Supply chain issues and Covid-19 are not making it easy to run a bar right now.
The Oktoberfest kegs are empty and public spaces are starting to light up with the holiday spirit. Most bar managers are pulling out their gingerbread martini and hot spiced rum recipes to fill their seasonal drink menus. But in 2020 and the midst of a pandemic, will the same old holiday cocktails appeal to guests? What trends and opportunities can bar programs leverage in the current market with different dining options and guest preferences?
Goliath Consulting Group analyzed data from our clients and national trends to identify some key options restaurants can utilize to expand their holiday business. Here are three innovative ideas to get in on the holiday action.
The Seltzer Market. Seltzers exploded on the scene in 2018 and continue to grow in market share. What started with a few key brands (White Claw, Truly, etc.) is now a booming segment with representation from all the big spirit and beer players. While some brands have flavors that are passable for the holiday season (Long Drink produces a highly rated cranberry seltzer), creating custom flavors is simple and full of endless possibilities. Use a traditional base spirit for your seltzer (vodka, neutral spirits) or spice it up with some gin, tequila, or rum. Look to flavors inspired by the season like spiced apple cider, sugar plum, cranberry maple. Use cinnamon sticks, candy canes, edible flowers to garnish the drinks. Insider tip: Seltzers typically have less than 6% abv. Drinks require less than an ounce of spirits.
Take Advantage of Modified To-Go Laws. With many municipalities modifying laws on delivery and to-go alcoholic beverages, restaurants have a lot of room to get creative. Most restaurant alcohol delivery programs function like food programs. Guests receive enough product for a single meal and an experience they may not typically be able to prepare at home. These options include cocktail kits or ‘build your own six packs.’ They are great for capturing the daily customer, but this holiday season is the time to think outside the box. Cocktail kits, large-format cocktail recipes for families, branded pos (typically provided free of charge from suppliers and distributors) make unique gifts may normally not be available to customers. Remember to check local laws before including alcohol in to-go programs. Some municipalities allow beer and wine only and some allow spirit sales with volume caps.
The Virtual Bar Lesson. Companies like MasterClass.com and the Great Courses offer opportunities for people to learn from experts and expand knowledge. It is time for restaurants hop on this trend and cater to the home mixologist. This group may have read a book on cocktails or watched a YouTube video or two and now they are prepared to make cocktails for the whole family…whether the family wants it or not. Restaurants can leverage their staff’s knowledge and guest service to bring regulars (and soon-to-be regulars) an experience like no other. A quick curriculum of seasonal quaffs mixed in with a signature cocktail or two can help the audience feel like craft cocktail connoisseurs. Use one of the multiple platforms like Zoom or Skype designed for interactive meetings and consider creating weekly curriculums that allow customers to participate based on specific subject material or join along for a ‘semester’ of bar knowledge.
Are you looking to maximize sales and efficiency in your beverage program? Is your restaurant considering a bar reorganization for the new year? The team at Goliath Consulting Group consists of industry professionals with experience in all areas of bar consulting, restaurant operations and marketing. Contact GetResults@GoliathConsulting.com to learn how Goliath Consulting can help your restaurant today.
From pumpkin spice to Chile de Arbol, here we dive into the restaurant industry’s top trending flavors and predict the ones that’ll last until 2021.
Fall flavors are dominating the market right now. Yelp’s recent data (from 9/21/2020) shows that searches for pumpkin spice foods were up dramatically from last year: pumpkin spice lattes were up 72%, pumpkin pie up 66%, pumpkin cheesecake up 242% and apple cider donuts were up 117% (1). Restaurants are taking advantage of this trend and accenting the flavors of fall in their menus. Take Bonefish Grill, for example, serving Grilled Swordfish & Pumpkin Ravioli with a Fresh Apple Martini made from house-infused apple cinnamon vodka, ginger liqueur, honey and apple juice (2). Meanwhile, Metro Diner is showcasing a variety of pumpkin themed breakfast items and desserts with their pumpkin style croissants, pancakes drizzled with pumpkin cream cheese icing and topped with cinnamon butter and candied pecans (2).
More consumers will be looking for foods tied with wellness and health during and after the pandemic, well into 2021. Immune-boosting foods high in vitamins, as well as fermented and foods high in probiotics have been trending this past couple of months, but botanicals have been the go-to trending “flavor” for being both healthy and delicious (3). According to The Hartman Group’s Functional Food & Beverage and Supplements 2020 Report, 29% of consumers said they were consuming more of these “functional foods” or beverages than before (4). “Functional flavors will shape the industry,” said Philip Caputo, marketing and consumer insights manager at Virginia Dare in an interview with Food Technology Magazine (3). “More specifically, the characterizing taste profiles from—or inspired by—highly functional ingredients, such as botanicals, spices, and healing herbs (e.g., turmeric, ginger, cinnamon, lavender, honey), will grow in popularity alongside the increased emphasis on emerging health trends.”
Japanese (2021 Olympics)
Demand for global flavors is up, particularly for Spanish, Middle Eastern and Mexican flavors, but the upcoming 2021 (previously 2020) Summer Olympics in Tokyo is spurring the resurgence of old favorites, such as matcha, as well as new ones like miso caramel (5). According to Yelp data, searches of Japanese glutinous rice “mochi” was up 96% from last year (1). Ibrahima Faye, a Senior Flavor Chemist at T. Hasegawa, stated that Yuzu, a Japanese citrus, could be a popular addition to the ongoing citrus trend, as yuzu offers an aroma “close enough to the well-known citrus fruits like lemon, lime, orange and tangerine; but they offer a characterizing aroma profile that clearly distinguishes them from the traditional fruits” (5). Kalsec, a leading producer of natural spice and herb extracts, stated that we’d also expect to see an “increase in Japanese dishes like souffle pancakes and taiyaki (fish-shaped ice cream cones)” (6).
