Before 2020, those searching for a sound investment looked for franchises that were recession resistant to obtain the biggest bang for their buck. Now, the standard by which entrepreneurs measure success should add the caveat, “pandemic proof.” Which means looking for that golden ticket points to franchise businesses that not only survived the worldwide health and economic crisis, but are being propelled next level and thriving as a result. All arrows point toward quick-service restaurants.
Here's why. While full-service dining concepts were flailing to stay alive during the crisis, quick-serves were uniquely positioned and persevered. The quick-service restaurant franchise model easily pivoted to adapt to customer needs. In fact, this model is the reason the restaurant industry is bouncing back with great vigor. Elements like carry-out, delivery, curbside, outdoor dining, meal prep kits and drive-thrus were the saving grace of the industry. They were mainstream to the model. Previously in place at the core of their operations, quick-serves dug in and upgraded the services and convenience factors to better serve their customers.
Having these services despite shut-downs, increased cleaning protocols, social distancing, mask mandates, proof of vaccination, fluctuating COVID-19 infections, a labor shortage and supply chain issues were certainly challenging. But they provided a taste of normalcy for customers fatigued by cooking at home—and whet the appetites of investors who took notice of profit potential.
For good reason. The fast-casual restaurant market was valued at $125.6 billion in 2019 and is expected to climb to $209.1 billion by 2027, a CACR of 10.6 percent from 2021 to 2027. Anticipated growth means investment opportunity is driving restaurant sales higher.
As a franchise coach who analyzes market trends, I believe this an excellent time to invest in a quick-service restaurant franchise. There are currently many outstanding opportunities with new units and franchise resales. During the height of the pandemic, the quick-service restaurant model revealed that it was not just keeping its head above water. Technology and innovations were fast-tracked, quickening the pace of improved efficiencies to better serve the customer. The old adage rang true that necessity is the mother of invention as the restaurant industry sped up progress. Inventions that may not have been incorporated for years were transitioned in within months.
The industry also needed a solution to the ever-growing mass exodus of restaurant workers. At one point, during the pandemic tailspin the National Restaurant Association reported that four out of five food service operations were understaffed. What normally would have been a red flag for a franchise prospect was solved through increased methods of automation. This essentially neutralized staffing shortages with revolutionary mechanization like contactless payments, streamlined ordering kiosks, artificial intelligence and robotics.
Not only has the quick-service model proven its adaptability and durability in the market but so has the franchise blueprint. Sector franchises had more money, greater resources and a superior support system to help their franchisees during the pandemic. They provided the advantage of the power of many minds using quick-thinking skills to adapt to curve balls thrown in their direction on an almost daily basis during the crisis.
Unlike many other industries, quick service restaurants proved their resiliency. The model adapted and set new standards like closing their doors to help overworked staff members and transforming to new technologies to sustain business. Franchises proved their worth as corporate think-tanks. There were many owners, managers and workers in the trenches coming up with solutions to problems on the fly. Those ideas were shared throughout the brand and available to all franchisees to help stay afloat. The same cannot be said for independent sole proprietors who had no networking capabilities like their franchisee counterparts. Franchise owners were scrappy and open-minded. They welcomed new technologies to remain in business and set the tone for the future, coming out of the crisis.
The quick-service restaurant franchise model is well positioned for future growth. We have witnessed the strength of the model being put to the test. What the results prove is that the team approach works. Having a network of franchisees to rely on is critical to success. Communication is key to sharing best practices and innovative ideas to weather storms, and there is power in numbers. Bottom line, if you are an entrepreneur ready for a profitable venture, the franchise model has more than proven itself.
Rick Bisio is a nationally recognized franchise coach and author of the bestselling book, "The Educated Franchisee, 3rd Edition.