Fast-Food Franchises are Recession-Proof
Thursday, June 25, 2009 at 5:31PM
Not only are fast-food franchises recession-proof, they actually perform better during lean economic times it seems.
Fast food sales have grown during the last 18 months as people, fearful of shrinking incomes, are eschewing even mid-priced eateries in favour of fried chicken, burgers, pizzas, sub sandwiches and other budget takeaway options.
Fast food prices are often lower even than the sum cost of a home-cooked meal's ingredients.
And franchises, benefiting from bulk buying, can offer even more competitive prices than their non-franchised rivals.
It’s well documented – as evidenced by Cadbury’s recent sales boost – that people covet comfort foods even more during times of adversity.
Not that the health concerns of recent years have suddenly disappeared.
But famous names like McDonald's and Subway have proven as responsive to the concerns of customers as you’d expect from such accomplished players.
McDonalds has offered new, healthier options, Subway has promoted the fact that it's at the healthier end of the fast food spectrum, and franchises have generally led the way in reducing salt and improving cooking processes. Once these improvements are achieved, they then have the marketing muscle to inform customer.
Baguette Express is one franchise that has continued its rapid growth despite the downturn.
Robin Stenhouse, owner of the sub sandwich franchise, told thisismoney.co.uk about how the company was seeking new territories, available to franchisees with an investment of between £75k and £115k.
“We retain a property agent who is continually looking for suitable sites in towns and cities, where there is good footfall,” he says. “We can sometimes obtain rental discounts and rent-free periods.”
A number of franchisees also told the leading business website about what it takes to run a fast-food franchise.
Said Sanjiv Razdan of Pizza Hut: "You need vision and drive to take the business to a higher level. You need to keep a sharp eye on the finances, customer response and timings."
Said Claire Preston Beer of Costa Coffee: "There is a reduced risk for prospective franchisees because banks are more willing to lend to support a venture with a successful brand.
Said Callum Davies of Hell Pizza: "You must be able to handle a fastpaced environment and be a multitasker."
If you’re really strapped for cash or you'd rather risk a smaller investment (although a fast food franchise is about as close as you can get to a Sure Thing) then you might consider buying one of the numerous opportunities which don’t require the purchase of premises, such as Dinky Deli or Snack in the Box.

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