Chilies and Heat
McCormick just published their “McCormick Flavor Solutions’ Flavor Forecast” on Oct. 14, and highlighted an ongoing heat trend that incorporates chilies and other spices (a.k.a. the “Chilies Obsession”) (7). The report put the spotlight on four different chilies that would bring out a “unique and distinctive” heat and flavor: the Aji Amarillo, Guajillo, Tien Tsin and Chile de Arbol. Meanwhile, IFT listed Gochujang, Calabrian Chile, Shishito and Harissa as the top 4 trending foodservice seasonings. “Globally inspired sauces and seasoning blends are trending right now,” said a report from FONA International, a global producer of food and beverage flavors (8). This is apparently due to the surging demand for a greater variety in spicy foods is driven by consumer desire to explore more authentic global cuisines and flavors. “Today’s consumers can easily differentiate jalapeño from habanero or ancho from Thai red chili,” the report added (8). A growing consumer appetite to not only try but educate themselves to a wide range of new flavors is what’s elevating this spice revolution to new levels.
Feel Good Flavors
Fall and Winter have always been about the comfort, but the COVID-19 pandemic has made more consumers lean towards feel-good foods and nostalgic flavors more than ever. According to Keera Perumbala, marketing manager at Sensient Flavors, “[comforting food] means different things to different consumers” (9). “For some, it means cereal for dinner on some days, and for others, it means a sea salt caramel fudge ice cream after dinner. Owing to this, we are expecting some classic favorites to make a comeback [but] with a twist.”
This can mean flavors like nut and toffee, molasses, s’mores, butterscotch, cinnamon and brown butter (10)—all warm and comforting flavors that could be easily incorporated into a dessert, a coffee or cocktail recipe. “Consumers now are programmed to go beyond the basics,” added Perumbala. “So adding a twist will help them feel adventurous while rooted in comfort.”
Goliath Consulting Group is a restaurant consultancy based in Norcross, Georgia. Menu development, product development, supply chain and sourcing are services that the company offers, following flavor trends and using consumer research to find the best solutions for our clients. To learn more, visit www.goliathconsulting.com or email us at firstname.lastname@example.org
2020 has been quite a learning experience. From social distancing to customers wearing face masks, the COVID-19 pandemic has introduced us to new vocabulary and concepts never heard of in the restaurant industry: businesses had to sell grocery items and toilet paper during the quarantine, specialty menu items had to go due to supply chain issues and some indoor spaces had to be closed off to accommodate new safety measures.
This is now the new norm, and we know that some of these changes are here to stay. But now that you’ve learned everything the hard way, what can you do to plan ahead for the new year? Here are our best guesses for the business trends of 2021.
It’s a new era of drive-thrus. Part of its upsurge comes from off-premise dining becoming widely adopted due to the pandemic, but there’s been an overall uptick in digital sales that’s helped drive-thrus gain significant traction. Brands like Starbucks are increasing their drive-thru prevalence to accommodate the demand for contactless orders (1). Domino’s launched their “Carside Delivery” Service nationwide this June which would allow customers to receive their online order without ever leaving their car (2). Del Taco has also been expanding its takeout and delivery channels, allowing the chain to keep company dining rooms closed to streamline the service modes more relevant to today’s guests (3).
Meanwhile, Chipotle is testing out new restaurant designs, and now have more than a 100 “Chipotlanes,” drive-thru stores where customers can pick up their digital orders (4). These pick-up lanes are also more profitable, said Jack Hartung, Chipotle’s CFO, adding that the lanes help “drive our high-margin digital order-ahead transaction.” He also has the numbers to prove his point: Digital sales at Chipotle accounted for 19.6% of total sales at the chain pre-pandemic, but in the first quarter, digital sales grew 80.8%, reaching a record $372 million, while digital sales accounted for 26.3% of total sales (4).
Drive-thru spaces aren’t the only thing businesses have been renovating, however. Architectural Digest writer Laura Itzkowitz, New York restaurants have seen a major expansion in outdoor dining space thanks to the Open Streets plan that “gives restaurant owners permission to expand their footprint onto the sidewalks and streets on the weekends provided they meet certain criteria” (5). According to David Rockwell, the founder and president of the restaurant Melba’s in Harlem, we can expect to see “more restaurants redefining the boundary between indoors and out. In the long run, restaurants will have to be adaptable, with seating plans that expand and contract easily and quickly” (5).
This flexibility will key as the cold season approaches (6). According to Guy Bloch, CEO of Bringg, a delivery orchestration software company, “an increased emphasis and more strategy behind the delivery and curbside pick-up is a smart consideration for restaurants right now, especially if they want to remain resilient during the colder months and continue to serve off-premises customers who may become a larger part of their base in cold weather” (7). Which brings us to the next point on deliveries.
Food deliveries have soared in the past couple of months. Popular third-party delivery apps such as DoorDash, Uber Eats and Grubhub have seen a stark increase in usage since the beginning of the pandemic, according to Seattle Times (8). For example, UberEats reported a 40% increase and GrubHub is up 24% from the same period the year prior (8)
Decreasing on-premise sales, social distancing and the new work-from-home lifestyle have all contributed to consumers opting to have their food delivered than dining in. Back in March, a survey by Statistica showed that 41.7% of consumers in the United States were likely to purchase restaurant food delivery online if confined at home due to the coronavirus (9), and yet when Zagat conducted a similar survey in May (“The Future of Dining Study”) the result was a staggering 90% of consumers (10).
Not surprisingly, we’re seeing more operators are making the shift from third-party delivery to self-delivery; a quick search of food delivery options on google and various name brand restaurants pop up now actively promoting their own delivery options. Businesses like Dig Inn, Modern Market, IHOP, Panda Express have all launched self-delivery as a way to increase sales and meet the increasing demand for delivery. And not just because of the high commission rate either. While it’s true that third-party delivery service fees can be as high as 30% commission (11), having an in-house delivery service means they have more control over their drivers, reduce transit time, as well as increase customer service.
