Over the past few months, we’ve attended a number of franchise industry events, including the International Franchise Association (IFA) 2015 Convention and the 2015 Restaurant Leadership Conference. Both were full of great information for franchises. We thought we’d provide a brief overview here.
Connect. Innovate. Evolve.The theme of the IFA 2015 Convention was “Connect. Innovate. Evolve.” It was aptly named, as there were many connections made that will hopefully inspire and drive innovation and, eventually, evolution in those who attended. Some of our favorite key takeaways include:
- Are you a boss or a leader? There was robust conversation around the importance of strong leadership in a franchise system. One presenter used a cycling metaphor—just as serious cyclers are “clipped in” to their bikes, leaders are clipped in to their organizations. Success doesn’t happen by accident—it takes strategy, planning, and buy-in from all levels of the franchise organization. A lot of work goes into building a strong team and, consequently, a strong business. It’s the whole “get the right person in the right seat on the bus moving in the right direction” theory put in practice.
- “Culture helps franchises make the right decisions when no one’s watching.” This quote from Dr. Ben Litalien, founder and principal of Franchise Well, kicked off a discussion about the importance of culture within a franchise organization. It’s important to establish a strong culture so franchisees and their employees are doing what they should be doing to support the brand; a strong brand and system help define the underpinnings of success. When does a franchisor have the greatest influence on a franchisee? Early on during recruiting and training. It’s imperative to establish that culture up front.
- Branding is a critical focus for franchises. Just walking around the trade show floor, we couldn’t help but notice that marketing service providers possibly outnumbered all other types of service offerings. This illustrates how important branding has become to franchises. When a franchise is up and coming, one of the more critical areas of focus tends to be the ad fund. Why? Because it’s more than managing that fund—it’s managing the brand image and direction of the system. It’s important to be strategic about developing your brand and to marshal the right talent to constructively carry that forward. It’s also about staying connected to the franchisees and learning from those who are interacting directly with the consumer about what is working from a brand perspective and what is not.
New dynamics of growthGiven the reduction in gas prices, there’s been an upward trend of consumers spending their new found disposable income at restaurants. It makes sense, then, that the theme of the 2015 Restaurant Leadership Conference was “New dynamics of growth” because the restaurant space as a whole is flourishing.
Here are a few of our favorite takeaways:
- There’s a continued focus on millennials. This includes everything from recognizing how they communicate/order to their preferences for “fresh” cuisine to how they determine where they’ll go (sites like Yelp). It’s critical to monitor a restaurant’s reputation on sites like Yelp and have a plan for responding — whether comments are positive or negative. There’s also an increased use of surveys to gauge satisfaction, so having a plan to react to the news — good, bad, or indifferent — is critical.
- Although restaurants in general are doing well, the fast casual space — restaurants like Chipotle and Qdoba — is doing even better. This space is the fastest-growing dining option. Therefore, it’s no surprise that private equity groups with multiple restaurants are adding fast casual restaurants to their portfolios at an explosive rate.
- There’s a renewed focus on the customer and providing top-notch customer service across all franchises. Take Chick-fil-A, for example. If you look at its corporate purpose, you don’t see anything about chicken. Instead, you see its attempt to focus on its customers: “To have a positive influence on all who come in contact with Chick-fil-A.”
- Despite all the growth, nearly half of restaurant operators believe that these are the most difficult times they’ve faced in their careers, according to a recent Restaurant Business survey. Responding to millennials through a variety of technologies is a huge cultural change. Many are struggling to adapt.
For more information on any of these challenges or opportunities, give us a call. We’re here to help.