January 28, 2025 • 26 mins
How much does it cost to open a fast food franchise in UK?
Below is an overview of the key expenses you’ll likely encounter when investing in a fast-food franchise in the UK. Keep in mind that costs can vary significantly depending on the brand, location, and type of fast-food concept you choose. Always conduct thorough research and consult with franchise representatives or financial advisors for the most accurate figures.1. Initial Franchise Fee
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Below is an overview of the key expenses you’ll likely encounter when investing in a fast-food franchise in the UK. Keep in mind that costs can vary significantly depending on the brand, location, and type of fast-food concept you choose. Always conduct thorough research and consult with franchise representatives or financial advisors for the most accurate figures.1. Initial Franchise Fee
- What It Covers: This upfront cost typically grants you the rights to operate under the franchisor’s brand name, access to their business model, and initial training.
- Typical Range: Anywhere from £10,000 to £50,000+, depending on the brand’s market presence and level of support offered. Premium franchises with strong brand recognition may charge higher fees.
- Restaurant Fit-Out: Converting or refurbishing a property to meet brand standards (e.g., signage, interior decor) can be a major expenditure.
- Kitchen Equipment: Ovens, fryers, grills, refrigeration units, point-of-sale systems, and safety equipment must meet the brand’s specifications.
- Projected Range: Costs may vary from £80,000 to over £200,000. Larger spaces and higher-end equipment drive up expenses.
- Property Costs: Location is critical in fast-food franchising. Prime retail spots in city centers or busy high streets generally cost more in rent than suburban or less trafficked areas.
- Lease Terms: Franchise agreements often span 5–10 years, and you may need to commit to a lease of similar length.
- Upfront Deposits: Expect to pay a deposit or rent in advance, plus possible legal fees.
- Ongoing Royalty Fees: Most franchisors charge a percentage of monthly turnover (often between 4% to 8%) or a flat fee. This covers continued use of the brand and ongoing support.
- Marketing/Advertising Contributions: Typically 1% to 5% of turnover, used for national or regional promotional campaigns. Some franchises may also require local store marketing spend.
- Day-to-Day Expenses: This includes staff wages, utility bills, raw ingredients, and unexpected maintenance.
- Cash Flow Cushion: Having adequate working capital helps cover initial losses until the business hits break-even. Financial advisors often recommend reserving at least 3–6 months of operating costs.
- Initial Training: Often included in the franchise fee, covering corporate culture, operations, customer service, and marketing.
- Ongoing Support: Some franchisors charge extra for refresher courses, extended training programs, or consultancy services.
- Bank Loans: Many major UK banks have dedicated franchise lending departments familiar with established fast-food brands.
- Government Schemes: Programs like the Start Up Loans scheme may provide low-interest loans for new entrepreneurs.
- Investors/Partners: Pooling resources with partners can reduce the individual financial burden but requires carefully structured agreements.
- Franchise Solicitor: It’s wise to have a solicitor review your franchise agreement to ensure fair terms and compliance with UK regulations.
- Accounting Services: Consider professional accountants to manage cash flow, tax obligations, and financial projections.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
All right, so you're thinking about opening a fast food
(00:02):
franchise here in the UK. That's right, got that entrepreneurial
spirit burning, eh, Well, before you go all in on
burgers and fries.
Speaker 2 (00:09):
You want to make sure you're not biting off more
than you can chew.
Speaker 1 (00:12):
Exactly. That's why we're here today. We're going on a
deep dive into what it really takes to run a
successful fast food franchise in the UK. We've got a
ton of great research in front of.
Speaker 2 (00:21):
Us, full of all the juicy details you're gonna need.
Speaker 1 (00:24):
We'll be covering everything, the costs, the competition, the steps involved,
the works. So if you're ready to get your hands
dirty and find out if this is the right path
for you, stick with us.
Speaker 2 (00:35):
Let's do it.
Speaker 1 (00:36):
Okay, let's talk money. What kind of investment are we
talking about here, just to get started?
Speaker 2 (00:41):
Well, like any business venture, it all starts with that
initial investment, and in the franchise world, that means a
franchise fee.
Speaker 1 (00:48):
Okay. So that's basically the price tag for using the brands, name,
their recipes, their whole system.
Speaker 2 (00:55):
Exactly. You're buying into a proven model, a recognizable brand,
and the support that comes with it.
Speaker 1 (01:01):
And I'm guessing that price tag varies wildly depending on
the brand. I mean, opening a McDonald's is going to
cost a bit more than say, your local kebab shop.
Speaker 2 (01:11):
Right, absolutely. Think of it like real estate. The brand,
the location, the size of the operation all play a role. So,
for example, a subway franchise, you're looking at around fifteen
thousand pounds. Okay, well the Kernel's Secret recipe KFC, that'll
be about thirty thousand pounds.
Speaker 1 (01:27):
Makes sense.
Speaker 2 (01:28):
But if you're dreaming of those golden arches, McDonald's going
to set you back a cool forty five thousand pounds.
Speaker 1 (01:34):
Wow, forty five thousand pounds just to get started with McDonald's.
I had a feeling it would be up there. But still,
and that's just the beginning.
Speaker 2 (01:41):
Right, Oh yeah, that franchise fee is just the tip
of the iceberg. Next comes the really big expenses setting
up your location.
Speaker 1 (01:48):
Right, got to have a place to serve those burgers.
Speaker 2 (01:50):
We're talking rent or maybe even buying property, construction, fitting
it out with that signature brand. Look all the kitchen
equipment it adds up fast.
Speaker 1 (01:58):
So ovens, Friar's, grills, the whole shebang plus all those
digital ordering systems everyone's using these days.
Speaker 2 (02:05):
Got to stay with the times exactly, and don't forget
seating decor making sure everything meets those strict brand standards.
You're looking at somewhere between one hundred thousand pounds and
three hundred thousand pounds for this part alone.
Speaker 1 (02:17):
Three hundred thousand pounds that's more than some houses cost.
And then the equipment itself.
Speaker 2 (02:22):
Oh yeah, fryars, ovens, grills, refrigerators, those fancy point of
sale systems. That's another fifty thousand to one hundred and
fifty thousand pounds.
Speaker 1 (02:30):
So we've got the franchise, feed location set up, and
the equipment. What else, don't.
Speaker 2 (02:34):
Forget about inventory. You need to stock up on food, packaging, napkins,
the whole nine yards. And then there are the licenses
and permits, business licenses, health and safety permits, food handling certifications.
Running a legitimate business means ticking all those legal boxes.
Speaker 1 (02:50):
Right, because food safety is no joke. You don't want
to be known for giving your customers food poisoning exactly.
Speaker 2 (02:55):
Nobody wants that kind of publicity.
Speaker 1 (02:56):
And what about training. I'm sure there's a cost involved
in learning the road and making sure everyone's up to
brand standards.
Speaker 2 (03:02):
Absolutely. Training is crucial to maintain that consistency and quality
that franchise customers expect. You and your staff need to
be well versed in the franchises procedures, recipes, customer service standards.
You're looking at somewhere between five thousand and ten thousand
pounds to get everyone properly trained.
Speaker 1 (03:20):
Okay, so let me try to digest all of this.
We've got the franchise fee, location, set up, equipment, inventory,
licenses and training. Anything else or can I finally order dessert? Almost?
Speaker 2 (03:31):
There? One more crucial element working capital. This is the
financial cushion you need to cover those initial operating costs,
keep the lights on, pay your staff before you start
seeing a profit.
Speaker 1 (03:42):
So basically a reserve to cover those early months when
you're building your customer base.
Speaker 2 (03:46):
Exactly, you want to have anywhere between thirty thousand, two
one hundred thousand pounds in working capital.
Speaker 1 (03:50):
Wow, So let's do the math. Franchise fee, site setup, equipment, inventory, licenses,
training and working capital.
Speaker 2 (03:57):
We're looking at a total initial investment that can range
from around one hundred and fifty thousand pounds to a
whopping five hundred thousand pounds.
Speaker 1 (04:03):
Yeah, that's a serious chunk of change. Makes you think
twice about that easy money idea of owning a fast
food choint.
Speaker 2 (04:10):
It's definitely a reality check. It's crucial to understand the
full financial scope before jumping in.