“We understand that convenience and value are what our guests need right now, so we’ve quickly adapted our marketing and business approach,” said Andrea Cherng, Chief Brand Officer at Panda Restaurant Group (12). “In order to provide quality meals at a value for families in our communities, we’re creating more regular promotions and speeding up our delivery-as-a service launch by half a year.”
A detailed pro/con list of third-party vs self-delivery is found here on our previous blog (13).
Social distancing and contact-free technology will be indispensable in 2021, as sanitation and safety concerns around COVID-19 remain (14). Aside from automatic doors, motion-activated faucets, touchless soap dispensers and paper towel dispensers, more hands-free options are likely to become increasingly implemented in the kitchen area, from touchless trashcans, doors, glove dispensers, sauce, to beverage dispensers.
A big part of the trend of automation for customers will revolve around new payment and menu alternatives. Payment solutions will have to change as well from conventional payment models of cash and plastic credit cards to contactless solutions such as EMV, tap and pay, and mobile wallets (14). And as more customers become sensitive to the use of plastic menus (The National Restaurant Association and CDC both recommend restaurants to use paper menus and discard them after each customer use), more will turn to contactless menu options like QR powered digital menus to comply with both demand and safety recommendations (15, 16)
We also expect more businesses to embrace tech and AI to accommodate this upward trend of digitalization for customers (14). By more tech and AI we mean smart ordering via AI voice technology, self-order kiosks and tablets. AI-powered training, staff scheduling and smart inventory (via RFID tags) are also expected to grow and enhance all aspects of restaurant management.
If 2020 was about reacting to the pandemic and learning ways to deal with the new changes, 2021 is going to be about the responding, as well as applying the hard-learned lessons to our businesses. That said, maintaining safety is still going to be the most important trend that operators will have to maintain and evolve. It will take some time to earn back the consumer’s trust in this issue, but operators who can incorporate these safety measures into their business model will be the first to earn them.
The Benefits of Owning a Franchise Restaurant Business
We discussed in our earlier blogs why it is a great time to buy a food franchise in 2020 through 2021. Prospects continue to be bright for fast food and fast-casual franchises: Papa John’s Pizza just announced their plan to open 1,000 new stores over the next five years (1), and Whataburger hinted an offer of offering new franchising units for the first time in 20 years (2). The COVID-19 pandemic is helping boost franchise sales as unemployment grows in the restaurant industry and people are reassessing new career options. But you might be wondering, why buy a franchise business at all? What do you have to gain by buying a franchise versus running your own independent restaurant?
Here we share our thoughts on what makes franchise ownership so appealing.
When you start a restaurant from scratch, much time must go into doing market research, creating business models and developing a new menu. You also have to staff the right people and figure out who your target customers are even before you come up with your marketing plan. But that is a lot of work. It takes time to set up a decent restaurant, particularly if you plan to start amidst the COVID-19 pandemic. One of the benefits of buying a franchise business is that you can skip many of these processes. With a franchise, you do not have to build the foundations from the ground up because there are a pre-established system and business plan. “With a franchise, you have the security of a proven concept,” says Don Daszkowski from the Forbes Business Council (3). “The franchisor already went through the pains of trial and error and the expense of branding, marketing and putting systems in place.” The less time you spend on starting, you can spend more on building your business. Buying a franchise allows you to take advantage of this speed.
Less Risk, More Support
According to Joel Libava, a franchise ownership adviser and author of Become a Franchise Owner!, revenue fluctuates much less in a food franchise setting (4). “As long as you have a steady stream of customers patronizing your restaurant or food store, revenue tends to be pretty high,” he wrote on sba.gov. Additionally, franchisors assist their franchisees with marketing, real estate, among other things. Popeyes, for example, offers support and expertise not only in the menu, operations and marketing, but also in development, and profitability (5).
There’s a less overall risk when there is more support. When you buy a franchise, this assistance package is included in the upfront and ongoing fees, including a Grand Opening (4). “Good franchisors know how to put on a strong Grand Opening,” said Libava, “and if yours goes well, you won’t have to wait long for customers to line up to try (and purchase) your food.”
Moreover, Franchisors will also connect you to a Real Estate person soon after your franchise agreement is signed. Franchisees can therefore leverage extra resources and connections to secure the best location possible for your new business. According to Libava, “that alone gives you a huge advantage over an independent businessperson (without Commercial Real Estate connections) who’s trying to secure a location for his restaurant” (4).
You know exactly what you are getting when you walk into a Chick-fil-A’s or a Subway’s. That is because both have massive brand recognition. While it takes most restaurant owners years to market and establish their brand, being a franchise owner allows to you reap the benefits of the brand’s name and trademark, giving you a competitive edge and making it easier for your store to attract customers.
This is also why financing is easier when you buy a franchise. You are more likely to get a loan from banks or organizations if the business is already well established. Also, there are quite many top-ranked, affordable franchises under $25,000 you can buy if you do your research right (5).
Good Balance of Independence and Dependence
Being a franchise owner allows you to be your own boss. If you classify yourself as a hands-on worker, a natural leader and communicator, result-driven and proactive, buying a franchise offers you the benefits of being a business owner while having the needed assistance from a strong support network.
A Better Opportunity for Long-Term Growth
There is also a better growth trajectory when you choose franchising. Once you start your franchise and acclimate yourself to your role as a franchisee, you can expand your portfolio long-term, buying other franchises in different locations or different concepts. Amyn Ali, a successful entrepreneur and owner of three Wing Zones, 10 Dunkin’ Donuts and Baskin-Robbins and one Papa John’s, shared his thoughts on Entrepreneur magazine (6). “I started in franchising eight years ago. I saw great potential in franchising and wanted to be my own boss, so I bought a Baskin-Robbins and Dunkin Donuts location, which turned out to be immensely successful. I wanted to diversify my franchise portfolio, so I signed a 14-unit deal with Wing Zone, which was also the first in the city of Chicago.”
