More and more people are taking increasingly active steps to live the best life possible for them. Relatedly, franchises associated with health and well-being have been expanding significantly in recent years and are showing no signs of slowing down.
Here’s an overview of the current state of the health food & supplement store franchise industry from market research company IBISWorld:
<blockquote>Over the five years to 2022, the Health Food and Supplement Store Franchises industry has grown relatively in line with shifting consumer preferences toward natural and organic products. According to data from the Federal Trade Commission, Americans spend billions of dollars each year on dietary supplements, foods and devices that help to bolster health and wellness, illustrating the large market for industry franchises. Moreover, as healthcare costs have considerably risen over the past five years, consumers have increasingly sought to improve their health in an attempt to cut down on overall medical costs, spurring demand for nutritional supplements and other items that can be used in conjunction with traditional healthcare.</blockquote>
It’s reasonable to say the health food store industry in the United States is closing in on a century old, as GNC was founded in 1935. Supplement stores, such as GNC and The Vitamin Shoppe, are the most common segment in the industry. These retail outlets sell vitamins, minerals, supplements, protein powders, healthy weight support, aromatherapy, herbs, superfoods, natural beauty products, and more to their customers each day.
An emerging segment of the industry is meal prep. Many consumers are looking for a way to incorporate better eating habits into their daily routines. However, it can be difficult for many to find the time to shop for and prepare nutritious food, especially when they’re working or going to school.
Meal prep franchises are doing their best to meet the needs and desires of these consumers. And, sometimes, the process can yield better-than-anticipated results—for both the customer and franchisee. As Lean Kitchen Company co-founder Austin Evans says, “we have customers frequently stop in to grab meals & tell us they have been able to come off their diabetes medicine that they have been on their entire life, or tell us they don’t need their blood pressure meds anymore, or how they have lost 85 pounds just from eating our meals. Impacting somebody’s life in this way is a feeling that money can’t buy.”
The Emergence of the “Flexitarian”
Related to the expansion of the health food store franchise industry is a trend occurring in the general health food franchise industry.
Accommodating “alternative” menu desires has been a part of the food franchise space for decades. However, greater awareness surrounding the environmental and health costs of eating certain foods -- meat in particular, has many looking at different options.
Food franchise customers as a whole have shown a shift towards healthier options with an occasional caloric splurge. “Nearly one-third of the consumer identifies as either flexitarian or say they limit or avoid animal proteins,” says Patty Trevino, senior vice president of brand marketing for CKE Restaurants Holdings, Inc., which includes Carl’s Jr., Hardees, Green Burrito and Red Burrito. Also, to that end, Liz Matthews, Taco Bell’s global chief food innovation officer, says “We believe that vegetarian food shouldn’t be a compromise; it shouldn’t be limited to one item, and it shouldn’t be just for vegetarians.”
However, it should be noted that the overall adoption of plant-based food, specifically burgers, has endured hiccups. But, in assessing the future prospects of the trend, note the actions of the powerhouse burger franchises. The insistence of companies such as Burger King, McDonald’s and others in continuing the development of these items despite setbacks indicates a future where plant-based is the norm.
Also, as meat becomes a luxury item, other alternatives such as gourmet bugs and insects have been growing in popularity as a protein source. But, that market is yet to reach its stride. In addition to food, there has also been a massive growth in alcohol-free adult beverages as well.
Bottom line: Food that wears its health credentials on its sleeve is now everywhere. And you can operate a food franchise with a “healthier” menu with virtually any cuisine. You can choose a franchise from Mexican food to Thai or stay with the more traditional picks in this area of smoothie or bowl franchise.
Initial Investment and Opening Costs for Health Food Store Franchises
The amount necessary to open a franchise varies depending on the unique business system and execution requirements for that particular franchise. The initial investment required for a health food store franchise can range widely, mostly dependent on the level of real estate purchase that will be needed.
Our franchise profiles will present you with a basic range for the initial investment or minimum cash required to open a franchise. But when it comes to finding out the details of an initial investment, the FDD is the best place to look. Franchisors offer itemized estimates in their FDD based upon their experience establishing, and in some cases operating, units.
Keep in mind these estimates are just that, though—an estimate. Prospective franchisees should review the figures presented with a business advisor, taking into consideration their unique circumstances, before making the decision to enter into a franchise agreement.
Ongoing Costs for Health Food Store Franchises
Don’t forget about the additional costs required for nearly all franchise businesses. This includes expenses such as royalty fees, marketing fees, software fees, training fees, and more.
The most common is the royalty fee. Royalty fees are assessed for the continued use of the franchisor’s trademarks and patented processes, along with certain types of operational support. In addition to regularly assessed fees, other fees are charged on an “as needed” basis such as audit fees, or costs for additional, non-mandatory, training.
It’s important to note that while many initial and ongoing costs are detailed in the FDD, there are some costs inherent to business ownership, like employee wages or utility costs, that aren’t.