There are some eternal truths in the quick-service restaurant industry: Margins are thin. Good employees are hard to find. Customers are demanding. And there is never enough staff or time in the day. But the tools and approaches we have to address these challenges are always evolving, and we seem to be in the middle of a supercharged boom in terms of quick-service innovations. From mobile ordering to robotic servers, from data mining to ghost kitchens, there are new ideas everywhere you look.
And that presents its own challenge. How do restaurant operators identify when to focus on the fundamentals and when to try something new? What challenges are most important to solve? And how can it all work together?
My company, Delaget, has some ideas regarding that last point. We offer a single dashboard that collects and presents data from the many systems used to operate restaurants, aggregates data from multiple locations, and puts the data into context to help owners and managers make better business decisions. That means we also have a unique birds-eye view of the challenges and solutions in play today and feedback from our customers (who include many of the country’s top quick-service franchisees).
It's in that capacity that I want to share what I currently see as the six key questions facing quick-service restaurants today, and some thoughts on where you will find answers.
How do I make operations more efficient and profitable?
This of course is the big question, and the answers to the other questions are part of the answer. But at a higher level, there are two areas to focus on: Tracking and cross-referencing all the data you can and looking for automation opportunities. Data tracking helps flag areas of loss or inefficiencies so you can address them, but it’s not always simple to analyze; that’s an area where the explosion in artificial intelligence will soon play a major role. Automation is one space where we are seeing a great deal of innovation to help simplify everything from making food to running payroll.
How can technology give me new insights?
A good place to start is by getting more from the technologies you already have, like drive-thru timers, transaction detail, and video. Enhanced value comes from the ability to match them up. One example: With the right systems, you may be able to match a negative customer comment—say, forgotten fries—to a specific transaction. By looking at the POS and cameras, this could reveal more insight: Maybe the fries really were forgotten. Maybe you can prove they were delivered. Maybe it’s a telltale sign of employee theft. What you find changes what action you need to take.
How do I attract and retain good employees?
Based on what we are seeing, it’s not just about salaries. Employees can compare these in an instant and usually aren’t casting a wide geographic net, so the going rate for labor will be pretty well set. The bigger effort is around building a culture where people want to work. That might mean offering unique benefits, doing team-building activities that make your restaurant a fun place to be, or even positioning a job in your restaurant as a start of a culinary career and helping interested employees advance in that field.
How should I address the rise in delivery orders?
Delivery is here to stay, and the relationship between quick-service restaurants and the delivery aggregators is a complex one that must be mastered. The innovations that I find interesting are the ones that benefit both parties—creating special pick-up lanes or counters to improve efficiency, or creating policies to treat drivers like customers, walking them through and confirming the order before handing it off. This reduces erroneous orders and increases customer satisfaction, to the benefit of everyone.
What is my growth strategy?
Restaurant owners have a few paths to consider. Some owners like to diversify by bringing on additional brands. The downside here is the need to maintain separate systems and multiple logistics streams. Expanding your footprint with the same brand means your success can be affected by changes and issues at the franchisor level, but you may gain greater efficiency by centralizing more of your back-office operations. Also watch for the rise of ghost kitchens—no-storefront operations that produce food just for delivery, without the same zoning requirements or costs found at an eat-in restaurant.
How will I finance growth and investments?
With the rise in interest rates and lease costs, it’s not as easy financially to expand into a new storefront. I expect to see redevelopment and refurbishment of stores making up a bigger part of the activity among franchise owners—it’s a proven way to increase sales, even if the store offering and staff are unchanged, and a chance to introduce new technologies and systems. Some are also using this as a chance to change to formats that better fit today’s environment, with more drive-thru and delivery lanes and smaller eat-in areas.
It’s both a challenging and exciting time to be in the quick-service business. Increasingly, owners can’t just cut costs to improve profitability; growing profits requires smart investments. Your answers to these questions will vary, but every owner should be asking themselves these questions today as they prepare for their future.
Jason Tober is the CEO of Delaget.