Speaker 1 (04:16):
Okay, so let's say someone is still interested after hearing
those numbers. What comes after that initial investment? Because the
spending doesn't just magically stop there, right.
Speaker 2 (04:25):
Oh no, not at all. Just because you flipped the
open sign doesn't mean you're off the hook. Financially, there
are ongoing costs to keep in mind.
Speaker 1 (04:33):
Okay, hit me with it. What are we talking about.
Speaker 2 (04:35):
Here, Well, first and foremost royalties. This is basically rent
you pay to the franchiser for the continued use of
their brand, systems and support.
Speaker 1 (04:44):
So like paying rent to a landlord, but instead you're
paying the brand to use their name in their system exactly.
Speaker 2 (04:50):
And the typical royalty rate falls somewhere between four percent
and ten percent of your gross sales. And remember that's
every month, year after year.
Speaker 1 (04:58):
So let's say I'm selling one hundred thousand pounds worth
of burgers a month. That means I could be giving
up between four thousand to ten thousand pounds of that
back to the franchiser.
Speaker 2 (05:06):
That's right, and it's not the only recurring cost. There
are also marketing and advertising.
Speaker 1 (05:11):
Fees, right, got to keep those cravings coming.
Speaker 2 (05:13):
You'll be contributing to national and regional campaigns to keep
that brand awareness high. Usually it's an additional two percent
to five percent of your gross sales, so.
Speaker 1 (05:24):
On top of the royalties, another two percent to five
percent for marketing. So in that one hundred thousand pounds
a month scenario, that's another two thousand pounds five thousand
pounds going towards marketing exactly. So just to be clear,
on top of all the initial costs, we're potentially giving
up six percent to fifteen percent of our revenue every
month just for royalties in marketing.
Speaker 2 (05:44):
That's the reality of the franchise model.
Speaker 1 (05:46):
Wow, that's a lot to swallow.
Speaker 2 (05:47):
It is a significant portion of your earnings, so you
really need to factor that into your profitability calculations.
Speaker 1 (05:52):
Okay, but we're not done yet, right, There are more
expenses lurking in the shadows, aren't there.
Speaker 2 (05:57):
Of course, don't forget the everyday expenses of running a businessiness, insurance, utilities, maintenance,
those all at up.
Speaker 1 (06:03):
Okay, break it down for me, what am I looking at?
Speaker 2 (06:05):
Insurance to cover your property, liability and employees. Utilities can
easily be a few thousand pounds a month for electricity, water,
gas and internet Internet costs.
Speaker 1 (06:14):
You can't skimp on that these days, especially with all
the online ordering going on.
Speaker 2 (06:18):
Absolutely. Then you've got maintenance and repairs Fryer's breakdown. Oveans
need cleaning, equipment needs servicing. Setting aside, somewhere between five
hundred and two thousand pounds per month for maintenance is
a safe bet, right.
Speaker 1 (06:32):
Because a broken ice cream machine can turn a happy
customer into a furious one pretty quickly, exactly.
Speaker 2 (06:38):
And then there are legal and professional fees. You might
need to consult with lawyers, accountants, maybe other professionals throughout
the setup and ongoing operation.
Speaker 1 (06:47):
Okay, so we've got royalties, marketing, insurance, utilities, maintenance, and
even legal fees. Wow. Running a fast food franchise sounds
like a constant juggling act.
Speaker 2 (06:56):
It definitely is. You need to be on top of
your game managing your finances carefully.
Speaker 1 (07:01):
But hey, at least we haven't even chosen a franchise yet.
There are tons of options out there.
Speaker 2 (07:05):
And each one comes with its own financial landscape.
Speaker 1 (07:08):
Let's talk about some popular ones in the UK. We've
mentioned McDonald's, but what are some other big names vying
for those hungry customers.
Speaker 2 (07:15):
Well, alongside those iconic golden arches, you've got Subway with
their customizable sandwiches, KFC and their finger looking good chicken,
and then there's Burger King, home of the whopper. They
each have different franchise fees, total investment ranges, and royalty structures.
Speaker 1 (07:30):
So let's break those down. Give me the rundown on
Subway all.
Speaker 2 (07:32):
Right, subways initial franchise fee is around fifteen thousand pounds,
much lower than McDonald's.
Speaker 1 (07:37):
Easier on the wallet, but still not chump change.
Speaker 2 (07:39):
Right, but their total investment range is still a hefty
one hundred thousand to three hundred thousand pounds the.
Speaker 1 (07:45):
So lower entry fee, but still a big overall investment.
What about the ongoing costs, the royalties and marketing fees.
Speaker 2 (07:51):
Well, Subway takes a bigger bite out of your sales.
Compared to McDonald's. They charge an eight percent royalty fee
and a four point five percent marketing fees, so.
Speaker 1 (07:58):
Twelve point five percent of your sales every month going
back to the franchiser.
Speaker 2 (08:02):
That's right.
Speaker 1 (08:02):
Wow, that's quite a chunk. What about KFC, what are
we looking at there?
Speaker 2 (08:06):
For KFC, the initial franchise fee is about thirty thousand
pounds and their total investment range is somewhere between five
hundred thousand pounds and one million pounds.
Speaker 1 (08:15):
So higher upfront costs than Subway, but maybe their ongoing
fees are a bit lower.
Speaker 2 (08:19):
KFC takes six percent in royalties and four percent in
marketing fees, totaling ten percent of grow sales, so they
fall somewhere in the.
Speaker 1 (08:26):
Middle, the middle child of the fast food world, at
least when it comes to fees. Okay, what about Burger King.
Speaker 2 (08:32):
Burger King's initial franchise fee is around twenty five thousand
pounds and their total investment range can be anywhere from
three hundred thousand pounds to seven hundred thousand pounds.
Speaker 1 (08:41):
So more flexible on the total investment that could appeal
to people with different budgets exactly.
Speaker 2 (08:46):
And their royalty on marketing fees are pretty standard. Five
percent for royalties, four percent for marketing, totally nine percent
of gross sales.
Speaker 1 (08:53):
So we've got Subway at twelve point five percent, KC
at ten percent, Burger King at nine percent, and McDonald's
at eight percent. Fascinating to see how those fees vary
even among some of the biggest players in the industry.
Speaker 2 (09:04):
It is, and these differences can reflect a lot about
the franchise's overall offering, the level of support they provide,
the strength of their brand, their marketing power, it all
factors into those percentages.
Speaker 1 (09:14):
So it's not just about the upfront cost. It's about
understanding the whole financial relationship you'll have with the franchiser
and what you're getting in return. It's about finding the
right fit for your goals, your budget, and your vision.
Speaker 2 (09:28):
That's a great way to put it.
Speaker 1 (09:29):
So let's say you've crunched the numbers, you've researched the
different brands, and you're ready to say, I'm ready to
flip some burgers. What are the actual steps involved in
opening a franchise.
Speaker 2 (09:39):
Well, before you start flipping those burgers, you got to
make sure you're choosing the right franchise for you, not
just the one with the flashiest ad campaign or the
cheapest entry.
Speaker 1 (09:48):
Fee, right, because you're not just investing money, you're investing time, energy, passion.
This is a big.
Speaker 2 (09:54):
Decision exactly, and that's where research comes in. Don't just
rely on brochers and websites. Talk to exist franchisees, visit
their locations, get a real feel for the day to
day operations. Ask yourself, can I see myself doing this?
Speaker 1 (10:08):
Okay? So, once you've done your homework and you're convinced
this is the franchise for you, what's next.
Speaker 2 (10:14):
Well, unless you've got a vault full of cash lying around,
you're probably going to need financing. And we're talking serious
money here, hundreds of thousands of pounds maybe even more.
Speaker 1 (10:23):
Yeah, not exactly pocket change. What are some options for
aspiring franchise owners.
Speaker 2 (10:29):
Well, you can look into personal savings, bank loans, investors,
or even franchise financing options offered by some franchisers. Each
option has its own pros and cons, so it's important
to do your research and choose the best fit.
Speaker 1 (10:41):
So you've got your research done, your financing in place,
Now it's time to make it official. How do you
actually applied to become a franchisee?
Speaker 2 (10:48):
You submit an application to the franchiser. This is their
chance to get to know you. See if you're a
good fit for their brand. Be prepared for interviews, background checks,
a thorough review of your financial history. They want to
make sure you're serious and capable.
