Is a Food Franchise Right for You? The Pros and Cons of the Restaurant Industry

For many, there’s an almost Pavlovian response to the word “franchise” that conjures up a mental image of some of America’s most recognizable chains. Often, those franchises exist in the food realm, where restaurant brands like McDonald’s, Pizza Hut and Dairy Queen go beyond merely franchising success, doubling as a slice of Americana. 

But the shine of a famous logo doesn’t erase the realities of the business. Even with playbooks and support, restaurants are hard, margin-sensitive operations that test capital, staffing and execution.

In America, nearly 20% of independent restaurants fail in the first year; this number swells to a whopping 80% within the first five. Franchising delivers a distinct advantage, with 95% of franchised restaurants surviving beyond their first year in business.

While the dream of owning a restaurant remains in play for many, it’s important to take a closer look at whether or not it’s actually the right fit, balancing the pros and cons of ownership in the restaurant industry.

The Pros of Restaurant Ownership

Arguably the single biggest advantage to ownership of a food franchise remains the presence of a strong, proven, easily navigable system.

There’s a reason McDonald’s operates nearly 45,000 locations in more than 100 countries as a global presence, and it’s due largely in part to the pairing of terrific marketing/strong branding in place alongside a proven system that works. 

Jersey Mike’s was recently ranked No. 2 in Entrepreneur’s list of the Top Food Franchises for 2025, touting a relatively low buy-in rate in the low six figures (compared to the McDonald’s low end which starts over $1 million). 

Chik-Fil-A is frequently lauded for its simple system and, with only a $10,000 cost to get in, provides a terrific franchised food option for many prospective entrepreneurs.

When the logo, menu and marketing are dialed in properly at the franchisor level, consumers aren’t just drawn to a proven entity; they trust it. Plus, a strong franchisor can help franchisees navigate a turbulent supply chain in constant flux.

Consistency is a significant pro, and a great system delivers it.

The Cons of Restaurant Ownership

There’s no getting around it: the restaurant sphere can be challenging. Navigating the supply chain amidst a quickly changing tariff structure is difficult. And inflation remains a thing.

But issues can start before the restaurant doors even open.

The Great Resignation hit the food industry hard, with many still reeling as they seek to cure staffing woes and retain workers, a process that can have a direct correlation on customer satisfaction (which in turn can affect repeat business).

And restaurant buildout can be costly. Real estate is expensive and upfront franchise fees are significant. Not having enough capital on hand to navigate the first three years is a frequent mistake made in the franchised restaurant industry. 

Today’s world moves fast. And the casual dining experience is often driven by the idea of convenience. Innovation in terms of ordering, pick-up and overall service options is crucial.

But failure to innovate on the menu side can leave a franchise vulnerable too. One need look no further than Popeyes, who saw their stock price increase sevenfold following the well-marketed launch of a chicken sandwich in 2019.

Choose Your Own Adventure

When the independent restaurant scenario is optimal, a high risk/high reward experience — driven by almost full autonomy — is possible. But there are significant advantages to life in the franchised sector too.

And turnaround stories happen all the time. In the early 2000s, Domino’s Pizza began battling perceived quality issues, launching a “Pizza Turnaround” that sent the stock surging 130% higher within just a year. 

All of which renders the idea of due diligence key.

As a prospective entrepreneur assessing food franchise options, it’s important to think long — but honestly — about the hours you hope to work and the amount of capital that’s realistically available to you.

While great branding, a trusted name and a proven system can take a franchisee far in the restaurant industry, staffing and supply chain issues coupled with great consumer demand in terms of innovation can all become deep waters to tread.

Enthusiasm can only take an owner so far. When assessing whether a food franchise is for you, a self-aware dive within can deliver significant dividends.

Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit www.1851growthclub.com and start your journey.