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www.FranchiseBusinessReview.com

FOOD FRANCHISES2011 SpECIAl REpORt


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For the rightperson whonds the right

franchisebrand, the food

business canoer an exciting,

rewarding,and protable

opportunity.

erhaps no other industry in franchising is as trend-driven and

competitive as the food sector. To be successful, franchisees

must overcome ckle consumer preferences, uctuating food costs,

y-by-night diet crazes, and immense pressure. But for the right person

who nds the right franchise brand, the food business can oer an

exciting, rewarding, and protable opportunity.

This report is designed to give you a detailed look at the food

franchise sector. We will explore the dierent types of franchise

concepts, the resources they involve, the pros and cons of the sector,

and the characteristics of a typical franchisee. We will also forecast

where we think the food franchise market is going and identify the top food franchises based on our franchisee satisfaction research.

Who We Are

Franchise Business Review is a national market research rm that

performs independent research of franchisee satisfaction. Our products

include franchisee satisfaction research, economic impact studies, and

sector reports. The data for this report was compiled as part of our 2011

food franchise study, which recognizes the top brands based on overall

franchisee satisfaction. To compile the data for this report, we surveyed

nearly 2,000 franchisees from the food sector, representing more than75 brands and 20,522 franchised businesses. We also talked to senior

executives at several brands for their rst-hand perspective

of the food industry.

It is important to note that not all of the companies mentioned in this

report participated in our franchisee satisfaction survey or interview.

These companies were researched using publically available

company intelligence.

FOOD FRANCHISES

Cover photos courtesy of (clockwise from top left

Papa Murphys, Auntie Annes, East Coast Wings & Grill, Nothing Bundt Cake

For more information on this report, visit: www.FranchiseBusinessReview.com 1

2011 SpECIAl REpORt: Food Franchises


4/162 For more information on this report, visit: www.FranchiseBusinessReview.com


Models/ConceptsThe franchise concepts within

the food sector typically fall into

one of several major categories:

quick serve restaurants (QSRi.e.,

fast food), fast casual (a variation

of QSR that includes higher end,

counter-service establishments),

retail stores, mobile (based in a

kiosk or mobile cart, for example),

delivery only, and full-servicerestaurants. Some franchisors

oer multiple business models.

These models may be further

broken down by food type, such as

burgers, wings, pizza, Mexican, ice

cream/yogurt, coee, and sushi,

to name just a few. Because many

of the models t into a number

of categories (a coee shop that

serves breakfast sandwiches, forexample), the concept lines are

often blurred.

For this report, we looked at many

dierent brands representing

several dierent concept types in

an attempt to accurately compare

and analyze both the companies

themselves and the overall market.

InvestmentThe food sector oers a wide

range of investment options

for prospective franchisees.

Some concepts require less than

$100,000 to get started, while

others cost a million dollars or

more. The investment range of our

2011 Top 30 Food Franchises (see

list on page 12) is $30,000 to $2.3

million, with the average initialinvestment of the top 30 being

$491,307. (Note that this is the

total initial investment, but with

nancing and lease options, the

typical upfront cash requirements

tend to be 20% to 40% of that

total investment.)

The amount of the initial

investment typically depends onthe real estate and equipment

needed to run the business. At

the low end of the investment

spectrum, you have opportunities

like Happy and Healthy Products,

a distributor of frozen treats,

which oers franchisees a full or

part-time home-based business

opportunity with an initial

Photo courtesy of VooDoo BBQ & Grill

How long have you been a franchisee?

I have been a franchisee of the Marcosbrand since June 2011 but have been afranchisee of various other brands for over10 years.

Why did you decide to buy a franchise?

Having gone through all the hard work ofdeveloping my own concept in the past, Iknow rsthand the value that a franchisewith great systems already in place canyield. Being part of a franchise allowsme to focus on growing the number oflocations in my organization quickly andsaves a considerable amount of money onestablishing an infrastructure. I look for acompany with a great foundation of solidpeoplethat is the company I want toinvest in and grow with!

Why did you choose your franchise?

