Digital Franchising is on the Menu

In light of the COVID-19 pandemic, there is much debate over the longevity and potential of QR codes in the hospitality industry. While the use of digital menus has been increasing for some time, their adoption in restaurants has surged since the onset of the pandemic. According to a recent survey by the National Restaurant Association, half of all full-service restaurants have switched over to QR code menus since March 2020.

QR code menus have proven to be a safe and reliable tool facilitating customer and restaurant staff interaction. Their implementation has helped restaurants streamline and successfully process orders while also save on overhead costs. For example, restaurants can update their online menu by the simple tap of a button and avoid reprinting costs. A recent industry study found that the average amount spent on 1000 printed menus is approx. $190 ($330 if double-sided). As such, some restaurants were spending as much as $10,000 annually on printing their menus.

Providing guests with access to a menu via a QR code is only one example of the ways restaurants responded to the ongoing crisis. The restaurant industry also adapted by ramping up outdoor dining, curbside pickup, and use of food delivery apps.

The main challenge restaurants now face is how to adapt to industry-wide problems like finding and keeping employees, supply chain disruptions, and dramatic increases in the costs of ingredients and packaging, while at the same time delivering a great guest experience and finding a way to turn a profit. While many uncertainties lie ahead for the industry, it is evident that technology will continue to be an instrumental tool to help restaurants remain in business and feed hungry customers.

A New Spin on an Old Business Model

The concept of franchising as a distribution model can trace its roots in the United States back to the mid-1800s. Modern day franchising transformed the restaurant business landscape providing the model for restaurant chains to expand across North America. The future, however, points to digital.

Digital franchising is the new frontier of franchising that will revolutionize how many businesses operate, by combining power of the internet and cloud-based applications with the distribution scale of franchising. The catalyst of the digital franchising model fits perfectly in this scenario. By definition, a digital franchise is a type of license or right sold to a franchisee that grants ownership of a local market and access to a digital technology that will enable them to build a local business under the company’s name.

For restaurants, there are digital franchise systems specialized in providing technology solutions that streamline operations and build a loyal customer base. Hospitality is increasingly relying on technology for ordering, payment and loyalty rewards and digital franchising provides an opportunity for entrepreneurs to help the industry solve some of its key pain points. 2022 is off to an unpredictable start for restaurants, so let's give them a helping hand.

2022 Off to an Unpredictable Start 

Since the beginning of the COVID-19 pandemic, the ever-changing in-person dining restrictions has set the restaurant industry on edge. While the industry has suffered catastrophic losses due to closures and capacity limits, demand for in-person dining is still strong. ‘Breaking Bread’ means more than just eating; it shares a sense of community with others. Now, we face the start off 2022 with its interruptions brought by COVID-19 variants resulting in understaffing due to illness which has affected restaurants across Canada and North America. QR Code menus, along with digital payments and rewards, are transforming restaurant efficiencies by saving time, money and dealing with the labour shortage head-on.

Restaurants must keep up with strong consumer demand while maintaining safety measures, speed, and operational costs. Solutions now exist that enable restaurant guests to not only access the menu via QR code, but to also directly order and pay from their mobile device. It has been reported that using QR codes combined with digital ordering and mobile payment can result in up to a 12% increase in higher basket spent per table and 10% faster table turnover.

Mobile Options: Flexibility and Functionality

In addition to the menu displays, ordering and payment functions, digital solutions now provide features to improve the customer’s dining experience - from reservations to ordering, payment, and rewards. After all, consumers are more tech-savvy than ever and increasingly rely on digital solutions to pay for their everyday necessities, including food and dining experiences. The global mobile payment market was valued at $1.48 trillion in 2019 and is projected to reach $12.06 trillion by 2027, growing at a CAGR of 30.1% from 2020 to 2027. If restaurants want to keep up with their tech-savvy customers, they must provide a dining environment that favours innovation and delivers quality food and service. In addition, they must be up to speed with the latest in (restaurant) software and technology.

Stay Relevant

The opportunity to be a digital franchisee is one primed for the taking as restaurant owners, managers and staff don’t always have the necessary tools and knowledge to leverage technology in their operations and business growth objectives – but they need it. Still, some restaurants feel ‘alienated’ and intimidated by industry software. The segment of Digital Franchising can help eliminate those problems. Each franchisee plays a role in providing the training and information to support restaurant owners with successfully implementing solutions such as digital ordering and mobile payment. 

There is not a single stand-alone solution that can completely rectify the hit the restaurant industry has taken. But on its road to recovery, this industry will once again thrive. The question is, how do we help restauranteurs get there quickly? What is certain is that the future of hospitality and dining is becoming increasingly dependant on technology and digital innovations—balancing industry automation with a business opportunity? That sounds like the ideal opportunity this sector needs to bring back confidence, fortitude and profitability.

About the Author

Jonathan Hoyles is the CEO of Perk Labs, the parent company of  Perk Hero and Perk Franchise.