The McDonalds golden arches are among the most quintessential symbols of American fast food franchising. But, did you know that many of your favorite restaurants and fast food places may be franchises, too? Bringing in hundreds of thousands of customers, Subway, Dunkin’ Donuts, and Domino’s Pizza are among some of the most popular food franchises today. But, the food franchise industry doesn’t stop at fast food.

According to an economic outlook report conducted by IHS Markit Economics in 2017, the food franchise industry is divided into three primary parts:

  1. Full Service Restaurants

  2. Quick Service Restaurants

  3. Retail Food

One of the biggest franchise industries, the food franchise industry comprises almost half of all franchise establishments in America. Not to mention, this industry produces roughly 65 percent of all franchise employment jobs. Let’s take a look into the three individual sectors and where they stand in comparison to one another.

the food franchise industry comprises almost half of all franchise establishments in America.

Sit down restaurants serving up sales

Although family spending at table service restaurants continues to contribute to household spending on services, full service restaurants­—wherein food is served sit down style and served directly to the customer by a waiter—comprise the smallest portion of the food franchise industry.

Nevertheless, the number of full service restaurant locations was expected to grow and experience a 6.8 percent growth in sales in 2017. As a result, this growth in sales would translate to a growth in productivity and therefore a projected 3.9 percent growth in employment.

Fast food still a top dog

Quick service restaurants are more commonly known as fast food restaurants. As predicted with full service restaurants, the fast food sector was also expected to experience a growth in employment, however, slower than in the past. The IHS report additionally predicted to see boosted wages, which hadn’t budged for years in the past. Continuing with the popular trend of the past, quick service restaurants are likely to remain the leaders of the franchise sector in overall employment growth.

The quick service sector has many of its own subdivisions according to goods being produced. Chief among these subdivisions are coffee franchises, ice cream or frozen yogurt franchises, pizza franchises, and juice or smoothie franchises. The growth in popularity of healthy, quick food options has been reflected in many of these subdivisions. For instance, franchises in the juice subdivision have seen a big jump due to the public’s lean towards healthier options.

More people dining in

Despite that the restaurant industry was anticipated to see growth, prices of restaurant food were also expected to grow, leading more people to prepare food at home. For this reason, the retail food franchise industry was expected to grow roughly 1.2 percent. Nevertheless, this rate remains lower than the other sectors of the industry. Employment in the sector was anticipated to grow about 2.7 percent.

Trends for 2018: Mindful Choices

As mentioned earlier, the public is beginning to look for healthier options when it comes to food. According Innova Market Insights, two in five US and UK consumers have increased their intake of “healthy foods,” and seven in ten want to understand the ingredient list on the foods they consume. For this reason, the food franchise industry will likely continue to experience a growth in healthy food options.

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“Today’s consumer displays a high level of mindfulness about well-being and the environment,” wrote Lu Ann Williams, Director of Innovation at Innova Market Insights. For this reason, “Mindful Choices” is among the top food trends.

Is the Industry Right for You?

The food franchise industry can be extremely successful or risky, depending on your desired commitment to your business. Food franchises that come out the most successful both follow trends of the time and stay consistent with their overall brand and customer base. If you’re someone that is interested in the overall food industry, however, a food franchise may give you the brand recognition and franchise-sized security you’re looking for.


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