Why should business owners consider investing in and opening a restaurant franchise after twenty one months of pandemic-induced unpredictability in the restaurant business?
Consider Berkshire Hathaway CEO and multibillionaire Warren Buffet’s advice to investors: “If you think being an entrepreneur is risky, try working for someone else for 40 years and living off social security.” Many people will panic if they can’t find a charger before their phone dies, but they won’t panic if they can’t find a plan before their dream dies.” Success is defined by the ability to be patient while acting aggressively when the time comes.
During the pandemic, I witnessed three specific restaurant concepts not only survive, but thrive. They saw the forest for the trees, realizing that many trends that arose out of necessity during the pandemic, such as streamlined delivery and contactless pickup, are here to stay. The owners of all 3 franchises made huge investments in technology, which are already paying off for their franchisees.
Entrepreneurs interested in franchising should carefully consider what distinguishes these concepts and look for similar characteristics in a franchise partner.
Financial Disclosure: Dan Rowe is the CEO of Fransmart, the franchising company that has Rise Southern Biscuits & Righteous Chicken, Brooklyn Dumpling Shop, and Taffer’s Tavern as partners.
Rise Southern Biscuits & Righteous Chicken
At the start of 2020, Rise founder Tom Ferguson avoided many common pandemic-induced setbacks. His successful restaurant had undergone a rebranding a few years before. With the rebrand came changes to the business model, such as shifting priorities to online and delivery orders.
By the end of 2019, all of the pieces were in place for the operational transition to take place in February 2020. Ferguson says of his fortunate timing, “I can’t claim visionary, but I can claim luck.” Rise had the flexibility to quickly transition from cash registers to self-service kiosks and add curbside service once the pandemic was fully operational in March 2020. Three of its corporate stores now have heated lockers for contactless customer and delivery driver pickup. Corporate store sales increased by more than 25%, while company-wide sales increased by 15%, with no signs of slowing.
Rise was able to automate restaurant functions typically performed by cashiers and food runners by installing kiosks and food lockers, resulting in a reduction in the number of employees required per shift. Rise was able to save money on daily labor costs thanks to the system, which allowed employees to focus on food quality and service speed. Despite having fewer employees working each shift, Rise increased their service speed and received higher guest feedback scores.
Many quick-service restaurants aim to keep labor costs at around 25% of sales, but Rise’s ordering efficiencies helped keep their downtown Durham, North Carolina, location’s labor cost percentage at an average of 18.18% throughout the first half of 2021, even dipping as low as 16.14% *.
Dumpling Shop in Brooklyn
Previously, automats used coin-operated cubbies with hot food and beverages behind a glass window. Due to the lack of waiters, automats could serve a large number of customers per day at a low cost.
Throughout 2020, Stratis Morfogen opened Brooklyn Dumpling Shop, integrating technology to reimagine the automat as well as permit an entirely contactless procedure from payment to pick up. The restaurant now serves 32 different dumplings and spring rolls, ranging from bacon cheeseburger to peanut butter and jelly.
Customers can order online from anywhere within a few miles of the restaurant, or at an in-store kiosk in real time. Customers receive a barcode to wave in front of their designated food locker after placing an order and agreeing on a pickup time. The locker automatically opens, and the customer receives their hands-free order from the temperature-controlled locker (depending on order type).
The shop recently announced expansions into Texas, Florida, and Georgia, and it expects rapid growth across the country.
The Taffer’s Tavern
Jon Taffer, an industry-leading hospitality expert and star of Paramount Network’s Bar Rescue, is taking safe, contactless pickup to the next level with his new full-service restaurant concept.
Taffer’s Tavern is the very first full-service restaurant to adopt fast casual to-go methods in its full extent. Taffer’s offers diners an advanced, state-of-the-art contactless pickup experience with the first thru-wall installation of the Carter-Hoffmann Pick Up Cabinet, which eliminates the traditional experience of placing a to-go order at the host stand (PUC). The pickup technology allows for street-side, walk-up carryout. Without entering the restaurant, a guest or third-party delivery service can access one of eight to-go lockers located outside. Outdoor food retrieval reduces traffic inside the restaurant, improving workflow protocols.
“Taffer’s Tavern is a game-changing concept.” “Not only do we want to provide our customers with an exceptional dine-in experience, but we also want to guarantee that their take-out experience is just as exceptional,” Taffer says. “Catering to our customers is the most important job we have, and we do it by utilizing the most advanced restaurant technologies in both the front and back of the kitchen.” With this in mind, we chose the most innovative, safest, and convenient option available to meet our takeaway customers’ high expectations.”
Taffer’s solution to the labor shortage was to design the “future kitchen.” Because of the use of sous vide cooking methods, approximately half of Taffer’s kitchen work is done outside of the kitchen. Although one of the primary goals of sous vide cooking is to provide a better guest experience and consistency, it also reduces the need for extensive cleaning and prep. The concept necessitates half the kitchen staff of a traditional restaurant, allowing franchisees to pay their employees more and improve employee retention.
The current real estate market provides unprecedented opportunities for new franchisees to act quickly and profit from a fast-growing and “future-proof” restaurant franchise. Entrepreneurs should look for restaurant concepts that aren’t afraid to invest in technology and are looking ahead.