Fast-Casual Franchises: Four Key Indicators of Success
Good News. If you are thinking about making an investment in a fast-casual restaurant, you have impeccable timing. Looking at the industry, it persevered and succeeded through the worst global economic and health crisis — the COVID-19 pandemic. Not only did it survive, but it was perhaps the model that foodservice was measured against as fast-casual streamlined innovations and quickly adapted to necessary changes making them very efficient. Specifically, some of these changes enhanced elements, like ordering apps, while simultaneously simplifying online delivery, curbside pickup, and implementing new ideas like meal kits.
Fast-Casual is a Great Opportunity
When some restaurants were closing their doors, fast-casual was growing. The fast-casual restaurant market was valued at $125.6 billion in 2019 and is expected to climb to $209.1 billion by 2027, with a CAGR of 10.6 percent from 2021 to 2027. This strong growth means the time is right for investments.
Fast-casual is a blending of fast-food convenience without the full service of fine dining. Sometimes it is limited counter service, or you build your own meal. The menu is typically higher quality than fast food.
Not only is the fast-casual industry strong, but a fast-casual franchise is appealing to many entrepreneurs because the franchise model proved to be strong during the start of the pandemic. The networking element in fast-casual restaurant franchises was a valuable tool for franchisees to share what was working and what wasn’t in a time of crisis when other restaurants were shutting down. It also allowed quick-pivot solutions and adjustments for brands in general.
For those just entering the world of franchising, here’s some background. The model allows a quicker ramp-up into business compared with an independent startup. You are given all the tools needed to operate your business, along with training from industry pros, ongoing support, and a marketing plan.
So, if you are researching fast-casual franchise opportunities, be on the lookout for key performance indicators, or KPIs. This is measurable data that shows whether or not a restaurant is performing well. It shows what’s working and what needs tweaking. Here are a few ideas to look for that hint at success. Look for overall benchmarks regarding sales, service, employees, and overall expenses.
Four Key Indicators
Sales: Take a look at whether or not the brand you are researching is trending. You also want to make sure that the restaurant is carving a niche in the market, or doing something that no other restaurant or competitor is doing. In fast-casual, that doesn’t mean you’re the only game in town. It could mean you are mission-driven, have a proprietary product, or are socially responsible. It’s that unique quality that will make a brand stand out and have customers coming back. You are looking for a brand that is not easily copied, or the market is not oversaturated, which can hurt profit margins.
As a potential franchisee, you are looking for strong sales in key metrics like gross profit and break-even point. You also want to track sales data over a period of time to see how well the restaurant is performing. This is indicative of trends or strength in a certain time of year (i.e., ice cream stores perform better in the summer months). This data can help a brand forecast for the future concerning everything from staffing to inventory.
Service: When it comes to service, customer retention rates are closely monitored. A fast-casual will have shorter customer visits but perhaps a high online rating based on ordering apps.
Employees: Labor is a challenge these days as many in the food service industry have had to incentivize workers and pay a higher wage due to so much competition in the service industry. Labor costs are a big expense for fast-casuals. The cost of labor is a considerable expense for most restaurants. In fact, experts say labor may be more than 30% of your total revenue.
Expenses: When it comes to overall expenses, the balance is about decreasing costs while still providing a good product with quality service.
SoBol Hits the Marks
If you are in the market for a fast-casual franchise that is achieving high marks on all these KPIs and delivering healthy, delicious food on a mission to make people’s day better, the franchise you’re looking for is SoBol.
SoBol is an acai bowl and smoothie café that is hitting all its benchmarks as a business in the fast-casual industry. We keep things simple, from our ingredients to our mission, and that’s what keeps customer retention high and allows the brand to grow.
What we need from you, as a franchisee, is a basic understanding of business, whether that means: franchising, retail, QSR, marketing, or real-estate development. We’ll do the rest. We provide extensive training with industry experts, as well as ongoing support to help along the way.
If you have a passion for a healthier lifestyle and a dedication to operational excellence, fill out and submit this franchise form and let’s get the conversation started.