5 truths about fast food franchises

What comes to mind when you hear the word “franchise”? Well, probably the brand of a fast food chain. Well, while it is true that there are more than 120 different business categories in the world of franchises, 1 in 3 corresponds to a food category, especially fast food franchises. You can be in Sao Paulo, New York, London, Hong Kong or Dubai, and you are sure to see a McDonald’s, a KFC and a Starbucks, just to name a few of the most popular brands. And there are powerful concepts articulated in solid systems that offer a consistent value proposition. So if you are considering purchasing one of the many successful fast food brands on the market, pay attention to the following truths you should know about this dynamic and lucrative industry:

How much does a fast food franchise cost?

Perhaps the first thing everyone asks themselves, because they imagine a local supermarket, an army of employees and millions of dollars. The truth is that the total investment is very variable and depends on the concept being sought. Get the idea of ​​needing liquid capital of between US$150,000 and US$500,000 for a good location of a ranked franchise.

What are the “dues” in a franchise?

The quotas or “fees” include: 1) the entry fee: 10% or 20% of the total to invest or an amount between US$ 10 thousand and US$ 50 thousand. 2) the initial investment: startup costs, such as premises, equipment, stock, etc. 3) the royalty: between 4% and 7% monthly on the sale paid to the franchisor. 4) the advertising fee: monthly percentage that varies according to the needs of the system.

**How ​​important is location? **

The location of the establishment is one of the most important elements for the success of a fast food franchise. Having your location in a high-traffic location within your target demographic will make your life easy and highly profitable. Don’t put yourself next to your competition. Do your homework, hire an experienced real estate broker, and cross your fingers.

How long does the entire process take?

Since you sign the franchise agreement with your franchisor, you can think about opening the doors of your business in about 6 months. This, considering that you already have the land, of course. Municipal permits, civil works, decoration and implementation of equipment and systems, and training your team can easily take up this time.

What brands still offer franchises?

The million dollar question: What franchises are available? If you have a special brand in mind, it will be as easy as making a call or writing an email. If, on the other hand, you have no idea what the market offers, there are various sources you can turn to, such as printed guides, fairs, chambers and associations, and of course the Internet.