Author: Franchise Strategist

SIX TECH TRENDS IN THE RESTAURANT INDUSTRY BORNE OUT OF THE PANDEMIC

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Photo by Austin Distel on Unsplash

Technology and innovation have helped and in some instances saved restaurants as they changed their way of thinking about the overall guest experience. Many thrived by staying connecting and engaged with their customers with this new worldwide operating model and mindset.

SIX TECH TRENDS IN THE RESTAURANT INDUSTRY BORNE OUT OF THE PANDEMIC
By: Gary Occhiogrosso – Managing Partner Franchise Growth Solutions, LLC.

As a New Yorker in the restaurant and franchise business, I’ve seen the industry go through difficult times over the last two years. From total closure to outdoor dining in the wintertime to mandated “proof of vaccination” rules imposed on citizens. Some moves made by the restaurant industry in response to the pandemic and the government orders resulted in numerous changes.

From an optimistic viewpoint, there have been innovative changes that will remain in place. The good news is we are nearing the end of the pandemic and learning to live in a mostly vaccinated society as guest are returning to restaurants in droves. One of the more forward thinking initiatives is the restaurant industry’s embrace of technology in a way that many restaurateurs had not considered or even shunned before the global pandemic. There is no doubt the COVID-19 pandemic forced many industries to shift to digital mode. The restaurant industry is no exception as it steered toward the use of technology by introducing digital menus and online ordering options to keep its business alive, just to name a few.

Technology and innovation have helped and in some instances saved restaurants as they changed their way of thinking about the overall guest experience. Many thrived by staying connecting and engaged with their customers with this new worldwide operating model and mindset. Everything from online orders to self-checkout, contactless payment methods, and home delivery, the restaurant industry could not afford to ignore the latest trends set in the food industry if they were to remain relevant and competitive.

Here are six tech trends in the restaurant industry borne out of the pandemic. I believe they are here to stay:

Online Ordering
Before the pandemic hit the world, many restaurants were waiting for the right time to introduce online ordering options for their customers. However, the strict lockdown forced the restaurant industry across the globe to close their cafes, QSR’s as well as dine-in services and shift to the digital medium of ordering, payment adn pick-up.

Many online platforms helped the restaurant industry to continue their business by collaborating with them. A study reveals that almost one in three Americans use online food ordering systems once a week. They introduced digital menus for the customers to check what the restaurants are offering.

Contactless Payment
Another mainstream trend in the food industry is contactless payment. It is not only about placing online orders but also about receiving payments through smartcards, smartphones, and smartwatches. Contactless payment originally gained momentum slowly with the global food industry. However, the pandemic gave it a big push to accelerate the concept industry wide.

Ready Contactless Dining
Logo for Ready Contactless Dining app with QR code and text reading Pay Here visible, at a restaurant in the Silicon Valley, San Jose, California, December 18, 2021. Photo courtesy Tech Trends. (Photo by Gado/Getty Images)GADO VIA GETTY IMAGES

It is a more hygienic and safer means of placing an order with no personal interaction and no cash handling. Moreover, it is a quick and convenient way of receiving payment from customers for the orders placed. Restaurants wishing to stay competitive in the handheld device era must design plans that create digital payment methods for a better experience.

Restaurant Reservation Software
For the full service space, automating restaurant reservation schedules, not only increases efficiency in a time of ongoing labor challenges, it also conveys an updated image to your diners. Moreover, it reduces the chances of over or double booking. Short staffed restaurant with extra busy staffers often make mistakes disrupting a great guest experience. Therefore, the reservation software reduces or eliminates the need to attend calls to reserve tables or assign employees to handle the customers.

Drone Food Delivery Systems
With the high cost of third party delivery services, restaurateurs are seeking alternatives. Drone delivery in certain parts of the country are beginning to become popular. Automating the delivery process may eventually lead to some restaurants doing away with the delivery person’s existence entirely. With the advancement of technology, drones soon may completely replace drivers to ensure contactless, timely delivery. Moreover, they can also film the surroundings and offer many avenues for marketing initatives. Having food delivered through drones would eliminate the cost of hiring delivery people and reduce the environmental effects caused by the vehicles while at the same time lessen the need for expensive third party servies.

Chatbots
A newer trend taking hold in the food industry is the use of website Chatbots. Restaurants can easily create chatbots. They do not require much investment and can easily integrate with different communication mediums. While interacting with customers, a chatbox may:

* recommend dishes
* suggest food
* pair drink options
* process payments
*ask for feedback
*offer promotions
*announce events
*and even crack jokes

Air purification:
To increase health security, air quality and purification enters the minds of some guests. As a result, restaurants are focusing on upgrading air purification systems to improve air quality inside their restaurants. Some restaurants opt for filter systems that trap pollutants and neutralize contaminants in the air. Although these concepts are still emerging in the restaurant industry, they are becoming an integral part of safety measure and you can expect to see more of it as we continue to learn to live with the threat of viruses. These air purification measures are in addition to customers expectations that the staff sanitize the restaurant regularly and thoroughly before serving meals.

