FAQ: Franchise Foods vs Creating Your Own Dishes

Serving food in your park or FEC is a fantastic revenue source! In fact, most parks and FECs get the bulk of their profits from selling food. But, how does a company decide whether to use franchise foods or hire a food service staff that can create their own unique dishes??

Both types of food styles can be highly beneficial to the family entertainment business. However, if you don't have the ability to hire a chef or an exceptional line cook, franchise foods may be a better option. Let's explore some of these possibilities.

Franchise Foods

If your situation is that you do not have the ability to hire a chef that can create food, franchised or licensed food makes more sense. It really isn't a bad option.

Franchise foods are used all over the place. For instance, gas stations, family entertainment centers, amusement parks, shopping marts, convenience stores, and the like, all use franchised foods for the most part. People who frequent these places can guarantee that the brand of food will always taste the same from location to location. This means they are not likely to be disappointed by their purchase.

Depending on the type of franchise food you choose for your facility, you will need to look into the proper equipment to cook the food.?

FAQ

Q.) Why does the franchise food always taste the same no matter where I buy it?

A.) Because franchise food comes with its own set of instructions to create the pre-made items. Many times, when you buy from the aforementioned locations, you will notice that the pizza ovens, hot dog grillers, etc might have the logo and brand of the franchise food company on the equipment. This is because some franchise companies even have their own equipment for other businesses to use when they decide to sell their products.

Q.) Do you have to use the same equipment that the franchise uses?

A.) In many cases, yes. You may be required to create the franchised foods to their standards using their equipment.?

Q.) Do all franchise companies lend or rent the equipment to these other businesses to sell their food??

A.) It depends on how well-capitalized the franchisor company is. The equipment costs money and someone has to pay for the equipment or borrow for the equipment.? If the franchise company provides the equipment for rent to the companies that buy the franchise, they (the franchisor) will most likely borrow money to buy the equipment to lend to the franchisee and charge all expenses of the equipment loan (plus profit) to the franchisee including sales taxes on the total rent cost the franchisee will pay.

Q.) Can I use other equipment if the franchise doesn’t offer an affordable rental option?

A.) There are times that you can use similar equipment that the franchisor uses to cook the dishes as long as you get approval from the franchisor to create it in your own equipment.??

For example, you can create a pizza in many different pizza ovens. It will still taste great! The point is that the standards that the franchisor has set, must be met by the company that uses their food.?

Sometimes, if you are making a certain brand of waffle or donut they may need to be made in a particular machine in order to create the same consistency in the product time and time again. This is why when you go to certain hotels that offer a complimentary breakfast, you may find that their waffle machines belong to the franchise company with the instructions directly on them so that no matter who is preparing it, the hotel staff or the guest at the hotel, the waffles will come out the same every time they’re made.?

Sometimes the franchisor is not financially stable enough to buy the equipment to lend or rent out. But, they may set up certain banks and lending institutions to lease the equipment or lend to the franchisee for the equipment so that the franchisor doesn’t have to do it. This method keeps it off their balance sheet which helps the franchisor financially.? Getting a bank or lending institution to assist with these types of programs is usually what the franchisor does.

Creating Your Own Unique Menu

There is no doubt about it, creating your own food is a fantastic option for any business. Sometimes though, it is just not feasible. There are several different aspects to creating your own unique menu ideas for your park or FEC.?

Perhaps one of the best reasons to try and create your own food is that it will likely stand you out amongst your competition. It is much easier to use franchise foods because it is already pre-made and the instructions are usually very simple and that is why most family entertainment businesses use this method. When you make your own food, you are probably doing something that your competition is not in a position to do. This can make you a little more popular with the public.

?FAQ

Q.) How do you create a unique menu?

A.)? The best way to determine what you should have on your menu is to create dishes and sell them for a period of time, or season. Track the sales and you will soon learn what items are popular and which items you should drop.

Q.) Is it more expensive to create your own food in comparison to using franchise food??

A.) It really depends on what type of food you are going to make. Obviously, some foods are much more expensive than others. Regardless, you can figure out what your food budget looks like and try to stay within that range.?

Q.) Will you disappoint customers by changing your food in order to find out what works best and what doesn't?

A.) This is an interesting question. If you do get customers that are disappointed that you have stopped selling a particular dish to see how other food sells, then it shows that particular item might be a hit with your guests and you can always bring it back! Be sure if you get a lot of feedback that an item is greatly missed, utilize marketing strategies when you bring it back to increase sales or add it to your deals and promos to get more people to spend the money on the packages you want to push. Example: You want to sell the higher-priced membership or pass package. You are also bringing back a hot-selling menu item. Your deals could incorporate a buy one get one free option for the menu items or a discount could be given for them at the time of the membership or package purchase.?

Q.) Do you profit more with franchise foods or create your own menu items??

A.) If you can create your own food and control it, you stand to make a lot more profits in the short and long-term than any franchise system. This is a solid money-generating option if you are able to do it.?

How To Decide Which Is Right For You

As previously mentioned one of the biggest factors you'll need to consider is whether or not you have access to a chef or a highly-skilled line cook and kitchen staff.?

If you find that your facility is more like a revolving door when it comes to your employees (employees tend to come and go and are not steady, long-term staff members), you may decide that franchise food works better for you. This is because no matter who is running the food preparation department it won't take much training and virtually anyone can do it.?

If you have the ability, you stand to make more money and become more popular than your competition by creating your own unique menu items. It also provides an excellent marketing opportunity to get people to come in and enjoy your food. This type of opportunity can open up a wealth of possibilities for your family entertainment business.?

Tim Murphy is CEO of APX Operating Company, dba Boomers Parks , under the ownership of Cerberus private equity ($55B assets). Boomers Parks owns six family entertainment centers and two water parks with locations in California, Florida, and New Jersey.

As CEO of Boomers Parks since 2020, Tim took these eight parks from bankruptcy to profitability in just a year – in the middle of a global pandemic. When Boomers acquired these parks, they were operating at a $10 million loss. Tim transformed the customer experience and added new revenue streams to generate a 180% increase in revenue in 2021 (and on track to be a 250% increase in 2022).

Tim launched his 35+ year career at Walt Disney World and has since served more than 150 entertainment, restaurant, and food & beverage brands across more than 10,000 locations in C-suite and senior positions.

Additionally, Tim is a Board Director with Coney Park, Happy City and YuKids - Family Entertainment & Amusement Parks, part of The Carlyle Group ($275B assets), a private equity firm that operates 150+ family entertainment centers and amusement parks in Latin America.?

Tim has worked with top-tier entertainment and restaurant brands including Disney, Rebounderz Trampoline Parks, Darden Restaurants (Olive Garden, Bahama Breeze, etc.), Red Lobster, Jimmy John’s, Applebee’s, Sonny’s Bar-B-Q, Denny’s, El Pollo Loco, Hardee’s, Golden Corral, and Firehouse Subs.

Tim has overseen more than 35 purchase transactions involving over 1,200 restaurants, stores, and park locations.? With extensive experience in buying and selling businesses, handling negotiations with buyers and sellers, and creating strategic partnerships to build strong brands, Tim has facilitated deals ranging from $11 million to $350 million+.

Tim is a member of IAAPA, CAPA, FAA, AAMA & WWA. He is a licensed commercial real estate broker in the State of Florida. Tim earned a BS/BA in Accounting from the University of Central Florida and an MBA in Finance from Orlando College.