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Entrepreneur Magazine Offers Predictions for the Future of Restaurant Franchising
2021 may have as many opportunities as potential pitfalls for the industry.
In a year that, for restaurants, has been defined by a host of dramatic and unprecedented challenges, the franchise industry is approaching 2021 with caution. It’s rare these days to see the word “future” without “uncertain” preceding it. Still, we’re starting to see some predictions of what might be in store for restaurant franchising in 2021 and beyond.
On Friday, Entrepreneur published an article by franchise consultant Mark Siebert that lays out his guidance for restaurant franchises preparing to survive in the new consumer landscape.
Franchise brands should be focused chiefly on three areas, Siebert says: “financial stewardship, dependable yet flexible revenue streams and trust rankings.”
Any restaurant that has survived this long into 2020 has likely already undergone an extensive financial overhaul, but according to Sibert, there’s more work to be done.
Restaurant owners have no doubt spent these last months looking at every cost and trimming where they could. Some have opted for a restaurant audit to identify areas where costs can be better contained to increase unit-level performance while at the same time maintaining brand standards. Now, more than ever, operators need to be proactive in asking for discounts and favorable terms during this time when vendors to the industry might be willing to make deals. A procurement review can reveal opportunities for savings. However, be careful about making long term commitments for short term gain.
As for “dependable yet flexible revenue streams,” Siebert advises franchisors to provide franchisees with a range of diversified profit-generators. Crucially, franchisors must also look to franchisees for innovation.
And franchisors need to keep in mind that some of the best ideas in franchising come from franchisees (breakfast at McDonald’s for example). After all, they know their community and their customers best. The franchisor needs to strike the balance between encouraging franchisee ideas that can contribute to the bottom line and being careful the franchisee does not go rogue and dilute the brand.
Finally, according to Siebert, restaurant franchises in 2021 will live or die by the degree to which consumers trust the brand. Even franchises that already enjoy strong consumer trust need to be staunchly protective of that trust, which Siebert says will be easier to lose than ever before.
If your front-of-house personnel leaves something to be desired in terms of sanitation and social distancing compliance, your customers will naturally be skeptical about what is going on in the back of the house that they cannot see. At the same time, employees will need to trust their colleagues are keeping COVID-19 concerns top of mind even with side duties, such as cleaning, stocking and prep work.