My “Take Away”
As technology changes everything from the guest experience to the ordering process to the functionality of the kitchens, restaurants must continue to evolve, innovate and monitor consumer trends if they expect to survive and thrive. Embracing the use of technology and digital solutions as a way remain competitive is undoubtedly here today and the future of our business.

Modern Tech Can Give Restaurants An Edge

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It is much more likely that franchisors, with resources already on hand, will be able to promote system-wide improvements for all franchisees in their systems.

Modern Tech Can Give Restaurant Businesses An Edge
By Jeremy Einbinder

Restaurants are continuing to use newer technologies that have the potential to optimize the experience both for the consumer and the business. Anything that improve customer experience and reduce labor costs- which is very important in a tight market- is a win-win.

Franchised Restaurants Set Themselves Apart

All of these innovations are especially important for franchised restaurants and allows them to set themselves apart from other restaurants. For entrepreneurs looking to open restaurant locations, it can be difficult to gather all the technological resources available to improve operations. It is much more likely that franchisors, with resources already on hand, will be able to promote system-wide improvements for all franchisees in their systems. These technological enhancements are wide-ranging and could set off a franchise restaurant boom.

For instance, instead of third-party delivery apps, many customers report a preference for ordering directly from the restaurant itself. It would be beneficial, if possible, for a company to have their own internal delivery app. In addition to building brand recognition, this also helps businesses avoid paying exorbitant fees.

Fred Kirvan, Founder and CEO of Kirvan Consulting, a New Jersey based restaurant optimization and consulting firm said: “At this year’s National Restaurant Show, we observed some notable improvements in tech-driven kitchen equipment aimed at providing a more consistent product to its end-user but much of the new tech seemed to be aimed at employee retention.”

Look But Don’t Touch

Payment technologies which allow for no-contact money transfer can also prove to be crucial, especially since the pandemic. In keeping with no-touch technology, it is becoming commonplace for customers to also access only menus and order without contact, allowing for a much safer environment for everybody. The cost reduction for restaurants can be substantial.

There are also tech payment options for employee payroll. Kirvan noted: “Companies offering early pay options and incentives were the noticeable standouts for me. Employee retention is key when you can consider all the software available for taking orders, you’re going to need people to prepare those orders.

Reservation applications like Eat App, Tablein, or OpenTable allow customers to see available time slots, and book their times at their convenience. In such apps, users simply view the time slots available with the number of seats needed and select one. This takes away any awkward interaction with staff of someone calling the restaurant and asking for a specific time for a reservation, only to realize it’s not available. For the business, it allows much greater flexibility in managing waitlists as well as customer loyalty.

Reducing Friction for the Front and Back of House

For streamlining customer orders, Kitchen Display Systems are very efficient, allowing both customers and kitchen staff to seamlessly log orders, instantly displaying them on screen according to priority. This also makes accommodating dietary restrictions much easier.

Radwan Masri, a 30 year veteran in the hospitality industry and a leading international culinary consultant and franchise expert with Ayy Karamba Hospitality added “The other side of food service tech driven business is FOH & BOH automation. Labor shortage in the service business combined with an increase demand for delivered food has impacted how food orders is being processed from start to end. Self-Serve ordering stations, QR codes scanning procedures. Your order nowadays through a drive through window is not the same as it used to be. i.e. I order in Chicago via a drive through window while my order is being processed by a mom sitting at home in Atlanta GA!”

This type of innovation is incredibly valuable and can easily cut down on unnecessary laborious tasks for employees. In addition, artificial intelligence technologies like Winnow reduce food waste. Using a camera, Winnow “learns” to recognize different foods being thrown away. It then calculates the financial and environmental cost of this discarded food to commercial kitchens. This in turn saves company’s money.

In Conclusion

If franchisees and independent restauranteurs expect to stay relevant and competitive they need to take advantage of these burgeoning technologies. The guest expectation has risen as a result of the pandemic and most guests will give a restaurant one, perhaps two chances to meet or exceed their exceptions. When it comes to the the overall guest experience, using these technologies gives operators a better chance to succeed.

Does Your Franchise Program Contain the Elements of a Top Franchise?

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Here are 10 elements that you will find in the top performing franchise programs. If you are a franchisor and want to enhance your franchise performance, make sure these are a part of your franchise operation.

Does Your Franchise Program Contain the Elements of a Top- Franchise?

By Ed TeixeiraFranchise Expert, Author, Franchise Executive and Former Franchisee with 40 years of Franchise Industry Experience.

Ever wonder what sets the top franchise brands apart from the rest? There is a big difference between the indicators of a good franchise program and how the franchisor got to that stage. Whether a franchise system has 10, 100 or 1,000 units there are certain practices that separate the top franchise brands from the rest.
Here are 10 elements that you will find in the top performing franchise programs. If you are a franchisor and want to enhance your franchise performance, make sure these are a part of your franchise operation.
 
1. Stick to your franchisee profile
Have a franchisee profile and when franchise candidates do not fit the profile, say no! If using brokers, then remain in control of the franchise sales process.

2. Be candid with prospective franchisees
Provide prospective franchisees the tools they need to be a successful franchisee.

