The foodservice industry is changing dramatically;consumers are looking for healthier products and intense rivalry is being observed among food operators. Busy lifestyle and increasing awareness for international products has been responsible for significant growth of fast food industry in India. No doubt ready-to-eat meals available at QSRs are unhealthy due to usage of chemical-based preservatives, on the other hand some brands are shifting menu to healthy options. Overall there are various challenges that need to be addressed in order to increase profitability. Fast food franchise sector is still profitable as new players have come up with customized menu.
1. Intensifying competition: At present, number of fast food brands have established franchise network in various parts of the world, moreover they are trying to penetrate Indian markets. Each brand is performing strong to create differentiated products so that consumers can be served effectively. In India small and medium side local brands have developed amazing varieties of fast foods to attract small pocket customers.
2. Automation: Digitalization and artificial intelligence are major point of discussion nowadays. To increase productivity some brands have already introduced automation to cut down cost on several operational activities such as food ordering process and employment. Each brand isn’t capable enough to embrace latest trends hence it is one of the challenging factors.
3. Demand of natural and organic ingredients: Consumers are demanding cuisines prepared through natural ingredients, moreover they want quick, convenient and affordable foodservice destinations. Each fast food franchise playerswant to dominate market, focusing on to grab large chunk of market share.
4. Marketing concepts: A number of fast food joints have developed effective marketing strategies such as combo meals, loyalty programs, public events, discounts, coupons, gift cards, etc. On weekends you can find different types of offers and health focus products at reasonable rates. Apart from this, social media is emerged out as biggest platforms to engage with potential and existing customers.
5. Profit margin: Cost of fast food recipes is low hence profit margin is high. Every brand that offers franchise is attracting investors by developing outstanding revenue models.
6. Fear of business loss: With increasing fast food brands in all over the world, it is quite difficult for a single brand to rule whole industry. For example, in earlier time McDonalds is sole market leader and in recent phase players like Domino’s pizza, Box-o-burger, pizza hut and Burger King has attracted lots of customers.
7. Customer preferences: Healthier foods aren’t only expectation of customers. It is essential for food operators to develop fast online delivery system as well and consistently implement new strategies in existing business models to create effective customer experience. For example, In India each state has its own unique food culture so fast food brands must prepared snacks that give local taste.
8. Set up cost: Owing to competition, each brand want to build innovative store where customer can order food, enjoy leisure time with friends and family members. Cost of interior set up, branding and furniture are points of discussion.
Fast food industry continually reinventing due to massive competition, in addition global players has adopted modern-day trends to satisfy their customers. New products are introduced, prepared with natural ingredients and green vegetables. Digital technologies help entrepreneurs in developing online delivery process and payment gateway. Box-o-burger is leading fast food brand that also offers low investment fast food franchise opportunities have developed amazing cuisines. All products are made of natural ingredients and special care has been taken in food preparation techniques. To start new fast food business you must consider above mentioned points.
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