News

Franchisees to ramp up growth via delivery strategy

April 1, 2019

A good majority of restaurant franchisees, 71 percent, feel pressure to grow their brands this year and will likely ramp up delivery options, boost unique value meals and invest in mobile tech and in-store reimaging to make it happen, according to a survey conducted by TD Bank.

It found that more than three-fourths (78 percent) of franchisees have a delivery option and 60 percent said their restaurants relied on third-party services while 18 percent had in-house delivery service, according to a press release on the survey.

Of the 22 percent of franchise owners who did not have a delivery strategy, 12 percent planned to put one in place soon.

"To really increase revenue in a finite market, franchisees should implement delivery if they do not already offer that service. Ignoring this trend will probably hinder those who do not participate from meaningful growth,” said Mark Wasilefsky, head of the restaurant franchise finance group at TD Bank.

The survey found that mobile ordering continued to influence business operations and 61 percent of respondents believe mobile ordering could expand their customer base.

"This is likely the reason why 42 percent of respondents plan to invest in mobile ordering in 2019," according to the release.

Franchisees also said mobile ordering had the potential to speed up food preparation, cooking and delivery processes.

More than half, 57 percent, had plans to spend money on store reimaging and remodels, and 49 percent will spend on technology investments such as POS systems, digital signage or other tech.

"Investments such as renovations and technology require large amounts of capital, but often bring a positive long-term return in business growth, and owners who aren't spending in these areas are likely to lose," Wasilefsky said in the release. "While environmentally friendly initiatives gain public goodwill, they do not yet tangibly impact profitability, which may be why they are not a higher priority in terms of spending."