3. Have an effective training program, evaluate it, and continue training
Top performing franchisors have an effective training program that continues as an on-going activity.

4. If the franchise program needs adjusting, then do it
If certain marketing programs, products or services are not delivering the results then make changes.

5. Franchisee profitability must be a priority
The structure of the franchise program both operationally and financially must provide franchisees an opportunity for success that does not require extraordinary performance. If the franchisees follow the program and do not earn an ROI commensurate with their original investment, then the franchise is flawed. There must be balance between the earnings of the franchisor and its franchisees.
 
6. Franchisor leadership must be fully engaged in the franchise operation
Franchisor executive leadership must be totally involved in the franchise so that there is total awareness of successes and failures. There is no room for “surprises” when it comes to franchise operations. Whatever the forum, franchisee feedback must flow to franchisor leadership.

7. Solicit Franchisee input for important operational and marketing decisions
Whether through a Franchise Advisory Council, advertising committee or other representative body use them as a sounding board before making major operational decisions.

8. New products and services should be evaluated and measured by select franchisees before introducing
Obtain objective results from these franchisees, which will enable you to obtain a franchisee system buy-in when implemented.

9. Measure franchisee results on a regular basis
Use key performance indicators (K.P.I.s) to measure franchisee performance on a scheduled basis, whether monthly or quarterly. This enables a franchisor to know how its franchisees are performing.

10. Protect the integrity and standards of the franchise program
It is critical that the franchisor uphold the standards of the franchise. The franchisees that follow the program deserve it and the customers that use the product or services provided by the franchisees are entitled to consistency. Franchisors that do not protect their brand are not respected by their franchisees.
When franchisors have these elements in their franchise program, they can feel confident their franchise brand will be a top performer.

About the Author:
Ed Teixeira Franchise Expert, Author, Franchise Executive and Former Franchisee with 40 years of Franchise Industry Experience.Ed is a recognized franchise expert with over 35 years experience in the franchise industry. He has served as a corporate executive for franchise firms in the retail, manufacturing, healthcare and technology industries and was a franchisee of a multi-million dollar home healthcare franchise. Ed is the author of Franchising From the Inside Out and The Franchise Buyers Manual. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country and spoke at a number of venues including the International Franchise Expo and the Chinese Franchise Association in Shanghai, China. Over the course of his career, Ed has been involved with over 1,000 franchise locations and launched franchise concepts from existing business models. Ed can be contacted at 631-246-5782 or [email protected].

5 TOP ITEMS YOUR SMALL BUSINESS NEEDS ON ITS CYBERSECURITY TO-DO LIST

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No matter the size of your business, you can take practical steps to help defend against cyberattacks, which will save your company time, effort and money in the long term.

5 top items your small business needs on its cybersecurity to-do list

(BPT) – If you run a small to medium-sized business, you may think your risk of cyberattacks is slim to none. But just because your business is smaller and you have your data stored on-premises does not exempt you from risk. According to the Ninth Annual Cost of Cybercrime Study by Accenture, 43% of cyberattacks are now aimed at small businesses — but only 14% of those businesses are prepared to defend themselves. Since the pandemic, cybercrime has increased by 600%, according to Embroker.com. And the cost of cyberattacks — from business disruption and lost data to system downtime, damage to your company’s reputation and even legal liability — is higher than ever. Cyber defense needs to be a major component of your business strategy.

What can your business do to help prevent these attacks in the first place?

Types of cyberattacks

It helps to understand where cybercriminals are most likely to strike, which is at most companies’ biggest point of vulnerability — the human factor. The Ponemon Institute’s State of Cybersecurity Report has identified the most common types of cyberattacks on small businesses:

  • Social Engineering/Phishing (57%): This can take the form of an email that appears to be from a trusted source, like a co-worker or supervisor, asking for help and requesting you click a link or download something.
  • Compromised/Stolen Devices (33%): Devices without sufficient security safeguards in place can be vulnerable.
  • Credential Theft (30%): Hackers obtain usernames and passwords to access accounts. Having strong, unique passwords and multi-factor authentication to access accounts can help prevent unauthorized access.

Strategies to safeguard your business

No matter the size of your business, you can take practical steps to help defend against cyberattacks, which will save your company time, effort and money in the long term.

Here are 5 tactics that should be on your cyber defense checklist:

1. Educate your employees about security best practices

Make sure everyone in your business understands common cyberthreats, and is well trained on how to identify typical phishing and social engineering scams. In addition, help remote employees secure their home networks by offering training on setting up secure Wi-Fi.

2. Keep business and personal devices separate

Especially as many employees continue working remotely all or part of the time, reduce security risks by emphasizing the importance of everyone in your organization using only company devices for work purposes.

3. Beef up security measures for employee accounts and network access

Require only strong, unique passwords for employee access, as well as implementing multi-factor authentication practices for an extra layer of protection.

4. Get a unified software platform for security and patch management

Make sure your entire system is more secure by using a single, effective software platform that can manage identity, access and devices in the cloud — as well as managing security upgrades and patching. For example, JumpCloud offers IT admins at any business the ability to control and manage a wide variety of configurations with Zero Trust security to secure your organization.

