Franchises With The Most Bang For Your Buck

7-Eleven

Best known for it’s iconic Slurpee, this franchises is actually the largest in the U.S. (by outlets). What’s better than that? How about military personnel getting a 10% discount on the initial franchising fee.

Panera Bread

Panera help redefine fast food with its classy array of homemade bread and gourmet sandwiches. Also, some restaurants, called Panera Cares location, offer food to the hungry and homeless acting as a charity.

Aarons

Most people think of selling food when they think of franchises. Now always. Aaron’s has been providing rental  furniture and household appliances and has been doing it spectacularly since 1955. This is a great option for people who want to take the road less traveled.

Getting a Loan For Your Franchise

Diving into your first (or next) franchise experience can be a fun and exciting time! But there are a lot of things to cover before you go and set up shop. And what is the most important is getting your loan.

The rate you pay on your loan, how much you take out, and dozens of other factors can greatly affect the success for your franchises and what you are able to get out of it. So what is the best way to start?

Check Your Credit Score

When getting a loan, it’s always best to start from the beginning. This score is determined by several factors. This includes credit history, current debt, number of credit inquiries, etc. The higher a credit score is the more likely you are to be approved for your loan!

Apply for the Loan

Okay, so you have a good credit score. Now, it’s time to apply for the loan. Specifically, what you will need to start a franchise is a small business loan. Most often, this is done through this is done through a Small Business Administration’s 7(a) loan program.

This type of loan won’t lend all the money to your franchise or business. Instead, the Small Business Administration guarantees only part of the loaned amount. How much will that be, you might ask? Well, it varies anywhere from 5,000 - 5 million dollars. But where the real value is in the interest rate. These loans have a prime rate of 2.75 percent. That’s less than the rate of inflation!

Take Out a Home Equity Loan

If you can avoid this step, it is best. But sometimes, a business will need a little extra “emph” to get it off the ground. A home equity loan is a loan where your house is used as collateral. That means if you don’t pay, you could end up losing your home. However, this loan is often low cost, has a quick turnaround, and has a low interest rate.  

How Much Does It Cost to Buy a Restaurant Franchise?

When looking into becoming a restaurant franchisee, one of the most frequently asked questions is how much does it cost. For being such a common question, it doesn’t really have a straightforward answer. Restaurant franchise costs widely vary depending on company, location, etc. Some of the biggest restaurant franchises in the world come with some pretty big price tags, but don’t be discouraged just because one company’s franchise costs may be out of your reach. There are plenty of other franchises out there that may be more attainable.

To give you an idea of how big of an investment you might be looking at, here’s a list of fees associated with ten popular restaurant franchises:


McDonald’s:
Total Costs:
Buying an existing restaurant: 25% down payment, rest paid off within seven years
Building a new restaurant: $45,000 initial costs plus about $955,708-$2,290,146


Krispy Kreme:
Initial Costs: $25,000-$50,000
Total Investment: $933,000-$1,888,250

Panera:
Initial Costs: $135,000
Total Investment: $550,000-$650,000


Wendy’s:
Initial Costs: $250,000
Total Investment: $500,000-$600,000


Steak ‘n Shake:
Initial Costs: $40,000
Total Investment: $955,000-$1,835,000

Subway:
Initial Costs: $15,000
Total Investment: $116,200-$262,850

Jet’s Pizza:
Initial Costs: $20,000
Total Investment: $370,000 or more


Cottage Inn Pizza:
Initial Costs: $15,000
Total Investment: $99,000-$160,000


Little Caesars:
Initial Costs: $15,000-$25,000
Total Investment: $265,000-$681,000


Domino’s Pizza:
Franchise Fee: $0-$25,000 for Internal Franchisees, $25,000 for external franchisees (Internal franchisees have experience as a general manager of a Domino’s restaurant for at least a year, external franchisees do not. Minorities and honorably discharged veterans are eligible to receive a reduced franchise fee.)
Total Investment: $119,950-$461,700

Pizza by the Numbers

One Word: Yum.

