Impact Of Covid-19 On The Restaurant Franchise Industry

This is an excerpt from Big 7 Media‘s 100-page report on The Future of the Restaurant Industry in 2020.

This detailed report provides current operational guidance and insight into emerging hospitality trends for 2020-21. We investigate the trends that are impacting the industry, both currently and in the future. You will learn: how to increase sales, current and future trends, supply chain issues and more.

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Restaurant Franchise Industry in 2020

Franchise restaurants, falling mainly into the fast-food or fast-casual sectors, will have better success in 2020-21. While visits to QSR (quick service restaurants) decreased by 19% in March, it is franchises that made up the majority of the sizeable 67% jump in delivery orders.

Franchisees also benefit from widespread communication systems and have access to more management support than independent restaurants. Many franchise locations are owned and operated in small, local markets. This provides a two-fold advantage of playing the local angle alongside larger brand recognition.

Jim Coyle of Coyle Hospitality states that because of Covid-19, “a new set of customers (older and more affluent) are now comfortable with apps, online ordering and curbside pick-up.” He expects upscale QSR concepts like Nando’s and Bolay to have more wallet share from both fast-food and more up-market consumers.

Growth for 2020-21 will also depend on the size of the franchise chain. Over half of micro-emerging brands (under 25 locations) stated they’ve stopped their franchise sales efforts due to Covid-19, compared to only 16% of those with between 100 and 500 locations. We expect to see slower growth of franchises into 2021, with a focus on successfully managing present locations.