One of the biggest trends in restaurants today is the explosive growth in off-premise sales. According to Industry Trends and Data Expert, Darren Tristano:
“Everyone knows it’s no longer a question of whether to go off-premise — the question for restaurants is how to navigate the shift,” says Dardick. “With the global foodservice industry facing unprecedented change, the entire off-premise operating model is shifting under our feet. Restaurant and foodservice operators need to understand sizing and growth trends. Right now the opportunities are huge, and the stakes are high.”
The franchising community, which is slower to change at times, is looking to serve customers who are looking for more convenience. While not supplanting the drive-through, for many brands off-premise is the growth driver. In fact, some find the growth so fast, that they are struggling to keep up with demand. According to Restaurant Business Online:
“Tools such as DoorDash, UberEats, Caviar, Amazon and Yelp’s Eat24 allow visitors to review menus from a variety of restaurants, place an order and schedule delivery. Restaurants using these services enjoy a bump in orders that they can often absorb, and the apps expose them to potential new customers. The delivery services charge a commission on orders and a fee for delivery.”
While this can create many questions in a franchisors’ mind from consistent brand experience across markets to the potential for royalty avoidance, the opportunity for off-premise is vast.
Off-premise dining is most popular among 18-34-year olds. This is a combination of iGen, at the younger side of the spectrum and millenials at the older end. According to QSR Magazine:
“Millennial families are now commonly dual-income—often with the female as the primary breadwinner—and convenience is more important than ever. But millennials also value diversity, healthy choices, and denser urban living. There has been a significant increase in interracial couples, an increase in multi-racial neighborhoods, and an increase in the consumption of ethnic food (aka international cuisine). Organic food sales have grown more than 10x in a generation, with millennials being the most likely age group to seek out organic foods.
“And it is difficult, if not impossible, to build a new drive thru in a dense urban environment. As millennials come of age, convenience is redefined for the preferences and tastes of a new generation. The ultimate convenience—delivery—brings more options, healthier choices, and speed even in places where drive thrus cannot go.”
These digital natives value ordering online, and are all about experiences over possessions. Interestingly, the convenience of delivery helps these customers experience what is most important to them: family and friends according to QSR.
“After a long day at work with toddlers demanding attention, the ideas of going out or cooking are not that appealing. Having food show up as ordered through the same interface one uses to get toothpaste is. More, if these 20-somethings are in the middle of an experience with their friends or kids, they aren’t going to stop that experience to go get food. They want the food to come to them.”
Let’s explore how major franchisors and franchise aggregators are navigating this change. Click here to read more...