Why Do Some Franchise Owners Fail? By Naz Daud At Isnare.com Ezine Articles

Buying a franchise business is supposed to be the least risk way to start a business. But is owning a franchise guaranteed to make you money? Not necessarily… the truth is that some business franchises are extremely hard work especially in the fast food industry.

Most people know about the franchise industry due to the fast food franchises that specialise in providing the same quality of food all over the world. They guarantee the same eating experience irrespective of where in the world you buy a meal.

Think about it, in the food industry, you have to open your business in time for breakfast and stay open until late evening. Most fast food franchise owners can easily work a 12 hour day. They can also forget about weekends off as this is the busiest time for sales! This business would only suit somebody who is prepared to work hard for at least 60 to 70 hours a week!

The people who joined the fast food industry in the early days by buying a franchise opportunity have done remarkably well. Now, in many areas, this market is saturated with many different franchises trying to compete for your food money. They range from sandwich shops, coffee houses, burger joints, fried chicken outlets, donut establishments and pizza stores.

As the rates and rents for high street premises have risen in value, the cost of a meal in these fast food franchises have actually fallen when you take inflation into account. This has meant that overheads have risen whilst income streams have dipped. It is now harder then ever to make serious money with a fast food franchise opportunity.

To compete in this ever burgeoning market place, fast food franchisors are now demanding very expensive shop fittings so that the business can be highly visible and comfortable for the customers. They are also offering regular special offers which are often sold at near cost price, making their franchisees next to no money and generating a lot more work.

Another problem for franchise owners is the regular franchise fees that have to be paid to the franchisor. These combined with huge staffing costs and high rentals can all add up to reduce the profitability of the business model.

In recent times the market has become even more competitive with supermarkets now entering the fast food business. Many supermarkets are open 24 hours a day and you can pop in and buy decent food extremely cheaply. They have fast food counters where you can buy fried or roasted chicken, pizzas (made with your own choice of toppings), curries and salads without making a huge dent in your pocket.

Supermarkets also have another weapon in their armoury. With the advance in food preparation techniques and improvements in packaging, cheap ready made meals combined with the falling costs of microwaves mean that some families never need to go near a fast food franchise, even if they do not like to cook.

Even fuel stations have entered the fast food industry. Many outlets now sell meals that you can microwave in minutes after filling up fuel.

The final problem in the fast food industry has been the improvements in food quality and hygiene being demanded by the ever increasing health and food regulations which are designed to protect us from undercooked, stale or contaminated food. Anybody serving food now has to keep extensive records and maintain the food storage areas to precise temperatures. Fresh ingredients, if not used by a certain date have often got to be chucked away. This leads to wastage especially in foods like salad which do not have a high shelf life.

Taking all the above into account, the market is now extremely competitive and in some areas totally saturated. Be very careful if you are deciding to buy a fast food franchise opportunity and do your homework carefully. Make sure you take proper business advice from your accountant and franchise lawyer.

Published At: Isnare Free Articles Directory http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=132378&ca=Business

Important Notice DISCLAIMER: All information, content, and data in this article are sole opinions and/or findings of the individual user or organization that registered and submitted this article at Isnare.com without any fee. The article is strictly for educational or entertainment purposes only and should not be used in any way, implemented or applied without consultation from a professional. We at Isnare.com do not, in anyway, contribute or include our own findings, facts and opinions in any articles presented in this site. Publishing this article does not constitute Isnare.com's support or sponsorship for this article. Isnare.com is an article publishing service. Please read our Terms of Service for more information.