Here’s his advice for future-franchisees: “So many people want to open up their own business but fail to look at all of the pros and cons of business ownership. The most important advice that I can give is to really do your due diligence and look into your competition, the longevity of the brand, how you’re going to manage it operationally” (6).
Owning a franchise business is still hard work that comes with its own disadvantages. Success is not guaranteed, and you’ll have to invest in it long-term, just as you would with any other business ventures. That said, there are many benefits to owning a franchise as it offers you speed, support and great profits. The decision is yours.
About Goliath Consulting Group
Goliath Consulting Group with headquarters in Norcross, Georgia offers a dynamic array of business development solutions, tailored to meet the needs of each individual client – in addition to a full suite of knowledge and tools that help make restaurants more profitable, including strategic planning, menu development, project management, new restaurant development, branding, marketing, franchising, equipment, technology, evaluations, outsourcing, and more. The company also has a management division that manages full-service restaurants. Goliath Consulting enjoys a ten-year track record of creating client success among local, regional and multi-unit national restaurant chains.
Goliath Consulting Group is actively involved in the Foodservice Consultants Society International and is an allied partner of the Georgia Restaurant Association.
We previously discussed social distancing and contact-free technology that offered safety solutions during the pandemic. But there’s much more that tech has to offer, especially when it comes to AI being integrated into guest order systems, training, and restaurant operations. Here are some standout tech innovations that forward-thinking business owners are investing in today in restaurant technology:
Voice-based tech is fast growing and increasingly evolving the guest ordering experience. Prominent restaurants of the QSR space are integrating voice-ordering into their apps. For example, Denny’s customers can order through Amazon Echo (Alexa) (1); Dunkin’ and Domino’s Pizza have also deployed bot and voice-enabled ordering by Alexa, Siri or Google Home, and Chipotle Mexican Grill rolled out voice AI to power their mobile orders in 1,800 of their locations (2). Just last year, McDonald’s announced its plans to bring AI voice technology to its drive-thrus after they acquired the voice-recognition startup Apprente (3). These drive-thrus would allow customers to place their orders like any voice-assistant-enabled order taker, except that these systems would use machine-learning techniques to learn and continually improve based on actual orders and spoken language (4). According to Rob Carpenter, founder and CEO of Valyant AI, a Colorado-based artificial intelligence company focused on QSR customer service, “AI ultimately provides an intelligent, convenient and informed customer service experience by way of improved order speed and accuracy” (5). “Drive-thru chains are inaccurate more than 10 percent of the time, and the average speed-of-service times have slowed down significantly in the face of such high employee turnover.” Meanwhile, digital employees work to improve order accuracy and decrease wait times (5).
Self-order kiosks can now use a camera to recognize regular customers and make suggestions based on a customer’s previous order history. “Once you opt into facial recognition, you can reorder and pay for your favorite dish in less than 10 seconds,” said Christopher Sebes, President of Xenial, Inc., producer of such self-order kiosks (6). These facial recognition systems are gaining popularity, and already in use at places like modern Asian street food restaurant Wow Bao, as well as the fast-growing high-end burger chain, BurgerFi. “Self-serve kiosks and tablets are gaining favor as a way to speed up service without sacrificing the human touch,” said Sebes. It also “encourages higher check averages and results in healthier sales. Guests seem to appreciate the ability to spend time studying photos, ingredients, and nutritional information, as well as easily request more food or drinks as the meal progresses” (6).
Consistent Training and Optimal Scheduling
When it comes to running a successful business, operators understand how training plays a crucial role. But just as with people, training must evolve and continually be improved upon. According to Steven Yee, COO for EDUonGo, the creator of Kiwi LMS focus on restaurant employee training, an optimal training regimen requires quality data collection (7). “It is difficult to know what changes need to be made in the existing training,” said Yee. “With AI, however, restaurants are positioned to collect relevant data, thereby improving their customer service, creating a better training experience for employees, and fostering a safe workplace culture” (7). AI can now collect a wide variety of information ranging from the length of time an employee stays in the portal, how often they log on to review materials, the success rate of their quizzes, and the completion rate of certifications (7). One restaurant that has adopted AI-based employee training is Modern Market Eatery, a farm-to-table restaurant based in Denver (8). By embracing mobile training platforms, such as PlayerLync, and implementing training within the real-life workspace, the restaurant has access to a variety of integrated technology systems that notify staff of menu or recipe changes as they occur, contributing to employee success and efficiency.
Scheduling staff times is also made easier with AI. For example, AI can now predict labor demand, handle on-call shifts, and allow employees to swap shifts with minimal manager intervention (6). According to Sebes, it even “determines which of your staff tends to do the most up-selling, and give those team members priority for high-volume shifts.”
Up to Date Inventory
POS systems that manage inventory and purchasing capabilities are already well established by now, but we expect AI to optimize these capabilities with the use of RFID (Radio Frequency Identification) tags which use electromagnetic fields to identify and store information about the object the tag is affixed to. According to Nely Broad, author and regular contributor of a tech news company BitRebels.com, RFID will allow operators to collect and trace vital pieces of information such as type, quantity, and origin of a product through its life-cycle (9). For example, when an RFID tag is placed in specified containers for a particular product, anyone would be able to scan an RFID reader and learn about the product’s history. The RFID tag would allow for easy inventory management, as scanning RFID tags would send a message to your inventory management software letting you know that the item is in stock (9).
RFID tags can also help ensure the safety and quality of your products. Food industry workers can monitor the temperature of foods—for instance, on milk containers that would contain an expiration date, the temperature, and other pertinent information (9, 10). When suppliers track the temperature of the milk through the information collected from the tags, the milk’s temperature can be tracked from the source, during shipment, and when it is delivered to the store.
