How Reforestation May Change Restaurant Franchise Investment Strategies

Reforestation is the process of replanting an area with trees. Though clearly a benefit for the environment, reforestation’s impact on franchise brands may not be so positive, as a larger food supply will become necessary as the global population continues to grow.

Additionally, the need for farmland will likely increase, and the investment strategy in restaurant franchises is bound to change because of it.

On Tuesday, Fiona Harvey of The Guardian reported that an over-reliance on tree-planting to offset carbon emissions could drive up food prices by 80% in 30 years. “Planting trees has been mooted as one of the key ways of tackling the climate crisis, but the amount of land needed for such forests would be vast, and planting even a fraction of the area needed to offset global greenhouse gas emissions would encroach on the land needed for crops to feed a growing population,” she said.

There are pre-existing risks in the short-term food supply chain, like a chicken shortage that has forced some to consider new menus or increased prices. This could be a mere taste of what’s to come if the global population demand exceeds available farmland. It will be tough for an emerging franchise to navigate a struggling supply chain even this year, and it is likely to get worse as the demand for farmland increases.

Projecting menu prices 30 years from now is difficult, but a long-term projection of growth may favor the larger restaurant franchises that can negotiate better large-scale food supply deals. Just as buying in bulk can save money per pound, the biggest restaurant chains can stock their food supply for less money and find themselves at an advantage compared to other, smaller franchises. 

That alone might lead the biggest franchises to get even bigger, leaving smaller ones in the dust. The demand for food might push some smaller companies out of business unlike before if they aren’t able to navigate a higher-cost supply service.

A comprehensive franchise investment plan should consider these long-term risks. A revised strategy could lead somebody to pursue business development with a well-equipped franchise, as they will be the most prepared to navigate this roadblock that could be here sooner than we think.