Franchise Spotlight: Food Service
Banks are often suspicious of food service start-ups – unless they’re franchised. Franchises have the scale and streamlined business models to satisfy the discerning yet cash-strapped consumer.
Including mobile/outdoor caterers, bakeries, cafes and the replenishment of vending machines, they are typically van-based or require only small premises (perhaps even a kiosk). Minimum capital requirements are generally modest, ranging between £5,000-£15,000.
- UK catering services market is worth £1.4bn – split fairly evenly between corporate and consumer
- Franchises have the scale and streamlined models to thrive given the value of high volume/low margin strategies (IBISWorld) amid rising raw ingredient costs and stagnating incomes
- Many are food vans, which are thriving and ideal for candidates on tight budgets
The structure of food service franchises
Franchises, in general, have comparatively low failure rates and franchises in this particular category buck the trend for short-lived food-service ventures.
Why? Well established, reputable brands offer a proven business model, plus training and ongoing support in all areas of running a business.
And food franchises should – providing you do your due diligence – be compliant with food safety regulations and provide training in food hygiene and how to follow a simple formula for delivering quality food, quickly and cost-effectively.
Head office should also generate leads in your territory, to which you’ll have exclusive access – freeing you to concentrate on delivering great food. They’ll also provide uniforms, business cards and – for mobile caterers – a fully liveried vehicle.
Consider your skills and preferences before browsing the options.
A mobile caterer might appeal, for instance, if your budget is tight and you appreciate flexibility in growing as fast or as slow as you want or can manage. Ambitious franchisees can eventually scale up, at modest investment, to a multi-van operation.
Free of the costs associated with fixed premises and requiring one or two additional staff at most, they also offer low overheads and decent margins.
Cafe2U, which dispenses coffee from the back of a van, is even simpler to operate.
Simpler still to run, Snack-in-a-Box offers family-friendly hours and avoids the stress of feeding queues of hungry customers. And with offices, schools or leisure centres paying nothing to host your vending machines, finding places to deposit these automated cash generators shouldn’t be too taxing.
For alternative food-related categories, check out our fast-food franchises and general food franchises.