QSR Magazine Names Pie Five Pizza “Best Franchise Deal…”
Having spent three decades helping franchisees evaluate prospective investments, Terry Powell has noticed a monumental shift in the industry. The days of franchisees signing on the dotted line with little more than a review of the royalties, franchise fee, and total investment have largely evaporated, Powell says, replaced by a steady collection of astute entrepreneurs bringing a sophisticated, inquisitive perspective to the table.
“Many of today’s franchisees are looking at a whole list of factors when evaluating a brand, and many are doing this before they even talk to the brand’s development people,” says Powell, who founded The Entrepreneur’s Source consultancy in 1984.
Today’s franchisees want a company that is responsive to its franchise partners and acts in the brand’s best interests, embracing the fact that franchising needs to be a mutually beneficial relationship. Many are favoring operational simplicity, which eases training and management burdens, and scrutinizing the franchisor’s leadership team, evolution, and scalability.
“Franchisees want to see the upside,” Powell says.
Unit economics remain critical, as many prospective franchisees investigate bottom-line earning potential, as well as items like cost of goods, labor efficiency, and supply chain management. Margins, ROI, and payback time stand at the forefront.
“At the end of the day, we’re in the game to make money, so the financial end of any franchise deal needs to make sense,” says Phil Ratner, a managing partner with California-based Synergy Restaurant Consultants and a former quick-service franchisee.
Then, of course, there’s the food, which, alongside the service and experience, must be rich and differentiated.
“There’s a popular saying—‘It’s the food, stupid’—and the successful restaurants have a product that is on trend, delicious, and appealing,” Ratner says.
Though some franchising candidates favor established concepts with proven track records, and others want to ride a brand’s ascent from regional player to national name, the quick-service landscape features compelling franchise deals. Here are a dozen that we think are worth your attention.
Read the entire post at QSR Magazine