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• Feb 14, 2018

Mobile technology development and integration is a top priority for restaurant franchise owners and franchisors, according to a survey conducted by TD Bank, America's Most Convenient Bank@, at the 2017 Restaurant Finance and Development Conference in Las Vegas. In fact, more than half (59 percent) of those surveyed plan to integrate smartphone/tablet apps and/or mobile ordering, or develop a mobile app in 2018.

TD's survey polled franchise owners and operators of quick-service and fast-casual restaurant brands. Fifty-four percent of respondents own or operate stores that are part of a major national brand, and 44 percent stated they own 25 or more restaurant locations. When asked how mobile ordering has specifically influenced their restaurants, respondents cited that it could:

  • Help expand their customer base (55 percent)
  • Eliminate the need to hire more staff (16 percent)
  • Speed up the food preparation, cooking and delivery process (15 percent)

“In addition to the back-end benefits, mobile apps provide an opportunity for restaurants to communicate with customers in new ways by offering customized service and incentives that provide a more seamless experience and help encourage needed repeat business,” said Mark Wasilefsky, Head of Restaurant Franchise Financing Group at TD Bank. “We live in a mobile society in which consumers expect that ordering food ― like any product ― should be quick and easy. Smart franchise owners will take advantage of the latest technology to reach customers through their devices.”

Restaurants Adjust to Shifting Consumer Demographics

As the industry and customer base evolve, franchises are channeling resources into retaining existing customers while also building a new, younger fan base. Beyond mobile enhancements, survey respondents reported that their top investment areas include: adding locations (70 percent); developing social media strategies to target Generation Z, ages 0-18, (56 percent); and creating or enhancing customer loyalty programs (55 percent). Additionally, restaurant industry professionals noted that menu enhancements/changes (54 percent) and meal delivery services (47 percent) will become key business strategies.

For most franchise owners, Baby Boomers and Gen-Xers with disposable income are becoming less vital to business decisions, as Millennials (ages 20-36, also known as Generation Y) are seen as the future of the industry. Indeed, 69 percent of franchise owners believe Millennials are most responsible for fueling the innovation that affects business plans.

“Millennials make up more than one-quarter of the U.S. population, and this generation is known to seek out new experiences while expecting high-tech interactions and convenience with any purchase,” said Wasilefsky. “Restaurants that are able to cater to the preferences of Millennials will successfully capture a key customer segment and gain an edge on the competition.”

Healthcare and Immigration Reform Pose Operational Concerns

Policy changes continue to affect restaurant franchise business operations. Particularly, healthcare regulations impacted revenue and operations the most, according to 60 percent of respondents, followed by immigration reform at 18 percent. Industry-targeted policies such as menu calorie count requirements and sugar/beverage taxes, meanwhile, had less impact on the bottom line overall.

Survey Methodology TD Bank polled restaurant franchise professionals at the 2017 Restaurant Finance and Development Conference held in Las Vegas, Nevada, in November 2017. A total of 260 responses were collected from industry professionals, including franchisees and franchisors.

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