The potential for AI to enhance all aspects of food ordering, restaurant operations and staff management is practically endless. We’ve seen how AI saves time and money, increases productivity and efficiency while reducing human error and labor costs. As more businesses embrace AI, begin to change the customer experience and their expectations of what foodservice can be, we’ll surely see these new restaurant techs take over the industry.
With all the trouble the pandemic has given the restaurant industry these past couple months, you might be surprised to hear that restaurant franchising opportunities have never been stronger. There are brands that are outpacing the overall industry. From an interview with Restaurant Business Magazine, Bruster’s Real Ice Cream reported selling 18 franchise agreements this year and now has 56 stores under construction or in development out of their 200 units (1). Up-and-coming restaurants like Fajita Pete recently announced it will triple locations from their new franchise deals (2). The fast-casual brand Dave’s Hot Chicken has now more than 200 units committed despite its franchise initiative being just launched in October 2019 (3). “When the pandemic hit just a few short months after we launched the franchising initiative, we weren’t positive how it would affect our franchise growth, but we were pleasantly surprised,” said Shannon Swenson, Vice President of Franchising for Dave’s Hot Chicken (3).
According to Jonathan Maze, Restaurant Business Editor-in-Chief, what we’re seeing in the franchising side of the business is not altogether unexpected (1). “Nothing fuels franchise sales quite like a recession, as unemployed workers look for their next career and frequently take a stab at buying into a restaurant or other business to become their own boss,” he said in a recent Restaurant Business article (1). As COVID-19 has dramatically upended employment, more people are making big decisions and considering entrepreneurship as an option. But is mid-pandemic even a good time to buy a franchise? There are a couple of reasons why we can say yes, it is.
Whether you’ve just lost your job or in jeopardy of losing one, finding a new position can be a challenging task. According to Don Daszkowski of the Forbes Business Council, “the competition [for jobs] will likely be fierce” (4). The unemployment rate for the industry is at an all-time high. According to the U.S. Department of Labor, 20.5 million people abruptly lost jobs in April alone. “Your employment may not be stable,” said Daszkowski. That’s why many people will be using this time to reassess their options.
There are good reasons why buying a franchise is better than starting a business from scratch. The latter is riskier and requires the owner to build the foundations from the ground up. “With a franchise, you have the security of a proven concept. The franchisor already went through the pains of trial and error and the expense of branding, marketing and putting systems in place,” says Daskowski (4). Of course, no success is guaranteed and your homework will be to do your research—it’ll go a long way to helping you make an educated decision about which concept will come out strong after the pandemic.
BETTER REAL ESTATE
According to a recent Yelp Report, permanent closures continue to increase across all industries—with the restaurant industry now reflecting the highest total business closures (5). The report shows that as of July 10, there have been 26,160 total restaurant closures, with 15,770 (60%) now permanently closed.
Moreover, other restaurants have shifted their operating models, converting to ghost kitchens, curbside pickup and online ordering, and as a result, there have been more sites available across the US—not only in retail strip malls, warehouses, but also office complex-type spaces (1). “Because restaurants are closing, there are locations we can go in,” said Jim Sahene, CEO of Bruster’s Ice Cream in an interview with RestaurantBusines.com. “End caps, drive-thru, freestanding building. More sites will become available” (1).
With more restaurants feeling increased pressure from further lockdowns and another wave of businesses expected to close in the coming months, the market has become favorable for brands that have been waiting to take advantage of a better real estate market. The same benefit would apply to new franchise buyers.
“Buyers are seeing this as a huge opportunity,” said Jackie Lobdell, VP of Franchise Development with Slim Chickens, a fast-casual restaurant chain that has greatly exceeded franchise growth since the pandemic (6). “Those who are able are taking advantage of the open real estate.”
Thanks to the Coronavirus Relief Funding options (such as the CARES Act), starting or expanding your business has become more feasible with loans guaranteed by the Small Business Administration (7). 2020 and 2021 will be optimal years to take advantage of low interest rates and better deals with the franchisors.
In addition to funding, Daszkowski says new types of resources have recently cropped up online for potential buyers to explore and educate themselves on franchising opportunities—virtual tradeshows, magazines and franchise portals, you name it (4). Franchising has become a popular subject in recent months, and there’s never been a time where so many people could connect and learn the ins and outs of franchising, all in the comfort of their homes.
There are blog posts like ours, too, that discuss trending topics and cover important factors that make concepts recession- and pandemic-resistant. That’s why we recommend you take some time to do research and figure out what kind of franchise would you like to own. Would you make a great franchisee? How much can you invest, or how you will finance the franchise? There are plenty of affordable franchises that you can start with, and if you need more assistance, hiring a consultant can help guide you to make a decision by pinpointing brands that interest you, as well as directing you to financing options you may not know about (6).
The next 18 months are a great time to buy a franchise, but having said that, buying a franchise does not come with a guarantee of success. Like any business venture, becoming a franchisee is hard work, and you’ll need to invest your time, commitment and energy to make it successful. But if you’ve previously considered buying a franchise and have a vision for yourself to become your own boss while still belonging in a larger network, this is an optimal time to figure out your financials, do research, and invest in something new for yourself.
*Special thanks to Jackie Lobdell, Vice President of Franchise Development with Slim Chickens, for providing her expert insights
With how the restaurant industry looks right now, from shifting consumer behavior and volatile demand, strategically pricing a menu has never been so complicated, nor so important. It doesn’t help that the costs of running a restaurant are higher than ever. According to an analysis by Buyers Edge Platform, a restaurant supply-chain company in Waltham, MA, restaurants are now spending 38% more just on food costs alone (1). Operators have also been pressured to spend on safety products from masks, sanitizing supplies, Plexiglass dividers and various touchless systems to protect their staff and customers. And while many operators have resorted to raising their menu prices, either by charging a COVID-19 surcharge or charging more for food being delivered than they do for take-out or dining in (2, 3), there is speculation that these costs increases will hurt customer relationships and cause long-term implications (4).
