Rick Bisio

necessitY breeds innovation: New Opportunities in QSR and Fast Casual Dining

rick Bisio is one of the countries most respected franchise coaches and author of the Amazon best seller, The Educated Franchise – 3rd Edition. Since becoming a franchise coach in 2002, Bisio has assisted thousands of aspiring entrepreneurs nationwide through franchise resales and helping them explore the dream of business ownership. www.afranchisecoach.com

For anyone considering owning a restaurant franchise, right now is great time to put those plans in place and move forward. Perhaps no industry was impacted more in its day-to-day operations than restaurants. But through adversity comes change and many in the sector have bounced back as a result.

As customers’ expectations and preferences have shifted, many restaurants had to do the same, or risk going out of business. While some segments of the restaurant industry have struggled to evolve, others have done well, even flourishing with the changes. As a franchise coach, I have seen the best examples of this trend coming in the quick-service restaurants (QSRs) and fast casual restaurants.

QSR and fast casual restaurants have become a fast-growing and increasingly profitable business concept, with growing markets with openings for new franchisees. Market experts anticipate the fast casual market alone will grow from $125.6 billion in 2019 to $209.1 billion by 2026. A large part of this is due to fast casual restaurants and QSRs being able to adapt quickly. Most of these restaurants are parts of franchises, which provide their locations with technology services to stay on top of the latest trends and developments. The franchisors also handle market research to know what practices are bringing in the most customers, something that independent restaurants tend to struggle with.

Get it to Go

One reason QSRs and fast casual franchises are profitable concepts is the last three years takeout and delivery services have grown in popularity. QSRs and fast casual restaurants have been able to add or expand drive thru services, and third-party delivery services like GrubHub and DoorDash have sprung up to provide such services to restaurants that previously haven’t provided delivery or takeout. Additionally, many QSRs and fast casual franchises have adopted curbside takeout, which has become popular for those who prefer limited-contact or no-contact pickup. As an example, Texas Roadhouse reported its off-premises sales have risen from 7% in 2019 to 14-15% by 2022. Meanwhile, customer engagement technology company Medillia Zingle stated a recent survey of its users show 87% of consumers want restaurants that provide curbside pickup to continue to provide the service and to limit in-person contact. QSRs and fast casual franchises have capitalized on these consumer trends.

There has also been a steady shift to online ordering which was only accelerated by the pandemic. According to Statista.com, a market and consumer data reporting website, the online food delivery market is projected to reach $63.02 billion in 2022 and grow to $96.5 billion by 2027. Again, this is an area where QSR and fast casual restaurant franchises have flourished, as franchisors are well equipped to handle websites and internet services, like online ordering, while the franchise owners and their staff focus on providing quality food and customer service.

cutting-edge tech

QSR and fast casual franchises are among the earliest adopters of technological innovations in the restaurant industry. Ordering online is the most obvious example, but even in-person ordering has seen technological upgrades. Ordering kiosks have been added to many national

restaurant chains, including McDonald’s, Panera Bread, Subway, and others.

Why own when you can rent?

QSRs are good concepts for a growing industry trend: ghost kitchens. This is a remote space in an existing restaurant rented out to handle delivery and/or takeout orders. This practice has gained a lot of interest with restaurants equipped for high-volume deliveries, particularly restaurants with large kitchens which have had to limit their dine-in capacity. When creating these ventures, the restaurant providing the kitchen space usually looks for concepts that mesh well with their in-house fare, making similar cuisine that requires the same sort of ingredients and kitchen equipment.

new ideas, new challenges

These innovations have helped QSR and fast casual restaurants succeed in difficult times. However, all new ideas take time to get the bugs worked out, and there are challenges to consider before opening your own QSR or fast casual restaurant.

Curbside takeout, delivery, and drive-thru services help franchises keep serving their customers, but order accuracy is very important. If a dine-in order is mixed up, it’s simply a matter of exchanging the incorrect food. But when your customers pick up their food and leave, they may not discover the mistake until they get home, requiring them to drive back or accept what they were given. In either case, it’s an inconvenience that can cost a restaurant further business if it happens too frequently. Order accuracy is also important with self-service kiosks, but with a different twist. Kiosks can ensure orders are accurate because the customers themselves are putting in the information. However, it depends on the interface being user friendly. Customers who aren’t tech-savvy, such as older customers, may be confused by a complicated ordering system. Ghost kitchens help restaurants make use of unused space and allow QSRs to serve “One reason QSRs and fast casual franchises are profitable concepts is the last three years takeout and delivery services have grown in popularity.”

their customers without having to manage a physical location. However, it’s important for the host restaurant to have the space and equipment available and for the QSR to find a location with sufficient online orders and access to third party delivery services.

new service, same Quality Fare

The events of the last three years have seen the restaurant industry go through a period of rapid evolution. Sometimes change and growth is painful and difficult, but ultimately those who can adapt will come through it stronger than before. QSRs and fast casual franchises have risen to the occasion. They are a good franchising opportunity for those willing to adopt new practices while maintaining the qualities that keep customers coming back, even when times are tough. While some have had to close their doors, these enterprising businesses have found their time to shine.