JumpCloud provides an easy, frictionless solution for small to medium-sized business requirements to hedge against increasing cyberthreats, with several security features to help your business improve its security posture, including:

  • Multi-Factor Authentication
  • Single Sign-On
  • Device Management
  • Zero-Trust
  • Patch Management

Even better, JumpCloud lets customers use all premium features for free, for up to 10 users and 10 devices.

“Any business owner today needs to be aware of and take active measures to protect against cyberattacks,” said Benjamin Garrison, technical evangelist at JumpCloud. “For any size business, JumpCloud provides an effective solution, all in one place.”

5. Monitor for security breaches

In case of a cyberattack, your business will recover and overcome the loss much more quickly the earlier you can detect the problem. Set up a system for frequent monitoring of your network for any potential breaches, and keep working to defend against them with regular updates and trainings for all staff.

Don’t wait until a security breach happens to get serious about cyber defense. Being proactive about the security of your business will be well worth it to defend everything you’ve created.

JumpCloud gives IT admins a single cloud directory platform to secure all their users in any device environment, wherever work happens. Visit JumpCloud.com to learn more.

PRESS RELEASE: Dave’s Hot Chicken is the Fastest Growing Restaurant in America

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FOR IMMEDIATE RELEASE…

Dave’s Hot Chicken is the Fastest Growing Restaurant in America

Fiery Franchise Growth and Strong Sales Performance Cements the Leading Nashville Hot Chicken Concept’s Position at the Top
LOS ANGELES — Dave’s Hot Chicken is riding its red-hot momentum generated from its exceptional franchise growth to the fastest growing restaurant chain in the United States.

With a 471% increase in total number of open units in 2021 compared to 2020, no other restaurant brand has come close to the type of growth that Dave’s Hot Chicken has experienced. Sales were also impressive, with a 262% increase from 2020 to 2021. Total sales for Dave’s Hot Chicken were $79.5 million.*

“There’s no question about it: Dave’s Hot Chicken is growing at a clip not seen anywhere else in the restaurant industry and the numbers back it up,” said Bill Phelps, CEO of Dave’s Hot Chicken. “I’m incredibly proud of what we’ve been able to accomplish in a few short years, but there’s much more in store. This is only the beginning for our unique, exciting and craveable brand.”

Dave’s Hot Chicken is continuing to build on this momentum to reach even greater heights in 2022. So far, 17 new locations have opened this year, which include entrances for the brand into new states such as Ohio, Wisconsin, Michigan, North Carolina, Massachusetts and Indiana. These new openings bring the total number of open Dave’s Hot Chicken locations to 57.
Led by the VP of Franchise Development, Shannon Swenson, Dave’s Hot Chicken has continued to build its roster of seasoned multi-unit operators with newly signed deals. In the first quarter of 2022, 13 new franchise groups have signed agreements for 127 franchise commitments, bringing the total to more than 70 franchise groups and more than 700 committed units. These new deals will introduce the brand to new markets throughout New York, Florida, Minnesota, Utah and Texas, along with a milestone deal to bring Dave’s Hot Chicken to the Middle East.

“The growth of Dave’s Hot Chicken is showing no signs of slowing down. Despite already signing a number of deals for hundreds of units across the country, interest in franchising with us is at an all-time high,” said Swenson. “The remainder of 2022 shows a lot of promise for us to do even better than what we accomplished last year. I look forward to what the future holds for Dave’s Hot Chicken.”

Founded by Arman Oganesyan and classically-trained chef Dave Kopushyan and two friends in early 2017, Dave’s Hot Chicken initially opened as a parking lot pop-up, with lines quickly wrapping around the block. Since then, the brand has exploded in popularity and now has over locations in the United States and Canada.

Specializing in hot chicken tenders and sliders, with spice levels ranging from “No Spice” to “Reaper,” each restaurant also serves sides of house-made Kale Slaw, creamy Mac & Cheese and crispy Fries or Cheese Fries.
Dave’s Hot Chicken offers a robust business model, including national and local marketing support, proven systems, manuals and operating procedures, as well as assistance with site selection. As the brand expands, it is seeking qualified, experienced, and passionate restaurant operators and franchise groups to develop the concept in key markets.

To learn more about Dave’s Hot Chicken and its franchise opportunities, visit www.daveshotchicken.com/franchising.
*Based on a study conducted by Technomic, a third-party research company.

About Dave’s Hot Chicken
In a modern-day American dream story, Arman Oganesyan and best friend Chef Dave Kopushyan, along with brothers Tommy and Gary Rubenyan, launched Dave’s Hot Chicken in a parking lot pop-up in 2017. Dave’s Hot Chicken quickly took off, opening its first brick-and-mortar restaurant in East Hollywood. In 2019, the team struck a deal with Wetzel’s Pretzels co-founder and former CEO, Bill Phelps, and movie producer John Davis to begin franchising the Dave’s Hot Chicken concept throughout the U.S. and beyond. The company has sold the rights to over 599 franchise locations in the U.S. and Canada and will open an additional 75 locations this year. In 2021, Dave’s Hot Chicken was listed as one of the Top 10 hottest brands by Fast Casual on its annual list of industry Movers & Shakers. Harkening back to an Eater LA blog that helped propel early interest in the brand, the company’s mission is to “blow their minds.” Additional brand investors include multiplatinum music artist Drake, former California First Lady Maria Shriver, Red Sox owner Tom Werner, actor Samuel L. Jackson, and Good Morning America anchor and retired NFL player Michael Strahan.

