Franchising opportunities provide brand recognition, management and administrative systems, and a proven business model to small business owners. In theory, this should result in Fast Food franchises having higher success rates than non-franchise business opportunities. But in practice, franchises can and do fail.
How much can you make if you own a Fast Food Franchise? By law a franchise salesperson cannot provide you with an Earnings Claim, unless it is included in the disclosure document. There is no legal requirement that the franchisor must provide you with an Earnings Claim, however some franchisors do provide it. If the franchisor has chosen not to provide it, then it remains important to contact other franchisees listed in the disclosure document. Other Fast Food franchisees can answer many of your questions. Many franchisors will also require you to visit their headquarters before signing the agreement, so that you can both get to know each other better. This is known as Discovery Day.
Be sure to ask about marketing programs (if any) that are offered to Fast Food Franchisees. If your franchise contract requires you to make contributions for larger scale advertising and marketing programs, try to find out how the franchisees participate in decisions on the programs, campaigns and budget management. You want to make sure your money is going to good use, and it's being managed properly.
When considering whether or not to invest your money in a Fast Food franchise, be sure to ask if you will be required to purchase products and supplies from the parent company. If so, compare your cost to the local retail prices of the same goods. There have been instances in the franchise industry where the price from the franchise company for goods was higher than the price of the same goods in local retail stores. Selling anything under these conditions would make it quite difficult to keep your prices comparable with your competitors.
A&W Restaurants FranchiseArby's FranchiseBurritoVille FranchiseWendy's Franchise
