Restaurants, cafes and takeaway businesses are well suited to the franchise model, and a large proportion of the investment opportunities on offer are in the food industry. But setting up your own eatery can be expensive, so we’ve rounded up four of the best low-cost food franchises out there.
Running your own business in the food industry can be tough; the market is extremely competitive and the failure rate is enough to put off any prospective entrepreneur. According to research, eight in 10 restaurants close down within five years, and six in 10 don’t even make it past the one-year mark.
Joining a food franchise can give you stability and security as you launch your business. You’ll be able to work under a recognisable brand with an existing customer base, and rely on plenty of business support to help you grow. Here are the top four low-cost food franchises for entrepreneurs who want to break into the food industry without breaking the bank.
Reasons to start a food franchise business
Brits love eating restaurant food, whether it’s in their favourite local eatery or at home as a takeaway. Almost 40 percent of people eat out at least once a month, and 8.5 percent visit a restaurant several times a week (Statista).
Takeaway services have seen incredible success in recent years, as more and more people order their favourite food to eat in the comfort of their own home. Both restaurants and delivery platforms are benefitting from this sector growth.
Thanks to the high number of food businesses offering franchise opportunities, there’s plenty of choice for budding entrepreneurs who’d like to join the industry. From Italian street food stalls to Thai restaurants and even vending machine companies, there’s something for everyone in this sector.
Top 4 low-cost food franchises
Our top low-cost food franchise at the moment is also our most unusual. Tubz is an international vending machine business selling snacks from well-known food brands, as well as children’s toys. Its towers are situated in high-footfall areas, where customers can get their hands on energising bites to eat.
- Becoming a Tubz franchisee: You can run your vending machine business on a part- or full-time basis, and you won’t need a lot of storage space or a team of employees. It’s a great opportunity for people who are looking for a business you can manage while maintaining a great work-life balance.
- How much you need to invest: You can get started from as little as £3,295, but the business has four different packages so you can choose the right one for you. Plus, there are no annual fees or royalties.
- Bronze bundle: £3,295 + VAT for 10 towers
- Silver bundle: £7,485 + VAT for 25 towers
- Gold bundle: £14,475 + VAT for 50 towers
- Platinum bundle: £27,450 + VAT for 100 towers (Pricing structure may change over time)
- What you get for your investment: Tubz provides a comprehensive training scheme, ongoing support, as well as site selection service and a two-year guarantee on all new equipment. The franchise package also includes stickers, uniforms and stock from popular brands like Pringles.
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Want to start your own Just Eat-style delivery business? This low-cost food franchise opportunity takes restaurant dishes right to people’s doors after they order online. The company was founded in 2018 and has a string of branches across the North West, but is now focussing on nationwide expansion.
- Becoming a Local Eats franchisee: You’ll partner with restaurants and food businesses in your local area to help them get their products to customers. You’ll have your own support and admin team as you work to grow your franchise unit.
- How much you need to invest: A Local Eats unit only costs £5,000 to launch, and you can aim to generate around £150,000 annually after two years.
- What you get for your investment: Local Eats gives you everything you need to get up and running in just 10 days. The package includes face-to-face or online training, as well as your own website and apps, and the franchise’s proven marketing resources to help you get word out about your business.
>> Read more:
Snappy Tomato Pizza
This brand cooks and delivers a range of pizzas, burgers and kebabs, as well as desserts and drinks. Customers can get their hands on the franchise’s unconventional square pan pizzas, which are 27 percent larger than a corresponding round one.
- Becoming a Snappy Tomato Pizza franchisee: If you’d like to join a delivery franchise without paying a premium price tag, this opportunity could be for you. Investors don’t need any experience, thanks to the business’s extensive training scheme.
- How much you need to invest: Total investment sits at £25,000, and you can expect to see a revenue of £325,000 after two years.
- What you get for your investment: You can complete your training at your nearest Snappy Tomato Pizza store. As part of the investment package, you’ll also benefit from a mobile-optimised website and app, a customer loyalty programme and ongoing menu development, as well as uniforms and initial stock.
Punch Pubs & Co
See yourself as the owner of a pub? This franchise offers low-cost management opportunities at a range of food and drink establishments. At the moment, it has 1,200 UK pubs in its network and 12 support teams to help franchisees maximise their income. Punch Pubs was also named Best Tenanted & Leased Company in the 2020 Publican Awards.
- Becoming a Punch Pubs franchisee: When you join this low-cost food franchise, you can decide whether you’d like to take out a Managed Ownership, Tenancy or Lease licence. Each option is slightly different in terms of the bills you pay, the support you get and the contract length.
- How much you need to invest: Franchisees make ongoing rental payments, so the initial cost is low compared to most other food franchises. You’ll need £13,000 to get started. After two years, you could reach up to £500,000 in revenue.
- What you get for your investment: You’ll get access to a free induction course called ‘Progress with Punch’, along with workshops for extra training. And you can always learn more on the franchise’s online academy, and benefit from regular business reviews from your operations manager.
Find more low-cost food franchise options
Setting up a restaurant from scratch often means investing hundreds of thousands of pounds, but there are lots of low-cost food franchise options offering an alternative route into the industry. Delivery and mobile food and drinks businesses, for example, can provide a great income without a huge initial investment, and don’t rely on in-house dining. Find these types of opportunities and more in our full selection of food franchises.
Alice Tuffery, Point Franchise ©