Franchising News

Food Franchising Industry Sees Solid Increase In Profits

Written by Tim Morral
Published: 9/24/2012

Franchise Business Review reports that the food franchise industry increased profitability and franchisee satisfaction over the past twelve months.

Profitability continues to be an elusive target for many businesses in the current U.S. economy -- but not for food franchises, according to a new report by the Franchise Business Review.

Food Franchising Industry Statistics

Based on a survey of 4,000 franchisees representing 84 brands across the franchise food sector, the study showed that food franchises increased profitability by an average of 5.8 percent over the past year.

The top 40 franchises in the food franchise category include Firehouse Subs, Culver's, Auntie Anne's, Ground Round, East Coast Wings & Grill, Simple Simon's Pizza, Hardee's, Bruegger's, Papa Murphy's, Penn Station and other recognizable brands. These franchises fared even better than average, with reported profits that were at least 15 percent higher than the rest of the industry.

Just as importantly, the report indicated that more than 70 percent of current food sector franchisees are satisfied with their franchise experience and would recommend their brand to potential franchisees.

"Most food franchisors are beginning to understand that satisfied franchisees are more successful and more engaged, which drives improvement at the corporate level," said Franchise Business Review president Michelle Rowan. "The brands on our list have maintained extremely high franchisee satisfaction, and, as a result, many have experienced double-digit growth right through the recession."

Access to capital is a recurring problem for food franchisees and other small business owners. Even for established franchisees, getting a small business loan is proving difficult as lenders continue to tighten their lending criteria and restrict loan offers to the most highly qualified borrowers.

"I have one person on the staff whose sole job is helping franchisees obtain financing. In a fast-growth environment like we're in, we need to do everything we can to help that process along," said Ken Switzer, vice president and CFO of Marco's.

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