New Report Shows Solid Recovery in Food Franchise Sector

by FBR

Franchise Business Review Report Looks at Food Industry, Names Top Brands

PORTSMOUTH, NH—A recent survey of nearly 2,000 food franchise owners indicates that many food franchises are making a big comeback in the recovering economy, while some brands have nothing to “come back” from, according to a report released today by Franchise Business Review.

Franchise Business Review’s new report, Food Franchises 2011, looks at an array of franchise concepts within the food sector to assess the franchise investment opportunity. Researchers surveyed more than 1,800 franchisees from the food sector—representing more than 75 brands—to name Franchise Business Review’s Top 30 Food Franchises for 2011

Topping the list are Auntie Anne’s Pretzels, Firehouse Subs, Jet’s Pizza, Ground Round, East Coast Wings & Grill, Toppers Pizza, Marco’s Pizza, Penn Station, Charley’s Grilled Subs, and Papa Murphy’s.

“When researching franchise opportunities, nothing is more important than franchisee satisfaction and performance at the unit level," said Franchise Business Review president and CEO Eric Stites. "Food is one of the most competitive sectors in franchising, and our Top 30 Food Franchises award-winning brands represent some of the best investment opportunities available today."

In addition to naming the top 30 food franchise brands, FBR’s Food Franchises 2011 looks at the pros and cons of the food sector, the future of the market, and what it takes to excel as a franchisee.

Based on Franchise Business Review’s findings, there are still many reasons to invest in food franchises. There are countless investment options, business models, and food types for franchise operators to choose from. A prospective franchisee can choose to run anything from a van-based delivery business to a full-service restaurant—with dozens of other business types in between.

Some concepts—like pizza, subs, and wings—have continued to thrive in the struggling economy, and franchisees have benefitted from the availability of real estate and employees, as well as competitive pricing for construction and equipment. Several franchisors featured in the report only continued to grow in the past three years.

One franchise concept that did well in the struggling economy was Papa Murphy’s Take 'N' Bake Pizza, which enables customers to purchase a freshly made pizza and cook it at home.

“We probably benefitted more than most in 2008 and 2009,” said Kevin King, senior vice president of operations for Papa Murphy’s.

Although many food brands’ local franchisees were not affected by the economy, the franchisors themselves did feel the economic sting in terms of new franchise development, especially in California, Florida, Arizona, and Nevada. Even the most qualified prospective franchisees were turned down for financing because of rigid lending requirements. However, franchise executives told Franchise Business Review that those requirements are loosening, and franchisees are finding ways to purchase a franchise without a bank’s help.

“We have found many people coming to us with cash. They’ve taken their money out of the stock market, and they really are interested in investing in themselves,” said Debra Shwetz, co-owner of specialty baking franchise Nothing Bundt Cakes.

Franchise Business Review, a market research company, looks at franchise opportunities from the perspective of a franchisee candidate using both detailed company and industry research applied consistently across all franchises. While the success of any franchise investment is highly dependent on the actions and performance of the individual franchise operator, Franchise Business Review's research focuses on key metrics collected from franchise disclosure documents (FDD), management interviews, industry and competitor information, and Franchise Business Review’s own proprietary analysis.
 

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