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What’s Hot in Restaurant Franchising Right Now? Two Industry Experts Weigh In

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Opinions expressed by Entrepreneur contributors are their own.

The past two years have triggered some radical changes to how food and beverage franchises operate and have brought significant shifts in consumer behavior when it comes to dining. The franchises that have been most successful were able to quickly adapt and thrive with ongoing changes by tapping into what’s hot — and not — in the current food and beverage industry.

QSR

Currently, the leading business model in restaurants is QSR — otherwise known as quick service restaurants or fast food, like McDonald’s or Taco Bell. QSR restaurants were generally successful at pivoting during the pandemic, and most picked up significant market share as a result. “They were able to move into delivery channels that weren’t there; they were able to expand on third-party carry-out— they just got the model better than anyone else,” says We Sell Restaurants co-founder Robin Gagnon. “So coming out of the pandemic, we’re really seeing all QSR models pricing at the highest multiples and selling at the fastest rate, and the turnover associated with that is in the best range.”

QSRs were able to adapt their models faster than full-service restaurants, and they embraced more in terms of technology and flexibility to meet shifting consumer demand. “They were able to drive sales and improve upon their labor models and their food costs in the moment with agility, and for that reason they have been the most successful — through the pandemic, outside the pandemic and today,” Gagnon says.

Related: A Billionaire Who Operates More Than 2,400 Franchises Knows These Types of Franchisees Make the Most Money

Technology

There’s no getting around it — the big buzz in restaurants right now is tech in varying degrees. Though the industry’s current hottest technology has been available for years, demand has spiked in the past two years as online ordering, optional contact and need for alternative labor has increased. “I have worked with brands where there was no online ordering, but you no longer can get away with ignoring technology in restaurants,” says Lauren Fernandez, founder and CEO of Full Course. “Franchisors are having to invest in that tech stack, and not only is that an additional expense for franchisors, but for franchisees too.”

However, it’s not just online ordering and delivery that restaurants need to adapt to — increasingly, it’s lack of labor. Several franchises are adopting technology alternatives to mitigate the recent labor shortage affecting their operations. Whether it be in the kitchen through automation or out in the streets with robotic delivery, franchises are finding ways to incorporate a new wave of technology to minimize costs, increase efficiency and boost profitability.

Still, Fernandez cautions franchisors and franchisees alike to be intentional and strategic when entering the tech space. “You have to make sure you’re pushing out technology for the right reasons and not just technology’s sake,” Fernandez says. “Be careful and diligent in testing technology. When you get a flood of tech into any industry, you get a lot of stuff that’s fly-by-night, or not properly vetted, or makes a lot of promises it can’t deliver, so it’s very important for franchisors to test the tech before they push it out into a system.”

Related: Square Makes it Easy to Add Online Ordering to Your Restaurant

Tread lightly with fads

When looking at thriving restaurant trends, it can be tempting to take the leap into spiking demand for concepts that focus on niches like poke, fried chicken or the recent stuffed cookie craze. Still, be wary of jumping in too soon — or late — as it takes time for the market to reveal if these concepts are fads or lasting industries that eventually become their own category. “There’s a lot of saturation in the market really fast, and there’s buzz and everyone gets in, but then it’s oversaturated,” Fernandez says. “We’re seeing brands testing out chicken to steal market share, but I would predict we’ll see some consolidation. I don’t think it’s going away, but there’s not enough for all of them.”

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