I absolutely love the product that Marcosprovides. When I became aware of the fastgrowth the company was experiencing, Iwanted to know more. After speaking withother Marcos franchisees and visiting withtheir corporate team, I was sold!

What is the best part of being

your own boss?

I like controlling my own destiny. Whenyou work for yourself, you dont alwayshave someone patting you on the back,saying, Good job, but you also dont haveto deal with being underappreciated.

What is the worst part of being

your own boss?

The hours involved. One week may be20 to 30 hours, and the next, its 90+,but I would not trade it for a 40-hour,9-5 any day!

For more information about Marcos,

please visit www.marcos.com or contact

Lauren Johnson at [email protected]

or (419)724-1867.

Daniel Caskey,Marcos Pizza


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investment of about $32,000.

Even some businesses that oer

hot, prepared foods are delivery-

based and do not require a large

physical footprint. The typical

initial investment for a business

like this is around $200,000.A quick-serve brand based in

a retail strip center can cost

less than $500,000 initially,

depending on the real estate and

overhead requirements. A full-

service restaurant, which requires

a large, stand-alone site (and

more employees and overhead for

day-to-day operation), typically

costs more than a million dollarsto get started.

Even within brands, you may see

an array of investment options.

Both Subway and Dunkin Donuts,

two of the biggest franchisors

in the sector, oer the option of

traditional stand-alone locations

as well as kiosk, retail store, strip-

center, and other non-traditionallocations. A Dunkin Donuts

franchisee might be able to open

a small, grocery-store-based

unit for around $150,000, while

a full-size traditional store runs

over a million dollars. Subway

oers a number of non-traditional

location types, including airports,

gas stations, military bases,casinos, and even churches,

which may make ownership more

aordable.

In 2010, East Coast Wings

and Grill, traditionally an

eat-in, full-service restaurant

concept, introduced a lower

investment QSR model for current

franchisees, which enables themto expand their market at a

$285,000 price point (about half

the cost of the full-service model)

because the real estate footprint

is much smaller than for a full-

service restaurant. East Coast CEO

Sam Ballas told us that a number

of existing East Coast franchisees

embraced this model as a way to

expand and grow in some of thesmaller communities near their

full-service locations.

The time investment for a food

service franchisee varies as much

as the monetary investment,

depending on the size and

capacity of the franchise concept.

Obviously, the more employees

a business has, the moremanagement is required on the

part of the franchisee. Distributor-

type concepts can sometimes be

run on a part-time basis, and some

of the snack/pizza/ice cream

concepts oer more exibility.

Full-service and breakfast-to-

dinner QSR concepts, on the

other hand, require considerable

night and weekend involvement.Even franchisees with onsite

managers to handle day-to-day

operations must invest a lot of

time promoting and marketing

their businesses.

Another factor contributing

to the nancial and time

investment of a food business is

the fairly common requirementby franchisors that franchisees

operate multiple units. It is

easier for the franchisor from

a development standpoint to

work with an owner who is going

to operate several locations,

and many of the higher-end

investment brands prefer not to

deal with single-unit franchisees.

These brands would rather havea big operator who plans to open

ve to 10 locations over a certain

time period. Obviously, running

multiple locations involves much

more time and money than a

single unit, so this is an important

consideration for prospective

franchisees.

Typical Investment Ranges for Food Franchise Locations

Kiosk/ Mobile /Non-Traditional Locations

Conversions of Existing Locations

Retail /In-Line Strip Center Locations

Stand-alone/New Construction Locations

*These are broad estimates of initial capital investments, and each franchise brand will havespecic liquid capital and net worth requirements.

$30,000 $250,000+

$100,000 $400,000+

$175,000 $500,000+

$750,000 $2,000,000+

The time investment for a food service franchisee variesas much as the monetary investment, depending on thesize and capacity of the franchise concept.




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Protability

Getting started in the food

sector typically requires a large

investment, and early prot margins

can be much lower than some other

service industriesespecially for

operators of high cost, single-unit

operations. Therefore, it can take

a long time for a new operatorto recoup start-up costs. Many

franchisees choose to operate

several locations because this

typically helps them turn a higher

prot and lowers some costs.

