Quaker Steak & Lube Delivers Award-Winning Franchise Advantage
What are the most important factors when deciding to invest in either a quick-service restaurant franchise (QSR) or a full-service concept?
First-time franchisees often look to QSR brands because of the simplified business model they commonly operate. On the other side of the coin, those with restaurant industry backgrounds recognize the higher earning potential of operating full-service restaurant franchises.
The advantages of owning a full-service restaurant concept outweigh perceived barriers to entry, particularly when prospective franchisees consider the benefits a brand like Quaker Steak & Lube (QSL) can offer. Here are just a few:
Restaurant Franchise Profit Margins
QSR Magazine put together a Top 50 list of quick-service concepts and the average unit sales they generate. For the top 10 concepts, the average sales per unit are roughly $1,391,629 per year. Across the fast-food industry, the average profit margin hovers around 3 percent.
As a result, the actual profit the average QSR franchisee would take home at the end of the year is close to $42,000. Average annual profit margins and unit volumes vary among different QSR concepts, but the industry average demonstrates the slimness of margin many operators must face.
Meanwhile, the average net profit margin for full-service restaurants was 6.1 percent in 2017, according to financial information firm Sageworks. So, while operators often have larger initial investments to open full-service restaurants, such as Quaker Steak & Lube, they tend to see stronger margins than the average QSR restaurant.
Another factor restaurant franchise owners should consider is how quickly they’ll be able to generate a return on their initial investment. Among other factors, it’s important to keep in mind the working capital owners will need to launch and sustain their businesses to keep pace with standard operating costs. These include prime costs (labor and cost of goods sold, for example), marketing, occupancy, and administrative costs. Owners can then compare that with their projected cash flow to get a better understanding of the potential return on their investment.
Experience Over Transaction
Consumers are increasingly willing to pay for experience over simply buying “stuff.” This trend is particularly strong among millennials, who currently make up the largest group of consumers. They spend upwards of 44 percent of their food budget on eating out, according to recent research. They also prioritize cost and convenience.
Restaurant franchise brands that deliver experience, value, and convenience are in the best position to attract and retain millennials—and other demographics with similar priorities.
Quaker Steak & Lube differentiates itself from other restaurant concepts by offering franchisees the option of a larger footprint as a way to create memorable guest experiences. Many Quaker Steak & Lube locations feature outdoor patios and segmented indoor seating areas that create spaces for various events. Bike Nites and Car Cruise-ins, for example, allow guests in the local community to bring their vehicles to show off and share their enthusiasm for motorsports, custom cars, and motorcycle culture. Outdoor patios and interior spaces dedicated to performances provide the perfect spots for franchise owners to host live bands.
By and large, most quick-service concepts don’t have Quaker Steak & Lube’s capacity, or wherewithal, to consistently hold events. Traditionally, interactions in this sector are transactional, where guests enter, order their food, and leave. These types of experiences lack the unique qualities that a brand like Quaker Steak & Lube offers.
Quaker Steak & Lube franchisees can also take advantage of multiple revenue streams built into the business model. Pick-up window and in-store pick-up options provide guests with more ways to conveniently enjoy the brand’s award-winning food. Third-party delivery services are also available in most markets.
With 43 casual-dining locations in 12 states, Westlake, Ohio-based Quaker Steak & Lube is actively seeking single-unit and multi-unit franchise partners to increase its presence across the country.
To learn more about joining Quaker Steak & Lube as a franchisee, get started by filling out a franchise application.
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