Everybody knows the story of the 65 YO man who started selling a special recipe in his restaurant and made it into a worldwide food franchise, the second largest in the industry; but the food industry has come a long way from the days of the traditional chain restaurants like KFC and McDonalds to many business groups offering franchises in different themes and lines of products.
Currently, worldwide food franchises run in more than 150 countries, providing employment for millions. Only in the United States, the estimated output of the food franchises exceeds B$76. It accounts for 36% of the establishments and 48% of the annual financial output of the franchise industry.
It makes this sector desirable for those willing to start a business. However, to choose between different companies, the franchisee should first consider the franchiser's performance regarding the industry trends, sustainable and responsible approach to business, health aspect, transparency, and technological advancement. This article will elaborate on all these points and how they may represent the eligibility of a franchisor.

Paying attention to the trends

The food industry can be as variable and changing as the fashion industry. Public preference about what and where to eat is diverse in different regions, and even in the same area, it will alter from time to time. To meet the public demand and sometimes almost be ahead of it, businesses must figure out running trends of the industry and follow them.
These trends sometimes demonstrate the popularity of a certain kind of food. An example of this is the high demand for Chinese food, Middle Eastern dishes, Italian food, etc. But trendy foods are not always about regional cuisine;
At times, people choose specific food for specific features. The popularity of vegan options in restaurants, high demand for seafood, and increasing awareness about organic and sustainable ingredients are just some of the latest trends affecting customers' choices.
Trends also leave a trace in the service providing section. In the past, the atmosphere of buffets and restaurants was a determining factor in their professional operation. Today, most food retailers lean on multiple outlets and efficient delivery options to gain customer satisfaction. It is evident that when a business knows the customers and follows popular trends, it is easier for its subsidiaries to cope with the public taste. Therefore, a franchisee needs to evaluate the franchiser in this regard.

Sustainability and responsibility of the business

With growing awareness of sustainability and responsible operation of companies, the demand for sustainability options in the food industry has grown too. While the term "sustainable food" can stand for a wide variety of products, its simplest definition is the food made through a process considering the well-being of people and the planet. Today, more than 80% of Americans prefer environmental-friendly food options. For a business owner trying to develop a small business using a franchise contract, these statistics should be a critical factor in choosing the franchiser; since taking customer choice into consideration can bring more profit for a new business.
There are several topics to inspect when analyzing franchisers' sustainability performance. Local food and organic food are the most commonly requested when it comes to sustainable food.
Studies show that the highest demand for organic food is in Europe, specifically Denmark and Switzerland, while India has the most organic food producers. In the past 20 years, the worldwide sales of organic foods experienced a drastic increase from 18$ billion to about 120$ billion.
A 2016 survey study shows that the most critical criteria in selecting healthy meals for people in the United States are using fresh local ingredients, offering low-calorie options, and demonstrating respective nutritional information in menus.
Other sustainability-related matters such as animal welfare in the supply chain can also affect customer choice. In addition, the social behavior of the franchiser towards the local community and staff can play a role in shaping public opinion. To put these all in just one sentence, the behavior of a company towards people and the environment forms a common picture that influences the financial performance of each franchisee.

Health aspects and personalization

There are two aspects to a company's performance in offering healthy products. One that refers to the compliance with local and international rules, regulations, and standards, and the other that reflects customer needs.
Every business is primarily obligated to follow the applied local laws, including health regulations, and desires to boost the excellent business reputation; many choose to follow pre-developed global standards voluntarily. Some go one step further and define specific personal codes for their business. For example, a franchiser might not be obligated to avoid providing genetically modified products for customers under the local laws; however, it may choose to follow global standards and ban such products in the supply chain. The franchiser can also go further and offer only organic food or at least add this choice to the menus. This is where the customer needs are taken into consideration. Today, many people prefer to go for the brands which provide healthier food, both in the items they offer (for example, choosing homemade food over fast food) and better ingredients (for example, choosing organic vegetables over the ones produced using chemicals). This approach can also be received as an element of personalization by customers. Personalization is currently one of the most influential trends in the food industry that leads to a more favorable opinion of the customers by offering customized options. Whether the franchiser is willing to take advantage of this trend to advertise its brand can change public response.

Avoiding legal conflicts

Franchise is primarily a legal agreement; as a result, it brings legal consequences for both franchisor and franchisee, and failure of the parties to anticipate future consequences can cause great reputational and financial loss for them. Having that in mind, one thing that seems crucial to consider in a franchise is transparency. Transparency in internal operations and the relationships with subsidiaries and the supply chain makes it possible for the franchisee to evaluate the performance and working capacities of the franchiser. This way, the franchisee recognizes the company's main values and professional path and has a better chance to act consistently, thus causing fewer troubles and misunderstandings for both parties.

Reliance on the new technologies

Modern problems indeed require modern solutions, and no, I'm not talking about fake IDs, but the day-to-day operation of any food chain. Like any part of our everyday life, technology is changing the face of the food industry heavily and won't stop. Modern innovation made it possible for food franchises to increase efficiency, lower the costs and the need for human resources, and minimize workplace accidents while raising production and expanding business reach.
From simple actions such as eco-friendly packaging and waste management to high-tech solutions like using robots, drones, and complex information systems, there are many ways in which technology improves the customer experience in the food industry. This improvement results in a competitive advantage for businesses, so it is essential for franchisees to consider the technological advancement of the selected franchiser.

The journey to start a food franchise can be lengthy and confusing. Even after finding a suitable franchiser, the technicalities of the contract can be hard to deal with. If you have plans to start your business under a franchise contract, our lawyers in Legamart are here to help you.