Truckers Are Angry, High Fuel Prices Probably Affecting Franchise Owners

A very rainy day in our nation’s capitol was the scene of a rally held by angry truck drivers who drove their big rigs to DC from all over the country, today. Members of Truckers and Citizens United circled the National Mall before parking their trucks at RFK Stadium. From there, over 100 protesters marched and took shuttles to the Capitol, where an afternoon rally was held. The issue: $4.00 + a gallon, Diesel Fuel.

On April 1st a loosely held protest was held by truckers all over the country. They pulled over to the side of the road, and in some cases, deliberately slowed their rigs to a crawl, hoping to get some attention about their plight.

Do you think some franchise owners are being affected by the price of Diesel Fuel? They must be, by now. The Energy Information Administration has a chart showing average Diesel Fuel prices from October 2005, until April 2008. Look. Driving a truck for a living in January of 2007, wasn’t a bad gig. The price of Diesel Fuel was around $2.40 a gallon. Fast forward to a little over a year later. Diesel Fuel is at about $4.20 a gallon, and rising. Do the math. It is a $1.80 a gallon increase! No wonder these folks are angry!

Back to the franchise owners. For the purpose of this discussion, let’s say that we are talking about a food franchise, since it is one type that will be affected by rising Diesel Fuel costs. As I discussed before, there are some automatic costs that you, as a franchisee must pay. {If you want to remain a franchisee, that is…} The 4-12% or more of your gross sales that goes to the franchisor is one such cost. There is nothing wrong with  paying royalties, as long as you, the franchisee, is getting some value. In most cases, you are. Other costs in a food franchise are things like utilities, personnel, rent, and insurance.   

When you own a franchise that stocks perishable products as part of it’s inventory, you get one, but more than likely, two food deliveries weekly. You may be getting your food delivered by a big rig, like the ones that were protesting the high fuel prices in Washington D.C. today. You could also be getting your food delivered by a medium sized truck, but one that probably picked up it’s delivery at a depot where a big rig dropped it off, first. Either way your food is delivered, there is a shipping costs associated with it. It is either a separate charge on your bill, or it is added to your food costs. Bottom line, it is there.

As a franchise owner, if your food costs are going up, do you adjust your menu prices? Do you keep them the same, and just take less net profit? Does the franchisor dictate your pricing? Questions like this can be answered before you invest in a franchise by doing the proper research.

Rising Diesel Fuel prices affect franchise/small business owners in a big way, which in turn, impact the bottom line. Our country has been through tough economic times before. Knowledge really has some power. I know that there up and down cycles in our economy. That knowledge usually helps me hang in there. I hope it helps you too.