Speaker 1 (11:02):
So you've passed the interview, they're impressed with your business plan,
and they've given you the green light. What happens next?
Speaker 2 (11:08):
Now it's time to sign the franchise agreement.
Speaker 1 (11:11):
This is the legally binding document that outlines the whole
franchise relationship right.
Speaker 2 (11:16):
Exactly, read it carefully. Understand your obligations, the franchisers obligations,
all those details about the support they'll provide. Don't be
afraid to ask questions, negotiate terms, and make sure you're
comfortable with everything before you sign.
Speaker 1 (11:29):
Definitely want to have a good lawyer at this stage
right to help navigate all that legal jargon.
Speaker 2 (11:33):
Absolutely, good legal counsel is a smart investment. Okay, So
once the agreement is signed, it's time to tackle the
next hurdle. Finding the perfect location.
Speaker 1 (11:43):
Location is everything, right. You could have the best burgers
in town, but if you're hidden away in some back alley,
nobody's going to find you.
Speaker 2 (11:50):
You want visibility, high foot traffic. Think busy streets, shopping centers,
areas where people naturally congregate. Easy accessibility is key, ample,
easy access for deliveries, proximity to public transport.
Speaker 1 (12:03):
Right, got to make it easy for people to get
their burger fix exactly.
Speaker 2 (12:07):
This stage involves research, market analysis, and often some tough negotiations.
You might need to secure a lease, deal with landlords,
navigate local regulations. It can be a complicated process.
Speaker 1 (12:17):
Sounds like a lot of work.
Speaker 2 (12:18):
It is, but finding the right location can make all
the difference.
Speaker 1 (12:22):
Okay, so you found the perfect spot. The lease is
sign you're getting excited. What's next?
Speaker 2 (12:27):
Training? You and your staff need to learn the ropes,
master those recipes, understand the operational procedures that make this
franchise tick.
Speaker 1 (12:35):
This is where you really get immersed in the brand
culture exactly.
Speaker 2 (12:39):
This training is usually provided by the franchiser, so you're
learning from the experts. They'll teach you everything from food
prep to customer service, inventory management to marketing techniques. Sounds intense,
It can be, but it's an investment that pays off
when you're finally ready to open those doors and welcome
those hungry customers.
Speaker 1 (12:58):
Okay, so trainings completely. Your team is trapped, the fryers
are hot, the anticipation is sizzling. It's launch time.
Speaker 2 (13:06):
That's right time to put all that hard work into action.
Speaker 1 (13:08):
And to make that launch a success, you'll want to
use the franchiser's marketing expertise, participate in national campaigns, and
maybe even consider local promotions to attract those first customers.
Make some noise and let everyone know you're open for business.
Speaker 2 (13:21):
Exactly, get that buzz going. But remember the launch is
just the beginning.
Speaker 1 (13:26):
Now, the real work begins building.
Speaker 2 (13:28):
A loyal customer base, managing your operations efficiently, and turning.
Speaker 1 (13:32):
Up profit, which brings us to our final segment tips
for success. You've come this far, you've opened your doors.
Now how do you make sure this fast food dream
doesn't turn into a greasy nightmare.
Speaker 2 (13:44):
That's where experience and strategic thinking come in. There are
a few key ingredients to running a successful franchise.
Speaker 1 (13:50):
Okay, give us the recipe for success. What are the essentials?
Speaker 2 (13:54):
First and foremost, adhere to those brand standards. Consistency is
key in the fast food world. Customers expect the same
Big Mac, the same Whopper, the same Subway sandwich no
matter which location they visit.
Speaker 1 (14:06):
Right, you can't have one location serving up a picture
perfect burger and another serving something that looks like it's
been through a food fight. Exactly.
Speaker 2 (14:14):
Maintaining those brand standards builds trust and keeps customers coming
back for more.
Speaker 1 (14:18):
And that consistency goes beyond just the food. It's about
the service, the cleanliness, the whole experience.
Speaker 2 (14:25):
It's all got align with those brand standards.
Speaker 1 (14:27):
Okay, brand standards are key. What else is crucial?
Speaker 2 (14:32):
Effective management? Build a strong team, train them well, create
a positive work environment. Happy employees lead to happy customers.
Speaker 1 (14:41):
Right, No matter how delicious the food is, terrible service
will send customers running to the competition.
Speaker 2 (14:47):
Exactly. Invest in your employees, empower them, create a culture
of excellence where everyone is proud to be part of
the team.
Speaker 1 (14:54):
Okay, brand standards and effective management. What else?
Speaker 2 (14:56):
Financial monitoring. You've got to be on top of your numbers, expenses, revenue,
profit margins, understand your cash flow, Identify areas where you
can cut costs, and make sure you're pricing your menu
items strategically.
Speaker 1 (15:10):
Because it's not just about making burgers, it's about making money,
you got it.
Speaker 2 (15:14):
Financial savvy is essential, all right.
Speaker 1 (15:16):
So we've got brand standards, effective management, and financial smarts
what else.
Speaker 2 (15:21):
Engage with your customers. Building a loyal customer base is
more important than ever. Use social media, loyalty programs, online reviews,
connect with your customers, make them feel valued.
Speaker 1 (15:31):
Right, build a community around your brand exactly.
Speaker 2 (15:34):
And lastly, remember the fast food industry is always evolving.
New trends emerge, customer preferences, change, technology comes along and
shakes things up. You need to stay updated, so.
Speaker 1 (15:45):
Don't be afraid to shake things up, try new things,
keep your menu fresh and exciting exactly.
Speaker 2 (15:51):
Embrace innovation, experiment with new technologies, and always look for
ways to improve your operations and your customer experience.
Speaker 1 (15:59):
Wow. This has been a lot to take in, from
the initial investment to the ongoing costs from finding the
perfect location to building a loyal customer base. Opening and
running a fast food franchise is definitely not for the
faint of heart. It's a serious commitment, it is, But for.
Speaker 2 (16:13):
Those with the passion, the drive, and the business acumen
it can be incredibly rewarding.
Speaker 1 (16:18):
And I think our listeners are ready for a little break.
We'll be back soon with part two of this deep dive.
Don't go anywhere.
Speaker 2 (16:25):
Welcome back to the deep dive. We've been digging into
all the details of opening a fast food franchise here
in the UK, and I gotta say it's a lot
to process.
Speaker 1 (16:33):
Yeah, there's a lot to think about, but I think
it's important to step back now and look at the
bigger picture. What are some of the broader implications of
joining this industry.
Speaker 2 (16:43):
Well, it's easy to get caught up in the excitement
of all those burghers and fries, but you've got to
remember this is a business.
Speaker 1 (16:49):
Right, It's not just about flipping patties, and not just.
Speaker 2 (16:52):
Any business of franchise. It comes with its own unique
advantages and challenges that you need to be aware of.
Speaker 1 (16:58):
Okay, so let's break those down. What are some of
the benefits of going the franchise rape, especially for someone
new to the restaurant world.
Speaker 2 (17:06):
Well, for one, you're not starting from scratch. You're buying
into a proven.
Speaker 1 (17:11):
System, right, You've got a blueprint to follow.
Speaker 2 (17:13):
A brand with a track record, a recognizable name. You're
tapping into existing brand awareness, marketing power, operational expertise.
Speaker 1 (17:21):
So you're basically getting a head start in the race exactly.
Speaker 2 (17:24):
And along with that head start, you get support the
franchiser is there to guide you, offer training, provide marketing materials,
help you navigate the challenges of running a business.
Speaker 1 (17:35):
You're not in the salon, so you've got a whole
team in your corner.
Speaker 2 (17:37):
That's right.
Speaker 1 (17:38):
Sounds pretty good so far. But what about the downsides.
What are some of the drawbacks of the franchise model.
Speaker 2 (17:45):
Well, probably the biggest one is the cost. We talked
about those big initial investments and those ongoing fees.
Speaker 1 (17:51):
Right, those royalties and marketing contributions can really add up.
Speaker 2 (17:54):
They eat into your profits, and.
Speaker 1 (17:57):
Some might argue that those fees limit your creativity, your
entrepreneurial freedom.
