Restaurant franchises are in a good place right now: The combined effects of globalization, recovering income levels, and new offerings has led to rapid growth in restaurant franchising and plenty of success stories. However, changing market forces and new regulations will be hitting restaurants with new expenses in the coming months and years. Is your restaurant ready? Does your franchise have a plan? Take a look at some of the upcoming costs and see how prepared you are. When you’re ready, visit FranchiseExpo.com and search for compatible franchises.
U.S. regulations in 2015 are requiring restaurants to publish more calorie information about their dishes, and nutrition facts are finding their way into restaurants in other ways, too. This means several changes are coming, especially when it comes to menus. In addition to new menu design and publication, changes to dishes may also be a priority. Publishing calorie information is a great way to change the way that customers view food – it also requires some research. How many of these costs with be passed down from franchisors to franchisees? It will likely vary from model to model.
2. Rising Minimum Wage
Minimum wages are going up in states and cities around the United States. These new rules make it more expensive to hire employees, end of story. Again, how franchises deal with these expenses depends on individual approach, but in many cases it’s the responsibility of the franchisee, which invites a whole lot of new costs going forward. It also adds a new dynamic onto territory: Is it worth expanding into a new area if the minimum wage is significantly higher there? How much will that eat into the budget? The answers may affect branch decisions.
3. Even More Tech Upgrades
Restaurants are going mobile in a big way. This means apps that allow you to order food ahead of time, tablet menus, self-service payment tablets, and many other amenities. As more businesses adopt them, more customers are going to expect them. This is a serious upgrade, especially when it comes to hardware, and it also has a major effect on workflow. The end result is more investment in the short term. Fortunately, more profit and savings seem likely in the long term.
4. The New Employee Definition
Both full-time and part-time employees have been receiving new legal definitions lately, and this puts many franchises in a bind. Many franchise employment strategies focus on minimizing costs by using part-time employees, a controversial tactic that is nonetheless effective. However, new health insurance and employment regulations are redefining the benefits given to part-time employees, and what it means to be a full-time employee. The result is a general increase the benefits that must be given to part-time employees, a staple of the restaurant industry.
5. New Payment Regulations
Chip-enabled credit cards are coming to the United States in a matter of years – they can only be put off for so long. And additional regulations are expected after that. This will mean upgrading payment systems across the board, which means plenty of investment in IT, hardware changes, new training, and data management.