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Can city-based food concepts give a good return?

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Micmarcmm	Can city-based food concepts give a good return?		Lead	[-]
Posts: 30 7-Apr-2008 13:45:50 Forum Administrator	Tags : None Is it a furphy that the city is the best place to operate a food concept? Is it reasonable to expect to make a good return on your investment plus payment of a reasonable wage for the work you put in? What do you think is a reasonable return that you should be making on your investment (BEFORE paying yourself a salary)? Remember, you can get about 7% by putting your money in the bank at zero risk. Help each other get a realistic view of "what's happening out there"! General observations regarding city-based food outlets include the following: - Rentals are very high - There is a high level of competition which, against all logic, continues to grow through the opening of yet more outlets - often by operators who are not experienced in the "food business") - Prices are too low as a result of "price"being the first thing that shop owners "cut", hoping it will address their problem - forcing everyone to have prices that are often lower than in the suburbs - Quality (and therefore food cost) must remain high - There are generally about 2.5 to 3 hours per day of "real trading" (i.e. where the business takes a reasonable amount of money). - Poor weather results in severely reduced revenue due to people not wandering the streets at lunch time. PLEASE POST YOUR COMMENTS. (If you'd like to remain anonymous we're happy to oblige). Tell each other (feel free to leave out or add in anything you want to from the list below): The type of business you operate (Fast food; Coffee; Restaurant etc) How many days a week you are open How many hours a week you work Average weekly revenue (sales) in a year. Average monthly rental as a percentage of average monthly revenue The city that you operate in Any other info you feel will help or that you would like to know BY TALKING TO EACH OTHER YOU BECOME BETTER INFORMED. WORKING TOGETHER GIVES FRANCHISEES AND INDEPENDENT OPERATORS STRENGTH IN NUMBERS AND A RESOURCE OF LIKE-MINDED PEOPLE WITH GREAT IDEAS. THERE ARE METHODS OF IMPROVING YOUR STORES PERFORMANCE. WE'LL CANVASS THESE IN LATER POSTS ONCE WE RECEIVE FEEDBACK FROM YOU www.franchiseesadvocate.com Last Edited By: Micmarcmm 7-Apr-2008 19:58:16. Edited 2 times.
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Shevitz	Cheaper than eating at home!	#1	[url]	[-]
Posts: 8 16-Apr-2008 08:23:02	I'm in the food business. I went to a nice food court at the bottom of Collins Street (off William St) in Melbourne. I purchased an excellent chicken breast baguette with avocado and crisp lettuce for $5.90. I can tell you that it is simply not possible to cover fixed costs and make a reasonable return unless that business is doing HUGE volumes - and it wasn't. There were so many other outlets in the food court that there is simply too much supply. How do we make the financials "stack up" for a food outlet in the City?
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