The Bottom Line: Should You Open a Restaurant Franchise In 2024?

Food businesses may be what comes to mind when people hear the word “franchising.” In 2022, it was estimated that there were 32,879 full service restaurant franchises alone in the United States.

The founders and CEOs of companies like FranCoach, Teriyaki Madness and Melting Pot all agree that there are plenty of opportunities in eateries. But is restaurant franchising ideal for every aspiring franchisee? 

Is Now a Good Time?

With so many restaurant franchises on the market, it's easy to wonder whether or not it's a good time to open one of your own.

“People can look at the food industry in two ways: we’re always going to eat and we’ve gotten pickier,” said Tim Parmeter, founder and CEO of FranCoach. “I think the fact that there are more options is driven by customers wanting exactly what they want. There's a perception that there's a higher risk and higher failure rate with restaurants. And so that can be a little scary to people.”

However, more competition isn’t necessarily a bad thing. With people demanding more options than ever, there’s more opportunity for different brands to thrive. And with pickup and delivery opportunities remaining popular in a post-pandemic world, there is even more opportunity for success. 

“Food has always been a constant franchise opportunity that's been popular and successful,” said Patrick Pounders, head of sales at Teriyaki Madness. “I think what we've learned here with what we've gone through with the craziness of COVID is that food is even more prevalent. We’re pandemic-resistant to certain degrees.”

Pounders noted that pre-COVID, about 75% of Teriyaki Madness’ food sales were pickup-and-go, catering and third-party delivery. Today, it's about 80%. This shift allows for a smaller space to dive into a lot of pipeline revenue. 

Whether or not it's a good time to buy a food franchise, or any franchise, is also dependent on your individual journey. Franchising is an opportunity for a fresh start, and a restaurant can be a great way to take that step into entrepreneurship. 

“I think one of the biggest drivers in franchising specifically is people that are seeing themselves in a position where they've accomplished certain goals that they've set for themselves,” said Colin Benyo, franchise growth specialist at Melting Pot. “And I think a lot of people are finding themselves in a position where they want a new challenge. They want to do something different. That's really a theme for a lot of people that I've talked to.” 

The Opportunities In Restaurant Franchising

As for who the restaurant franchising opportunity is ideal for, there are several traits that align. Though it can be common for brands to require or prefer some restaurant experience, that is not always the case.

At Teriyaki Madness, anyone that has a passion for food, even if they don’t have food experience, would be a great addition to the system, according to Pounders. They should also want to have a brick-and-mortar business where they’re excited to motivate employees and be a part of the community. 

“We're a very community-focused business in our heart, and we have been since our inception,” he said. “Being out in the market and supporting local sports teams and nonprofit fundraisers is a great thing to do, and it also drives a ton of foot traffic.”

Parmeter agreed that becoming a restaurant franchise owner provides an opportunity to become an active member of the community. Not only does it help you make connections, but it provides an opportunity to give back. 

“Think about how you can make a real impact,” he said. “What can you do at the end of the day with the food that's left over? Is there a shelter you can donate to? Can you sponsor a little league team? Somebody with that mindset of really giving back in the community?”

The Labor Challenge 

When it comes to challenges, labor is often the biggest one people come across in restaurants. Though it looks like restaurant employment has returned to pre-pandemic levels, there are other considerations to keep in mind when it comes to hiring. 

“With food, we're going to have unskilled labor for the most part — and we're going to have a lot of them and we are going to potentially have turnover,” said Parmeter. “So if you look at that type of labor force and immediately have a negative response to it, it may not be a good industry for you.”

On the flip side, you may be up for the challenge of being able to bring in high school or college kids and give them an opportunity to learn something. 

“There’s countless stories of people who started at the bottom and 10 years later, they own a store,” Parmeter added. “So if you’re up for the challenge of training, despite the turnover, and creating a great environment for them, food is a fantastic place to be. 

Practical Advice and Considerations to Follow

Benyo emphasized the importance of finding the right connection with your restaurant franchise. 

“It's easy to throw money at an opportunity, but if you don't believe in it, then there's really no gain in it,” he said. “Find a business that you trust, that you understand and that you intrinsically connect to in order to really feel like you're making the right decision.” 

And if you decide restaurant franchising is for you, follow the plan and put forth the effort, Parmeter advised. 

“Really make sure you are finding the right people and building out a leadership team because there’s a lot of moving parts,” he said. “If you don’t have the experience, hire somebody who does.” 

Whether you are an experienced restaurateur or a newcomer to the food scene, the key to being successful in restaurant franchising is found in your commitment, adaptability and genuine belief in your chosen brand.