Thinking of becoming a restaurant franchise, but aren’t sure which one is right for you? Pizza franchises are definitely a popular way to go. Americans just can’t seem to get enough pizza. Over three billion pizzas are sold every year in the United States alone. Pizzerias are also responsible for some pretty staggering statistics about the food and restaurant industry:

• 94% of Americans eat pizza regularly.
• About 350 slices of pizza are eaten every second in the United States.
• Pizzerias make up 17% of all restaurants in America and are responsible for 10% of all sales in the food industry.
• The top 5 days for pizza sales are: Super Bowl Sunday, New Year’s Eve, Halloween, the day before Thanksgiving, and New Year’s Day.
• Saturday is the most popular night for pizza sales.

A few other interesting facts about pizza sales:

• 36% of all pizza orders include pepperoni.
• The most popular size for pizza is 14 inches in diameter.
• 80% of all Italian cheese produced in America is Mozzarella.
• 61% of Americans prefer regular thin crust pizza, 14% prefer deep dish crusts, and 11% like extra thin crusts.
• 62% of Americans like meat toppings on the pizza, 38% prefer vegetable toppings. Women are twice as likely as men to order vegetable toppings.

Source: http://pizza.com/fun-facts

Franchise Ownership Myths, Debunked!

Thinking about owning a franchise but not sure if it's right for you? There are a lot of myths about owning a franchise that might be holding you back from making the investment. Here are some of them, debunked!

I Can’t Afford a Franchise!

The costs of becoming a franchisee can largely vary depending on a number of factors. Of course, franchises with hugely recognizable companies like McDonald’s, Burger King, and Pizza Hut can come with some pretty steep price tags. But even with a huge company like McDonald’s, a big factor in cost is whether you want to purchase an already existing restaurant or build a completely new one. To purchase an already existing McDonald’s restaurant, you need to make a 25% down payment and pay off the remaining balance in no more than seven years. Building a new McDonald’s restaurant requires a $45,000 initial fee and equipment and other pre-opening costs that typically range from $955,708 to $2,209,146. Franchisees starting new restaurants also have to pay 40% of total costs with their own money and can only finance 60% of them.

If nationally or internationally known brands are out of your price range, smaller, regional chains may be a good option for you. For example, Cottage Inn, a pizza restaurant franchise popular in Michigan and Ohio, estimates the total costs of starting a Cottage Inn restaurant as a franchisee at between $99,000 and $160,000 (figures include all costs involved including initial fees, signage, equipment, training, rent, and supplies). There are also fewer restrictions on whether you use your own money or use financing.


I Won’t Be Able to Make My Own Decisions.

While you do have to follow the basic guidelines set forth by corporate, you have the freedom to make many decisions independently. Corporate has no say in who you do or don’t hire. Although some franchises offer assistance with marketing, in most cases, you’re able to make your own advertising choices. For example, you could set up a Facebook fan page just for your franchise’s location rather than having your customers “like” the main corporate Facebook page. Also, if you have a restaurant franchise, you can allow your kitchen staff to experiment with new ideas. You never know what might catch on. After all, McDonald’s Egg McMuffin was originally created by a franchisee, not at corporate headquarters.

I Don’t Know Anything About This Industry.

So maybe you’re interested in buying a franchise restaurant, but you don’t have any managerial experience and have never owned any kind of dining establishment before. Some companies may want inexperienced franchisees to find a partner who does have experience, but in many cases, lack of experience isn’t a deal breaker. You will be undergoing training that will teach you the valuable skills you need.


Franchises Are a Safe Investment/It’s Hard for Franchises to Fail.

While it’s true that franchises have an advantage in the sense that you’re working with an established brand that comes with a name many people will recognize, that doesn’t guarantee a franchisee’s success. Although franchisees can get guidance and training from corporate, there’s only so much corporate can do. You still need to invest a lot of time and effort into your franchise to make it a success. Corporate can’t help you if customers stay away because you make poor managerial decisions or hire a staff of people with poor customer service skills.

