Franchise Business Models: Food vs. Non-food (Food for thought!)

Posted by Rob Goggins in Business Strategy, Franchising, Management | 10800 commentshttp%3A%2F%2Fgreatclipsfranchise.com%2Fblog%2F2011%2F10%2Fchoosing-the-right-franchise-business-model%2FFranchise+Business+Models%3A+Food+vs.+Non-food+%28Food+for+thought%21%292011-10-14+14%3A46%3A52Rob+Gogginshttp%3A%2F%2Fgreatclipsfranchise.com%2Fblog%2F%3Fp%3D1080

I’m tackling advice on another big decision you may have to make when researching franchises to buy.  Should you buy into a food-based company or stay far away?

Having been in the franchising industry a long time, I’ve seen franchisees go through both models and have seen firsthand the pros and cons of each. So, I’ve put together my top 4 benefits of each type of franchise. I hope it will help you along the road to becoming a business owner.

Top 4 Advantages to Owning a Food Franchise

1. If you are already interested in or working in the food industry, you can probably find a franchise model that will meet your needs. This is due to the large variety of restaurant franchises.
2. In the food industry, your support staff often works on tips and commission. They can make or break your restaurant, so finding friendly, reliable, trustworthy employees can be a challenge. And keep in mind, low-wage food industry jobs tend to have a very high turnover rate. So if you find good employees, incent them to stay with you.
3. Many restaurant owners find the lifestyle to be a huge benefit in food franchise ownership. It’s not for everyone, but these owners often love the hustle and bustle of a restaurant and don’t mind late nights or early mornings.
4. Often, a food franchise company will have several locations in one city. So, you can usually share the burden of marketing and building brand awareness. This can also be true for non-food franchises, depending on the industry.

Top 4 Benefits of Buying a Non-Food Franchise

1. When people hear franchise they often think of food first. But there are a ton of non-food franchises to choose from. Name a business and there’s probably some kind of franchise associated with it. Trust me, a solid franchise system will give you all the support you need so you don’t make costly mistakes starting from scratch.
2. In a service or retail company, you don’t have to deal with the headache of food storage and spoilage which can be very costly.
3. Regulation and paperwork surrounding non-food franchises is often much easier to manage than in the food industry where you must constantly deal with licensing and inspections.
4. Food franchises tend to have much higher start-up costs than most other businesses, so you can usually get started in another industry with less initial investment.

Additional advice? More questions about food vs. non-food or want another business model question answered?  Leave them in the comments.

Rob Goggins

SVP of Real Estate & Development - Rob joined Great Clips in July 2007 as Vice President of Franchise Development. Prior to Great Clips, Rob was Vice President of Franchise Development for Service Brands International. In that position, Rob helped grow franchise sales for all four of the Service Brands franchise concepts.

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