Healthy Food Businesses - What Franchises Are There?

12/01/2019 08:00 | Food franchises

Healthy food businesses

The franchise sector has long been associated with the fast food sector, but the times they are a-changiní, and an increasing number of UK consumers are looking for healthy eating options. With this in mind, we take a look at the healthy fast food industry as a whole and then examine five franchises in greater detail.

Healthy fast food

For the first time since it achieved market dominance, fast food is under threat. The challenge comes from a new generation of diners who, recognising that many of the foods, processes, and practices used by the fast food industry are neither sustainable nor healthy. Instead, theyíre opting to eat at a new kind of restaurant Ė the healthy fast food restaurant.

Though healthier fast food options have always existed, itís only recently that businesses have recognised the enormous demand for healthier produce and responded by launching new companies. A remarkable 72% of UK shoppers are consciously buying healthier foods, and approximately 43% are happy to spend more on organic produce. This suggests that the health food industry is more than just a flash in the pan and is here to stay. It also indicates that the organic, free-from, and healthy eating movements have gone from being niche interests to mainstream consumer behaviours.

Healthy food business

Health food businesses have also benefitted from an increasing number of UK shoppers adopting a vegetarian, vegan, or flexitarian diet. Over the last three years, the number of consumers purchasing vegetarian foods has increased by 26% - an astounding jump when you consider the reputation vegetarian dining had just five years ago.

Likewise, health food manufacturers and retailers are also benefitting from a greater interest in free-from products. While gluten-free products boast the most significant growth in this market, lactose and yeast-free products are also proving popular. A recent study has also shown that roughly 19% of shoppers are also willing to spend more on this kind of product soon.

While all of these factors have contributed to the strong performance of health food businesses, the industry is also a product of the traditional fast-food sector's inability to adapt to new market realities. So far, traditional fast food outlets such as McDonald's, Burger King, and Wimpy haven't been able to respond adequately to millennialsí changing tastes and their growing concern for larger ethical issues. This has resulted in the creation of an apparent gap in the market, which health food businesses have exploited to excellent effect.

Healthy food franchises

Though there are plenty of independent or privately owned healthy food businesses popping up, there is also a considerable number of health food franchises proliferating across the UK. These businesses have benefitted from the franchising systemís ability to facilitate brandsí rapid expansion, and have been able to reach a broader audience in a shorter amount of time. With this in mind, we thought it an excellent opportunity to take a look at five of the most popular health food franchises on the market.

Riverford Organic Farmers

Founded in 1987, Riverford Organic Farmers grow, harvest, and distribute organic veg boxes to homes and businesses around the UK. The farm has grown from a small, family-run operation to a national (still family-run) franchise delivering approximately 47,000 boxes every week and that's the go-to choice for those who appreciate healthy, nutritious, and organic produce. The business has won numerous awards, including the Food and Drink Business of the Year Award in 2017 and the British Farming Award in 2016.

To become a Riverford franchisee, youíll need to raise a minimum investment of approximately £40,000. The companyís most successful franchises report an annual turnover of over £1 million, demonstrating the brandís potential for significant growth.

Humpit

Humpit advertises itself as the only 100% plant-based franchise in the UK and is one of the country's most promising new businesses. With a menu that's primarily focused around super-tasty, super-healthy hummus, the company has also managed to build a popular brand that resonates with UK consumers. The franchise is undoubtedly heading in the right direction, as is demonstrated by the business winning the Virgin Start-Up of the Year award at the 2015 Foodpreneur Festival.

An initial investment of £30,000 is required to open a new Humpit franchise, though the total capital needed to grow the business is likely to amount to £70,000. This includes the £15,000 franchise fees.

The Avocado Show

If thereís one super-food that can be said to be the engine behind the growing demand for healthy eating options, itís the humble avocado. Photogenic, delicious, and full of goodness, the avocado has been the Instagram generationís food of choice. So it makes sense that an avocado-based restaurant would soon become the next big thing. Based in Amsterdam, the brand has experienced enormous success and is now looking to utilise the franchise model to move into new markets.

While you'll need £149,000 in the long run, would-be franchisees need only find an initial investment of £60,000 to join the Avocado Show team.

Salad Box

Unlike most of the other franchises on this list, Salad Box originates from outside of the UK. Nevertheless, it has had an incredible impact on the UK franchising sector and is set to become one of the healthy fast food industryís biggest success stories. Launched in Romania, in 2011, the company now operates ten company-owned business and 60 franchises, in 12 different countries.

Though the cost of opening a Salad Box franchise can vary drastically depending on its location, the franchise charges a royalty fee of 4.5% of net income and a 1.5% marketing fee.

The Skinny Kitchen

Our final health food franchise is Skinny Kitchen. Launched in Ibiza, in 2014, the business began running pop-ups in London later that year. Restaurants in Bournemouth, Canterbury, and Belfast have followed, and new locations in London are also on the cards.

To acquire the rights to a Skinny Kitchen franchise, you'll need to raise somewhere between £100,000 and £300,000. The franchise charges a royalty fee amounting to 5% of turnover.

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