5 Digital Media and Entertainment Habits in 2022

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Photo by Brandpoint

5 Digital Media and Entertainment Habits in 2022
By Brandpoint

(BPT) – Consumers have more options for digital media entertainment than ever before, but what kind of content are they looking for, how are they finding it and how are they interacting with it? Each year, Deloitte – a global professional services organization – surveys consumers to answer these questions.

In its latest report, titled “2022 Digital Media Trends, 16th edition: Toward the metaverse,” Deloitte surveyed consumers globally and found there is a growing preference for more personalized, interactive, and social experiences, especially among younger generations. Below are five key findings that underscore this trend.

1. Consumers are tired of chasing content

Despite the sizable content budgets of streaming video on demand (SVOD) services, consumers are growing more frustrated with SVOD content discovery and subscription fees. SVOD services often require consumers to juggle multiple subscriptions at increasing costs. But on social media platforms, content discovers the user, offering free passive and interactive experiences with near-infinite streams of personalized content that are continuously refined.

2. SVOD services struggle to attract and retain subscribers

SVOD providers face greater pressure to attract and retain subscribers who have become savvier about chasing content and managing their subscription costs. The average churn rate (the rate at which consumers have cancelled, or both added and cancelled, a service during the past six months) in the United States remains consistent at 37% across all paid SVOD services. In the United Kingdom, Germany, Brazil, and Japan, the average overall churn rate is closer to 30%. In an effort to compete, consumers may find media companies diversifying their approach, offering ad-supported tiers and bundles, or pairing premium content with more immersive experiences.

3. Growing popularity of user-generated content

Short-form and user-generated social video feeds are incredibly engaging. Nearly half (46%) of U.S. consumers say they watch more user-generated content online than they did six months ago. Fifty percent (50%) also say they always end up spending more time watching user-generated content online than they had initially planned. This figure jumps to 70% among the youngest generation, Gen Z. About four in 10 (41%) U.S. consumers surveyed spend more time watching user-generated video content online than TV shows and movies on video streaming services, a sentiment that increases to about 60% among the younger generations (Millennials and Gen Zs).

4. Social media usage continues to rise across generations

In the U.S., 81% of social media users use social media services daily, and 59% use these services several times a day. Across all five countries surveyed, Gen Zs, Millennials, and Gen Xers are consistently more likely to say they use these services. Also, 70% of U.S. respondents say they follow an influencer online, and more than half of U.S. Gen Zs and Millennials surveyed say online personalities influence their buying decisions.

Social media platforms are also affecting consumer spending habits. About 53% of U.S. respondents and around 40% in the U.K., Germany, and Japan say they see ads on social media for products or services they were searching for, a figure that jumps to 72% in Brazil.

5. Younger consumers prioritize interactive experiences

Younger generations who have grown up with smartphones, social media, and video games prefer entertainment experiences that are more social and interactive. User-generated social media streams and social video games may meet their needs better than streaming video.

According to the report, Gen Z respondents prefer playing video games as their favorite entertainment activity in all five countries. In the U.S., Gen Z and Millennial gamers play the most, logging an average of 11 and 13 hours per week, respectively.

Looking to the future

As streaming video audiences juggle more subscriptions and higher costs to chase entertainment, social media is free and available anywhere, anytime.

Deloitte’s report suggests that to prepare for the next generation of digital entertainment, streaming video companies should think hard about how people socialize around entertainment. Will younger generations and the generations to follow them dismiss entertainment that isn’t social or interactive in some way? Or will the passive and somewhat isolated experience of streaming video always offer a meaningful form of entertainment? Only time will tell.

To learn more about the 2022 Digital Media Trends, 16th edition: Toward the metaverse survey, visit Digital Media Trends for the full report.

Trends Affecting The Restaurant Industry In 2022

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Photo by Alex Haney on Unsplash

According to the National Restaurant Association, Wholesale food costs were up 7.9 percent in 2021, and hourly labor costs were up 8.6 percent for the year.

Trends Affecting The Restaurant Industry In 2022
By Gary Occhiogrosso

Like many industries, COVID 19 greatly affected the restaurant industry. Since it was unable to operate normally for an extended period due to the lockdown and other restrictions imposed by the government, the industry faced a significant setback in 2020 that, for many, continued into 2021.

Lasting Restaurant Industry Trends in 2022
As we are coming out of the most significant pandemic in generations, restaurant owners still face many challenges operating their businesses. That said, I believe the most effective & positive trend in the industry is how restaurants of all sizes now embrace technology. Much of the technology, such as apps, third-party ordering, and direct online ordering, has been used for several years. Still, it took Covid 19 to force the industry to exploit its use to a fuller extent. This adaptability of technology is paving the way for recovery and growth in 2022. By the end of 2022, the food industry expects to reach $899 billion in sales.

