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Our special feature on forecasting sheds light on how to choose the right model, offers advice from Jack Stack and more.
Get started"Yes, I will have a Barbacoa, please."
"Would you like black beans or pinto beans?"
"Black beans, please, and all 3 salsas."
"Great, would you like sour cream and cheese?"
"Yes, thank you, and a drink, too!"
"Ok, your total is $8.00, please."
And so goes my weekly trip to my local Chipotle Mexican Grill.
Although Chipotle does not offer franchises for sale, they are a great example of a very streamlined operation, that looks and smells like a franchise. {As a matter of fact, Chipotle smells pretty darn good, when you enter the restaurant!} It is also a wonderful example of what is known in restaurant circles as QSR, or a Quick Service Restaurant. QSR's are so numerous, they even have their own industry magazine.
Even as the US economy struggles through what is finally being called a recession, people are still busy and time-starved. They obviously feel that spending $8-$10 for a speedy lunch or dinner is a good time vs. value proposition. I sure do. What about you?
In my 2nd Annual Franchise Trends article over at Small Business Trends, I discussed the food franchise sector, which seems to be holding its own in our current economy.
So, which QSR's are sizzling currently?
3 franchise chains top the 2008 rankings. They are:
1. McDonald's
2. Burger King
3. Subway
As a matter of fact, only 1 non-franchise QSR finished in the top 10. It was Starbucks, which came in at #5.
So, would you like to own a Quick Service Restaurant
After all, they sure seem to be busy.
Before you jump onto a Restaurant Franchise Directory, you'll need to do a net worth statement. Take out a legal pad, and draw a line down the middle. On the left hand side list all of your assets including; real estate, stocks, bonds, IRAs etc. On the right hand side, list all of your liabilities; include your mortgage balance, auto loans, credit cards, taxes owed, etc. Then subtract your liabilities from your assets, and you now have your net worth. Is it in the $750k-$1 million range? It needs to be, in most cases. That is because you are most likely investing in an operation that has a building of its own like Popeye's Chicken and Biscuits, as opposed to a strip center location, like a CiCi's Pizza.
If you can get past the name, Hamburger University could be one of your 1st stops along the road to the food franchise that everyone asks me about. Of course, you'll need to shell out a minimum of $300k of your own non-borrowed money, up-front. That's right. If you would like to become a McDonald's franchisee, your net worth statement needs to show 6 zeroes. Not all QSR's require that type of investment, but food franchises in general, have a higher investment threshold than most other franchise opportunities.
Also, you need to know that you will be working in the business for awhile, not on the business. Working in the business means having extremely long hours, tons of employee turnover issues, and high monthly expenses to meet. Eventually, you should be able to back off your business, and hopefully enjoy the fruits of your labor.
Investing in this popular segment of franchising could be a great thing, if you have the money and the drive. Maybe you could even retire comfortably one day, and become a Professor, over at H.U.
I only mentioned a few food franchises. There are literally hundreds of them to choose from. Good Luck!
About The Author: Joel Libava is a Cleveland, Ohio franchise consultant and marketer. He blogs at The Franchise King blog. His website is The Franchise King.
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