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While restaurant sales, in general, have been steadily improving since the early days of the pandemic, <a href="https://www.npd.com/wps/portal/npd/us/news/press-releases/2021/with-hope-for-recovery-in-2021-the-us-restaurant-industry-ends-2020-making-its-way-out-of-the-steep-declines-caused-by-pandemic/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686" target="_blank" rel="nofollow">newly released data from The NPD Group</a> provides some interesting insight into how full-service and QSR chains have been weathering the crisis differently. In April, casual dining chains saw a whopping 70% decline in sales, while QSR concepts only saw a 35% decline. Last month, the full-service category experienced transaction declines of 30%, while the QSR industry saw a decline of 8%.&nbsp;Over the past few months, traditionally dine-in focused restaurant chains have taken a page out of the quick-service handbook in an attempt to cut losses.&nbsp;<h4>The Big Difference Between QSR and Casual</h4>The primary factor for this steady discrepancy between casual dining and QSR is off-premise services. This is an offering that has been a staple of the QSR segment for decades but has become an invaluable lifeline amid <a href="https://1851franchise.com/national-restaurant-association-survey-finds-17-of-all-us-restaurants-closed-in-economic-free-fall-2714475">dining room closures</a> and <a href="https://www.bloombergquint.com/business/covid-superspreader-risk-is-linked-to-restaurants-gyms-hotels?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686" target="_blank" rel="nofollow">consumer anxiety about eating in restaurants</a>. McDonald's U.S. comparable sales <a href="https://corporate.mcdonalds.com/content/dam/gwscorp/assets/investors/Q3-20_Earnings_Release_99.1.pdf?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686" target="_blank" rel="nofollow">were up 4.6%</a> during Q3 2020, for example, marking its highest monthly comps in nearly a decade, McDonald's CFO Kevin Ozan said <a href="https://seekingalpha.com/article/4387002-mcdonalds-corporation-mcd-q3-2020-results-earnings-call-transcript?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686" target="_blank" rel="nofollow">during the company's October earnings call</a>.Whether it be <a href="https://1851franchise.com/driving-the-competition-fast-casual-chain-eateries-are-implementing-drive-thrus-to-compete-with-fast-food-giants-2709766">introducing drive-thru lanes</a>, <a href="https://1851franchise.com/wingzone/wing-zone-is-thriving-by-providing-contactless-free-delivery-curbside-pickup-and-247-franchisee-support-2712739">implementing curbside pick-up</a> or <a href="https://1851franchise.com/panera-bread-finally-joins-the-third-party-delivery-party-2710862">partnering with third-party delivery providers for the first time</a>, full-service restaurant chains are now realizing that they need new systems if they hope to achieve the same results as their QSR peers.For example, IHOP is one full-service chain that has pivoted successfully during the pandemic. The chain implemented a brand new curbside pick-up offering within weeks of the pandemic, and has seen a major boost in sales. In Q3 of 2020, off-premise comp sales at IHOP were up by 154%, <a href="https://www.forbes.com/sites/aliciakelso/2020/11/02/ihop-is-rethinking-its-real-estate-format-to-get-back-to-growth/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686" target="_blank" rel="nofollow">according to Forbes</a>. The off-premise mix is "a little over 30%, split nearly evenly between delivery (16%) and takeout (18%), with more than 20% of all orders placed digitally," the article states.Now, to build off of this momentum, IHOP is even considering a brand new real estate strategy. “We are looking at prototypes to think how we handle to-go orders more efficiently. What are better, easier ways to pick up food? Does that include a pickup window?” <a href="https://www.forbes.com/sites/aliciakelso/2020/11/02/ihop-is-rethinking-its-real-estate-format-to-get-back-to-growth/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686" target="_blank" rel="nofollow">IHOP President Jay Johns told Forbes</a>. “We’re thinking through a lot of ideas right now and the footprint itself, asking if we need as much space, or if we dedicate more for to-go, less for tables. If we look at real estate that automatically has a patio. We were already thinking about to-go differently, but now we’re thinking about it more and ideating the most optimal ways to pick up food.”&nbsp;<h4>A Long Time Coming</h4>Although COVID-19 has undoubtedly sped-up the process, the full-service category was already looking to shift towards off-premise to <a href="https://foodinstitute.com/focus/full-service-restaurants-struggle-amid-success?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686" target="_blank" rel="nofollow">combat mediocre same-store sales</a>. Last year, <a href="https://1851franchise.com/flipd-by-ihop-why-fast-casual-spinoff-concepts-are-the-latest-trend-for-full-service-dining-brands-2711823#stories">IHOP announced the roll out of Flip’d</a>, a fast casual concept that was designed to target the <a href="https://1851franchise.com/pizza-hut-to-test-cubbie-system-pick-up-location-in-los-angeles-2710559">to-go and delivery crowd</a> with <a href="https://1851franchise.com/self-service-kiosk-market-to-reach-over-30-billion-2710538">guests ordering from a digital kiosk or online</a>. In February of 2019, The Cheesecake Factory opened an Asian-themed fast casual concept called <a href="https://www.nrn.com/casual-dining/cheesecake-factorys-fast-casual-spinoff-set-open?