Based on our 2011 survey, the

average annual protability (dened

as any income, salary, or prot the

Getting started in the food sector typically requires alarge investment and early prot margins can be muchlower than some other service industriesespeciallyfor operators of high cost, single-unit operations.

owner takes out of the business) of

a food franchisee is $77,511, which

is 13% higher than the averageprotability of all franchisees (based

on data from 10,073 franchisees

from all industry categories). Yet

55% of food franchisees earn less

than $50,000 a year.

When you look at just the Top 30

food systems on our list (see page

12), average protability improves

by 16%, with the average

being $89,749.

At rst glance, these numbers

look quite good compared to

the overall franchise industry,

but from a return on investment

perspective, thats not necessarily

the case. The average food

franchise investment is two to

four times the cost of a non-food

franchise, so having an average

Average Protability of FBRs Top 30 FoodFranchises vs. All Food Franchises

Protability Range

$0 - $25,000

$25,000-$50,000

$50,000 - $75,000

$75,000 - $100,000

$100,000 - $125,000

$125,000 - $150,000

$150,000 - $175,000

$175,000 - $200,000

$200,000 - $225,000

$225,000 - $250,000

$250,000+

0% 5% 40%35%30%25%20%15%10%

Percent Response

FBRs Top Food Franchises All Food Franchises

*Protability data listed above is based on independent surveys completed with 1,781 food industry franchisees in the previous 12 months. This sampleincluded data from 78 franchise brands, representing 20,522 operating units. Protability is dened as any annual pre-tax income the franchisee receivedincluding salary and/or business prots.

4 For more information on this report, visit: www.FranchiseBusinessReview.com



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protability just 13% more isnt

so impressive. For comparison,

the senior care sector has an

average annual protability of

$98,723 (based on surveys of

842 senior care franchisees),

and the average investment iswell under $100,000.

Pros

Although food is at the heart of

every franchise concept within the

food sector, there are countless

investment options, business

models, and food types for

franchise operators to choose

from. A prospective franchisee canchoose to run anything from a van-

based delivery business to a full-

service restaurantwith dozens of

other business types in between.

The industry also provides

instant gratication in the way of

customers love for food. For true

foodies, theres nothing more

rewarding than serving a productor meal that the customer truly

savors. Franchisees often get to

witness rsthand consumers

enjoyment of their products.

Although the industry is aected

by trends and competition, the

convenience, entertainment value,

and overall enjoyment of a meal

ordered out will never go away.

Despite reports of the economys

negative eects on the restaurant

business, many franchise brands

have actually performed very well

in the past few years. Don Fox,

CEO ofFirehouse Subs, says the

stability of the sectorat least for

certain conceptsis actually one

of the upsides of the industry.

During the worst year of the

recession on a comp basis, the

food industry was down about

3%. Most industries in this

country would die to have that

as a number. Yes, there is fallout

even with a 3% decrease in sales,but for people who go in and

embrace it and do a great job at

it, it is an extremely vibrant and

healthy business, Fox said.

A food franchise can be a

substantial moneymaker, and multi-

unit operators in particular may see

a signicant return on investment

once they are established. The widerange of franchise models available

to someone looking to enter the

food services sector make the food

business a feasible endeavor at

almost any investment level.

Perhaps more than in any other

franchise sector, operators of food

franchises may reap signicantbenets from being part of a

large franchise system rather than

operating alone. The food industry

is highly competitive and trend-

driven, and operators in this space

must constantly be marketing

themselves and developing new

products. Franchisees benet from

having a recognized brand and

the support and resources of acorporate oce to help with

these tasks.

Photo courtesy of Auntie Anne

For true foodies, theres nothing more rewardingthan serving a product or meal that the customertruly savors.




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Cons

The food sector is not for the

faint of heart in terms of what

it takes to run and operate a

successful business. Rising foodcosts, soaring competition, high

employee turnover, and long

hours are just a handful of the

sectors drawbacks.

The expensesboth initial and

ongoingare much higher than in

other sectors, unless the business

is a mobile concept. And accessing

capital to nance a business is stillnot easy, despite improvements

in the economy. Ron Lynch,

CEO ofTilted Kilt (a sports pub

franchise), says the lending

landscape is his biggest challenge

to growth because even qualied

franchisees arent always able to

access the capital they need to

nance a franchise. (The estimated

start-up costs for a Tilted Kilt

franchise are around $2 million,

including a $75,000 franchise fee.)

