Entrepreneur's Startups Summer 2022

When most people think of a franchise business, they first think of burgers. Or pizza. Or coffee (and donuts). Or tacos. There are, of course, many different markets in which franchises thrive, but the success and growth of numerous fast-food behemoths have made it so that, if you were to play a game of word association and offered up “franchise,” most people would probably instantly respond: “McDonald’s.” But your first thought shouldn’t be your last one. When deciding whether to purchase a restaurant franchise, you must focus on the characteristics of the business from a franchisee’s perspective. Only that can determine whether this industry is the right one for you. Popularity is one of the wonderful advantages of having a food business, but there are also some challenges you need to be…

Retirement. The word means different things to different people. For some, it’s an idyllic lifestyle at the end of a long career. But for others, it’s increasingly becoming a chance to hit refresh and try something new—without necessarily leaving the working world. That second group is showing up in a big way. The U.S. Government’s 2020-2021 Report on the Economic Well-Being of U.S. Households found that 45% of people retired because they reached normal retirement age, and an even larger percentage—48%—retired because they wanted to do other things. Where are many of them going? “We are seeing an increasing number of baby boomers looking strongly at food franchises,” says Robin Gagnon, cofounder of We Sell Restaurants, a brokerage that specializes in food brands. Gagnon says there are many reasons that food franchises appeal…

If you look at how burger franchises developed, there were two big waves. First was the McDonald’s and Burger King wave, with a business model that helped parents get burgers with their kids at an affordable price. Then came the gourmet burger wave, with brands such as Five Guys and Burger 21 adding toppings like garlic aioli and cilantro cream. Experts say that same business pattern is now repeating with chicken. Whereas brands such as KFC, Popeyes, and Church’s Chicken are long-established and beloved, a new wave of franchises like Pollo Campero, El Pollo Loco, and the Shaquille O’Neal–backed Big Chicken are offering sandwiches with smashed avocado and low-calorie, fire grilled chicken breast dinners. “We call it the better chicken category,” says Sam Rothschild, chief operating officer at Slim Chickens, a 19-year-old…

McDonald’s, Taco Bell, and other major food brands have been investing heavily in their loyalty programs, and with good reason: Every profitable venture is built on the love of its loyal customers, and these kinds of programs make loyalty a priority. After all, it’s much easier to serve an existing customer than it is to find a new one. Think of a loyalty program this way: It’s a wholesome club that feels exclusive enough to make membership desirable, while also collective enough to make everyone feel like they’re part of something bigger. In a loyalty program, your brand is the host of the party—and its biggest star. Your customers are there because, so long as you treat them right, they have every intention of coming back. The longer a loyalty program’s…

Last summer, while Subway was taking heat for the allegedly mysterious contents of its tuna sandwiches, Long John Silver’s used the moment to soft-launch its new, intentionally fish-free items. The fast-food seafood chain partnered with Good Catch, a plant based fish alternative brand, to sell fish-free filets and crab-free cakes at select locations. Good Catch’s marketing was aggressive. Last July, it parked vans and trucks in front of Subway locations in the U.S. and U.K. and offered free fishless sandwiches. They were made with Good Catch’s flaky but fishless tuna, created from a blend of legumes. The clear message was: Here’s food you can trust. But this was much more than just a fish fight. It was a very public example of a shift that’s taking place in the way people eat—and…

Some franchisees own only one location. Some own a handful. Others own dozens, maybe even hundreds or thousands—and those owners can be especially popular with food brands. To be clear, food brands aren’t the only kind of franchisors who love multi-unit franchisees. But these companies—and particularly the ones with retail locations and full kitchens—have some unique reasons why. Restaurants are expensive to build and complicated to run. There are countless moving pieces, including staff, food, and often a lot of menu items that must be recreated to perfection each time. If someone owns dozens or hundreds of restaurants already, it’s likely because they’ve already figured out how to maximize these systems—and they have the financing available to build out multiple new units at once. But there are other reasons, too. Here, we…