Speaker 2 (18:03):
True, there's definitely less flexibility compared to starting your own
independent restaurant. You have to follow the franchiser's rules and guidelines.
Speaker 1 (18:12):
But I guess some people might find that structure reassuring,
especially in a high pressure industry like fast food.
Speaker 2 (18:18):
Absolutely for some people that's a big plus. Knowing what's expected,
having that support system in place.
Speaker 1 (18:24):
It's all about finding the right balance between freedom and
structure exactly. Okay, But let's talk about the industry itself.
What are some of the big trends and challenges feacing
the fast food sector in the UK right now.
Speaker 2 (18:35):
Well, I think one of the biggest challenges is keeping
up with the changing consumer landscape. Well, people are becoming
more health conscious, more demanding, more tech savvy.
Speaker 1 (18:45):
Yeah, I gotta have that online ordering exactly.
Speaker 2 (18:47):
They want fresh, customizable options, they want convenience, they want
order from their phones.
Speaker 1 (18:53):
That's a lot to juggle, it is.
Speaker 2 (18:55):
So fast food franchises can't just rely on the same
old burgers and fries anymore. They need to innovate, adapt
and stay ahead of the trends.
Speaker 1 (19:03):
So we're talking about new technologies, healthier menu options, right,
and that seamless customer experience with online ordering and all
that jazz.
Speaker 2 (19:11):
Precisely, it's not just about serving up food anymore. It's
about creating a whole experience a brand that really connects
with customers.
Speaker 1 (19:19):
Okay, so let's shift gears a bit and talk about
the human side of all of this. We've talked about
numbers and systems, but what about the people. What makes
a successful fast food franchise owner? What are the key
qualities they need to thrive in this industry.
Speaker 2 (19:32):
Well, I'd say, first and foremost, resilience. The fast food
world is fast paced, high pressure, demanding, you'll face challenges, setbacks,
long hours.
Speaker 1 (19:41):
Yeah, you've got to be able to handle the heat
literally and figuratively exactly.
Speaker 2 (19:45):
And along with resilience, strong leadership skills. You've been managing
a team, motivating employees, creating a positive work environment.
Speaker 1 (19:53):
Because those employees are the face of your franchise right,
interacting with customers every day. Their attitude and perform ormance
can really make or break the customer experience.
Speaker 2 (20:02):
Absolutely. You also need great communication skills, both with your
team and with your customers, being able to clearly convey
your vision, expectations, that brand message.
Speaker 1 (20:13):
So we're talking about someone who's tough but fair, organize
but adaptable, a leader who can inspire. S like a
pretty demanding job but also a rewarding one.
Speaker 2 (20:23):
It definitely is. And let's not forget about passion. Choosing
a franchise you truly believe in that aligns with your
values and your vision that can make all the difference.
Speaker 1 (20:32):
Right. Passion is that secret ingredient that takes it to
the next level.
Speaker 2 (20:36):
Absolutely.
Speaker 1 (20:36):
Okay, let's get practical for a minute. What advice would
you give to someone who's seriously thinking about taking the
plunge and opening a fast food franchise. What steps should
they take to make sure they're making a good decision?
Speaker 2 (20:48):
Well, I always say start with research. Really dig into
the different franchise options out there. Look beyond those flashy
bushers and marketing material. You pass the surface exactly. Delve
into the company's history, their values, their financial performance. Talk
to existing franchisees, get their perspective. Visit their locations, see
what the day to day operations look like. Ask yourself,
(21:10):
can I see myself doing this?
Speaker 1 (21:11):
A real feel for it.
Speaker 2 (21:12):
Exactly, And once you've got a few options in mind,
carefully review that franchise agreement. That's a legally binding document
outlines your rights and obligations, so you need to understand
every detail before signing.
Speaker 1 (21:25):
Definitely get a lawyer involved at that stage.
Speaker 2 (21:27):
Absolutely, don't be afraid to ask questions, negotiate terms, get
that professional advice.
Speaker 1 (21:32):
Okay, so research, due diligence, legal advice. What about the
financial side? How can someone realistically figure out if they're
financially ready for this kind of venture?
Speaker 2 (21:42):
I always recommend creating a comprehensive business plan. This forces
you to think through every aspect of the business, your
target market, your marketing strategy, your operating costs, profit projections.
Speaker 1 (21:53):
So it's not just about having enough for that franchise fee.
It's about having a solid.
Speaker 2 (21:57):
Plan, exactly, and part of that plan is exploring financing options.
Do you have enough savings? Will you need a loan? Investors?
Each option has its own terms and conditions, So do
your research right.
Speaker 1 (22:10):
Because getting financing for something this big can be tricky.
Speaker 2 (22:13):
It can, but with a good plan and preparation, it's
definitely possible.
Speaker 1 (22:17):
Okay, So passion, resilience, leadership skills, business avvy, a good
lawyer on speed.
Speaker 2 (22:24):
Dial, don't forget the lawyer.
Speaker 1 (22:25):
Sounds like we've covered a lot of ground here, But
what about the bigger picture? What about ethics and sustainability
in this industry? Can you be both profitable and responsible?
Speaker 2 (22:35):
That's a great question and a really important one. You know,
the fast food industry has faced a lot of criticism
in the past.
Speaker 1 (22:41):
Yeah, for their environmental impact, labor practices, and the healthiness.
Speaker 2 (22:44):
Of their food exactly. But there's a growing movement towards
sustainability and ethical practices.
Speaker 1 (22:50):
So it's not just about serving a quick and tasty
meal anymore. It's about being mindful of the impact of
that meal right on.
Speaker 2 (22:57):
The environment, the people who make it, the health of
the customers in our franchises.
Speaker 1 (23:01):
Responding to this.
Speaker 2 (23:01):
Shift, they are a lot of them are taking steps
to become more sustainable, sourcing ingredients locally, reducing waste, investing
in energy efficient equipment, offering healthier menu options.
Speaker 1 (23:13):
So it's important for potential franchise owners to do their
research on this as well.
Speaker 2 (23:17):
Absolutely, ask about their sourcing policies, waste management, employee benefits,
their approach to corporate responsibility.
Speaker 1 (23:25):
It's about aligning your values with the franchise you choose.
Speaker 2 (23:28):
Exactly, finding a brand that you can be proud of,
that reflects your own commitment to making a positive impact.
Speaker 1 (23:35):
And I bet that alignment can be really motivating.
Speaker 2 (23:37):
It can for you, your team, and your customers.
Speaker 1 (23:41):
It's about building a business with a purpose.
Speaker 2 (23:43):
Absolutely, So as you're making this decision, remember to look
beyond the numbers.
Speaker 1 (23:47):
Think about the bigger picture exactly.
Speaker 2 (23:50):
Research those company values, their commitment to their employees and
their communities. Ask yourself, do I believe in what this
company stands for?
Speaker 1 (23:58):
Because finding a franchise that allign with your heart as
well as your head, that can make all the difference.
Speaker 2 (24:03):
It really can, and.
Speaker 1 (24:04):
That's a great point to transition to the final part
of our deep dive. Welcome back to the deep dive.
We've really been covering a lot of ground here, haven't.
Speaker 2 (24:12):
We We have from finances and operations to the importance
of leadership and sustainability.
Speaker 1 (24:17):
It's been quite a journey, it has. But for those
who are truly passionate about the fast food industry, I
think it could be an incredible one.
Speaker 2 (24:25):
Absolutely, And you know, as we wrap up this deep dive,
I think it's important to go back to something we
talked about earlier. Okay, choosing a franchise that truly aligns
with your values.
Speaker 1 (24:37):
You're talking about more than just a love for burgers and.
Speaker 2 (24:39):
Fries, right exactly. It's about finding a company that shares.
Speaker 1 (24:44):
Your beliefs, your principles.
Speaker 2 (24:47):
Think about it. You're going to be representing this brand,
their mission, You're interacting with customers.
Speaker 1 (24:52):
You're the face of the company.
Speaker 2 (24:53):
It's about more than just serving food. It's about aligning
yourself with a company that you believe in.
Speaker 1 (24:58):
So someone who's really into sustainability it look for a
franchise that focuses on things like local sourcing, or reducing.
Speaker 2 (25:04):
Waste exactly, or if someone's really driven by social impact,
that they might choose a franchise that's known for treating
their employees well or being involved in the community.
