If you’ve been dreaming of opening a restaurant, you may have come across franchising in your research. It makes sense that Ben & Jerry’s lists social consciousness and a dedication to running an ethical business as two of their eligibility requirements. Among these and other factors, franchisees also need to have at least two years of management experience under their belts, a strong credit history, a minimum net worth of $350,000, and $100,000 in liquid assets. Ben & Jerry’s also prefers that their franchisees have a college degree or higher, though this isn’t necessarily a make-or-break element of your application.
Few industries can withstand this sort of shock and not come out damaged. But restaurants are especially unprepared. Much of the industry is made up of small businesses, including independents and franchisees, who operate on thin margins to begin with.
In the restaurant industry, you will need to count all ingredients. As an example, a cheese burger with tomato, lettuce, and mustard on a wheat bun with a small bag of potato chips has a total cost of $2.10. If you want to get a 30% food cost for this item, you will need to divide $2.10 by 30 % (.30), which will give a menu price of $7.
The digital revolution has brought about a massive migration of retail to online. In practical terms, a developer who is contractually committed to ground floor retail has fewer options for those spaces than ever before. Even 20 years ago that 3000-6000 square foot retail space could have been any number of things- bookstore, shoe store, record store, etc. Not likely in the age of Amazon, Zappos and iTunes. Ground floor retail is becoming increasingly synonymous with restaurants.
There are a few silver linings in the National Restaurant Association’s study, however. Eighty-nine percent of operators have found a boost from takeout and delivery alcohol orders, for example, which represented 10% of all off-premise sales. Thirty-two states and Washington, D.C., have relaxed licensing laws during the pandemic and some are making those laws permanent.