This may improve as prospective

franchisees nd alternativeways to nance their businesses.

People are nding ways around

the banks, Lynch told us.

We have found many people

coming to us with cash. Theyve

taken their money out of the

stock market, and they really

are interested in investing in

themselves, said Debra Shwetz,co-owner of specialty baking

franchise Nothing Bundt Cakes.

When franchisees do have success

accessing traditional bank loans,

franchisors say its from local and

regional banks rather than the big

national players. However, Ballas of

East Coast Wings and Grill said hes

starting to hear from national banks

that havent expressed interest in

lending in the past few years.

The time investment for running afood franchise is also signicant,

especially in the early days of

start-up. Even mobile concepts,

which may oer more exibility in

scheduling, usually require a lot of

weekend time.

The food sector is probably the most

competitive space in franchising

(and in business in general).There are millions of options for

consumers, both franchised and

not, and the market is strongly

driven by whats hot now, which

can change overnight. Franchise

companies must constantly be

researching and developing new

products to keep up with the latest

food trends. Otherwise, a popular

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9/16

food craze (e.g., the carb-free diet)

can be death to a franchise brand

that focuses only on, for example,

donuts. However, some brands have

made the most of the national push

to eat healthier.

Dunkin Donuts successfully

made the transition from a focus

on only donuts to coee, bagels,

and meal options for day parts

other than breakfast. Other fast

food brands that once focused

on burgers and fries have added

healthy menu optionssuch

as salads, grilled chicken, and

smoothiesand attracted anentirely new customer base.

Of course, these transitions also

required an additional investment

from franchisees to re-vamp

equipment and train sta.

Nothing Bundt Cakes recently

introduced a new producta

bundtinia miniature bundt cake

for people wanting a treat withoutthe full-size guilt. The company also

provides Weight Watchers points

and other nutritional information

to any inquiring customers.

We were concerned about the

whole low-carb thing, said

Nothing Bundt Cakes founder

Shwetz. We read about it, we

waited for it to hit but it didnt.People like their sweets, and they

like to indulge themselves. Theyre

going to do that no matter what

the current trend isat least

thats what weve found.

Even servers of traditional fast

foods like hamburgers have

increased their emphasis on fresh

and wholesome ingredients.

Five Guys and Jakes Wayback

Burgers, two successful burger

franchises, are known for serving

big, juicy hamburgers that, while

they may not be low in fat, are

marketed as made of the freshestingredients.

Because of the competition in

the food space and the economy,

there is also signicant pressure in

terms of pricing. Franchisors must

constantly keep an eye on their

prices, adjusting them to compete

with other concepts. In recent

years, a number of QSR and fast

casual concepts have introduced

value-menu pricing as a means

to out-price competition and

keep customers coming in the

door. At a time when the cost ofbasic food supplies like coee,

our, and eggs skyrocketed,

franchisees ended up losing

money as they were forced to

oer more food for less money. In

many concepts, even when sales

were up, unit-level protability

suered considerably.

Photo courtesy of Nothing Bundt Cake




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Market Analysis

While high-end restaurants

suered dramatically, lower costoptionslike pizza, wings, and

some fast casual conceptsdid

well despite the economy

because they oered families an

inexpensive dinner option that

didnt necessarily require tips,

a bar tab, or some of the other

extras of a full-service restaurant.

Not surprisingly, these concepts

also had the highest satisfaction

among franchisees (note that

pizza concepts make up more than25% of our 2011 Top 30 Food

Franchises list).

However, even the franchise

brands that continued to perform

well throughout the recession

faced regional challenges in hard-

hit states like California, Arizona,

Florida, and Nevada.

I havent seen that much disparity

on the selling subs side of the

business, but selling franchises

was denitely aected on a

regional basis, said Firehouse

Subs Fox. Las Vegas and Phoenix

While I had very high unitvolumes therewhich should help

promote franchisingthe reality

is the overall economic climate in

those markets was a deterrent to

potential franchisees.

