Ready for Food Truck Franchising?
With franchise businesses expected to generate more than 4.5% of U.S. Gross Domestic Product in 2015 – and with restaurants being the largest franchisors – is your food truck concept strong enough to consider joining the big boys in Franchise Land?
There are at least three reasons, says Mobile Cuisine, to think about franchising your food truck concept: People, Capital and Time.
As far as growth is concerned, the main obstacle for any food truck operator has always been capital. By going to the franchisee model, the initial investment would be provided for the truck, which would permit growth to occur at significantly reduced costs.
Another obstacle to the food truck industry lies in locating and hiring solid food truck managers. Franchising skirts this dilemma because the truck manager’s position is essentially filled by a franchisee that has some skin in the game.
Franchising also saves time because trying to open a new food truck business in a different city is, well, time-consuming. Some of the essential tasks that you’d have to repeat when you open trucks in many locations include finding a commissary, setting up financing, training staff, purchasing the truck and kitchen equipment (including the appropriate Concession Hood), securing the appropriate license and buying the inventory.
So, is you food truck franchisable? Just about any kind of food truck can be, if it meets some basic criteria. In the first place, your truck must appear to be credible in the view of potential franchisees – all of whom will want to know the following: Is the concept unique and is it attracting white-hot attention? And is your truck concept professionally designed? Is everything you are doing reproducible, and can your operations and systems be taught and learned?
Above all, how profitable is your food truck business? Because you will be reducing the franchisee’s potential returns by deducting a royalty, you need to be sure that the franchisee can still earn a decent profit – said to be a minimum of an adjusted 15% of return on investment.
Perhaps even more important when considering whether to become a franchisor: You will be entering an entirely different business than you experienced as an operator. You will go from preparing meals for hungry customers to selling and servicing franchisees. Because the crucial element in the success of any franchise is the success of each franchisee.