The Future of Nontraditional Franchise Locations

Nontraditional real estate locations, such as airports, college campuses, grocery stores and stadiums, have long been a staple within the franchise industry. As challenging as COVID-19 has been on the franchising industry, units that are located in nontraditional venues have had a particularly tough year. 

For one, nearly every college campus has been shut down for nine months and many of these schools are opting to continue with remote learning for the foreseeable future. American sports stadium have been operating at limited capacity since mid-March and when it comes to airports, traffic has only been about 20% of pre-COVID-19 numbers, according to the Transportation Security Administration.

How Nontraditional Franchise Locations are Adapting to COVID-19

While those units in nontraditional spaces may be struggling right now, the nature of nontraditional franchising is all about adapting, and many of these franchise brands have been finding creative ways to survive.

“There’s a reason they call our field of work nontraditional,” Jim Gregory, founder and CEO of OnCampus Brands told QSRMagazine. “We’ve always had to be good at adapting to space and constraints, and embracing upside opportunity.”

For example, ghost kitchens are becoming more and more popular on college campuses, and many brands are experimenting with ways to promote this offering in order to eliminate face-to-face interactions and cut back on labor costs. A few months into the pandemic, Firehouse Subs began rolling out lockboxes at college campus locations where students could use a code sent to their phone ahead of time to pick up food in designated cubbies. 

The Use of Kitchen Robotics Technology

Other franchisors are starting to experiment with new technologies at nontraditional locations. The restaurant kiosk market is expected to grow considerably through 2026 in response to the COVID-19. The global food robotics market was expected to grow at a CAGR of 12.7% between 2019 and 2025 prior to the crisis, and that expansion could be faster now. 

For example, Chowbotics' robot, Sally, uses its technology to assemble customizable salads from 22 sealed ingredients from a nine-square-foot refrigerated machine with a touchscreen interface. Chowbotics has already deployed more than 100 robots that have served over 185,000 meals since its 2017 debut. As the salad bar landscape struggles amid COVID, Sally’s innovative technology is designed to safely serve custom meals in grocery stores, hospitals and college campuses.

When it comes to other operational costs, Sally robots cost about $35,000  — a fraction of the cost of opening a new restaurant — and they only need to sell about seven bowls a day to break even, according to The Spoon. These robots can also increase traffic, with some hospitals selling about 65 to 70 bowls a day throughout the day and into the night thanks to Sally. These stations can also help increase brand awareness at nontraditional locations like hospitals and will likely continue to appeal to safety-conscious consumers after the pandemic ends.

Nontraditional franchising has always been about pushing the limits of an established business model. While this pandemic has been challenging, it has also ensured that these brands are able to continue breaking the mold.