Home Delivery System
Another trend carrying into 2022 is restaurant delivery. Food delivery services became immensely important but brought unique challenges. Trust of the food handling process, delivery methods, and demand for contactless transactions became front and center for those using restaurants for home delivery. Remembering that more than 900,000 people died in the U.S. makes the ongoing situation a long-term consideration for food service workers, field workers, and other employees related to the field.

Labor Shortage
From servers to cooks, and other restaurant workers to agriculture and the meatpacking production workforce, labor shortages still significantly affect the industry and the cost associated with running a restaurant—the number of employees willing to work is such a critical situation that many restaurants are forced to operate with shorter hours and fewer days. In addition, continuing trucker shortages and delays in delivery have created congestion in restaurants’ delivery processes, causing some restaurants to modify their menu.

Supply Chain and Food Supply
Supply chain issues also raised multiple problems for restaurant owners, from fresh produce to meats to paper products such as coffee cups, straws, and takeaway containers. As a result, restaurant owners continue to experience shortages and increasing prices as we approach the second quarter of 2022.

Taylor Morabito, the owner of New York’s famed Friend of a Farmer restaurant, said, “While labor shortages have begun to improve, I think the biggest challenge the industry currently faces is the drastic increase in food cost, specifically within the world of poultry, meat & fish.

Products that used to cost $11 or $12 a pound have doubled &, in some cases, nearly tripled in price. Unfortunately, with the current supply chain issues & rising inflation, I believe that restaurant owners & management will be navigating around this particular challenge for quite some time.”

According to the National Restaurant Association, Wholesale food costs were up 7.9 percent in 2021, and hourly labor costs were up 8.6 percent for the year.

“Vaccinated Only” Restrictions Lifted
The “No Vax, No Entry” restrictions are changing in major cities like New York. The easing of regulations resulting from vaccinations worldwide and people following social protocols has finally started to move the restaurant business towards the pre-pandemic normal.

Over 68% of the American population has received complete vaccination. The fact is; the vaccinations led the government to lift restrictions allowing people to sit and enjoy meals in a pre-pandemic style.

Digital Work Models
The past two years have completely changed the way people think and function. The pandemic has also altered people’s expectations of the restaurant business. With contactless payment methods and online orders, people have become more dependent on technology than before. To survive during the pandemic and shutdowns, restaurants offered enhanced discounts as many customers shifted to online or app ordering. However, in 2022, many customers still expect restaurants to continue discounting, extra reward incentives, and other programs to connect to their favorite eateries.

Digitalization has helped all types of industries in different ways. Like other industries, the food industry gained numerous benefits by shifting to a digital working model. It helped them reduce costs and increase performance. With restaurant workers quitting jobs in significant numbers and business owners struggling to retain them, digital technology became helpful with recruiting, retention, and reducing the number of employees required to service the guest.

Regarding the data-driven trends in the industry, Fred Kirvan, the founder of Kirvan Consulting, a New Jersey based restaurant consulting firm, stated, “Now more than ever, it’s vital that you analyze the data available to ensure your business is fully optimized. As an example, valuable information exists within your point of sale to help you determine what changes could streamline your menu offerings. Streamlining your menu offering could result in improved profitability, the need for less staff, and fewer items from your distributor, so you’re using more of what you do use. But, so often, I find that business owners aren’t using the data to drive the decisions that could help them navigate these challenging times.”

The Restaurant Industry Impacts America’s GDP
Since the restaurant industry contributes significantly to America’s economy, one cannot ignore its difficulties for the past two years. Unfortunately, the food industry is still working to recover the losses. Still, unless there is a recurrence of Covid, restaurant sales in 2022 are trending in a very positive direction.

The United States Census report stated that the ongoing pandemic had damaged the sales of restaurants and bars up to $280 billion. Even though the restaurants, eateries, and bars managed to follow all protocols, the various mandates negatively impacted the entire food industry’s economy. Therefore, restaurateurs look to 2022 as the turnaround year.

Conclusion
Technology became a crucial answer in addressing issues restaurants faced during the pandemic. The tech-savviest operators shifted their menu online and increased delivery, which allowed them to stay open. However, to continue the positive trend in 2022, we need to address inflation, supply chain, and labor issues. Overall the first quarter of 2022 is proving to trend in the right direction, demonstrating the resiliency of our industry.

Sources:

GLOBAL FRANCHISE
Key takeaways from the 2022 State of the Restaurant Industry report | Global Franchise

RESTAURANT DIVE
7 restaurant trends that will define 2022

WORLDOMETERS
United States

Franchisors Shouldn’t Confuse Franchisee Validation with Endorsement

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Photo by Kenny Eliason on Unsplash

Successful franchisee validation is so important, it’s common for most franchisor development staff to be aware who their best franchise validators are. Franchisor staff might even recommend which franchisees to contact, because some franchisees don’t want to be bothered while others are flattered to offer their feedback.