For all types of concepts, it

appears the economic situation

in the food sector is improving. A

2011 Economic Outlook report putout by the International Franchise

Association and prepared

by PricewaterhouseCoopers

forecasted an increase in units,

employment growth, and output

for both QSR and full-service

concepts in the coming year. (This

increase follows a decline between

2008 and 2009.)

Anecdotally, franchisors agree with

the promising reports. Lynch of

Tilted Kilt told us 2011 may be his

franchises best year ever in terms

of new unit growth and protability.

Executives from Papa Murphys,

Firehouse Subs, East Coast Wings

and Grill, and Nothing Bundt Cakes

echoed that sentiment.

One franchise concept that did

well in the struggling economy

was Papa Murphys Take N Bake

pizza, which enables customers to

purchase a freshly made pizza and

cook it at home.

We probably benetted more

than most in 2008 and 2009, said

We have certainly benetted from real estateavailability and real estate costs in dierent markets.Weve seen reductions in construction costs becausetheyre more competitive and very at equipmentpricing because of the recession.Kevin King, Papa Murphys



Photo courtesy of Firehouse Subs


11/16

Kevin King, senior vice president

of operations for Papa Murphys.

The challenges for us came later

on when pizza pricing became very

aggressive in 2010. We encouraged

our owners to get equally

aggressive or more aggressive.That took some time, convincing

franchisees that its worth some

short-term margin hits for long-

term share and trac gains. In the

long run, the changes paid o for

Papa Murphys franchisees, King

said, and they were able to recoup

some of the early lost revenue as

their customer base increased.

And while the lending situation

remains a big roadblock for

prospective franchisees, a report

in The Restaurant Finance Monitor

says lenders are more likely to

nance franchised restaurants

than other business types because

their SBA failure rate in the past

few years has been lower than

both independent restaurants andsmall business in general (19%

compared with a failure rate of

24% for all small business).

Things are denitely getting better

from the lending standpoint, said

Fox of Firehouse Subs. Frankly,

the lending terms before were far

too liberal going back four or ve

years ago. If the concept is soundand banks can see it and all your

fundamentals are good, theres

money to be had out there.

According to franchisors, there

has actually been an upside to

the recession in terms of real

estate, equipment costs, and

employee availability.

Ill speak to the availability

of talent, Shwetz said. In Las

Vegas, where unemployment is

around 14%, we have been able

to hire some really great, amazing

people.

Ballas of East Coast Wings and

Grill says his brand saw signicant

savings in real estate during the

recession, saving upwards of $10 a

square foot since 2009. Its been

extremely positive for us in our

stores that we rolled out in the last

two years, he said.

We have certainly benetted

from real estate availability and

real estate costs in dierent

markets, said King of Papa

Murphys. Weve seen reductions

in construction costs because

theyre more competitive and veryat equipment pricing because

of the recession.

Theres a ip side, however, to

that real estate market for Papa

Murphys, which has built about

100 locations a year since the

recession began.

This is one of the few franchise sectors where priorexperience is not only a nice-to-have, itsoften required.

Photo courtesy of East Coast Wings & Gril




12/16

One negative is the lack of new

shopping center development. In

the earlier part of the 2000s, we

would see 60% to 70% of our

new stores in new construction.

That has obviously changed. Wehave to go into older centers and

take over existing space,

King said.

Franchisee Success Attributes

A lot of people are attracted to

the food sector because they

recognize the brands, and it might

be a sexier business concept

than owning, for example, a homecare business. However, food is

a very tough business in which

to make money, and franchisees

need to have the right skills and

background to be successful.

This is one of the few franchise

sectors where prior experience is

not only a nice-to-have, its often

required. In some ways, this goes

against the typical thinking in

franchising, in which franchisors

usually prefer people with

general business management

and marketing experience over

direct industry experience.

When it comes to running a food

franchise, howeverespeciallymultiple unitsmany franchisors

require their franchisees (or

their partners) to have had

vast operational experience in

the industry. This helps on two

levelsfranchisees know what

theyre getting into and they are

more likely to be successful in

the day-to-day operations of their

business because theyve done or

seen it before.

