendars!

In two days, one of the nation’s leading franchise coaching networks, The Entrepreneur’s Source, is hosting Start a Business Weekend, a virtual franchising expo January 24 through 26, 2013.

The Start a Business Weekend® expo allows attendees to “walk” through a digital Exhibit Hall and visit the booths of more than 60 of the nation’s hottest franchise concepts where they can chat live with representatives from a variety of different franchise brands, learn how to finance their new business, attend keynote presentations, and download informational resources with relevant information about franchising and specific opportunities throughout the nation. Business coaches from The Entrepreneur’s Source® will also be available to help would-be entrepreneurs discover business opportunities that meet their personal goals, needs and expectations.


“Today’s career economy is plagued with uncertainty, especially as more and more companies move towards a more fluid, part-time workforce. In order to take control, many are pursuing entrepreneurship through franchising as a viable means to achieve their desired Income, Lifestyle, Wealth and Equity goals for them and their families,” said Terry Powell, CEO and founder of The Entrepreneur’s Source®, noting that studies show more than 70 percent of the U.S. population looks to be self sufficient rather than working for somebody else. “This is the year to make the move to entrepreneurship and create the next, improved version of your life or what we’re calling You 2.0TM. Our virtual Start a Business Weekend® expo is all about getting important questions answered, while offering valuable resources to prospective franchisees – no matter their current situation.”


The Entrepreneur’s Source® has more than 25 years of experience in helping make franchisors and their franchisees more profitable. With more than 230 offices in the United States and Canada, The Entrepreneur’s Source® presents prospective franchisees with new business opportunities that complement their goals, needs and expectations, while delivering franchisors the right individuals to grow their concepts. Additionally, the company also offers business-coaching services to help franchisees advance, improve efficiency and increase the return on the investment made on their franchise business.


Registration for the SABW Expo is currently open, with no registration fee, at www.StartABusinessWeekend.com. For more information about The Entrepreneur’s Source® and business coaching support, visit www.TheEntrepreneursSource.com.

Friends Vs. Beyoncé: Why You Don’t Need a Celebrity Endorsement

These days it seems like every company has a celebrity linked to its product or services: Beyoncé drinks Pepsi. Betty White eats Snickers (and plays football). Kate Hudson uses Almay and wears Ann Taylor. Ashton Kutcher snaps photos with his Nikon. Sarah Jessica Parker and Giada DeLaurentis both color their hair with Garnier products.


The big boys are shelling out the big bucks to big stars in exchange for public support of their business. What should small businesses and franchises do? Is a celebrity endorsement really the best use of money when you’re trying to engender customer loyalty?


The short answer? No.


Think about it; how often does a celebrity endorsement really affect your buying behaviors? Do you trust 50 Cent? What about Kim Kardashian? I didn’t think so.


At its core, each transaction is about trust. As a matter of fact, need or want is irrelevant– sometimes we buy things we want but don’t need and sometimes we buy things need but don’t want. Regardless of our motivation for purchasing something, as we pull the dollar bills from our wallets we’re trusting that the service or product will be or do what we believe it will.


A recent study by Battery Ventures makes three very salient points on the subject of buyer behavior in a social context: celebrity affiliation does not build trust, service is king and family trumps friends.


So, what should the little guys — franchises and small businesses– do to grow their customer base? It’s easier than you think:


  1. Hire the right people and treat them well. Hire employees you trust and are proud to have as part of your team. Invest in their happiness and there’s a high chance they’ll treat your customers with same loyalty and respect.
  2. Treat your customers like friends and family. One of the biggest reasons why we return to the same restaurants, car mechanics and grocery stores is based upon previous positive experiences. Treat your customer’s concerns or complaints with grace and they’ll come back.
  3. Share good news and specials through social media. Social media isn’t just for college students, as you well know by now. Businesses can really make a big difference in their bottom lines by utilizing platforms like Twitter and Facebook to keep customers engaged. It also makes it easier for friends of customers to hear about you. We all know that we trust what our friends and families say about other businesses.
  4. If you want to get someone to endorse your brand, pick someone who’s already been using your business’ goods and services. People are more likely to believe an everyday person uses and likes your business instead of Brad Pitt.