Advice for Buying a Restaurant and Selling a Restaurant

Franchise Infographic Breaks Down the Numbers - Restaurant Brokers Weigh In

Posted by Robin Gagnon on Sep 3, 2015 10:20:00 AM

Many believe a picture is worth a thousand words and the restaurant brokers agree, especially when it comes to franchising.  Bank of America recently posted this infographic which gives a topline view of some important numbers. Their source data is the International Franchise Association, the industry's organization for research and statistics.

The infographic shows there are 782,000 franchise units projected for 2015, an increase of more than 12,000 units over the prior year.  Those franchise units translate to $5.21 Billion dollars in today's economy and hire 8.2 million people!  

Since many of the 8.2 million jobs and 782,000 locations are restaurant franchises, this continued growth signals the health of the business.  The other telling statistic on this chart are the number of franchises that are single owner/operator type models.   Restaurant Broker Robin Gagnon says, "As a restaurant broker, we are so often participating in helping someone achieve the American dream. For many, that means the ownership of a single franchise unit."   The charge reveals that 45% of franchise units are single unit operators.

As this chart points out, the leading category of franchise brands are restaurants where We Sell Restaurants excels.  "We are heavily involved in helping franchise re-sell transactions occur" says Eric Gagnon, President of the firm.  Quick Service and Sit Down dining dominate the franchise list on this infographic scoring the first and second place finishes on the list of franchises by brand.

How much does it cost to build a franchise restaurant?  The average investment in a sit down location tops the costs for the industry at a whopping range of $698,000 to $1.4 million.  Fast casual is less expensive but still weighs in at more than $300,000 and ranges up to $600,000.  Those statistics, says these restaurant brokers are why "Buying a franchise resell unit is often a better option than starting from scratch."  According to the Gagnon’s, "We like to see buyers purchase units before the third year of ownership when they can acquire for the lowest capital costs and still have the upswing for the future of the opportunity." 

Who's buying a restaurant franchise?  The IFA research quoted here shows the field is dominated by males at 72% and skews heavily to the baby boomer ranges of 45-54.  This jives with the restaurant broker’s sales data for 2014 and 2015 says the team. "We typically find many in the range of 40 t0 50 looking at franchise opportunities, though it is not uncommon to also work with college graduates that are buying an existing unit in lieu of finding that traditional corporate job."

The most popular states for franchising cited in IFA research and this infographic are Texas and California.  The restaurant brokers agree on this count saying that a large majority of their transactions occur in the Lone Star state of Texas. 

Lastly, IFA says, "Franchise businesses will continue to increase and create jobs at a faster pace than the overall economy in 2015, as it has in each of the last four years."  The restaurant brokers concur with these thoughts.  Robin Gagnon says, “As both brokers to the franchise resell world and franchisors ourselves, we find that most clients appreciate the consistency of the service model, the process approach and trademark value to buying within the franchise community.  We see only future growth for the restaurant franchise industry.” Franchise_Infographic-page-001For more informaton on We Sell Restaurants, visit www.wesellrestaurants.com.  For information on the We Sell Restaurants franchise, visit:  https://www.wesellrestaurants.com/franchise.php

Topics: Buying a Restaurant