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686" target="_blank" rel="nofollow">Social Monk Asian Kitchen</a>. That same month, Hooters announced<a href="https://www.chicagobusiness.com/restaurants/hooters-minus-short-shorts-expanding-here?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686" target="_blank" rel="nofollow"> its fast casual concept Hoots</a>.&nbsp;Now, these concepts may be better positioned than ever to compete against fast food giants, especially since <a href="https://www.restaurantdive.com/news/Casual-restaurant-curbside-pickup-faster-than-fast-food/586880/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686" target="_blank" rel="nofollow">a recent report from Rakuten Ready found that casual dining had faster curbside pickup service than the QSR segment</a>. While this may be surprising at first glance, it actually makes a lot of sense. Full-service restaurant brands benefit from large real estate footprints that can hold more parking spots, which is one of the biggest operational hurdles for curbside pick-up.Of course, these off-premise channels come at a price, especially if they are integrated with advanced POS technology or <a href="https://1851franchise.com/warning-restaurant-owners-third-party-delivery-services-are-taking-over-2710756">third-party delivery providers who charge a hefty commission fee</a>. Still, franchisors may not have much of a choice, as these investments can help curb future closures and can yield a strong ROI if consumers remain dedicated to these channels after the pandemic ends. Digital sales, for example, are <a href="https://www.incisiv.com/report-limited-service-restaurant-digital-maturity-benchmark-2020?utm_campaign=Restaurant+Benchmark+2020&amp%3Butm_source=Ketner+Group&amp%3Butm_medium=Press+release&amp%3Butm_content=Ketner+group+promo&utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686" target="_blank" rel="nofollow">now expected to make up more than half of limited-service restaurants’ business by 2025</a>, a 70% increase over pre-pandemic estimates.<h4>How the Franchisee Can Help</h4>For full-service franchisors who are looking to adopt these new revenue streams but are still nervous about the outcome, willing franchisees can be a great way to pilot new initiatives. <a href="https://www.nrn.com/casual-dining/applebee-s-testing-its-first-drive-thru-location?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686" target="_blank" rel="nofollow">An Applebee's franchisee is adding the brand’s first drive-thru pickup window to an existing restaurant in Texarkana, Texas, early this year</a>. The franchisee will evaluate feedback from guests and operators to potentially inform future store design. Applebee’s saw off-premise business <a href="https://www.restaurantdive.com/news/how-13-casual-chains-are-turning-sales-around/589509/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686" target="_blank" rel="nofollow">make up 20% of its sales during Q3 and off-premise YOY sales increased by 144%</a>.Many franchisees are even taking matters into their own hands. Nearly 40% of franchisees surveyed by TD Bank as part of its <a href="https://www.prnewswire.com/news-releases/off-premise-sales-and-non-traditional-payment-options-are-top-of-mind-for-restaurant-franchisees-in-covid-19-landscape-301156796.html?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686" target="_blank" rel="nofollow">2020 Restaurant Franchise Pulse</a> said they added drive-thru capabilities to overcome pandemic-related restrictions, while 72% rolled out enhanced delivery services or online and mobile ordering platforms.<h4>The Future is Fast Food?</h4>This all begs the question: is the traditional, sit-down-only restaurant franchise a thing of the past? With some experts claiming that <a href="https://www.restaurantbusinessonline.com/financing/full-service-restaurants-may-not-recover-until-2025-new-data-show?utm_source=1851franchise.com&utm_medium=article&utm_campaign=why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686" target="_blank" rel="nofollow">full-service restaurants won’t fully recover until 2025</a>, it is likely that many of the casual-dining staples like IHOP and Applebee’s are going to start to look more and more like McDonald’s in an attempt to bounce back quicker.&nbsp;Hopefully, once dining rooms do reopen, full-service restaurants will still have some of those traditional dine-in systems in place to keep up with the pent-up consumer demand. Better yet, with all of these new off-premise channels in place, maybe customers won’t have to wait as long to get a table!

Why Full-Service Restaurant Franchises are Starting to Look More Like QSR’s

1851 Franchise

As full-service restaurant brands like IHOP and Applebee’s adapt to recover from the pandemic at the same pace as their QSR competitors, the distinction between the two categories may be shrinking.

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Caring Transitions

How Caring Transitions Supports Adult Children in Managing Their Parents’ Moves

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Senior Care Authority Is a Great Fit for Multi-Generational Business Ownership

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