Although restaurant experience is

not required for us to do a deal with

single-unit franchisees, if were

going to enter into a multi-unit

development with someone, we

prefer prior restaurant experienceand really prior multi-unit

restaurant experience just as a way

to shorten the learning curve, said

King of Papa Murphys.

Even if a brand doesnt require

their franchisees to have prior

restaurant experience, a

lender might.

Although franchisee satisfaction tends to be lowerin the food sector, a handful of franchise conceptshave managed to buck that trend and have createda successful and satisfying investment opportunity

for their franchisees.

Photo courtesy of Ground Round




13/16

Lenders are putting more priority

on people having very specic

related experience if theyre going

to write a loan for it, said Fox of

Firehouse Subs.

In addition to prior industryexperience, successful franchisees

also must be experienced

business people, with knowledge

of sales, marketing, and people

management.

We focus on sales and marketing

because we can teach anyone to

bake a productwe have a very

simple conceptbut they have tobe able to get out there and talk

to people about it, give samples,

and have events. Theres tons and

tons of community involvement,

said Shwetz of Nothing Bundt

Cakes, which uses a proling

system to determine whether a

candidate will be a good t as

a franchisee.

Historically, weve taken people

from all dierent backgrounds

from school teachers to

executivesand theyve made

successful franchisees, Papa

Murphys King said. Its more

about the skills and qualities

that the individual has, how

involved theyre going to be in

the business, and their abilityto get out in their local

communities and introduce

people to our brand.

Because so much experience

and knowledge is required to be

successful in this business, youll

often see experienced franchisees

buying out low-performing

Prospective franchisees must do their homework andcompare brands side-by-sidelooking at bothwell-known food franchises and some of the smaller,lesser-known opportunities. Every food franchise has

its own culture, and franchisees should carefullyconsider how that culture ts with their own businessgoals before committing to a brand.

Subs. If the franchisee cant bring

a real service culture and be a

people person not only with their

sta but with their guests, theyre

not going to be successful.

To this end, Firehouse Subsrequires all prospective

franchisees to work in one of the

brands training restaurants for 50

hours before they enter into any

franchise agreement.

Franchise ownership can look

great from the customer side

of the counterespecially if

franchisees have not been in therestaurant business beforebut

getting them on the other side

really tells a story, Fox said.

operators who didnt have a solid

food industry background when

they entered the industry.

The amount of sta management

required to run the day-to-day

business of a food franchise maybe a drawback for some operators,

depending on the size and structure

of the concept. Many concepts

require large numbers of low-wage,

low-skilled employees. Oftentimes,

these are teenagers with no prior

work experience. Franchisees with

experience managing this type of

workforce will likely fare better than

people without this experience.

Were looking for a lot as far as

personality, said Fox of Firehouse

Photo courtesy of Ground Roun




14/16

core values of franchisor,

nancial opportunity, and general

satisfaction, as well as a self-

evaluation of the franchisees

work-life situation.)

The sector scored especiallylow in the area of franchisee

training and support, coming in

at 52.4%, compared with our

overall benchmark of 60.6%. In

the nancial opportunity section,

the sectors scores were more in

line with our overall benchmark,

diering by 3.3%. Despite the

lower-than-average satisfaction

scores, however, it is important tonote that 68.9% of food sector

franchisees said they would Do it

Again regarding investing in their

franchise brand.

Although franchisee satisfaction

tends to be lower in the food

sector, a handful of franchise

concepts have managed to buck

Photo courtesy of Penn Station East Coast Sub

Top 30 Food Franchises

Auntie Annes

Firehouse Subs

Jets Pizza

Ground Round

East Coast Wings & Grill

Toppers Pizza

Marcos Pizza

Penn Station East Coast Subs

Charleys Grilled Subs

Papa Murphys

Great Wraps!

BrueggersJack in the Box

VooDoo BBQ & Grill

Einstein Bros Bagels

Happy and Healthy Products

Nothing Bundt Cakes

Straw Hat Pizza

Yogurtland

MixStirs

Scooters Coeehouse

Jamba Juice

Donatos Pizza

LaRosas Pizzeria

PJs Coee

Russos New York Pizzeria

Biggby Coee

Zoup!