“Generally, if the prices are significantly higher for 30 days or more, restaurants will have to start making decisions,” said Buyers Edge CEO John Davie in an interview with Business Insider (1). Because of the economic impact of the pandemic, consumers will be seeking more value and buying up deals (1). Navigating the balance of loss and profit and figuring out win-win scenarios for both operators and customers is sure to be the key to a restaurant’s future success.
Here are some steps you should take when you price your menu items:
The food and operational costs vary by restaurant, so there is no one-size-fits-all solution to pricing your menu. That’s because creating the perception of value in a customer’s eye goes beyond what goes behind the dollar sign. Value isn’t about being the cheapest. It’s a package of both experience and price.
As you begin to make changes and adjust your pricing strategy, try to remember that once the pandemic passes, your customers will return. Here’s what not to do according to McKinsey Research (7): taking advantage of customers, assuming that every demand problem can be solved with pricing, extensive cost-cutting and relying on old price-sensitivity research. Doing these things could help your business in the short-term, but the businesses that are most likely to succeed after the pandemic will be those that do what’s hard. By focusing on long-term value, optimizing their business, and sustaining customer relationships.
Back in December we did a blog piece on our most anticipated food trends, never knowing what 2020 would bring, what with COVID-19 and the impact the pandemic would have on the restaurant industry. Eight months later and we are looking forward again. Here are some food trends on the spotlight today.
Menu items that are focused on wellness, as well as foods that are thought to boost the immune system, will trend as consumers become more focused on staying healthy. Recent surveys have found that most consumers are expecting to eat more healthy and fresh foods after the pandemic (1). According to Mike Chapman, Chief Executive Horticulture in New Zealand, fruits, and vegetable consumption has exploded since the onset of COVID-19 (2). The Kerry Group, a public food company headquartered in Ireland, stated that “consumers who are concerned about immune health are shopping for products with a range of ingredients including probiotics and various herbs and spices” (3). This even applied to cocktails high in botanicals due to their perceived health benefits (3, 4).
So, what foods will consumers be looking for? The CDC discussed the importance of a balanced nutrition in their recent report, stating that the best way to obtain immune-boosting nutrients (e.g. vitamin C, D and zinc) is through foods, especially fruits, vegetables, lean protein and whole grains (5). A blog article from the Harvard School of Public Health identified vitamin C, vitamin D, zinc, selenium, iron, and protein (including the amino acid glutamine) as critical for the growth and function of immune cells, as well as probiotic and prebiotic foods (6).
Here is a list of immune-boosting foods that will fit into this trend (4,6,7):
Foods high in Vitamin C: Citrus (oranges, kiwi, lemon, grapefruit), Bell peppers, Strawberries, Tomatoes, Cruciferous vegetables (broccoli, Brussels sprouts, cabbage, cauliflower)
High in Vitamin D: Salmon, Swordfish, Tuna fish, Sardines, Beef liver, Egg yolk
High in Zinc: Shellfish (oysters, crab, lobster), Beef, Poultry, Pork, Legumes, Nuts, seeds, Whole grains
Probiotics: Kefir, Yogurt with live active cultures, Fermented vegetables, Sauerkraut, Tempeh, Kombucha tea, Kimchi, and Miso.
Prebiotic foods: Garlic, Onions, Leeks, Asparagus, Jerusalem artichokes, Dandelion greens, Bananas, and Seaweed.
Botanicals: Echinacea, Green tea extract, Lemongrass, Ginger, Turmeric, Elderberry, Cinnamon
The uncertainty of the meat and dairy supply chain, as well as the linking of COVID-19 hotspots to meat processing plants, has accelerated the rise of plant-based foods, widening consumer appetite for alternative meats, vegan “eggs,” non-dairy milk and cheeses. According to Mark Driscoll, a sustainable food systems consultant, “sales for plant based and meat-alternative products have increased during lockdown with global sales of global plant-based meat alternatives showing growth of about 17% this year” (8). As a result, we are likely to see a trend in flexitarian diets, as “meat eaters will likely shift even more toward plant-based products,” said Driscoll.
Here is a list of trending plant-based foods:
Meat alternatives: not just Impossible or Beyond meats, but alternatives like Jackfruits and Soy/ Faux Chicken.
Vegan subs: vegan “eggs”/ aquafaba.
Non-dairy products: non-dairy milk (oat milk in particular), non-dairy chocolate, non-dairy cheese.
Sanitation is going to be on the back of most consumers’ minds from now on, and we can expect shareable menu items to take a backseat while individually portioned meals and items will increase in demand. In an interview with Mike O’Hanlon, head of catering partner business at ezCater, orders containing individually packaged menu items have more than doubled as the result of the Coronavirus pandemic (9). The Spillover Restaurant in Miami, for example, is now focusing more on salads, sandwiches, and entrees, while removing the shareable dishes, to emphasize guest safety (10).
Packaging will most likely evolve alongside individually portioned meals and the rise of take-out, and we think the trend of individual servings and lunchbox type meals to continue as more people prefer social distancing and small gatherings.
More on food packaging trends can be found in our previous blog article “What’s packing your food? Delivery Packaging Trends.”
While it may seem like the pandemic has shifted food trends drastically, that does not really seem to be the case when we consider how long these health-focused, plant-based trends have been around. If anything, COVID-19 may have accelerated an already-growing trend of wellness. In other words, these trends may be here to stay.