Speaker 1 (25:14):
It's about finding that perfect match between your passion for
the industry and what you care about most.
Speaker 2 (25:21):
And that alignment can be really powerful. You know, it
can motivate you, your team even attract customers who share those
same values.
Speaker 1 (25:29):
It's about building a business that you're truly proud of, exactly.
Speaker 2 (25:33):
So as you're going through this process weighing your options
making this big.
Speaker 1 (25:37):
Decision, don't just focus on the money right.
Speaker 2 (25:40):
Look beyond the numbers, the brand recognition research, those company values,
their commitments to their employees, to the community. Ask yourself,
do I believe in what this company stands for?
Speaker 1 (25:51):
I love that because at the end of the day,
it's about finding a franchise that aligns with your heart
and your head. That's how you set yourself up for success. Absolutely,
that's a great place to wrap things up. We've covered
so much in this deep dive. We have the financial realities,
the operational challenges, the importance of leadership, that growing emphasis
on sustainability. It's a lot to consider it is, but
(26:13):
hopefully our listeners feel a little.
Speaker 2 (26:14):
More equipped now, I hope so.
Speaker 1 (26:16):
To make those big decisions right.
Speaker 2 (26:18):
With the knowledge and insights they need exactly.
Speaker 1 (26:21):
Well, thank you for joining us on this deep dive
into the world of fast food franchises here in the UK.
Speaker 2 (26:27):
It's been a pleasure.
Speaker 1 (26:28):
We wish you all the best on your entrepreneurial journey.
All right, so you're thinking about opening a fast food
(00:02):
franchise here in the UK. That's right, got that entrepreneurial
spirit burning, eh, Well, before you go all in on
burgers and fries.
Speaker 2 (00:09):
You want to make sure you're not biting off more
than you can chew.
Speaker 1 (00:12):
Exactly. That's why we're here today. We're going on a
deep dive into what it really takes to run a
successful fast food franchise in the UK. We've got a
ton of great research in front of.
Speaker 2 (00:21):
Us, full of all the juicy details you're gonna need.
Speaker 1 (00:24):
We'll be covering everything, the costs, the competition, the steps involved,
the works. So if you're ready to get your hands
dirty and find out if this is the right path
for you, stick with us.
Speaker 2 (00:35):
Let's do it.
Speaker 1 (00:36):
Okay, let's talk money. What kind of investment are we
talking about here, just to get started?
Speaker 2 (00:41):
Well, like any business venture, it all starts with that
initial investment, and in the franchise world, that means a
franchise fee.
Speaker 1 (00:48):
Okay. So that's basically the price tag for using the brands, name,
their recipes, their whole system.
Speaker 2 (00:55):
Exactly. You're buying into a proven model, a recognizable brand,
and the support that comes with it.
Speaker 1 (01:01):
And I'm guessing that price tag varies wildly depending on
the brand. I mean, opening a McDonald's is going to
cost a bit more than say, your local kebab shop.
Speaker 2 (01:11):
Right, absolutely. Think of it like real estate. The brand,
the location, the size of the operation all play a role. So,
for example, a subway franchise, you're looking at around fifteen
thousand pounds. Okay, well the Kernel's Secret recipe KFC, that'll
be about thirty thousand pounds.
Speaker 1 (01:27):
Makes sense.
Speaker 2 (01:28):
But if you're dreaming of those golden arches, McDonald's going
to set you back a cool forty five thousand pounds.
Speaker 1 (01:34):
Wow, forty five thousand pounds just to get started with McDonald's.
I had a feeling it would be up there. But still,
and that's just the beginning.
Speaker 2 (01:41):
Right, Oh yeah, that franchise fee is just the tip
of the iceberg. Next comes the really big expenses setting
up your location.
Speaker 1 (01:48):
Right, got to have a place to serve those burgers.
Speaker 2 (01:50):
We're talking rent or maybe even buying property, construction, fitting
it out with that signature brand. Look all the kitchen
equipment it adds up fast.
Speaker 1 (01:58):
So ovens, Friar's, grills, the whole shebang plus all those
digital ordering systems everyone's using these days.
Speaker 2 (02:05):
Got to stay with the times exactly, and don't forget
seating decor making sure everything meets those strict brand standards.
You're looking at somewhere between one hundred thousand pounds and
three hundred thousand pounds for this part alone.
Speaker 1 (02:17):
Three hundred thousand pounds that's more than some houses cost.
And then the equipment itself.
Speaker 2 (02:22):
Oh yeah, fryars, ovens, grills, refrigerators, those fancy point of
sale systems. That's another fifty thousand to one hundred and
fifty thousand pounds.
Speaker 1 (02:30):
So we've got the franchise, feed location set up, and
the equipment. What else, don't.
Speaker 2 (02:34):
Forget about inventory. You need to stock up on food, packaging, napkins,
the whole nine yards. And then there are the licenses
and permits, business licenses, health and safety permits, food handling certifications.
Running a legitimate business means ticking all those legal boxes.
Speaker 1 (02:50):
Right, because food safety is no joke. You don't want
to be known for giving your customers food poisoning exactly.
Speaker 2 (02:55):
Nobody wants that kind of publicity.
Speaker 1 (02:56):
And what about training. I'm sure there's a cost involved
in learning the road and making sure everyone's up to
brand standards.
Speaker 2 (03:02):
Absolutely. Training is crucial to maintain that consistency and quality
that franchise customers expect. You and your staff need to
be well versed in the franchises procedures, recipes, customer service standards.
You're looking at somewhere between five thousand and ten thousand
pounds to get everyone properly trained.
Speaker 1 (03:20):
Okay, so let me try to digest all of this.
We've got the franchise fee, location, set up, equipment, inventory,
licenses and training. Anything else or can I finally order dessert? Almost?
Speaker 2 (03:31):
There? One more crucial element working capital. This is the
financial cushion you need to cover those initial operating costs,
keep the lights on, pay your staff before you start
seeing a profit.
Speaker 1 (03:42):
So basically a reserve to cover those early months when
you're building your customer base.
Speaker 2 (03:46):
Exactly, you want to have anywhere between thirty thousand, two
one hundred thousand pounds in working capital.
Speaker 1 (03:50):
Wow, So let's do the math. Franchise fee, site setup, equipment, inventory, licenses,
training and working capital.
Speaker 2 (03:57):
We're looking at a total initial investment that can range
from around one hundred and fifty thousand pounds to a
whopping five hundred thousand pounds.
Speaker 1 (04:03):
Yeah, that's a serious chunk of change. Makes you think
twice about that easy money idea of owning a fast
food choint.
Speaker 2 (04:10):
It's definitely a reality check. It's crucial to understand the
full financial scope before jumping in.
Speaker 1 (04:16):
Okay, so let's say someone is still interested after hearing
those numbers. What comes after that initial investment? Because the
spending doesn't just magically stop there, right.
Speaker 2 (04:25):
Oh no, not at all. Just because you flipped the
open sign doesn't mean you're off the hook. Financially, there
are ongoing costs to keep in mind.
Speaker 1 (04:33):
Okay, hit me with it. What are we talking about.
Speaker 2 (04:35):
Here, Well, first and foremost royalties. This is basically rent
you pay to the franchiser for the continued use of
their brand, systems and support.
Speaker 1 (04:44):
So like paying rent to a landlord, but instead you're
paying the brand to use their name in their system exactly.
Speaker 2 (04:50):
And the typical royalty rate falls somewhere between four percent
and ten percent of your gross sales. And remember that's
every month, year after year.
Speaker 1 (04:58):
So let's say I'm selling one hundred thousand pounds worth
of burgers a month. That means I could be giving
up between four thousand to ten thousand pounds of that
back to the franchiser.
Speaker 2 (05:06):
That's right, and it's not the only recurring cost. There
are also marketing and advertising.
Speaker 1 (05:11):
Fees, right, got to keep those cravings coming.
Speaker 2 (05:13):
You'll be contributing to national and regional campaigns to keep
that brand awareness high. Usually it's an additional two percent
to five percent of your gross sales, so.
Speaker 1 (05:24):
On top of the royalties, another two percent to five
percent for marketing. So in that one hundred thousand pounds
a month scenario, that's another two thousand pounds five thousand
pounds going towards marketing exactly. So just to be clear,
on top of all the initial costs, we're potentially giving
up six percent to fifteen percent of our revenue every
month just for royalties in marketing.