By Ed Teixeira

It’s an established fact that to develop a franchise system the franchisor needs to have franchisees who will validate the value of the franchise, including franchisor services, support and quality of the franchise program.

Most of the literature that offers advice to prospective franchisees states that the most valuable source of information on a franchise system is from existing franchisees. In fact, it’s often said that franchisees help sell new franchises as much as franchise development staff and brokers.

Successful franchisee validation is so important, it’s common for most franchisor development staff to be aware who their best franchise validators are. Franchisor staff might even recommend which franchisees to contact, because some franchisees don’t want to be bothered while others are flattered to offer their feedback. I recall a franchisee who was often critical of our franchise support, yet surprisingly was one of top franchise program validators.

It’s important to recognize the difference between franchisee validation and using franchisees to endorse the franchise brand. When a franchisor utilizes existing franchisees in ads or social media to endorse and promote the franchise brand there can be risks. For example, I recall an incident when one of the franchisees in our franchise system helped to obtain a prized national account contract. For his efforts, he was granted a financial benefit from the specific National Account revenues. However, as a further show of appreciation, the franchisor President had the franchisee thanked in a marketing piece and on the franchise web site. A few months later, a dispute led the same franchisee to file a lawsuit against us. It’s one lesson I’ll never forget.

Although franchisors may utilize their franchisees to market its products or services to customers, its different from having their franchisees actively promote and endorse its franchise opportunity.

When it comes to franchisee validations and endorsements, a franchisor should:

Expect franchise candidates to contact a franchisee in an ad for validation. This means that franchisee must remain satisfied with the franchise and franchisor support and services.
When using a franchisee for an endorsement avoid statements that may represent an earnings claim. For example, ‘I’ve made lots of income from this franchise.”
Be wary of how franchisee advertising funds are being used. Using ad funds that single out certain franchisees could cause other franchisees to be upset by publicizing certain franchisees.
In franchise locations visited by customers who could become prospective franchisees the franchisor should promote the franchise opportunity by having tri-fold brochures describing the franchise opportunity and signage to announce the business is franchised.
When recruiting franchise candidates be sure to recognize the difference between positive franchise program validation and using existing franchisees to endorse and promote the franchise opportunity. In the case of franchisee endorsements, there is always the possibility that the franchisee if disgruntled, could be embarrassing to the franchise program.

About the Author: Ed Teixeira
Ed Teixeira is a recognized franchise expert with over 35 years experience in the franchise industry. He has served as a corporate executive for franchise firms in the retail, manufacturing, healthcare and technology industries and was a franchisee of a multi-million dollar home healthcare franchise. Ed is the author of Franchising From the Inside Out and The Franchise Buyers Manual. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country and spoke at a number of venues including the International Franchise Expo and the Chinese Franchise Association in Shanghai, China. Over the course of his career, Ed has been involved with over 1,000 franchise locations and launched franchise concepts from existing business models. Ed can be contacted at 631-246-5782 or [email protected].

Franchisor Focus: The One Responsibility of Franchising Too Many Franchisors Overlook

Posted on by Franchise Strategist

The relationship between a franchisor and their franchisees touches every aspect of a franchise operation ranging from developing the franchise system to franchisees participating in aggressive price promotions. A positive relationship can enable success while poor franchise relations can thwart it.

Franchisor Focus: The One Responsibility of Franchising Too Many Franchisors Overlook
Courtesy of Ed Teixeira

As I consider subject matter for my franchise blogs it’s sometimes challenging to come up with a stimulating topic. Because I direct content mainly to franchisors, it’s important to provide helpful and constructive information. Whether as a franchisee, franchisor executive or providing operational advice to franchisors I’ve always advocated that a franchisor should have a strong franchise relations strategy. Certain franchisors are familiar with the clichés often attributed to fostering a climate of positive franchise relations, including having profitable franchisees, responding promptly to their emails, telephone calls and requests for assistance. Unfortunately, some franchisors don’t give franchise relations the attention it deserves.

In 1992 I was fortunate to contribute to the first IFA Franchise Relations booklet, so I decided to review articles written by franchisor executives. Although the booklet was published 29 years ago, in terms of franchise relationship management very little has changed. The same principles and policies that were advocated then remain the same. No other component of the franchise business model has remained constant.

The relationship between a franchisor and their franchisees touches every aspect of a franchise operation ranging from developing the franchise system to franchisees participating in aggressive price promotions. A positive relationship can enable success while poor franchise relations can thwart it. Unfortunately, some franchisors ignore how important franchise relations is or fail to have a franchise relationship strategy.

Here are four questions that franchisors need answered to appraise the state of their franchise relations.

Are the franchisees profitable?
Whether using Key Performance Indicators (“KPIs”) or franchisee financial statements to measure franchisee financial and operational performance, this is an important responsibility of every franchisor. Rather than obtaining an answer to this question many franchisors focus on identifying the franchisees that aren’t profitable. The problem with this approach is that the franchisor lacks key financial and operational data that pertain to their entire system and individual franchisees.