Goliath Consulting Group is a national restaurant consultancy headquartered in Norcross, Georgia, a suburb of Atlanta. Goliath offers a host of consulting services including restaurant menu development and consultation. For more information visit www.goliathconsulting.com or contact us at email@example.com
COVID-19 is redefining jobs (1). Social distancing has radically changed the way restaurants work, causing a spike in delivery and take-out orders, and employees are taking on different responsibilities to fit these new roles in the workplace (2). Another profound shift in the industry is the way staff is now expected to interact with their customers. Soft-skills, defined by the Oxford Dictionary as “personal attributes that enable someone to interact effectively and harmoniously with other people”(3), will be more important than ever, and managers with a long-term vision for their restaurant are using this time as an opportunity to build and strengthen their team. Here are some skill sets we think will help managers manage in today’s environment and how they can teach them.
Conflict Resolution (Guest Relations)
“Conflict Resolution” refers to the way one resolves an issue or problem between two or more people (4). According to the American Management Association, a non-profit educational membership organization and leader in professional development based in New York City, conflict resolution is a core skill for managers and supervisors, not only for handling disputes efficiently, but also for leveraging potential conflict situations as opportunities for critical conversations that enhance work relationships, increasing overall performance, and preventing conflicts from hindering employees’ professional growth (5).
This skillset will hold more significance now during the COVID-19 pandemic. People (guests and staff alike) are on edge, and more sensitive at this time of uncertainty. For example, a guest might refuse to wear a mask; a guest may file a complaint on a poorly handled order via third-party delivery. Conflicts, especially concerning the new regulations around safety and sanitation, are more likely to arise and staff should be aware and prepared so they can handle situations professionally.
You can visit a step by step guide to conflict resolution in the AMA article here (4, 5), but we recommend supervisors to first create opportunities for awareness and open dialogue with their staff. It is natural for people to react instinctively and not think through how they respond, but they can also prepare and practice handling these situations beforehand and practice stepping out of their comfort zone and putting conflicts into context (12). This is why we recommend role playing as part of the staff training—so that managers can first become comfortable with conflicts and practice resolving them in a controlled space. Practice will also help to build empathy for the guests and to handle difficult situations more quickly and readily.
Internal Conflict Resolution
Internal Conflict Resolution is focused more on building trust between staff (or between staff and managers) by addressing and resolving commonly encountered conflicts within the workplace. The same guidelines apply when teaching internal conflict resolution, except that supervisors should be prepared to play a mediator’s role. Open discussion, while it may be an opportunity for the team to open up, connect and clear up misunderstandings, may also stir up emotion and create tension. As with external conflict resolution, role playing and practicing situations will help build trust and credibility with team members, create team resiliency, and help team members gain confidence in holding difficult conversations calmly and assertively (5, 6).
Worksheets can come in handy. Choosing a particular conflict to discuss and dissect as a team can help staff reflect on ways emotions affect their perception of a particular problem. By considering both sides of an issue and feelings one may have experienced, they may be able to find ways to resolve conflicts logically, or else, find a good compromise that satisfies both parties.
We mentioned earlier how the pandemic has been redefining jobs. According to Arran Heal, the Managing Director of CMP Resolutions, the sudden shifts of workload and responsibility have been making it difficult to keep a grip on workplace relationships (7). There’s more potential for misunderstandings, silences, unconsidered messaging; existing interpersonal problems are coming under renewed pressure and new conflicts are being created between employees (7).
A flexible leadership style is crucial in this current environment. One model that we’ve been introducing to our GMs is “Situational Leadership,” a leadership theory that encourages leaders to take stock of their team members, weigh the many variables in their workplace and choose the leadership style that best fits their goals and circumstances (8).
The Blanchard and Hersey model of Situational Leadership is based on two dimensions: leadership style and development level of the employees (8). Directing leaders (S1) should use specific guidance and close supervision and best paired with employees who are of a low development level (D1: low competence and high commitment); Coaching leaders (S2) explain and persuade and best when working with employees of the D2 level (some competence, low commitment); Supporting leaders (S3) share and facilitate and should work with D3 employees (high competence, variable commitment); while a Delegating leadership style (S4) should be used with D4 employees (high competence and high commitment).
While situational leadership is not traditionally categorized as a soft-skill, this particular leadership model is an excellent tool for managers, helping them to modify their leadership styles based on their evaluation of a staff’s competency and commitment levels. No one size fits all, even in leadership, and managers who can understand and utilize different leadership styles will find it easier to effectively drive behavior change, accelerate employee development, as well as manage their employees in the COVID world, where roles are constantly shifting (9).
More information and teaching materials can be found here on the main site (9). We found that situational leadership is a valuable addition to managerial training, particularly if used in conjunction with exercises to help identify leadership styles, worksheets to help define development levels, and role playing.
Good communication is the foundation of good leadership, and the need for this soft skill has become more significant with the pandemic. According to Nicole Dehler, vice president of StayNTouch, a mobile hotel property management system (PMS) company based in Bethesda, Maryland, restaurant staff, especially those in front of house, literally compose the “front lines” when interacting with guests and implementing hygiene and social distancing measures (10). “If [staff] aren’t informed of your brand’s messaging on sanitation guidelines and response strategies, management will be more difficult and people could be put at risk,” she said. “It is absolutely vital that you communicate with your employees early and often, and are as upfront and transparent as possible, even if it means having difficult conversations or conveying bad news” (10).
Just as with conflict resolution and leadership skills, supervisors can teach effective communication by initiating hands-on practice, role-playing and introspection (11). To measure the effectiveness of communication, supervisors can collect qualitative information by studying employees and asking them for feedback. Long term measurements could also be taken by considering turnover rates, productivity and employee satisfaction (11).
Many of the soft skills overlap in that they aim to reduce friction between relationships through building emotional intelligence and flexibility. Conflict resolution (external and internal), situational leadership and effective communication will all be critical to harmonizing workplace relationships until the return to normality post-pandemic, and supervisors should consider training their team these crucial skills to improve team building and solidarity.
