Article contributed by Franchise Direct
Franchise Direct has analyzed the latest facts and figures from the pizza industry. What emerges is a snapshot of a food franchising sector that is well-positioned to thrive during the current economic downturn.
This research comes from assessing FDD (UFOC) documents of a sample size of 20 pizza franchise chains, as well as published industry sources.
Generally-speaking, the restaurant industry has shown initial resilience in coping with the downturn. Americans continue to rely on restaurants, primarily take-away establishments, for their daily eating. National restaurants surveys show an industry bracing for hardship, but confident that consumers will remain loyal.
Franchise Direct’s research shows that pizza franchises make up a majority of America’s restaurants. Our findings state that pizza franchises experienced consistent sales growth up until last year, when the industry slowed. There are a number of reasons why pizza franchises are projected to remain strong. Commodity prices will fall in the coming years, creating savings for the purchase of ingredients. Pizza franchises will also seamlessly fit into new consumer trends, such as the switch towards healthier and organic food options and the integration of new technology in ordering food. Our research suggests that pizza franchises present a deft balance for consumers searching for a quality at an affordable price. It is believed that pizza franchises will succeed as other more expensive dining options fail.
Pizza franchises also boast a number of advantages as far as purchasing a restaurant is concerned. New entrepreneurs can avail of a franchisor’s assistance in getting their business up and running. Our research reveals the typical franchise fee for a pizza restaurant. That figure tends to drops significantly for carry-out restaurants and double for larger, full-service pizza franchises.
The total investment sum for a pizza franchise can also vary greatly depending on location, unit size and whether the restaurant is take-out or dine-in. Our research tracks the range in investment in owning different types of pizza restaurant, factoring in fixtures, signs, inventory, training expenses, payroll and more. There are also a number of ongoing fees that the franchisee must be accountable for and our analysis details every payment that one can expect to make.
Most pizza franchises come with an exclusive territory, although some franchisors maintain a right to open new outlets within a given territory in certain circumstances.
In all, it remains hard to forecast the total earning potential of owning a pizza franchise. Every franchised industry is facing challenges at the moment, with the economy flailing and the sales expected to drop across the board in 2009. Cost control, management efficiency and slumping commodity prices will help to offset the sales decline brought on by the slump in the economy. According to research by Franchise Direct, pizza franchisees who can enhance their service and offer true quality to consumers will be the ones that will enjoy positive outcomes in 2009.