Food franchises are consistently one of the top franchise opportunities for entrepreneurs. Restaurant franchises fulfill multiple needs that consumers seek out in a dining experience, including experiencing flavors and environments they can’t readily reproduce at home. This and multiple other factors help contribute to an industry that generated an estimated $798.7 billion in sales in 2017.
When choosing from the myriad food franchises, it’s important to do your due diligence before making an investment and carefully evaluate each aspect of the franchise opportunity to make the right decision. From a broad perspective, you should consider investment level, franchise model and available markets. Here are a few other factors to keep in mind:
The food franchise segment is divided into a few different models – quick-service restaurants (QSR), fast casual and full service. Each of these models requires different levels of investment and the resulting return on investment (ROI) varies significantly. The variables that impact profitability include, among others:
- Food costs
- Labor costs and employee benefits
- Rent and occupancy
- Beverage costs – alcoholic and non-alcoholic
Full-service restaurants tend to have the highest investment level. This leads some prospective franchisees to look into low-investment QSR concepts. However, keep in mind a lower initial investment typically yields lower revenue. As a result, you’d have to invest in multiple units with a QSR concept to achieve the same profit levels as a single full-service franchise restaurant.
Profit margins for full-service and fast casual concepts both hover around 6 percent, while fast-food restaurants averaged less than 3 percent. Comparatively, Angry Crab Shack stands out from the crowd of full-service restaurant concepts. Angry Crab restaurants typically achieve multi-million dollar sales volumes in their first year of operation. The brand is continually growing and owners are experiencing great returns. A proven track record will help candidates envision their own potential for success.
We are breaking the mold for full-service concepts by designing and perfecting a reduced overhead business model that generates a healthy ROI. The estimated average initial investment required of franchise owners is only $392,000 to $932,000 – well below many other full-service restaurant concepts. We maintain low costs by keeping things simple.
Ease of Operations
Simplicity or complexity of operations is a huge variable to consider for first-time franchisees or individuals without restaurant experience. A restaurant business with straightforward operations, a clearly differentiated and focused menu and a streamlined kitchen can help simplify operations, giving you greater flexibility to focus on growing your bottom line. For example, Angry Crab’s seafood is boiled in a bag and served to guests in that same bag. This minimizes the need for extensive kitchen equipment and excess materials, and it creates a unique dining experience for guests. The simplicity is an asset for guests, franchisees and the brand as a whole.
In addition, corporate training and support are integral parts of transitioning not only into a restaurant franchise but into business ownership overall. The systems a franchisor puts in place are designed to bridge the knowledge and experience gap for those new to restaurant franchising. We invest heavily in the success of Angry Crab Shack franchise owners. You’ll spend more than 90 hours with our trainers in both classroom and on-site environments focusing on ways to maximize profitability. On top of that, you get 70 hours of training on kitchen management.
Consider the territory where you’d like to open a restaurant franchise. See which franchise opportunities have available territories in your target market, as well as what similar restaurant concepts are already in business. Mature restaurant franchise brands may experience market saturation and, in turn, have very few remaining territories to offer. Evaluate if you’re willing to compromise on territory.
Emerging brands like Angry Crab Shack have wide open development markets. We work with candidates to select the right territory and real estate where Angry Crab will be successful. When it comes to site selection, our corporate team employs second-generation real estate tactics to find and refurbish sites that fit our criteria. Our team will be with you every step of the way.
Find a franchise opportunity that fits your intentions and goals for business ownership. To be successful, you need to be passionate about the concept. At the same time, you need to make sure you’ll be set up for success. Evaluate the track record of current locations to gauge the success of your future location. Reach out to a variety of current franchise owners to learn more about the brand and their experience with their investments. This validation is often the final piece for franchise candidates. If locations are struggling, be sure you understand why – as there could be a multitude of reasons.
If you’re interested in owning a full-service restaurant franchise with low overhead and high return, contact us directly at (248) 647-1989 or email Jim@angrycrabshack.com.