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How Inflation Is Impacting Fast Casual Franchising

By Doug Mark, The Learning Sherpa

We live in unprecedented times (I find that phrase a little cliche, but it certainly describes what we are going through). Inflation has reached an all-time high, the pandemic has shuttered many brick-and-mortar locations, and office workers are heading home to work. Gas prices have skyrocketed, groceries are insanely expensive, and because times are tight, going out to dinner has become more of a luxury. More and more people, especially families, are trying to find a way to enjoy family time and go out to eat without breaking the bank. This opens the door for franchising, especially in the fast and casual space — but here lies the challenge. 

Rising costs are increasing expectations in the food industry.

Because everything costs more, and I do mean everything, expectations are changing. I used to be able to get a meal from Five Guys for around $10, and that same meal today costs me about $20. If I’m paying $20 for a burger, it should be hot, delicious, and come out the way I ordered it. Unlike a $5 Biggie Bag from Wendy’s, I expect my $20 order will be correct, fresh, and served with a smile. A family with two young kids might drop up to $80 on a fast, casual dinner. Do you think their expectations will be the same as if they paid $37? Surely not.

Delivery Services are certainly not immune and are impacting franchise business

A few weeks ago my wife and I ordered pizza to be delivered on a friday night. We went with an emerging Franchise Brand who had recently come to the DC area. I’d had it in person and it is awesome so we had no fear about getting it delivered. We ordered at 5:47 and our pizza arrived at 8:53. As you might imagine it was cold, late and a horrible representation of their food. I know this because I’ve been to their location in person and it was a wildly different experience. I think it’s time to mention that one Large pizza delivery was going to cost us $38 after fees and tips. For one pizza. I’m not sure how you feel about this but I certainly didn’t appreciate waiting 3 hours for cold pizza. It’s hard to say whether this was the delivery service’s fault or the restaurant but I was not going to waste almost $40 on pizza that arrived looking like it had spent several hours in a hot yoga studio before being placed in some dude’s corolla for a week. This ended up ultimately costing both the restaurant and the delivery service. Truth be told I haven’t used that service or ordered from that brand ever since this happened. My expectation changed because of the cost. If this happened to me on a $12.99 pizza I’d had laughed and said you get what you pay for but this was almost $40, I didn’t feel like I got what I paid for I felt like I’d fallen for a banana in a tailpipe. 

When waste is detrimental, training is essential.

Restauranteurs need to have as little waste as possible, with the goal being zero waste. Your food costs are going up, so when a mistake occurs, and you have to give away a free meal or remake it correctly, you know what that costs you. Food waste can kill a restaurant in the form of lost revenue, food waste, and the negative reputation that comes with poor customer experiences. The good news is there’s things you can do to mitigate all of the items we’ve been discussing and that answer lies within training. Today, there is ample opportunity to improve staff training on customer interactions, demanding or upset customers, food quality and accuracy, and more. 

Each person has a part to play in the customer experience.

Investing in your people, brand, and legacy has never been more critical than now. What’s more likely to happen — someone having a great experience and writing a super positive review or someone having a negative experience and writing a hatchet job on your business? Unfortunately, it’s the latter, so every customer interaction matters, whether on the phone, during counter or table-side service, or when compiling takeaway orders. The cooks need to know why it matters that they get orders right, and the same goes for prep cooks. Customers who visit franchises tend to have preconceived notions of what the experience and food are like. Each franchise brand should understand this. Everyone plays a part in the customer experience. Everyone. 

Training should be tailored to the individual learner.

We have a generation of young adults joining the workforce. We know most of them don’t learn the same way I did. You can’t hand them a manual and hope they figure it out and teach themselves. You can’t sit them in a breakroom with a TV & VCR watching hours of tedious training videos. 

You need to get inside your learners’ heads and try your best to understand how they learn and deliver training in a way they want to absorb. They need to see and feel that by taking this training, they will understand how to do their job better, how they are assessed, and how they can meet and exceed your expectations. If they love flipping through TikTok and Instagram, they likely love being entertained. They expect short, quick informational videos they can rewatch again and again to absorb all the nuances of what you are teaching them. 

Finally, always explain why you need things done a certain way, and never assume the learner understands or knows the “why” behind “what” you are teaching. For example, you might need to explain to learners why you wash the floors this particular way: there’s no slipping, product buildup, or environmental damage. As a result, employees should understand why a job needs to be done a certain way. In turn, the customer will be happy with the human interaction and the product because everyone did their job right. 

Use an LMS for your franchise training needs.

If your staff needs to improve its ability to meet or exceed customer expectations, you need a learning management system (LMS). This tool allows you to teach your staff in person or online. With an LMS, you can retrain your staff on things they may not have picked up the first time. Perhaps the most compelling reason for an LMS is the fact that you can track training completions, progress, and history but also identify areas for improvement. You need tracking to do this effectively which is standard in every LMS. Most systems are very similar, so buy from someone you like. When you choose an LMS, chances are you are entering into a long-term professional relationship. I recommend getting some demonstrations and seeing who resonates with you the best. 

 Happy Franchising,

The Learning Sherpa

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