Starting a Fast Food Restaurant in 2020: Challenges and Opportunities

In the current pandemic environment, starting a new fast food restaurant may not be the most feasible or advisable idea. This article explores the challenges and opportunities involved in opening a fast food restaurant in 2020, providing insights for potential entrepreneurs and business owners.

Challenges Faced in Starting a Fast Food Restaurant

Opening a fast food restaurant in 2020 comes with a series of unique challenges due to the global pandemic. Here are the key issues:

Little to no dine-in options: Due to strict health guidelines, dine-in services are either severely restricted or entirely eliminated in many areas. Even if dine-in becomes possible, it is likely with additional safety measures such as partitions between staff and customers and between tables. Lower sales: With more people choosing to eat at home or reduce their dining out frequency, overall sales are likely to be lower than pre-pandemic levels. This trend is not expected to change by much in the near future. Inconsistent or pricier inventory: Supply chain disruptions during the pandemic mean that essential ingredients and other supplies may be scarce or more expensive. Additionally, competition for suppliers is likely to increase, leading to higher costs. Extra expenses for safety supplies: Adopting safety measures such as providing masks, hand sanitizer, and extra cleaning supplies can significantly increase operational costs. Smaller pool of applicants: Working in close quarters, especially in the kitchen, poses significant health risks. Many potential employees may be hesitant to take such risks due to the pandemic. Stricter financing requirements: Securing loans from banks and other financial institutions has become more challenging due to the economic uncertainty surrounding the pandemic. Processed permits and approvals: Local government offices may operate with reduced hours or face delays in processing licenses and permits.

Opportunities in the Current Market

While the challenges are significant, there are also opportunities. In economically difficult times, few individuals are considering launching new businesses. This may result in a more relaxed competitive landscape for potential fast food restaurants. In fact, many of the world's most successful companies were born during recessions or economic downturns. Therefore, if you are aware of the challenges and still see a viable market for your fast food concept, it could be a promising venture.

Money: The Key to Success

Ultimately, the success of your fast food restaurant will largely depend on the resources you have at your disposal. If you wish to franchise a well-known chain like McDonald's, you will need a substantial amount of capital, typically at least $2 million. For smaller fast food concepts, the startup costs are lower, but you will still need a significant amount of capital. Additionally, you must also consider the costs and logistics involved in starting up during the pandemic, as mentioned earlier.

Entrepreneurs and business owners are advised to carefully plan and make realistic projections. Failing to do so can lead to financial difficulties, and in some cases, bankruptcy. Expert forecasts indicate that the economy is unlikely to return to pre-pandemic levels anytime soon. Therefore, it is advisable to wait for a more stable economic environment before opening your fast food restaurant.