Running a restaurant franchise has always been high stakes, but today, the pressure is unprecedented. Rising food costs, fierce competition, and shifting consumer habits are reshaping the industry. Yet some franchise owners are finding ways not just to survive, but to thrive.
Mark Wasilefsky, Head of Restaurant and Franchise Finance at TD Bank, has a front-row seat to these challenges and sees the successful strategies that franchise owners are implementing.
“There’s a lot happening at once: new businesses, economic shifts, rising costs,” he said. "All of it hits sales, so owners have to be innovative to survive this landscape."
Inflation on the Menu
Housing prices are up. Mortgage rates are higher. Everyday essentials like bacon, eggs, and milk have grown more expensive. Younger generations are feeling the weight of inflation not seen in years.
“When people feel stretched, they’re less likely to spend on eating out,” Mark explained.
Fast food, once the budget-friendly choice, now sometimes costs as much as fast-casual dining. Suddenly, packing a lunch seems smarter than ordering takeout.
For restaurants, delivery apps have made competition fiercer than ever. Twenty years ago, it was just pizza and Chinese, according to Mark. Today, almost any cuisine can arrive at your door in minutes. Coffee shops, chicken-focused restaurants, avocado-heavy menus, they’re everywhere, all vying for the same customers.
Winning Strategies
Still, there’s a bright side.
“People will always need to eat. Online services still need to work with local restaurants to fulfill orders. AI won’t replace dining,” Mark pointed out. The trick is finding the right strategy for each restaurant.
- Value meals: Even if the margins are tight, these offers bring in new and repeat customers. While the company may not make as much money on a value meal, they keep people coming into the restaurant. “Value meals are used to attract new customers and to preserve existing customers,” says Mark. “The consumer benefits, because some of the offers are extraordinary.”
- Targeted discounting: A well-timed digital deal can turn a passerby into a regular. For example, if you regularly go to one coffee shop on your way to work, and you receive a DM for cheaper coffee at a different shop that is also on your way to the office, you may give that new shop a try. When that works out, habits are changed and that other shop has a new, permanent customer.
- Digital and Delivery: Convenience is king - “Digital and Delivery has reshaped the industry and helped many franchises weather today’s challenges,” Mark noted.
The Franchise Advantage
A restaurant isn’t just a building, it’s a brand. Its value comes from customer trust and the recurring revenue this trust generates. “At TD, we lend against the brand’s value via its cash flow generation,” Mark said. Keeping consistency throughout every location is essential, as consumers expect the same experience regardless of where a brand is".
TD Bank has invested selectively in this sector, carefully choosing the best operators and the best brands all and supported by a dedicated team that comprises of experts on the origination and underwriting sides, according to Mark. He noted that TD Securities’ acquisition of Cowen, Inc. has made a significant difference in the Bank's offerings in this space, allowing TD to take advantage of the shift in the industry's investor base to private equity and larger, scaled founder-based operators.
“With a small team, the TD Restaurant and Franchise Finance group has built a strong, nationally recognized platform that didn’t exist 3 years ago. The potential here is enormous, and we’re just getting started.”
For franchise owners, the takeaway is clear: adapt, innovate, and lean into strategies that resonate with customers. The restaurant business may be competitive, but it’s also unstoppable—because people will always need to eat.
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