Goliath Consulting Group offers management training and a host of other services for independent, chain and franchised restaurants. Learn more at http://www.goliathconsulting.com or contact us at firstname.lastname@example.org
By Bora Kang and Colin Kopel
Despite your best efforts to adhere to CDC’s safety guidelines and to make your guests feel safe and comfortable dining in your restaurant, you may face an unavoidable situation where your employee tests positive for the novel coronavirus. According to Will Eadie, Global VP of alliances, WorkJam, foodservice workers are essentially on the front lines and at high risk of getting sick (1). Workers may also be exposed to the virus elsewhere and may be in a situation where a family member contracts COVID-19. So, what can do you when your staff tests positive? Here are resources and advice on what to do when it happens.
First things first. The CDC is your best source for guidelines regarding COVID prevention, intervention and control, and you should consult the website for instructions on what to do when you are faced with a sick employee. Here is a brief overview of the CDC’s content (see website for more details https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/business-employers/bars-restaurants.html ).
1. Advise Sick Employees of Home Isolation Criteria
2. Isolate and Transport Those Who are Sick
3. Clean and Disinfect
4. Notify Health Officials and Close Contacts
Once you have followed these steps you can proceed to damage control. While it is recommended that restaurants temporarily close so that the business has time to clean and disinfect the restaurant, as well as having the rest of their staff tested, the rules regarding closures vary from state and region. For example, the State of Massachusetts now lawfully requires restaurants to immediate shut down for 24 hours (3). Some restaurants opt for closures voluntarily, even though they are not bound by law to close. A running list of restaurants and bars that are temporarily closed in Atlanta, GA, are listed here (4).
Unfortunately, not all restaurants can afford to shut down operations. Most restaurants do not have any form of a safety net left and closing can be devastating. Many operators will close for a few hours to disinfect the restaurant. There are third party companies that will come in and spray the entire facility with bio-friendly solutions. If they do close, restaurateurs leverage programs like Unemployment Insurance to hold their staff over on wages.
Overall, being flexible and prepared to act quickly and take necessary steps to sanitize the workplace will help operators expedite this process.
Notifying the Public
Transparency may be a difficult decision to make as an operator, especially given the financial loss that comes from temporary closures and the possible negative profiling of restaurants that report cases of COVID-19. First consider your number of staff and where their exposure came from. For example, if you have a small number of employees you may be able to narrow down the path of contact, isolating the cases so that you can prevent further exposure; if you discover that one of your staff has had close contact with someone who contracted the virus recently while outside of the workplace, you may be able to manage and contain the situation by asking the employee to stay at home until they fully recover.
Many experts have expressed a more positive outlook for restaurants that have chosen transparency. According to a social media survey by Taylor Adams, “Would You Eat Where Someone Tested Positive?” some diners showed support for restaurants who were honest with their customers (6). One commented: “There are most definitely restaurants that have remained open despite employees testing positive. I am thankful for those that have been transparent and are clearly taking this issue seriously. I hope that we collectively support them” (6). Meanwhile, one prominent restaurant in Colorado faced scrutiny when they failed to report their first COVID positive case to their guests (7).
The topic of transparency can be a difficult issue, and what works for one restaurant is not always going to work for another. Communicating a commitment to sanitation and promoting any vendors that are hired to sanitize the building or additional programs the restaurant is undertaking such as ServSafe Covid-19 Training is key. A restaurant’s commitment to extra safety precautions is a cornerstone to showing guests you are providing as safe as possible dining experience.
Reinforcing Safety Protocols
A staff testing positive can be a much-needed wake-up call for businesses. Operators should use this opportunity to remind your staff about safety and re-training them so that they adhere to the sanitation policies in place, most importantly—masks, gloves, hand-washing and social distancing, such as one provided by the CDC (2). Some operators have added regular temperature checks and deep cleaning into their routines because of growing concern among their employees (8). The Centrolina Restaurant in DC, for example, are enforcing stricter safety policies such as hand washing every 30 minutes, hourly cleaning, and twice-daily temperature checks for staff, after reopening after a positive COVID-19 case (8). Managers should accept staff call-outs due to medical reasons, allowing them to be excused from work if they are not feeling well. who express concerns they may have been exposed should be taken at their word. Many states require wellness contracts that outline symptoms such as fever that require them to stay home until they have recovered.
Collaborating with your employees is the key to effectively communicating important COVID-19 information, according to the CDC (9). We recommend operators to communicate with their employees about planned changes and, most importantly, seek their input. It may be difficult at first to balance an appropriate level of communication, to decide whether you tell your staff if an employee was exposed or tested positive, even after getting the employee’s written consent to share their personal results. Communication transparency is important for good company culture. While restaurants are open during the pandemic there is already an unease among staff and, coupled with another negative industry history of undervaluing hourly employees, there is a certain amount of skepticism towards management.
If someone tests positive, remind them of the environment we are in and that vigilance is their best tool to protect themselves. Let them know all the additional safety measures the restaurant is taking and, most importantly, listen to them. Ask them what would make them feel safer and, when feasible, accommodate the staff. They are the ones on the front line, and you cannot run a successful business without well-trained staff. They need to feel safe and know that the restaurant is here to support them.
Returning to Work
Individuals who have tested positive can return to work when they have fully recovered. There are certain tests individuals can take to determine whether an employee can safely return to work, but go-to resource should be this CDC website where a “Return to Work Criteria” is listed for businesses (10).
Exposure to the COVID-19 virus is possibly unavoidable given the spread of the pandemic, and there is no one right strategy to prepare for its impact on businesses. Overall, operators who can act quickly to employees testing positive, as well as possible closures, will benefit by avoiding further confusion and panic (1). Our recommendation to operators is to keep your staff informed about updates, ensuring that the communication lines are open and streamlined so that staff can be up to date on new safety policies, scheduling, as well as hours and staffing.
Contact us at email@example.com or visit our website at goliathconsulting.com to get information on our training and consulting services.