Food Trends for 2014

If you’re thinking of joining a restaurant franchisee, it’s important to consider what customers are looking for. Just like the fashion industry, the food industry goes through big trends every year. The National Restaurant Association publishes an annual report of culinary trends for the upcoming year based on a survey of over 1,300 chefs in restaurants across the country. Here are just a few of the highlights of their report for 2014:

Locally Sourced Meat and Produce

Consumers are very concerned about environmental sustainability these days. Even when dining out, many people tend to choose restaurants that get their meat and produce from local farmers rather than having it shipped from across the country. In some cases, restaurants are going hyper-local and starting gardens to grow their own vegetables. Owning a franchise restaurant doesn’t mean it’s impossible to use locally sourced materials. Chipotle recently began promoting their efforts to use organic, local, and family farmed ingredients with their Food With Integrity program.


Healthy Kids’ Meals

With childhood obesity on the rise, many parents are clamoring for healthier options on the kids menu. Parents are looking for restaurants that offer options such as fruit, yogurt, and whole grains instead of french fries and hot dogs.


Healthier Options for Adults

Eating healthy certainly isn’t just for kids. Many adults are growing tired of the oversized portions so many restaurants serve. In response, some restaurants have started offering half-sized portions for a lower price. Vegetarian dishes continue to be very popular. As of 2012, roughly half of all Americans were eating at least one meat-free meal per week, which is 40% higher than it was in 2007. Vegetarian options aren’t just healthy, it makes good business sense to include them. Many people dine out in groups and offering vegetarian options might prevent groups from choosing another restaurant over yours because there are vegetarians in their group.


Gluten-Free Options

The demand for gluten-free food options continues to grow. As a result, many restaurants are using grains such as buckwheat, quinoa, and amaranth as a substitute for wheat products. Even restaurants that specialize in foods like pasta and pizza are trying to offer gluten-free alternatives. In the Metro Detroit area, Renee’s Gourmet Pizza, a pizzeria with a completely gluten-free menu, has recently opened. Cottage Inn Pizza, a franchise restaurant in Michigan and Ohio, has also developed a gluten-free pizza crust and sandwich bread for those who request it.

 

High Quality Pizza

People are starting to get bored of pizzas with the same old processed meat toppings, processed cheese, and vegetables that aren’t fresh. If you want to really impress pizza-buying customers, you’ll want to offer some different cheese options, fresh vegetables, unique toppings, and interesting concepts for pizzas. Blaze Pizza lets customers create their own pizzas (kind of like at Subway) with high quality ingredients and a variety of cheeses and sauces.

Five Benefits of Franchise Ownership

Owning your own business is the dream of many entrepreneurs. Franchising is one way to do that. Thinking about buying into a franchise? Here are five reasons why I love franchising:

1. Be Your Own Boss

Doesn’t everyone dream of getting to be their own boss? With franchise ownership, you can be. While you do have to follow the guidelines set forth by corporate, you’ll have plenty of room to make your own rules. And with so many different types of franchises available, you’re free to pursue whichever opportunity suits you best.

2. Reduced Risk

Franchises aren’t a fail-proof business venture, but there is a lot of added security that comes along with them. When working with an established brand, you follow a system that has been proven to work time and time again. Your business will also benefit from having a name that many people already recognize. Many banks are also more inclined to give loans to people looking to buy franchises because of the reduced risk.

3. Training and Ongoing Support

Franchisors have a vested interest in your success because if you succeed, they succeed. Most franchisors require a training period so you can learn about everything you need to know to run your business. They will help you through every step of the process, from location selection to marketing. Even after your franchise location gets up and running, you’ll always have the benefit of having people at corporate who can help anytime you need it.

4. You’ll Be Able to Give Back to the Community

Wouldn’t it be nice to be able to do something to make the community you live in a better place? With your franchise, you’ll be creating jobs for the community and contributing to the local economy. You’ll also be able to participate in local events that enrich the community and become involved with local charities.

5. There’s Room to Grow

Even when you’re your own boss, you still have room to grow. If you start out as a franchisee with a single location and you turn it into a big success, why not invest in a second location?