WOW Cafe & Wingery

Mooyah

*FBRs Top 30 Food Franchises list is basedon independent surveys of 1,781 franchiseesacross 78 franchise brands, representing20,522 operating units. FBRs proprietaryranking formula is based primarily on overallfranchisee satisfaction, but also takes intoaccount systems size and survey responserates. All 30 franchise brands appearingon the list have above-average franchiseesatisfaction as compared to FBRs Food SectorBenchmark.



Franchisee Satisfaction

Overall franchisee satisfaction in

the food sector traditionally runs

extremely low (10% to 15% lower

than in other sectors). This is not

particularly surprising given that

the industry as a whole is verycomplex with lots of moving parts,

high costs (especially in the last

few years), potential day-to-day

management issues, and high

employee turnover.

Although overall franchisee

satisfaction in 2011 is up just

slightly from 2010 (65.2% vs.

61.16% in 2010), it remains onthe low side compared with other

sectors, and the sector as a whole

scored about 10% lower than

our overall benchmark in almost

every individual category of the

FBR survey. (Survey categories

include training and support,

leadership, overall franchise

system, franchisee community,


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that trend and have created

a successful and satisfying

investment opportunity for their

franchisees. These brands make

up our list of the Top 30 Food

Franchises for 2011.

Its worth noting that more than

25% of the companies on our

2011 list are pizza concepts, and

many of the other top brands oer

similar quick, inexpensive foods

such as sandwiches and wings.

These concepts tended to fare

better nancially in the struggling

economy, which likely had an eect

on franchisee satisfaction. Also,because these businesses require

a smaller start-up investment,

they have become very popular as

franchise opportunities in the past

few years. Since there are more of

these concepts in general, it makes

sense that they have a bigger

representation on our list.

Summary

Food has always been synonymous

with franchising, so regardless of

whats going on in the economy,food franchises will always

be popular investments. And,

while the food industry may be

challenging, its operators are some

of the most passionate in all

of franchising.

Because of the popularity of

the industry itself, potential

business owners may be initiallyattracted to the hype around

a brand or the overall idea of

running a restaurant. The appeal

of a particular brand or product,

however, should be secondary to

thorough due diligence.

Prospective franchisees must do

their homework and compare

brands side-by-sidelooking at

both well-known food franchises

and some of the smaller, lesser-

known opportunities. Every food

franchise has its own culture,and franchisees should carefully

consider how that culture ts with

their own business goals before

committing to a brand.

Yes, food franchises have had their

ups and downs in recent years, but

the industry is clearly here to stay.

For the right person in the right

franchise, it can be a rewardingand exciting business.

For more detailed research

on specic food franchises,

please visit us online at:

FranchiseBusinessReview.com.

Franchisee Satisfaction:Food Sector vs. All Industries

Training + Support

Franchise System

Leadership

Core Values

Franchisee Community

Self-Evaluation

Financial Opportunity

General Satisfaction

0% 10% 80%70%60%50%40%30%20%

All Industries Food Sector

*Satisfaction comparison data above is based on independent surveys of franchisees completed within the previous 12 months. FBRs Food Sector Benchmarkis based on data from 1,781 food industry franchisees. The FBR Benchmark is based on data from 12,584 franchisees across all industries.

Percent of Satisfaction




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LOCAL

FRANCHISEDEVEL

OPMENT

INCENTIVES

We know you want your investment working today, so

we want you to have existing locations.

Jack in the Box operates and franchises over 2,200

restaurants in only 19 states. That means we offer plenty

of growth potential to our franchisees. In select corporate

seed markets growth starts with an acquisition. You can

franchise recently opened company restaurants and

these locations could be used as a platform for future

market development.

We are committed to supporting your growth in

new markets, and demonstrate that with:

Were Growing andWere Taking You With Us

Acquire existingcompany restaurants and further develop these markets.

Call 858-522-4759 or visit jackinthebox.com/franchise

*Effective January 2012

The Mark 9 Model

Port Arthur, TX

Documents

FBR FoodSector-FINALweb