Aspiring fast-food franchisees believe that competition from big chains is the greatest challenge they face in a competitive arena, according to a survey by FranchiseSales.com.
Thirty-nine percent of those browsing for fast-food franchises for sale in the website surveyed cited competition as the greatest of five suggested challenges, averaging a ranking of 2.31 out of five.
The rising cost of ingredients, considered a challenge for more than 20% of potential franchisees, was the second biggest challenge with 2.66, followed by adhering to health and safety regulations (14% but ranked at an average of 3.05), keeping up with consumer trends such as low-carb diets, halal/kosher and so on (19% and 3.16%).
The least important purported challenge, according to the would-be fast-food entrepreneurs polled, was meeting the high standards set by the franchisor (14.1% and 3.49).
Just under half (48%) of those wanting to acquire a fast food franchise have no experience of running a food-related business, while 39% have worked in, rather than run, a food business.
For 64% of respondents being their own boss was a driving motivation for considering buying fast-food franchises. As for their aspirations as a fast-food franchise owner, 31% believe that there is a lot of money to be made in fast food, 35% want to build a famous brand and 32% think they will enjoy the lifestyle.
Meanwhile, the number of fast-food restaurants in the UK’s top 10 cities grew by 8.2% in 2008 as the recession took hold. Offering low-cost meals quickly, fast-food joints commonly weather downturns well.
Like everyone, we are facing a tough economic environment, but are combating this by being more efficient and customer-focused, which means we continue to do good business
Mark Rannard, Subway franchisee
The average age of the person considering buying a fast-food franchise is 39. An overwhelming 87% are male, compared to 60% of prospective cafe buyers in an earlier BusinessesForSale.com survey.
Perhaps women are deterred by the unhealthy connotations of fast food, stoked by the success of books such as Eric Schlosser’s Fast Food Nation, and deflecting attention from ‘healthier’ fast-food franchises such as salad and smoothie bars.
The average budget of aspiring fast-food franchise buyers is £67,000, with budgets varying considerably from less than £5,000 to in excess of £200,000.
Mark Rannard, who ploughed his savings into a single Subway restaurant franchise, now runs seven branches.
He says: “It’s been the hardest thing I’ve ever done, but also the most rewarding. We have been able to grow to seven Subway stores in the first four years of trading, which is a fantastic result.
“Like everyone, we are facing a tough economic environment, but are combating this by being more efficient and customer-focused, which means we continue to do good business.”