Speaker 2 (05:44):
That's the reality of the franchise model.
Speaker 1 (05:46):
Wow, that's a lot to swallow.
Speaker 2 (05:47):
It is a significant portion of your earnings, so you
really need to factor that into your profitability calculations.
Speaker 1 (05:52):
Okay, but we're not done yet, right, There are more
expenses lurking in the shadows, aren't there.
Speaker 2 (05:57):
Of course, don't forget the everyday expenses of running a businessiness, insurance, utilities, maintenance,
those all at up.
Speaker 1 (06:03):
Okay, break it down for me, what am I looking at?
Speaker 2 (06:05):
Insurance to cover your property, liability and employees. Utilities can
easily be a few thousand pounds a month for electricity, water,
gas and internet Internet costs.
Speaker 1 (06:14):
You can't skimp on that these days, especially with all
the online ordering going on.
Speaker 2 (06:18):
Absolutely. Then you've got maintenance and repairs Fryer's breakdown. Oveans
need cleaning, equipment needs servicing. Setting aside, somewhere between five
hundred and two thousand pounds per month for maintenance is
a safe bet, right.
Speaker 1 (06:32):
Because a broken ice cream machine can turn a happy
customer into a furious one pretty quickly, exactly.
Speaker 2 (06:38):
And then there are legal and professional fees. You might
need to consult with lawyers, accountants, maybe other professionals throughout
the setup and ongoing operation.
Speaker 1 (06:47):
Okay, so we've got royalties, marketing, insurance, utilities, maintenance, and
even legal fees. Wow. Running a fast food franchise sounds
like a constant juggling act.
Speaker 2 (06:56):
It definitely is. You need to be on top of
your game managing your finances carefully.
Speaker 1 (07:01):
But hey, at least we haven't even chosen a franchise yet.
There are tons of options out there.
Speaker 2 (07:05):
And each one comes with its own financial landscape.
Speaker 1 (07:08):
Let's talk about some popular ones in the UK. We've
mentioned McDonald's, but what are some other big names vying
for those hungry customers.
Speaker 2 (07:15):
Well, alongside those iconic golden arches, you've got Subway with
their customizable sandwiches, KFC and their finger looking good chicken,
and then there's Burger King, home of the whopper. They
each have different franchise fees, total investment ranges, and royalty structures.
Speaker 1 (07:30):
So let's break those down. Give me the rundown on
Subway all.
Speaker 2 (07:32):
Right, subways initial franchise fee is around fifteen thousand pounds,
much lower than McDonald's.
Speaker 1 (07:37):
Easier on the wallet, but still not chump change.
Speaker 2 (07:39):
Right, but their total investment range is still a hefty
one hundred thousand to three hundred thousand pounds the.
Speaker 1 (07:45):
So lower entry fee, but still a big overall investment.
What about the ongoing costs, the royalties and marketing fees.
Speaker 2 (07:51):
Well, Subway takes a bigger bite out of your sales.
Compared to McDonald's. They charge an eight percent royalty fee
and a four point five percent marketing fees, so.
Speaker 1 (07:58):
Twelve point five percent of your sales every month going
back to the franchiser.
Speaker 2 (08:02):
That's right.
Speaker 1 (08:02):
Wow, that's quite a chunk. What about KFC, what are
we looking at there?
Speaker 2 (08:06):
For KFC, the initial franchise fee is about thirty thousand
pounds and their total investment range is somewhere between five
hundred thousand pounds and one million pounds.
Speaker 1 (08:15):
So higher upfront costs than Subway, but maybe their ongoing
fees are a bit lower.
Speaker 2 (08:19):
KFC takes six percent in royalties and four percent in
marketing fees, totaling ten percent of grow sales, so they
fall somewhere in the.
Speaker 1 (08:26):
Middle, the middle child of the fast food world, at
least when it comes to fees. Okay, what about Burger King.
Speaker 2 (08:32):
Burger King's initial franchise fee is around twenty five thousand
pounds and their total investment range can be anywhere from
three hundred thousand pounds to seven hundred thousand pounds.
Speaker 1 (08:41):
So more flexible on the total investment that could appeal
to people with different budgets exactly.
Speaker 2 (08:46):
And their royalty on marketing fees are pretty standard. Five
percent for royalties, four percent for marketing, totally nine percent
of gross sales.
Speaker 1 (08:53):
So we've got Subway at twelve point five percent, KC
at ten percent, Burger King at nine percent, and McDonald's
at eight percent. Fascinating to see how those fees vary
even among some of the biggest players in the industry.
Speaker 2 (09:04):
It is, and these differences can reflect a lot about
the franchise's overall offering, the level of support they provide,
the strength of their brand, their marketing power, it all
factors into those percentages.
Speaker 1 (09:14):
So it's not just about the upfront cost. It's about
understanding the whole financial relationship you'll have with the franchiser
and what you're getting in return. It's about finding the
right fit for your goals, your budget, and your vision.
Speaker 2 (09:28):
That's a great way to put it.
Speaker 1 (09:29):
So let's say you've crunched the numbers, you've researched the
different brands, and you're ready to say, I'm ready to
flip some burgers. What are the actual steps involved in
opening a franchise.
Speaker 2 (09:39):
Well, before you start flipping those burgers, you got to
make sure you're choosing the right franchise for you, not
just the one with the flashiest ad campaign or the
cheapest entry.
Speaker 1 (09:48):
Fee, right, because you're not just investing money, you're investing time, energy, passion.
This is a big.
Speaker 2 (09:54):
Decision exactly, and that's where research comes in. Don't just
rely on brochers and websites. Talk to exist franchisees, visit
their locations, get a real feel for the day to
day operations. Ask yourself, can I see myself doing this?
Speaker 1 (10:08):
Okay? So, once you've done your homework and you're convinced
this is the franchise for you, what's next.
Speaker 2 (10:14):
Well, unless you've got a vault full of cash lying around,
you're probably going to need financing. And we're talking serious
money here, hundreds of thousands of pounds maybe even more.
Speaker 1 (10:23):
Yeah, not exactly pocket change. What are some options for
aspiring franchise owners.
Speaker 2 (10:29):
Well, you can look into personal savings, bank loans, investors,
or even franchise financing options offered by some franchisers. Each
option has its own pros and cons, so it's important
to do your research and choose the best fit.
Speaker 1 (10:41):
So you've got your research done, your financing in place,
Now it's time to make it official. How do you
actually applied to become a franchisee?
Speaker 2 (10:48):
You submit an application to the franchiser. This is their
chance to get to know you. See if you're a
good fit for their brand. Be prepared for interviews, background checks,
a thorough review of your financial history. They want to
make sure you're serious and capable.
Speaker 1 (11:02):
So you've passed the interview, they're impressed with your business plan,
and they've given you the green light. What happens next?
Speaker 2 (11:08):
Now it's time to sign the franchise agreement.
Speaker 1 (11:11):
This is the legally binding document that outlines the whole
franchise relationship right.
Speaker 2 (11:16):
Exactly, read it carefully. Understand your obligations, the franchisers obligations,
all those details about the support they'll provide. Don't be
afraid to ask questions, negotiate terms, and make sure you're
comfortable with everything before you sign.
Speaker 1 (11:29):
Definitely want to have a good lawyer at this stage
right to help navigate all that legal jargon.
Speaker 2 (11:33):
Absolutely, good legal counsel is a smart investment. Okay, So
once the agreement is signed, it's time to tackle the
next hurdle. Finding the perfect location.
Speaker 1 (11:43):
Location is everything, right. You could have the best burgers
in town, but if you're hidden away in some back alley,
nobody's going to find you.
Speaker 2 (11:50):
You want visibility, high foot traffic. Think busy streets, shopping centers,
areas where people naturally congregate. Easy accessibility is key, ample,
easy access for deliveries, proximity to public transport.
Speaker 1 (12:03):
Right, got to make it easy for people to get
their burger fix exactly.
Speaker 2 (12:07):
This stage involves research, market analysis, and often some tough negotiations.
You might need to secure a lease, deal with landlords,
navigate local regulations. It can be a complicated process.
