What are the Costs Associated with a Fast-Casual Restaurant Franchise?
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Aspects of Franchise Cost
Initial Franchise Fee
The franchise fee is a one-time payment made by the potential franchisee typically due when entering into agreement.
Additional Fees
The Franchisor will outline the additional franchise fees required including products, services, equipment, etc.
Royalties & Marketing Fees
Royalty and other franchise fees are most commonly a percentage of revenue paid by the franchisee to the franchisor on a weekly or monthly basis. Royalty percentages range from 4% to 12% or even greater of total revenue. Marketing fees are typically 2% or greater of total revenue.
Target Revenues
According to Franchise Business, the average profit margin for restaurants is between 3-5% but can range from 0-15% with fast casual falling on average between 6-9%.
Why Explore Fast Casual Restaurants?
Fast-casual franchises reported a growth of 11.5 percent in its year-over-year revenue, while the rest of the industry progressed at a rate of a mere 4.1 percent, thereby making it one of the best franchises to own.
According to RestaurantBusinessOnline, Pizza is currently the largest sector at 37 percent of fast-casual restaurants, followed by seafood (25 percent) and ‘healthy’ at 21 percent.
WHAT ARE THE BENEFITS OF JOINING A FRANCHISE
Instant Brand Recognition
Independent businesses take more time to establish whereas a franchise offers brand recognition with a proven customer base.
Established Business Model:
There are many points that need to be emphasized while starting out a new business. Franchisors come with a reputed experience, a business model, training and support system.
Established business relationship
Franchises typically have a network of professionals including legal, marketing, products and services passing these relationships onto their partners.
Higher success rate:
Studies suggest that franchises have a success rate of about 85 percent as compared to 15 percent of business that are started independently.
Benefits of Owning A Franchise
Training & Resources:
Franchises offer the knowledge and support of running a
successful business with an established business model created.
- Are you a people person:
- Can you afford the franchise?
- Do you have the support you need
- Investment vs Profit Analysis
Higher Success Rate:
Studies suggest that franchises have a success rate of about 90% as compared to 15% of business that are started independently.
- Are you a people person:
- Can you afford the franchise?
- Do you have the support you need
- Investment vs Profit Analysis
Download the FREE resource to learn more about the costs for a fast-casual franchise restaurant
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