Thought about Food Franchises?

Thought about Food Franchises?

By Claudia Foxcroft

Franchising is a popular option for Service-leavers looking for a new challenge. It offers the chance to be your own boss but within a structured and regulated format that reduces the risks associated with starting a business from scratch.

By Gary Buswell

Food and drinks franchises are particularly popular, with everything from big name high street brands to small delivery companies and mobile van based traders popping up everywhere. So whether you’re looking to become a small-scale sole trader or set up a busy restaurant with an army of staff, there’s a franchise to suit you.

What is franchising?

Franchising has been described as “being in business for yourself, but not by yourself”. If you set up and run a franchise, you buy the rights to trade under someone else’s brand name rather than going it alone as an independent business.

Franchising is popular as it gives people the freedom to be their own boss while reducing the risks associated with starting a business. Not only do you get to follow a tested, successful business model, but you also get continued advice, support and resources to help your business develop. This includes everything from marketing to business planning and staff management.

Many successful companies both large and small franchise their brands as a way of generating extra income. Those buying the franchise pay an upfront fee in return for initial training, plus a monthly fee for continuing support. It’s a great way of starting up your own business.

Why franchising is a good choice for Service-leavers

Ex-military personnel have the ideal set of traits and transferable skills for running a franchise. Life as a franchisee involves being able to follow a well-structured system and framework of regulations, while at the same time exercising good decision-making skills, keeping cool under pressure and being able to motivate those around you. All attributes that you will have relied upon in your Military life.

In addition to this, your time in the Forces will have equipped you with skills such as problem solving, organisational skills and risk planning. These are all advantageous when it comes to managing a business.

For franchisors, it’s vital that they can find reliable partners to sell to. Having invested time and money in creating a winning formula, the last thing they want is to have their brand placed in the wrong hands. This is why franchisors in all sectors are keen to reach out to Service-leavers.

Food and drink franchises are a particularly good choice for Service-leavers. Not only are there a wide array of options available, but it’s an industry that continues to thrive. Government statistics show that expenditure on food, drink and catering rose by 0.7% to around £203 billion in 2016.

Types of food and drink franchises

Eating and drinking out in the UK is popular, as is ordering takeaway food, and there is an ever-growing number of businesses sprouting up to cater for diverse tastes and preferences. This is great news for would-be franchisees interested in the food and drink sector. Franchise opportunities range from cafes, pubs and restaurants to juice bars, bakeries and delivery firms.

There’s something for everyone so it’s worth spending time thinking about what type of business you want to get involved in. You might want to ask yourself if you would prefer:

  • Something small that you can manage yourself (e.g. tuck shop) or a larger business with a team of staff (e.g. pub or restaurant)?
  • A “shopfront” premises or something mobile (e.g. burger van, home delivery service)?
  • A big name brand (e.g. McDonald’s) or something not so well-known?
  • Any particular food or drink type e.g. fast food, healthy products, hot meals, snacks, budget-line, expensive high-end?

Food franchise start-up investment costs vary wildly, as per the list below:

  • One Delivery: £495
  • Hooters Bar & Restaurant: £1,500
  • Snack Aid Mobile Food: £2,899
  • Cafe 2U Mobile Coffee: £10,000
  • Hot Sausage Street Food: £20,000
  • Baguette Express: £30,000
  • Warren’s Bakery: £50,000
  • Avocado Show Restaurant: £75,000
  • McDonald’s: £85,000
  • Papa John’s Pizza: £100,000
  • Harry Ramsden’s Fish & Chips: £150,000
  • Bella Italia: £350,000

Getting started

If the idea of a food and drink franchise appeals to you, the first thing you’ll need to do is choose which one. The right franchise for you will be one that:

  • Suits your own skills, interests and preferences.
  • Has a good track record of success. Research how previous franchisees have fared. Have they been successful? What is the feedback like on earnings potential and level of support given, etc? You can find information through organisations such as the British Franchise Association.
  • Is within your budget. Banks are usually willing to lend to Service-leavers for franchise fees, but you’ll need to build in repayment costs if you do this.
  • Suits your location. Make sure there is sufficient demand and that you won’t be over-saturating the market.

Once you’ve chosen a franchise, paid the fees and completed the training, don’t forget to:

  • Register your business with the local authority before opening. You’ll also need to register with the tax authorities, as well as for VAT if your turnover is above £85,000.
  • Ensure that you follow the regulations on food hygiene and food safety management, including getting all staff trained in food hygiene awareness. You can contact the Food Standards Agency for guidelines.

You should receive an operations manual from your franchisor that will cover all of the main points and more, so don’t worry about overlooking anything. Just focus on utilising those skills developed in the Forces to make a success of your new business!

Resources:
www.thebfa.org – British Franchise Association
www.startuploans.co.uk – Start Up Loans
www.food.gov.uk – Food Standards Agency

Royal British Legion Employment Support Grant
Tel: 0808 802 8080