Speaker 1 (12:17):
Sounds like a lot of work.
Speaker 2 (12:18):
It is, but finding the right location can make all
the difference.
Speaker 1 (12:22):
Okay, so you found the perfect spot. The lease is
sign you're getting excited. What's next?
Speaker 2 (12:27):
Training? You and your staff need to learn the ropes,
master those recipes, understand the operational procedures that make this
franchise tick.
Speaker 1 (12:35):
This is where you really get immersed in the brand
culture exactly.
Speaker 2 (12:39):
This training is usually provided by the franchiser, so you're
learning from the experts. They'll teach you everything from food
prep to customer service, inventory management to marketing techniques. Sounds intense,
It can be, but it's an investment that pays off
when you're finally ready to open those doors and welcome
those hungry customers.
Speaker 1 (12:58):
Okay, so trainings completely. Your team is trapped, the fryers
are hot, the anticipation is sizzling. It's launch time.
Speaker 2 (13:06):
That's right time to put all that hard work into action.
Speaker 1 (13:08):
And to make that launch a success, you'll want to
use the franchiser's marketing expertise, participate in national campaigns, and
maybe even consider local promotions to attract those first customers.
Make some noise and let everyone know you're open for business.
Speaker 2 (13:21):
Exactly, get that buzz going. But remember the launch is
just the beginning.
Speaker 1 (13:26):
Now, the real work begins building.
Speaker 2 (13:28):
A loyal customer base, managing your operations efficiently, and turning.
Speaker 1 (13:32):
Up profit, which brings us to our final segment tips
for success. You've come this far, you've opened your doors.
Now how do you make sure this fast food dream
doesn't turn into a greasy nightmare.
Speaker 2 (13:44):
That's where experience and strategic thinking come in. There are
a few key ingredients to running a successful franchise.
Speaker 1 (13:50):
Okay, give us the recipe for success. What are the essentials?
Speaker 2 (13:54):
First and foremost, adhere to those brand standards. Consistency is
key in the fast food world. Customers expect the same
Big Mac, the same Whopper, the same Subway sandwich no
matter which location they visit.
Speaker 1 (14:06):
Right, you can't have one location serving up a picture
perfect burger and another serving something that looks like it's
been through a food fight. Exactly.
Speaker 2 (14:14):
Maintaining those brand standards builds trust and keeps customers coming
back for more.
Speaker 1 (14:18):
And that consistency goes beyond just the food. It's about
the service, the cleanliness, the whole experience.
Speaker 2 (14:25):
It's all got align with those brand standards.
Speaker 1 (14:27):
Okay, brand standards are key. What else is crucial?
Speaker 2 (14:32):
Effective management? Build a strong team, train them well, create
a positive work environment. Happy employees lead to happy customers.
Speaker 1 (14:41):
Right, No matter how delicious the food is, terrible service
will send customers running to the competition.
Speaker 2 (14:47):
Exactly. Invest in your employees, empower them, create a culture
of excellence where everyone is proud to be part of
the team.
Speaker 1 (14:54):
Okay, brand standards and effective management. What else?
Speaker 2 (14:56):
Financial monitoring. You've got to be on top of your numbers, expenses, revenue,
profit margins, understand your cash flow, Identify areas where you
can cut costs, and make sure you're pricing your menu
items strategically.
Speaker 1 (15:10):
Because it's not just about making burgers, it's about making money,
you got it.
Speaker 2 (15:14):
Financial savvy is essential, all right.
Speaker 1 (15:16):
So we've got brand standards, effective management, and financial smarts
what else.
Speaker 2 (15:21):
Engage with your customers. Building a loyal customer base is
more important than ever. Use social media, loyalty programs, online reviews,
connect with your customers, make them feel valued.
Speaker 1 (15:31):
Right, build a community around your brand exactly.
Speaker 2 (15:34):
And lastly, remember the fast food industry is always evolving.
New trends emerge, customer preferences, change, technology comes along and
shakes things up. You need to stay updated, so.
Speaker 1 (15:45):
Don't be afraid to shake things up, try new things,
keep your menu fresh and exciting exactly.
Speaker 2 (15:51):
Embrace innovation, experiment with new technologies, and always look for
ways to improve your operations and your customer experience.
Speaker 1 (15:59):
Wow. This has been a lot to take in, from
the initial investment to the ongoing costs from finding the
perfect location to building a loyal customer base. Opening and
running a fast food franchise is definitely not for the
faint of heart. It's a serious commitment, it is, But for.
Speaker 2 (16:13):
Those with the passion, the drive, and the business acumen
it can be incredibly rewarding.
Speaker 1 (16:18):
And I think our listeners are ready for a little break.
We'll be back soon with part two of this deep dive.
Don't go anywhere.
Speaker 2 (16:25):
Welcome back to the deep dive. We've been digging into
all the details of opening a fast food franchise here
in the UK, and I gotta say it's a lot
to process.
Speaker 1 (16:33):
Yeah, there's a lot to think about, but I think
it's important to step back now and look at the
bigger picture. What are some of the broader implications of
joining this industry.
Speaker 2 (16:43):
Well, it's easy to get caught up in the excitement
of all those burghers and fries, but you've got to
remember this is a business.
Speaker 1 (16:49):
Right, It's not just about flipping patties, and not just.
Speaker 2 (16:52):
Any business of franchise. It comes with its own unique
advantages and challenges that you need to be aware of.
Speaker 1 (16:58):
Okay, so let's break those down. What are some of
the benefits of going the franchise rape, especially for someone
new to the restaurant world.
Speaker 2 (17:06):
Well, for one, you're not starting from scratch. You're buying
into a proven.
Speaker 1 (17:11):
System, right, You've got a blueprint to follow.
Speaker 2 (17:13):
A brand with a track record, a recognizable name. You're
tapping into existing brand awareness, marketing power, operational expertise.
Speaker 1 (17:21):
So you're basically getting a head start in the race exactly.
Speaker 2 (17:24):
And along with that head start, you get support the
franchiser is there to guide you, offer training, provide marketing materials,
help you navigate the challenges of running a business.
Speaker 1 (17:35):
You're not in the salon, so you've got a whole
team in your corner.
Speaker 2 (17:37):
That's right.
Speaker 1 (17:38):
Sounds pretty good so far. But what about the downsides.
What are some of the drawbacks of the franchise model.
Speaker 2 (17:45):
Well, probably the biggest one is the cost. We talked
about those big initial investments and those ongoing fees.
Speaker 1 (17:51):
Right, those royalties and marketing contributions can really add up.
Speaker 2 (17:54):
They eat into your profits, and.
Speaker 1 (17:57):
Some might argue that those fees limit your creativity, your
entrepreneurial freedom.
Speaker 2 (18:03):
True, there's definitely less flexibility compared to starting your own
independent restaurant. You have to follow the franchiser's rules and guidelines.
Speaker 1 (18:12):
But I guess some people might find that structure reassuring,
especially in a high pressure industry like fast food.
Speaker 2 (18:18):
Absolutely for some people that's a big plus. Knowing what's expected,
having that support system in place.
Speaker 1 (18:24):
It's all about finding the right balance between freedom and
structure exactly. Okay, But let's talk about the industry itself.
What are some of the big trends and challenges feacing
the fast food sector in the UK right now.
Speaker 2 (18:35):
Well, I think one of the biggest challenges is keeping
up with the changing consumer landscape. Well, people are becoming
more health conscious, more demanding, more tech savvy.
Speaker 1 (18:45):
Yeah, I gotta have that online ordering exactly.
Speaker 2 (18:47):
They want fresh, customizable options, they want convenience, they want
order from their phones.
Speaker 1 (18:53):
That's a lot to juggle, it is.
Speaker 2 (18:55):
So fast food franchises can't just rely on the same
old burgers and fries anymore. They need to innovate, adapt
and stay ahead of the trends.
Speaker 1 (19:03):
So we're talking about new technologies, healthier menu options, right,
and that seamless customer experience with online ordering and all
that jazz.
Speaker 2 (19:11):
Precisely, it's not just about serving up food anymore. It's
about creating a whole experience a brand that really connects
with customers.
Speaker 1 (19:19):
Okay, so let's shift gears a bit and talk about
the human side of all of this. We've talked about
numbers and systems, but what about the people. What makes
a successful fast food franchise owner? What are the key
qualities they need to thrive in this industry.
