Franchise Spotlight: Fast Food
Nowhere has the franchising model been used more widely and effectively than the fast food sector.
Like most countries, Australia has an enormous fast-food sector that has achieved an impressive industry growth rate over several decades.
The $17bn industry has, admittedly, taken a hit during the coronavirus crisis, with revenues projected by market research firm IBISWorld to decline by 16.1% across 2019-20.
However, many operators were comparatively well insulated, with, for instance, McDonald’s already having a drive-thru option and Domino’s Pizza exclusively delivering to customers even before the pandemic hit.
Typically offering low prices compared to many other dine-in or takeaway options, fast food is also a recession-resilient culinary category.
Fast food industry analysis
The fast-food industry has embraced the franchising business model more than most sectors. Powered partly with capital raised by franchisees, the expansion of world-famous chains has been rapid without compromising quality or consistent customer experience. Having highly motivated business owners and a framework for assuring adherence to a winning formula have arguably been key to this success.
This business model has created an accurate perception that fast-food chains uphold consistently high standards in cleanliness, food hygiene, service speed and the food itself.
Leading chains in Australia, as elsewhere globally, are mostly either 100% franchised or have a substantial number of franchisees, including Mcdonald’s, Domino’s, KFC, Subway, Hungry Jack’s, Red Rooster and Nando’s.
The brand name recognition and high success rates these and even less well-known brands offer means there is no shortage of high-quality candidates jostling to become franchisees.
However, would-be franchisees must be willing to work long hours and weekends, have business acumen and strong interpersonal and managerial skills, and be able to follow a tried-and-tested formula in a fast-paced environment.