Key Market Dynamics Impacting Restaurant Franchising

In an article published by Franchise Journal (see page 60), iFranchise Group Mark Siebert predicts that as we (hopefully) exit the pandemic, the restaurant industry will look quite different. Restaurant sales and employment levels were of course significantly impacted during the early shutdowns, but what wasn’t as predictable was the resulting labor shortage, as employees that may have been laid off or who have since taken stock of their careers, are deciding not to return to their foodservice jobs.

This shortage of labor is even more problematic when coupled with higher costs for food and rent, not to mention supply shortages. And yet, the restaurant industry is expected to grow in terms of revenues. Similarly, restaurant franchising had an exceptional year in 2021, a trend which is expected to continue well into 2022 and beyond.

Dining out is still a great American pastime, but what’s different today is how people dine out: with more drive-thrus, takeout/delivery options, outdoor dining and even ghost kitchens and meal-assembly kits taking hold in the industry. This means additional, new profit centers for restaurant owners; Siebert discusses these revenue opportunities and others in the article.

He also advises that whether a restaurant brand is already franchised or if a restaurant owner is considering franchising, now is the time to reassess strengths and opportunities, and take a close look (or have an outside expert like a franchise consultant take a close look) at the business model itself — its processes, procedures, and culture — to ensure that the franchise offering is both properly structured and attractive in today’s market.