4 Challenges a Fast Food Franchise Faces | Hot Dog on a Stick Franchise

The 4 Greatest Challenges (and Opportunities) All Potential Franchisees Face

  • May 8, 2016

Running a fast food franchise store comes with challenges and advantages unique to the enterprise. Following are four of the most prominent in each category.

Four Advantages of Owning a Fast Food Franchise

  • ExperienceA franchise that’s been around a while has accumulated information pertaining to operations. When buying into an established fast food franchise, you’re buying into all that knowledge, and don’t have to learn lessons the hard way through trial and error disguised as strategy.
  • Training: Prime franchises offer implantation that’s basically turnkey; that is to say, operations have become streamlined enough that when a store is brought into operation, franchise professionals help ensure it functions as intended. You’ll be trained in the operation of the new facility.
  • Products/Services and Advertisement: A franchise has already been established in the market, so the “marketing” has been done for you. From commercials to radio advertisements and magazine inserts, Facebook and social media posts, the franchise you’re buying into has already done the footwork. Services or products rendered can be purchased in bulk quantities — a smaller, privately owned business has marketing and product-related expenses that simply aren’t necessary with an already-established franchise.
  • Continual Research and Development: It’s to a franchise’s advantage to continue discovering and implementing streamlined methods of operation. Research and development is costly, but you won’t have to pay for any with a franchise. Not only will they advise you on the best business practices they’ve discovered for the franchise over the years, and those new ones which have just been developed, but they’ll continuously refine the product or services sold in your store.

Four Notable Challenges in Owning a Franchise Store

  • Working Inside the Franchisor’s System: An established franchisor has a system of operations that requires strict adherence. While it provides liberty in many traditional senses against the difficulty of entrepreneurial independence, it is structured with certain conventions that must be adhered to.

One example would be pricing. You’re not going to have a lot of haggling at a fast food place, but you may have some substantial haggling over certain department store goods. The wiggle-room for discounts can be very slim in a franchised option, because there’s a national — sometimes international — standard to uphold.

  • Initialization Risk: When a new franchised store opens, it will face some of the same risks a newly opened private business faces — things like visibility and traffic will come into play, and certain metrics must be maintained for the store to continue. Franchisors have standards here, and they’ll be similar to those your own budget introduces. This risk is diminished from individual exploits, but it is definitely still a consideration.
  • Marriage and Its Consequences: Getting involved with a franchisor is, in many ways, like being married. You’re in a partnership that allows for some freedom, but it’s a partnership that is legally binding and lasts for a long time. The solution here is to choose carefully, and fully commit once the choice has been made.
  • Battling False Expectations: Getting a franchise store will very likely yield financially in the long run, but it takes time and effort. It’s a full-time job, and not something that will bring instantaneous riches. You’ve got to be prepared to be realistic and work hard, and in the end there’s a high likelihood of that work paying off.

Franchising has revolutionized business practice and can be exceptionally lucrative, but it requires careful consideration and a strong work ethic. For the right investor, it’s one of the most sustainable business decisions available.

A well-known hot dog franchise today is Hot Dog on a Stick. With 70 years’ operation and 80 locations in the U.S. and internationally, this group is sustainable and continuing to grow.

To learn more about opening a fast food franchise with Hot Dog on a Stick, download our franchise brochure.