In this fast paced life, people hardly have enough time to spend with their family and friends on daily basis. Thus fast food has taken the center stage to fulfill the desires of nice and tasty food for those who have no time to spare in cooking and not much money to flow in a high end restaurant, like college students, middle class people and mostly bachelors.
This is why fast food market is growing in India.
Indian fast food market is expected to grow at a CAGR of 18% by 2020 due to changing consumer behavior and demography.
Fast food market in India is expected to be worth US$ 27.57 billion by 2020.
About 10% of the fast food market in India is organized. NOVONOUS estimates that the organized fast food market in India is expected to grow at a CAGR of 27% by 2020.
Vegetarian fast food constitutes of around 45% of the whole fast food market in India and is expected to grow at a CAGR of 18% by 2020.
Fast food Casual dining restaurants (CDRs) market in organized fast food sector in India is projected to grow at a CAGR of 27% by 2019-20.
Seeing the chance and eyeing the profits, this business is going to garner, there are a lot of aspiring restaurateurs and businessmen looking for opportunities to franchise with fast food companies.
Here are a few vital points to know what it takes to start a fast food franchise:
1. Self Identification:
Before jumping into the market with all the money and resource, it is important to know your skills, interest and financial resources.
Assure yourself that you have the required skills to start a fast food franchise. Identify your talents and dedication towards this business, as this business is very demanding. You have to work late, without vacations or holidays at least for a brief period of 5-10 years, until the business becomes a little stable.
You have to commit yourself to the business. Evaluate your interest in starting the business and also the financial resource, which will flow into making the business a hit. Ask yourself these questions:
a.Do you have enough money to set the business up?
b.Are you really interested in starting the business?
c.Are you ready to face the problems?
d.Are you prepared to bear the initial struggle and losses?
e.Are you skilled enough to shoulder such a thing, which demands dedication, time and responsibilities of your staffs and customers?
2. Research Market:
For any business, a thorough market research is a must. Study the market, its demands, where will the supply come from, and analyse it thoroughly before jumping into the line.
Market analysis will clear the clouds from the surface by addressing some very important questions, such as what do you want to serve to your customers, where does your restaurant stand in the market, is there any demand for any particular cuisines or food type in the market now or in future, who all are your competitors in the market, how can you attract the customers and what are your expectations from the market?
3. Research opportunities:
Look out for the companies or fast food brands, which are offering franchising opportunities.
Brian Sozzi, CEO and chief equities strategist for Belus Capital Advisors said, "The franchisee has to maintain the brand promise, and a large part of doing that is being able to fund the buying of equipment and intangible things, like going the extra mile to pick up smashed cups in the parking lot. Should they start bringing in lower quality franchisees, the risk heightens that the business is not run well, in turn hurting the franchisees doing things the correct way."
Ask for a copy of the franchisor's Franchise Disclosure Document (FDD) and financial statements, and review them with your accountant and attorney.
It is foolish to rely on the franchisor and its information solely, before deciding to open a franchise. Get a list of current franchisees and former franchisees, who are still working or were working as franchisees and take their feedback about the franchiser. Ask them if they are satisfied with their earnings and the franchisor's performance.