franchising feature
EXPERT ADVICE: Robert Toth | Special Counsel | Sanicki Lawyers
Food in Franchising
Where are we now? We all have to eat, so surely the food and hospitality sector is virtually recession proof you would think but every sector has its unique challenges.
rent payments and get back to recouping rent leading to some vigorous rent and lease renewal negotiations.
Some of those challenges over the past few years have been the impact of covid which also saw the rise of home delivery services such as Uber Eats, Deliveroo and others.
CBD cafes, bars and restaurants suffered enormously through that period and are still attempting to bounce back with office workers returning to the CBD at around 65% to pre Covid times and foot traffic in centres such as QV and Emporium still well below pre covid figures.
Then there were (and continues to be) staff shortages with many restaurants and cafes struggling for staff. Covid rent relief kicked in for retail tenants and kept many businesses alive when they would otherwise have failed but those benefits have now stopped and landlords are catching up and seeking to recover deferred 34 business franchise MAGAZINE
Many hospitality and fast food franchisees were already struggling before covid due to rising costs and tightening margins of course.
Supermarkets went gangbusters during Covid (apart from supply chain issues) and amazingly anything that was for sale used cars, and houses went crazy! Ironically many food and café establishments
in the suburban areas did very well during covid due to the forced working from home conditions and I know many of those cafes were more profitable without having staff waiting on tables. On top of all of this consumer demand, tastes have changed with increased demand for vegan products leading to most in hospitality having to now offer vegan options. The food and hospitality sector is dynamic, somewhat fickle and highly competitive with so many options for consumer tastes. Many businesses in the sector are franchised brands from the most well known McDonald's the world's largest fast-food restaurant chain (more than 39,000 locations in around 100 countries) to the myriad of other well known chains we all know Subway, Pizza Hut, KFC and the list goes on.
