Guide To US F&B Franchise

The United States boasts a thriving F&B industry, offering numerous opportunities for E-2 foreign investors. This article discusses the E-2 visa, the U.S. F&B industry and its potential, F&B franchise costs to consider, and what to look for when searching for E-2 visa-eligible F&B franchises.

E-2 Visa Overview

The E-2 visa is a non-immigrant visa designed for nationals of treaty countries with which the U.S. has a treaty of commerce and navigation. It allows foreign investors to develop and operate a business in the U.S.

To qualify, you must meet these requirements:

  • Be a national of a treaty country.

  • Invest a substantial amount in a U.S. enterprise.

  • Enter the U.S. to develop and direct your business. Thus, you must own at least 50% of the enterprise.

Note that the E-2 visa is a non-immigrant visa, so it does not lead to obtaining a green card. However, as long as your bona fide U.S. enterprise is profitable and operating, you can renew indefinitely.

Read our comprehensive E-2 visa guide for more information.

Food & Beverage F&B Industry in the United States

The United States has a thriving food and beverage (F&B) industry, driven by changing consumer preferences and the nation’s diverse culinary culture. The trend for convenience, quality, and unique offerings and dining experiences fuels the demand for the industry. In fact, a¬†Franchise Direct report¬†estimates that F&B makes up 30% of franchise establishments and almost 60% of direct employment by franchises in the U.S.

In 2022, full-service restaurant franchise establishments in the U.S. experienced an estimated output of over $76 billion, projected to increase to over $78 in 2023. On the other hand, the fast food industry is expected to grow at an annual compound growth rate of 5.1% from 2020 to 2027.

f&b franchise

Opportunities in the U.S. F&B Franchise Industry

E2 visa franchises

The thriving F&B franchise industry in the U.S. presents several opportunities for E-2 visa investors, including:

  • Diverse market

The U.S. is a melting pot of cultures, and this diversity is reflected in its wide range of culinary options. As an E-2 visa investor, you can explore a diverse and dynamic market in the U.S. and cater to various tastes and preferences. You can differentiate yourself by investing in a franchise offering global cuisines, regional specialties, or unique culinary experiences. You can take the opportunity to introduce and popularize a unique cuisine or a concept that may be new to the local market. Whether you are interested in healthy options, vegan cuisine, fusion food, or traditional recipes, there is a niche for every culinary passion.

  • High demand

The demand for F&B services in the U.S. is thriving and resilient, making it a lucrative sector to consider. Food is considered essential, so it enjoys year-round demand. Even during economic downturns, people prioritize dining experiences, albeit with lower spending habits. This steady demand ensures a reliable customer base for your F&B franchise.

  • Franchise options

Opting for a franchise is a safer choice than starting your own F&B franchise since a franchise comes with a proven business model, significantly reducing the risks of starting a new venture. Furthermore, there are many F&B options to choose from.

Here are some of the most common F&B franchise categories:

  • Bakery

  • Coffee or cafe

  • Fast food or quick-service restaurant

  • Full-service restaurant

  • Ice cream and frozen yogurt

  • Juice and smoothie

  • Pizza

  • Retail food

  • Vending machine

F&B Franchise Costs to Consider

One of the important factors to consider when investing in an E-2 visa-eligible F&B franchise is its initial cost. The average franchise cost varies depending on the franchise or brand, location, and type of establishment you choose. Here are some of the costs you should be prepared for:

  • Franchise fee

The franchise fee is the upfront fee you pay the franchisor to obtain the right to operate under their brand. This fee depends on the franchise type, popularity, and market presence. For instance, it can be as little as $10,000 for a relatively known franchise to over $100,000 for a well-known chain.

  • Equipment

The cost of leasing or purchasing a suitable location, renovating it to meet franchise standards, and buying kitchen equipment and furnishings can vary widely depending on your location.

  • Working capital

You will need sufficient working capital to cover initial operating expenses, such as rent, payroll, utilities, and inventory.

  • Marketing and royalty fees

Franchise agreements require ongoing royalty payments, a percentage of your revenue. Royalty rates vary by industry, typically from 4.6% to 12.5%. Additionally, you will need to allocate funds for marketing efforts to attract customers, typically a percentage of your revenue paid to the franchisor. These can be paid weekly or monthly, depending on the franchise agreement.

  • Legal and administrative costs

Legally binding franchise documents are full of important details you may miss without an experienced immigration attorney to guide you. We recommend consulting with an immigration lawyer to help you review the franchise disclosure document and agreement before signing.

What to Look for When Searching for an E-2 Visa-Eligible F&B Franchise

  • Visa eligibility

Not all F&B franchise can qualify for the E-2 visa program. Ensure your chosen franchise has a track record of successfully supporting E-2 visa applicants.

  • Financial viability

Research the financial stability and growth prospects of the franchise. A well-established franchisor can provide the support you need for a successful investment. This is important as projected profitability ensures your E-2 investment is not marginal.

  • Training and support

Ensure your chosen franchise offers comprehensive training programs for you and your staff. Remember to inquire about ongoing support, marketing assistance, and operational guidance.

  • Location

Your chosen location can significantly impact the success of your F&B franchise. Conduct thorough market research to identify strategic areas with high foot traffic and a target customer base that aligns with your concept. Additionally, rent and other expenses vary depending on the city.

  • Brand recognition

Investigate the reputation of the franchise brand. You can look up customer reviews, industry awards, and any history of legal disputes or controversies. Additionally, it would be helpful to get in contact with other franchisees. Franchise disclosure documents often have a list of other franchisees.

Ready to pursue your E-2 visa in the F&B industry?

Contact today for a free consultation with our expert team of immigration attorneys and business plan writers.

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