Work & Finance

4 ways to invest in what tastes good to you

Buy “fast- casual” stocks
Stick with top franchises like Panera Bread (symbol: PNRA), P.F. Chang’s (PFCB), and Chipotle (CMG). With organic-food stocks you’ll have to pay up for market leader Whole Foods (WFMI). A less costly alternative is United Natural Foods (UNFI), the leading wholesaler of organic produce that counts the grocer as its top customer.

Play the sector, not the stock
PowerShares Dynamic Food & Beverage Portfolio (PBJ) is the only exchange-traded fund that provides broad exposure to the entire sector, which tends to hold up well in a recession (Investing 101: People gotta eat). The fund’s top holdings recently included Starbucks and Yum! Brands, operator of KFC, Taco Bell, and Pizza Hut.

Invest in a high-growth franchise
Emerging restaurant chains provide entrepreneurs with an opportunity for quick growth at a reasonable entry price. Take Raving Brands’ most successful concept: Moe’s Southwest Grill. To set up shop, you’ll need to invest $450,000 and start-up capital of $25,000. Royalties will cost you 5 percent of revenue.

Pony up for a restaurant partnership
Partnerships are a risky but lucrative way to buy into several restaurants at once. If the entrepreneur running the partnership has majority control, negotiate a “preferred investment” that enables you to earn a return before he does, advises David L. Epstein of J.H. Chapman Group LLC, a Chicago investment bank specializing in the food industry.

See How to Make a Billion-Dollar Burrito.