Speaker 2 (19:32):
Well, I'd say, first and foremost, resilience. The fast food
world is fast paced, high pressure, demanding, you'll face challenges, setbacks,
long hours.
Speaker 1 (19:41):
Yeah, you've got to be able to handle the heat
literally and figuratively exactly.
Speaker 2 (19:45):
And along with resilience, strong leadership skills. You've been managing
a team, motivating employees, creating a positive work environment.
Speaker 1 (19:53):
Because those employees are the face of your franchise right,
interacting with customers every day. Their attitude and perform ormance
can really make or break the customer experience.
Speaker 2 (20:02):
Absolutely. You also need great communication skills, both with your
team and with your customers, being able to clearly convey
your vision, expectations, that brand message.
Speaker 1 (20:13):
So we're talking about someone who's tough but fair, organize
but adaptable, a leader who can inspire. S like a
pretty demanding job but also a rewarding one.
Speaker 2 (20:23):
It definitely is. And let's not forget about passion. Choosing
a franchise you truly believe in that aligns with your
values and your vision that can make all the difference.
Speaker 1 (20:32):
Right. Passion is that secret ingredient that takes it to
the next level.
Speaker 2 (20:36):
Absolutely.
Speaker 1 (20:36):
Okay, let's get practical for a minute. What advice would
you give to someone who's seriously thinking about taking the
plunge and opening a fast food franchise. What steps should
they take to make sure they're making a good decision?
Speaker 2 (20:48):
Well, I always say start with research. Really dig into
the different franchise options out there. Look beyond those flashy
bushers and marketing material. You pass the surface exactly. Delve
into the company's history, their values, their financial performance. Talk
to existing franchisees, get their perspective. Visit their locations, see
what the day to day operations look like. Ask yourself,
(21:10):
can I see myself doing this?
Speaker 1 (21:11):
A real feel for it.
Speaker 2 (21:12):
Exactly, And once you've got a few options in mind,
carefully review that franchise agreement. That's a legally binding document
outlines your rights and obligations, so you need to understand
every detail before signing.
Speaker 1 (21:25):
Definitely get a lawyer involved at that stage.
Speaker 2 (21:27):
Absolutely, don't be afraid to ask questions, negotiate terms, get
that professional advice.
Speaker 1 (21:32):
Okay, so research, due diligence, legal advice. What about the
financial side? How can someone realistically figure out if they're
financially ready for this kind of venture?
Speaker 2 (21:42):
I always recommend creating a comprehensive business plan. This forces
you to think through every aspect of the business, your
target market, your marketing strategy, your operating costs, profit projections.
Speaker 1 (21:53):
So it's not just about having enough for that franchise fee.
It's about having a solid.
Speaker 2 (21:57):
Plan, exactly, and part of that plan is exploring financing options.
Do you have enough savings? Will you need a loan? Investors?
Each option has its own terms and conditions, So do
your research right.
Speaker 1 (22:10):
Because getting financing for something this big can be tricky.
Speaker 2 (22:13):
It can, but with a good plan and preparation, it's
definitely possible.
Speaker 1 (22:17):
Okay, So passion, resilience, leadership skills, business avvy, a good
lawyer on speed.
Speaker 2 (22:24):
Dial, don't forget the lawyer.
Speaker 1 (22:25):
Sounds like we've covered a lot of ground here, But
what about the bigger picture? What about ethics and sustainability
in this industry? Can you be both profitable and responsible?
Speaker 2 (22:35):
That's a great question and a really important one. You know,
the fast food industry has faced a lot of criticism
in the past.
Speaker 1 (22:41):
Yeah, for their environmental impact, labor practices, and the healthiness.
Speaker 2 (22:44):
Of their food exactly. But there's a growing movement towards
sustainability and ethical practices.
Speaker 1 (22:50):
So it's not just about serving a quick and tasty
meal anymore. It's about being mindful of the impact of
that meal right on.
Speaker 2 (22:57):
The environment, the people who make it, the health of
the customers in our franchises.
Speaker 1 (23:01):
Responding to this.
Speaker 2 (23:01):
Shift, they are a lot of them are taking steps
to become more sustainable, sourcing ingredients locally, reducing waste, investing
in energy efficient equipment, offering healthier menu options.
Speaker 1 (23:13):
So it's important for potential franchise owners to do their
research on this as well.
Speaker 2 (23:17):
Absolutely, ask about their sourcing policies, waste management, employee benefits,
their approach to corporate responsibility.
Speaker 1 (23:25):
It's about aligning your values with the franchise you choose.
Speaker 2 (23:28):
Exactly, finding a brand that you can be proud of,
that reflects your own commitment to making a positive impact.
Speaker 1 (23:35):
And I bet that alignment can be really motivating.
Speaker 2 (23:37):
It can for you, your team, and your customers.
Speaker 1 (23:41):
It's about building a business with a purpose.
Speaker 2 (23:43):
Absolutely, So as you're making this decision, remember to look
beyond the numbers.
Speaker 1 (23:47):
Think about the bigger picture exactly.
Speaker 2 (23:50):
Research those company values, their commitment to their employees and
their communities. Ask yourself, do I believe in what this
company stands for?
Speaker 1 (23:58):
Because finding a franchise that allign with your heart as
well as your head, that can make all the difference.
Speaker 2 (24:03):
It really can, and.
Speaker 1 (24:04):
That's a great point to transition to the final part
of our deep dive. Welcome back to the deep dive.
We've really been covering a lot of ground here, haven't.
Speaker 2 (24:12):
We We have from finances and operations to the importance
of leadership and sustainability.
Speaker 1 (24:17):
It's been quite a journey, it has. But for those
who are truly passionate about the fast food industry, I
think it could be an incredible one.
Speaker 2 (24:25):
Absolutely, And you know, as we wrap up this deep dive,
I think it's important to go back to something we
talked about earlier. Okay, choosing a franchise that truly aligns
with your values.
Speaker 1 (24:37):
You're talking about more than just a love for burgers and.
Speaker 2 (24:39):
Fries, right exactly. It's about finding a company that shares.
Speaker 1 (24:44):
Your beliefs, your principles.
Speaker 2 (24:47):
Think about it. You're going to be representing this brand,
their mission, You're interacting with customers.
Speaker 1 (24:52):
You're the face of the company.
Speaker 2 (24:53):
It's about more than just serving food. It's about aligning
yourself with a company that you believe in.
Speaker 1 (24:58):
So someone who's really into sustainability it look for a
franchise that focuses on things like local sourcing, or reducing.
Speaker 2 (25:04):
Waste exactly, or if someone's really driven by social impact,
that they might choose a franchise that's known for treating
their employees well or being involved in the community.
Speaker 1 (25:14):
It's about finding that perfect match between your passion for
the industry and what you care about most.
Speaker 2 (25:21):
And that alignment can be really powerful. You know, it
can motivate you, your team even attract customers who share those
same values.
Speaker 1 (25:29):
It's about building a business that you're truly proud of, exactly.
Speaker 2 (25:33):
So as you're going through this process weighing your options
making this big.
Speaker 1 (25:37):
Decision, don't just focus on the money right.
Speaker 2 (25:40):
Look beyond the numbers, the brand recognition research, those company values,
their commitments to their employees, to the community. Ask yourself,
do I believe in what this company stands for?
Speaker 1 (25:51):
I love that because at the end of the day,
it's about finding a franchise that aligns with your heart
and your head. That's how you set yourself up for success. Absolutely,
that's a great place to wrap things up. We've covered
so much in this deep dive. We have the financial realities,
the operational challenges, the importance of leadership, that growing emphasis
on sustainability. It's a lot to consider it is, but
(26:13):
hopefully our listeners feel a little.
Speaker 2 (26:14):
More equipped now, I hope so.
Speaker 1 (26:16):
To make those big decisions right.
Speaker 2 (26:18):
With the knowledge and insights they need exactly.
Speaker 1 (26:21):
Well, thank you for joining us on this deep dive
into the world of fast food franchises here in the UK.
Speaker 2 (26:27):
It's been a pleasure.
Speaker 1 (26:28):
We wish you all the best on your entrepreneurial journey.
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