Are franchisee customers satisfied with the products or services?
Franchisors should have a method for obtaining franchise feedback regarding the level of customer satisfaction. Whether using customer satisfaction surveys, franchisee focus groups or surveying franchisees its important information that should be gathered. This data benefits the franchisor and its franchisees.

What are our franchisee competitors doing?
Franchisors that display an interest in the behavior of their franchisee competitors will receive high marks from their franchisees. Many franchisors rely upon their franchisees for competitive information, however when the franchisor plays an active role in this process it benefits the franchise system and enhances franchise relations.

Is the franchisor doing the best it can?
Whether using a third-party firm to survey franchisees or doing their own survey, a franchisor must have a method for measuring their franchisee satisfaction levels. When the results are tabulated, the franchisor will know which areas if any can negatively impact franchise relations and may require attention.

Despite the countless changes that have occurred in the franchise industry over the years, one constant is the importance of franchise relationship management. Franchisors should be focused on evaluating and managing their relationship with their franchisees.

About the Author: Ed Teixeira
Ed Teixeira is a recognized franchise expert with over 35 years experience in the franchise industry. He has served as a corporate executive for franchise firms in the retail, manufacturing, healthcare and technology industries and was a franchisee of a multi-million dollar home healthcare franchise. Ed is the author of Franchising From the Inside Out and The Franchise Buyers Manual. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country and spoke at a number of venues including the International Franchise Expo and the Chinese Franchise Association in Shanghai, China. Over the course of his career, Ed has been involved with over 1,000 franchise locations and launched franchise concepts from existing business models. Ed can be contacted at 631-246-5782 or [email protected].

Franchisor Focus: The Franchise Development Process Must Be an Unbroken Chain

Posted on by Franchise Strategist

A successful franchise development process can be compared to a chain that consists of links that hold a sprocket or wheel together while they run. If one link in the chain is broken it can stop them from running like the franchise development process being interrupted.

Franchisor Focus: The Franchise Development Process Must Be an Unbroken Chain
By Ed Teixeira

When it comes to growing a franchise network, there are fundamental steps that every franchisor should have in place if they expect to grow their system with qualified franchisees.

Successful lead generation and an effective franchise development team are only part of the requirements needed to achieve system growth, along with components needed to attain positive franchise system growth. These other elements in the franchise development process in combination with lead generation and an effective franchise development team can be compared to links in a chain.

A successful franchise development process can be compared to a chain that consists of links that hold a sprocket or wheel together while they run. If one link in the chain is broken it can stop them from running like the franchise development process being interrupted.


(Click to enlarge diagram)

Franchise development chain diagram
The links in the franchise development chain:

1. Profitable franchisees. If franchisees aren’t profitable, it will be difficult for prospective franchisees to obtain positive validation. Even if the franchisor can have positive franchise growth unless the majority of franchisees are profitable it will only be a matter of time before the franchise prospect realizes the situation.

2. Positive franchisee satisfaction. The franchisor must must be aware of its franchisee satisfaction levels. Using their satisfaction surveys and obtaining personal feedback its essential that franchisors know how satisfied their franchisees are with their franchise. If there is negative feedback regarding franchisor support or other issues, they should be corrected ASAP.

3. Effective franchise development team. Whether the franchisor has in-house franchise development staff, uses brokers or employs a combination of both the development team must be experienced and effective. This requires that the results of the franchise development team are competent and achieve results.

4. Positive system growth. The franchisor should be achieving either positive franchise system growth or at least is not losing franchisees except in the case of a startup franchise. Prospective franchisees can be concerned when a franchisor has negative franchise growth or no growth at all.

5. Productive lead generation. It’s necessary that the franchisor is generating sufficient franchise leads for the franchisor team to work. Depending upon the franchise It can take 100 to 200 franchise leads to complete a franchise transaction. Without enough franchise inquiries or leads it can be difficult to recruit qualified franchise candidates.

6. Adhere to franchise qualification standards. Every franchise prospect should be properly qualified and able to meet the standards of the franchisee profile. Without adhering to the proper standards for qualifying its franchise leads there is a risk of granting a franchise to a poorly qualified individual.

7. Maintain Franchisee Engagement. When a qualified franchise candidate is found it is important that the franchisor representative maintain close contact with the candidate and respond to their concerns and questions. When engagement is not maintained the franchise candidate can lose interest in the franchise opportunity.

The franchise development process is akin to links in a chain if one link is broken the chain stops working. When franchisors follow the proper franchise development process it can lead to successful franchise system growth however, when one step in the process is not followed it can result in a lack of franchise growth.

About the Author:
Ed Teixeira is a recognized franchise expert with over 35 years experience in the franchise industry. He has served as a corporate executive for franchise firms in the retail, manufacturing, healthcare and technology industries and was a franchisee of a multi-million dollar home healthcare franchise. Ed is the author of Franchising From the Inside Out and The Franchise Buyers Manual. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country and spoke at a number of venues including the International Franchise Expo and the Chinese Franchise Association in Shanghai, China. Over the course of his career, Ed has been involved with over 1,000 franchise locations and launched franchise concepts from existing business models. Ed can be contacted at 631-246-5782 or [email protected].