The post-COVID food industry has shifted for restaurant franchises as franchisees are facing labor shortages and new technological changes. You will also begin to see a shift in consumer behavior as they lean towards healthier food options and support sustainable businesses. Today, we will explore six challenges and emerging trends and how they might impact restaurant franchises in 2022.
Key Takeaways:
- Many changes from COVID-19 are here to stay even though restrictions are lifted.
- Consumers expect healthier, more organic options from franchises.
- Multi-brand franchises are rising, which might solve some of today’s current challenges.
- Technology is driving many advances in restaurant franchises moving into 2022.
Changes to Expect in Restaurant Franchises
Knowing the future challenges and emerging trends in restaurant franchises will help you build a proactive business strategy. Smoothie King is an excellent example of a franchise that used its knowledge of changes in the restaurant industry to take actions that would protect its business. Through this proactive approach, they were able to stay afloat during the economic hit from COVID-19. To help you develop a proactive business approach, the following six changes in the restaurant franchise industry into account
1. New Advances in Restaurant Technology
Technology will help restaurant franchises meet the current labor shortage and improve their overall service. For example, Rise, a franchise known for its incredible biscuits and chicken, implemented self-serve kiosks into their restaurants, enhancing their revenue by 25%. Other new technology changes franchises are embracing include:
- QR code menus and ordering
- Contactless payment through apps or kiosks
- Pick-up lockers for deliveries
The following video explores some of these digital trends and others that will continue to grow in 2022. It covers how technology is helping restaurants deliver food on demand, offer contactless service, and improve customer satisfaction. It also looks at how you can streamline your restaurant services by replacing traditional manual systems with digital technology.
2. Multi-Brand Restaurant Growth
Companies that own and manage several brands have begun introducing multi-brand restaurants. These restaurants have two different brands from the same company operating under one roof. This is one solution for franchisees that want to expand into areas that seem to be oversaturated with restaurants.
This trend is growing quickly, with notable pairs like Dunkin’ Donuts and Baskin Robins or Kentucky Fried Chicken and Taco Bell. These types of partnerships widen your market while also decreasing your labor needs as you can share facilities, equipment, and employees between the two brands versus staffing separate restaurants.
3. Demand for More Pick-Up and Delivery Options
Over the last five years, food delivery increased by 200% and is still in high demand, despite many COVID regulations being lifted. A restaurant franchise that wants to keep up with its competitors will also need to continue offering more versatile delivery and pick-up options. However, customers are split on whether they prefer in-house delivery or third-party delivery options, which leaves the choice to restaurant managers as to what they can handle. For example, In-house delivery means that customers have direct contact with your restaurant, which helps eliminate communication errors. Meanwhile, third-party delivery will relieve the restaurant of delivery tasks so that employees can fully focus on customer service, food preparation, and other in-house duties.
The following chart outlines the current growth of the food delivery market from 2015 through the pandemic.
Image from BusinessofApps
According to these numbers, food delivery was on the rise even before COVID-19 restrictions went into place. This supports predictions that food delivery preferences are here to stay and will only be in greater demand in the future.
4. Growth of Ghost Kitchens
Ghost kitchens are restaurants that only prepare food for delivery. They do not provide dine-in options for customers. Instead, customers order food through apps or websites, and ghost kitchens prepare and deliver the orders. They are growing in popularity with an expected market reach of $1 trillion by 2030.
Franchises can use ghost kitchens and dine-in restaurants to meet the increasing demand for delivery options while also cutting costs for the business. Since you do not have to staff registers, clean a dining area, or serve customers, you do not need as many employees or a large space to operate.
According to current trends, the following chart shows how customers might be receiving their meals and snacks by 2030. These predictions show a sharp rise in the drive-thru and takeaway food service while eat-in service is only half as popular. Ghost kitchens will help you stay ahead of this shift and manage online orders.
Image from Fit Small Business
5. Interest in Healthier Food Options
Healthy eating trends are rising, with consumers now searching for more plant-based or healthy options on menus. Fast food franchises typically have a minimal selection of healthy food options. However, with the shift towards healthy eating, franchises must amend their menu to meet customer demands. For example, Chipotle prides itself on its organic, sustainable ingredients.
6. Push for More Sustainable Business Models
Sustainability is a leading trend in many businesses in 2022, including the restaurant industry. About 20% of Americans consistently think about sustainable food production. Building a sustainable restaurant will make you more appealing to customers, lessen your restaurant costs, care for your employees, and protect the environment. Here are a few ways you can create a sustainable restaurant franchise:
- Serve quality, local food
- Pay fair wages to staff
- Limit water, energy, and gas use
- Switch to renewable energy sources
- Implement recycling
- Minimize food waste
- Use recyclable packaging
Stay on Top of Restaurant Franchise Trends in 2022
Your restaurant franchise has many opportunities for growth amid today’s changes in the restaurant industry. However, to succeed, you must stay on top of the quickly changing trends while also building a solid support network. At SIAL America, we hold regular exhibitions to promote your business and make professional connections that will help you succeed beyond 2022.
Build your network by connecting with other restaurant franchise experts by participating in our next event.
