Dessert Franchise & Business Opportunities
Dessert Industry
Dessert Franchises and Restaurants
The dessert industry is a significant contributor within regional economies and to the U.S. economy. The overall dessert market size has been steadily increasing over the past five years; in fact, the ice cream and frozen desserts sector alone has increased 2.6%, reaching around 6.7 billion USD in 2020. The dessert restaurant industry is expected to continue growing over the next several years. It is an industry that has developed important innovations over time, quickly responding to the changes in consumer demand and meeting the needs of the American consumers.
Food Industry Trends
Entering a new decade, the Dessert Industry continues to change. From flexible menu types to delivery and take out playing a huge part in the industry, dessert restaurants are constantly adapting to keep up with the times. With that said, the public is requesting several new types of dessert restaurant experiences, including (but not limited to) increased customization, more dietary options, sustainability, ethical sourcing, value and convenience. The solution is for businesses in the industry to innovate together with the trends positioned by the consumers.
Key Food Industry Numbers
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Paid-in-Full Rate
The Paid-in-Full Rate is when the SBA loan is fully paid off by the small business owner including interest, indicating financial strength.
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Charged Off Rate
The Charged Off Rate is the SBA loan default rate where loans have no confidence in being paid off by the small business owner.
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SBA Loan Success Ratio
For every 8 SBA loans fully paid including interest, 1 SBA loan was unable to be paid back, or defaulted.
-SBA Loan Data from 2010-2019
-Non-Franchise Businesses taken into account: 44,851
Dessert Franchise Review
The first thing that comes to mind when most people hear desserts might not be franchising, but more notable dessert concepts are a part of the franchise business than one might think, including names like Great American Cookies, Coldstone Creamery, and more! In fact, some of America’s favorite names in dessert are franchises concepts. Dessert restaurants have been increasing in popularity in recent years. Even franchises that have traditionally been main meal businesses have added more and more dessert options to their menus.Dessert Franchising Trends
One major trend in the dessert franchise industry is a shift toward healthier menu options. Although health might not be the number one thought that goes along with sugary desserts, more and more Americans are gravitating towards the healthier dessert options like frozen yogurt in response to the health consciousness movement. Many dessert franchises are also moving to source fresher ingredients with less additives in order to cater to the average health conscious American. Another major trend in dessert franchises is increased demand for online ordering and delivery services. In response to this demand, many dessert restaurants increased their deliverability and delivery methods in order to assure the highest quality upon delivery. Fort frozen desserts restaurants, this typically included packaging with a cooler temperature in order to maintain freshness. Restaurants have also increased their focus on the structure and ease of the online ordering process, be it on the website or an app.Food Franchising Trends
Convenience stores are becoming a force in food service footprint. Convenience store franchises have been increasing their food offerings in recent years. Featured convenient stores such as 7-Eleven has over 8600 stores in the United States.
Another major trend in fast food franchises is slimming down the menu. For instance, McDonald’s menu has ballooned by 70% over the years, leading to a slowdown in service is affecting customer satisfaction. The solution has been to cut down the menu to re-energize sales.
How much can a Food franchise cost?
Through our online platform Vetted Biz, we have reviewed over 2,900 businesses and franchises. Currently, almost 25% of the businesses on our platform are food and beverage franchises. Of the food and beverage concepts we have reviewed, total investment amounts can start as low as $3,000 for smaller kiosk concepts all the way up to $6,732,615 for a full-service restaurant. Many factors will affect the investment amount, including but not limited to heavy-duty equipment like grills, or where the food and beverage concept needs to be located. In our research, the average royalty fee takes up 5.3% of gross revenue, and the average marketing fee is 2.3% of the gross revenue. From 2016 to 2018, an average of 2.78% of franchise units ceased operations for reasons other than terminations or non-renewals. Moreover, of the 100 franchises we reviewed, there are approximately 3100 franchise units projected to open next year.
Average Food & Beverage Franchise Industry Percentage Fees
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Royalty Fee
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Marketing Fee
Standard Food & Beverage Franchise Industry Investment
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This metric is the standard industry investment amount for a single unit franchise investment in this industry. Our research and analytics team analyzed over 523 franchise concept investment breakdowns in order to calculate this figure.
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%
Paid-in-Full Rate
The Paid-in-Full Rate is when the SBA loan is fully paid off by the franchisee including interest, indicating financial strength.
0
%
Charged Off Rate
The Charged Off Rate is the SBA loan default rate where loans have no confidence in being paid off by the franchisee.
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:1
SBA Loan Success Ratio
For every 9 SBA franchise loans fully paid including interest, 1 SBA franchise loan was unable to be paid back, or defaulted.
-SBA Franchise Loan Data from 2010-2019
-Franchise Businesses taken into account: 15,203
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