From the trenches
The restaurant industry didn’t catch its breath in 2021. In some respects, operating through the fall-out has been as complex as the onset. Supply and labor, the ever-shifting integration of digital into consumers’ lives. These aren’t short-term themes. And now, winter knocks with the omicron variant forcing closures and mandates in some markets yet again.
At QSR we’ve outlined some predictions and possibilities (is value going to make a comeback?) that could define 2022, in both sectors. Now, it’s time to let some operators give their unfiltered takes.
As we approach the end of the calendar, here’s what’s on the mind of seven leaders, from restaurant to tech executives.
Frances Allen, CEO at Checkers & Rally’s
We are seeing growing demand for our frictionless drive-thru model, partly fueled by the pandemic, as more restaurants are racing to create a faster and more efficient system for customers and employees. Checkers & Rally’s is the pioneer of the double drive-thru restaurant model, and we recently adjusted our drive-thru lanes to maximize efficiency, dedicating one lane to traditional consumer drive-thru service, and one lane to pre-paid digital orders for pick-up and third-party delivery orders. We expect to see more of this across the industry as off-premise continues to gain traction.
We anticipate operators redesigning several facets of their business in order to stay competitive and functioning at a high capacity. Whether it be reconfiguring an off-premise order process, or redesigning restaurant interiors like our restaurant of the future model, consumers have painted a pretty clear picture of what they want and restaurant companies will have to adapt in order to meet their needs and provide convenience. We also expect more brands to invest in technology that will help team members streamline tasks and efficiently perform. Our company welcomes technology that will help our team members maximize time and efficiency and make their jobs more doable and enjoyable, creating a better experience for them as well as our guests. Lastly, we expect this to continue to extend into efforts surrounding hiring and retaining employees. While we are fortunate to have a high retention rate based off of our competitive pay, thorough training programs, flexible hours and fun work environment, operators will need to continue to execute on creative ideas to attract employees, otherwise they may be left shorthanded. We were one of the first to give our crews the opportunity to be paid the day after the shift you worked through Insta Pay and have seen an incredibly positive response following the rollout.
Scott Lawton, CEO and Cofounder at bartaco
As third-party delivery continues to grow exponentially and more restaurants are faced with staffing issues, rendering them unable to appropriately take care of guests, we believe it is imperative to put the guest experience above anything else and focus on ways to maintain and improve hospitality. With the industry shifting, we are evolving our service model to account for these trends, as we expect that more people will be increasingly discerning of where they will dine. Additionally, while the supply chain issues will continue in 2022, its vital for operators to think creatively and avoid raising prices to the detriment of the guest experience.
Clinton Anderson, CEO at Fourth
While labor efficiency has always been a priority for the restaurant industry, the stakes are higher now than ever for brands to find, hire and retain talent given the current and anticipated landscape in 2022. Not only are restaurants feeling the effect of direct costs, but the labor crunch is also impacting topline revenue as understaffed locations are being forced to close for certain hours, operate at limited capacity, and ultimately serve less people.
In an effort to attract workers, some brands have introduced perks like high starting salaries and sign-on bonuses only to struggle with long-term employee retention. In response, restaurants must offer greater benefits to stand out from the competition and keep employees happy, including implementing initiatives like early-access to earned wages and leveraging technology to improve scheduling, automate processes and streamline operations to create a more seamless shift experience. Some of our solutions at Fourth are specifically designed for this purpose, including our workforce management app, HotSchedules, our new Fuego app for on-demand pay, and our Labor Productivity solution, which all promote labor efficiency and a happy work environment. In 2022, it will be more critical than ever that restaurant brands lean towards technology and invest in a tech stack that helps optimize operations and facilitate a better employee and customer experience to strengthen their workforce and build brand loyalty amid increased competition within the industry.
Noah Glass, founder and CEO at Olo
As the industry inches its way closer to digital entirety, brands will continue to embrace digital across all service models, including delivery, drive-thru, takeout, and on-premise, to facilitate transactions and create the most seamless process for customers and employees alike. We expect this trend to pick up steam in 2022 and beyond as brands capitalize on technology to automate processes and streamline operations. With the increased use of digital, we also anticipate brands will focus on analyzing customer data to better understand their markets, deepen customer relationships, and help with high-level decision making.
Additionally, we see off-premise only growing as consumers lean towards convenience by opting for delivery and takeout from their favorite brands. Restaurants will continue to invest in third-party delivery platforms and expand their in-house delivery capabilities to broaden their reach through different channels and serve more customers in relation to their location, preference, and available drivers.
In the year ahead, we also expect virtual brands to continue to gain traction. Operating as a digital and delivery-only service model, these brands, which popped up quite regularly in 2021, offer a low-cost way for operators to enter new markets, test menu innovation, or create entirely new brands. At Olo, we’ve helped these virtual concepts become 200-location brands almost overnight, which previously would have taken years for a brick-and-mortar restaurant brand to build up.
Michael Osanloo, CEO at Portillo’s
Over the past two years, we have seen a major shift in how consumers use restaurants. Portillo’s was well-positioned for this shift in consumer mindset—we have been multi-channel since early on in our 58-year history. In addition to our strong dine-in sales, we have best-in-class operations across channels, including drive-thru, delivery, catering and direct shipping. And these are all platforms we’ll continue to focus on and invest in. In fact, we’re opening our first Portillo’s Pick Up in early 2022. This new model, which will be located in Joliet, Illinois, won’t have a dining room. Instead, the restaurant will focus on off-premise operations, including catering and delivery, with an expanded, three-lane drive-thru and a designated pickup area.
Mike Rypka, founder and CEO at Torchy’s Tacos
As we head into the new year, we’ll see more restaurants rethink their store footprints in order to enhance the guest experience, for example scaling back on dining room size in favor of larger outdoor patios and, similar to what we’ve done at Torchy’s, creating designated to-go sections in the restaurants in an effort to optimize a seamless and quick pick-up experience. The digital guest experience will also be at the forefront, and the brands that will be successful are those that use tech in a meaningful way to enhance both off-premise ordering as well as complement the in-store experience, from intuitive and easy-to-use app experiences to tech-enabled curbside service. For us, these innovations are centered around giving our guests options to enjoy Torchy’s how, where and when they are most comfortable, all while remaining laser focused on using the highest quality ingredients and making all our food from scratch to provide the Damn Good experience our guests know and love.
Anita Adams, CEO at Black Bear Diner
We expect to see restaurants continuing to prioritize the off-premises revenue channel in 2022, as demand for takeout and delivery remains high. Operators will need to implement a seamless process balancing the guest experience within the four walls while meeting the needs of guests who are looking for a delicious meal to enjoy wherever they choose. We pride ourselves in providing a wholesome, traditional family environment in our diners, however, we also recognize that convenience and quality is of the utmost importance to our guests dining off premise as well and have been catering our offerings to meet the needs of both guests.