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Foodservice is as competitive as ever, with consumers having unprecedented access to thousands of restaurants without ever having to leave the house, which is why embracing innovation remains the best route to success for franchisors looking to accelerate their expansion strategy. The Restaurant Franchising and Innovation Summit, which took place July 2017 in London, highlighted the key trends and topics franchisors and franchisees alike need to be aware of.
Technology has given operators the means and consumers the desire to bring the restaurant experience fully into the modern era. Consumers now have different expectations when it comes to what they want from a dining out experience (whether that actually means leaving their homes, or not) and different criteria on which they judge the value of that experience. Likewise, technology can help operators meet these needs in new ways.
Robotics and automation is one technology will become increasingly important due to rising labour costs. John Miller, CEO of Cali Group, demonstrated ‘Flippy’ – a robotic assistant which using machine learning can perform a broad range of repetitive kitchen tasks, such as flipping burgers or chopping onions. Miller also spoke of a facial recognition loyalty platform ‘Chocolate chip’ that the fast-casual group had developed in response to the lack of data in the ‘offline world’ despite 90% of transactions in the US still occurring in the offline world.
As global chains look to new markets for growth, the “one size fits all” format and foodservice model has become less relevant. Unlike soft drinks, packaged foods, or apparel and footwear, where a single good may travel more easily across borders, this is much more difficult to do in foodservice, as foodservice preferences are so intertwined with local eating habits, cuisines, and culture. Moreover, this process of understanding how best to adapt a foreign format or menu to local preferences to facilitate expansion is increasingly difficult to do from abroad.
In response, global foodservice companies are adopting a more flexible, global-orientated operational structure to help make their brands and menu offerings more relevant in global markets. This was discussed at length during the panel discussion; “The Ultimate Balance: Empowering the Franchisee vs. Maintaining Brand Integrity” which featured CEO’s of Koti Pizza Group (Tommi Tervanen) and Zoup! (Eric Ersher). They spoke about their structures’ features decentralised control and localised growth strategies driven by local operators that franchise the brand. Regional franchisees, or master franchisees, have the control to ensure the brand travels well and can generate local interest.
An increasingly popular format pairing includes restaurants with entertainment venues and concepts that promote a certain theme or lifestyle. Restaurants, like traditional retailers, are looking for creative ways to attract consumers in-store, preventing consumers from ordering-in or cooking at home. Entertainment provides a unique draw to the restaurant itself, a unique experience consumers cannot get at home.
Coyote Ugly Saloon’s Justin Livingston discussed how their brand is transcending borders due to its ‘restaurantainment’ characteristics which play on the success of the film franchise and provides visitors with a unique experience. Caliburger also spoke about how they host global mobile e-sports tournament to provide another reason to entice their target consumer base to visit their restaurants and enhance their brand engagement. To drive in-store traffic, operators are piecing together the best of different format types to create new concept formats, referred to as hybrid formats, to create an experience that can only be had in-store.