Three food and drink franchises on the rise
When you think of fast food franchising, the giants like McDonald’s, Subway and KFC are usually the first to spring to mind. Here we look at three food industries, focusing on a not-so-obvious brand for each, to get you thinking about different ways into franchising.
Suss out Saladworks and help people eat healthily
With more and more consumers seeking out healthier options, why not “be original” and check out Saladworks, where customers can build their own salads or simply pick from a set menu. QSR Magazine listed the salad entrée chain among nine fast food chains ready to soar in 2020, citing its 2020 objective to double in size.
Perhaps the pandemic put a damper on this rather ambitious goal. Saladworks opened its 100th store in January 2020 and just over a year later, in March 2021, Restaurant Business reported it had only reached about 130 outlets in North America. But CEO Kelly Roddy appears to be sticking to his guns with plans to open 90 new units in 2021 using the concept of ‘ghost kitchens’. This would certainly be a change in fortune for the health-food chain, which filed for Chapter 11 bankruptcy in 2015 after litigation involving its owners.
And it could see the predominantly east-coast franchise attain a wider presence. It has 39 outlets in Pennsylvania and 30 in New Jersey, compared to an average of just two in the other 20 states it has locations. Even health-conscious New Yorkers only have three outlets on their doorstep, so there’s an opportunity here to spread the love further afield.
The salad store comes across approachable to prospective franchisees. It stresses its commitment to transparency, reassuring potential buyers that it never wants to put its owners in an uncomfortable financial position. It offers to put you in touch with current franchisees at any point in your due diligence, and says it provides ongoing support once you’re on board. And admitting that finding the right location can be tricky, it says it has a dedicated team researching the best locations.
The franchise’s $350K net wealth requirement and $125K liquid capital requirement are lower than the food industry average but still put it on the less accessible end of the spectrum. Similarly, the average cost per unit peaks at about $550, which does make it less affordable than the average food and drink franchise. The company has a low cessation rate for the industry at 0.8%, but its termination rate is a bit higher – 7.4% where the industry average is 4.7%.
Another healthy food option to consider is Vitality Bowls. It serves fresh, antioxidant-rich food like its signature açaí bowls, as well as smoothies, fresh juices, soups and salads. Entrepreneur ranked it #185 in its Franchise 500 Ranking, whose ‘five pillars’ are costs and fees, size and growth, support, brand strength, and financial strength and stability. It was a strong performance for a first outing in the league table, especially selling food as niche as açaí bowls (Entrepreneur gave it top spot in that particular category). When you study Vitality Bowls’ growth you can see why – it started franchising in 2014, just three years after selling its first bowl, and now has more than 70 stores nationwide.
Give coffee addicts their next fix while protecting the planet
We couldn’t write about franchising in the food and drink industry without mentioning coffee. Forget about Starbucks though. According to NerdWallet, the caffeine king opted out of franchising because it didn’t want to lose its company culture, “which can potentially get muddled through the franchise network.” But as the same finance website shows in this handy blog, there are loads of alternatives out there.
One of them is east coast-based Aroma Joe’s, which is both on the more accessible and affordable side. Its $15,000 franchise fee and $50-70,000 required liquid capital are low like its ecological footprint, prioritising sustainable sourcing as much as taste. And if its Rainforest Alliance certification isn’t enough to make you feel good about the brand, it also offers veterans 50% off its franchise fee.
Entrepreneur ranked Aroma Joe’s at #8 in the coffee category of its 2021 Top Food Franchises Ranking – a solid performance alongside big names like Dunkin’ and Scooter’s Coffee, perhaps because it has grown 30.5% over the past three years. It was also a finalist in the Franchise Times Zor Award Get Caffeinated, alongside Scooter’s (who won), PJ’s Coffee and Biggby Coffee. Franchise Times put it at #439 in its 2020 list of top franchises, up from 477 in 2019.
As part of Aroma Joe’s’ support package, head office helps you find the best location for your premises, 70 hours of instore and classroom training, and accounting expertise to assist you put in place best practices. Once you’ve opened, you’ll have access to its brand experts, R&D team, and you and your baristas will be kept abreast of industry standards. And with no bankruptcies or lawsuits that we know of, this all comes wrapped with a good reputation. Watch out for its rather steep 8% royalty fee though.
In terms of other coffee franchises to consider, it’s worth mentioning Dunkin’ even if it is more of an obvious choice. Entrepreneur ranked it #2 in its 2021 Franchise 500 Ranking (Taco Bell beat it to the top spot). And Biggby, which has another low franchise fee of $15,000, is looking for franchisees in Michigan, Florida, Illinois, Kentucky, Ohio, South Carolina, Texas and Wisconsin.
Enjoy the odd ice cream indulgence? Make it your career at Bruster’s
In March, NerdWallet highlighted “14 of the most promising [franchising] options to look into this year” and almost a third were ice cream parlours: Baskin-Robbins, Dairy Queen, Ben and Jerry’s and Cold Stone Creamery. They ranked at #1 #2 #3 and #6 respectively in Entrepreneur’s 2021 Top Food Franchises Ranking ice cream category, with Baskin-Robbins taking spot #38 in the main draw.
But let’s look at the restaurant that took 8th spot – Bruster’s Real Ice Cream. In 2020, while the coronavirus pandemic wreaked havoc on the US economy, more than half of about 200 Bruster’s franchises set record all-time highs in revenue, Franchise Times reported. The ice cream company reached $91.1 million in sales, opened four new outlets and signed nearly 30 franchise agreements.
What does Bruster’s expect from prospective franchisees? There’s the financial requirements – about half a million to a million in investment and a $35,000 franchise fee. Central to its franchising approach is working with franchisees who will mentor the young people who usually work there, encouraging collaboration among them.
But on the other hand, Bruster’s doesn’t expect you to know anything about ice cream. After you’ve had your training and you’ve settled into your new role, it provides ongoing coaching, tools, resources, best practices and programs. And if you open a second store, it’ll give you 50% off the franchise fee.
Apply to be a franchisee and you can expect “discovery calls” with the franchise development team. You’ll then meet other departments, analyze markets, talk to existing franchisees, and maybe even meet the CEO and his wife.
Where to now?
We’ve focussed on these three brands just to give you a taste of what’s out there beyond places like Dunkin’, Taco Bell and 7-Eleven. Take the time to research the opportunity and local demand, make sure you have the finances, and decide whether you’re the right fit – both personally and professionally. Read our piece on five important things to do before you take the plunge.