Are healthy food franchises a viable business?

Discussion in 'Chit Chat' started by Maverick1, Feb 4, 2019.

  1. Maverick1


    Take one new line, the 'healthy bowl' business, usually involving exotic fruits and a gluten-free type menu. Estimates for startup are around $200k to $500k or higher depending on location. Even if you're at the bottom end of that, $200k of debt (assuming you have little cash to begin with) sets you back at least $800 a month. Not to mention, you've got your utilities (water, electricity, insurance) to cover.

    How many bowls does one have to sell to start to make a profit from an operation like this? Take the acai bowl business, they sell at an average price of ~ $9-10. Margin on that is probably what, 30-40%? Even if generous at 50%, then at $5 per bowl you've got to sell 200-300 bowls a month just to break even.

    Does the math work?
  2. tiddlywinks


    GENERALLY SPEAKING, restaurants work as such... PER MENU ITEM

    30% food costs.
    30% labor and admin costs.
    30% fixed and maintenance costs.

    Menu pricing of 3x food cost is a standard guideline, or if possible within a geographical market and the cuisine-type competition, a minimum.

    200-300 bowls a month is not even close to breakeven. 100-200 bowls a day and you have a chance.
    CaseyB and Maverick1 like this.
  3. Maverick1


    Thanks Tiddly, so pre tax margins of around 10%... sounds like a really tough proposition if in a small-medium town, even with good location? Do you have any experience with this type of franchise?
  4. tiddlywinks


    That is the primary reason why someone looks at a franchise. A proven model.

    A small to medium size town has space for niche cuisine. But Little Caesars Pizza for example, might be a preferable type of franchise for longevity and out of the gate sales, without need to educate.
    Maverick1 likes this.
  5. newwurldmn


    I thought food and beverage ingredients ran < 20percent of the revenues typically.
  6. vanzandt


    .............."Founder Steve Ells attended the Culinary Institute of America in Hyde Park, New York. Afterward, he became a line cook for Jeremiah Tower at Stars in San Francisco, California. In 1993, Ells took what he learned in San Francisco and opened the first Chipotle restaurant in Denver, Colorado, near the University of Denver campus with an $85,000 loan from his father.

    Ells and his father calculated that

    the store would need to sell 107 burritos per day in order to be profitable; however, after one month, the original restaurant was selling over 1,000 burritos a day.

    Ells had originally planned to use funds from the first Chipotle to open a fine-dining restaurant but instead focused on Chipotle Mexican Grill.

    By 2017, Chipotle was operating more than 2,400 restaurants.
    Maverick1 likes this.
  7. tiddlywinks


    That MAY BE possible to achieve, but variables such as purchase quantity, food grade, usability across menu items, and more, not to mention what food, all come into play. Of course less is better... no reason to use grade A tomatoes to make a tomato bisque. But can those same tomatoes be used for a prosciutto bruschetta? 20% food cost is very very difficult to achieve.
  8. ElCubano


    Giordinos salad has been very successful down here. I considered one several years ago and never pulled the trigger. It was a friend of mine who needed the cash. That store generates $160k plus take home. It runs on its own.
    Maverick1 likes this.
  9. Maverick1


    Yeah pizza and burritos I understand, but bowls of granola with fruit and peanut butter? I don't know
  10. vanzandt


    If you want a solid, fast growing, "healthy food" franchise... you might want to take a look at Bibibops. Its moving fast. Similar to a CMG in the setup. I've eaten there several times and its outstanding. Excellent food quality, and about as healthy as you're going to get. Millennial's love em. Put one of these in a college town with foot traffic.... it'll be a cash cow.
    About $400K-$900K
    #10     Feb 5, 2019
    ElCubano and Maverick1 like this.