If you are considering franchising your restaurant – depending if you are reading this article during the COVID-19 Coronavirus pandemic or, more likely, as we ease out of and recover from this pandemic – the restaurant industry, the franchise industry, small business, and the world has changed. Health, safety, families and our nation are naturally our first and foremost priority but so is recovery, growth and rebuilding! With change comes opportunity and as the restaurant industry is reshaped, so are opportunities for franchising and growing your restaurant.
The Restaurant and Franchise Industries have Changed and There is Opportunity in Franchising Your Restaurant
As we work with our restaurant clients through this crisis, many have faced closures while others are maintaining operations with curbside take-out and delivery. Some of our delivery oriented restaurant brands that maintain small retail footprints and that have always been built around take-out and delivery are even holding their own and maintaining sales. No matter the situation, one commonality that I see in the founders and management teams of our restaurant clients is a positive belief that they will weather the storm and that there is opportunity ahead.
Based on the experiences and advice of our clients, these are some important factors to consider if you are thinking about franchising your restaurant:
- Opportunity in the Restaurant Industry – In times of crisis like the 2008 financial collapse and, now the COVID-19 pandemic, there will be a shake-out and, eventually, a recovery. Restaurant brands that learn from and whether this storm will have significant opportunity in the coming franchise and restaurant industry recovery.
- Opportunity in Retail – The retail landscape has been altered and what was previously a hot landlord market will now become a market more favorable to restaurants and franchisors. During recovery stabilized and even reduced rents will help to increase restaurant and franchisee profitability.
- Opportunity in Second Generation Restaurant Locations – The space left behind by the restaurant locations that, unfortunately, don’t recover, represent a lower-cost expansion opportunity as second-generation lower cost locations. For smart restaurant franchisee’s, second generation leased retail locations represent an opportunity to build-out locations at lower costs and achieve higher cash-on-cash returns on investment.
- Opportunity to Leverage Consumer Preferences – During this period of crisis consumer behavior has changed and there will be opportunity ahead for restaurant brands that better leverage delivery, pick-up, and even opportunities with ghost kitchens. Retail locations will still matter and will remain important in maintaining the connection between brand and customer, but there will be opportunity for additional innovation.
- Opportunity in Franchise Sales – The franchise landscape has been altered and what mattered to franchisees in the past has changed and the franchise lead generation funnel has changed and this represents an opportunity for start-up and emerging restaurant brands. More than ever, now is the time to engage in thoughtful and honest dialogue about your brand, your brand story, and how your restaurant can improve the lives of your future franchisees.
Franchising Will Remain a Winning Formula
During this time of crisis the value of the franchisor-franchisee relationship has been front and center. Good franchise systems are focusing on franchisee support and win-win relationships and future franchisees are taking notice. As we recover there will remain shifts in the work place and we expect there will be significant pent-up franchise demand by well qualified and financed individuals who will be leaving corporate America. Franchising is all about long-term wins and if you are focused on a 1, 2, and 3 year strategy, you restaurant and brand can be one of the many success stories that – together – we will be achieving as our nation recovers.
Getting Started With A Winning Formula
To learn more read our Ultimate Guide to Franchising Your Business, How to Franchise a Restaurant, and watch our franchise webinars. Contact our team at (800) 976-4904, live-chat, or by email. We look forward to assisting you and helping to empower you and your team to grow!
