These 3 Restaurant Franchises Thrived During the Pandemic. Here's What to Learn From Their Successes.
Facing an unprecedented labor shortage, forward-thinking restaurants doubled down on technology to increase profits
After 21 months of pandemic-induced uncertainty within the restaurant industry, why should entrepreneurs consider investing in and opening a restaurant franchise?
Take it from Berkshire Hathaway CEO and multi-billionaire Warren Buffet, who advises investors, “If you think being an entrepreneur is risky, try working for someone else for 40 years and living off social security. Many people will panic to find a charger before their phone dies but won’t panic to find a plan before their dream dies.” Success lies in the ability to be very patient but to act aggressively when the time comes.
I have seen three specific restaurant concepts not only survive, but thrive, during the pandemic. They saw the forest through the trees, realizing that many trends born out of necessity during the pandemic — like streamlined delivery and contactless pickup — are here to stay. The owners of all three franchises made bold investments in technology, a strategy that is already paying off for their franchisees.
Entrepreneurs interested in franchising should carefully note what sets these concepts apart and seek out similar qualities in a franchise partner.
Financial Disclosure: Dan Rowe is CEO of Fransmart, the franchising group partnered with Rise Southern Biscuits & Righteous Chicken, Brooklyn Dumpling Shop and Taffer’s Tavern.
Rise Southern Biscuits & Righteous Chicken
Rise founder Tom Ferguson dodged many common pandemic-induced setbacks at the start of 2020. A few years prior, his well-performing restaurant went through a rebrand. Along with the rebrand came alterations to the business model — including shifting priorities to online and delivery orders.
By the end of 2019, the pieces were in place to make the operational transition in February 2020. Thinking back on that fortunate timing, Ferguson says “I can’t claim visionary, but I can claim luck.” Once the pandemic was in full swing in March 2020, Rise had the flexibility to quickly transition from cash registers to self-service kiosks and add curbside service. Three of its corporate stores have now incorporated heated lockers for contactless pickup by customers and delivery drivers. Corporate store sales increased more than 25%, and company-wide sales rose by 15%, with no signs of slowing.
Installing kiosks and food lockers enabled Rise to automate restaurant functions typically performed by cashiers and food runners and reduce the number of employees required per shift. The system enabled Rise to save on daily labor costs and allowed staff to focus on food quality and speed of service. Although fewer employees were working each shift, Rise increased their speed of service and achieved higher guest feedback scores.
Many quick-service restaurants aim to keep their labor cost percentages at around 25% of sales, but Rise’s ordering efficiencies helped keep their downtown Durham, North Carolina, location’s labor cost percentage at an average of 18.18% throughout the first half of 2021, even dipping as low as 16.14%*.
Brooklyn Dumpling Shop
In the past, automats utilized coin-operated cubbies containing hot food and beverages behind a glass window. The absence of waiters meant that automats could accommodate numerous patrons per day at a low price.
Stratis Morfogen launched Brooklyn Dumpling Shop in 2020, introducing new technology to reimagine the automat and enable a 100% contactless process from payment to pick up. The restaurant now offers 32 unique dumplings and spring rolls, from bacon cheeseburger to peanut butter and jelly.
Patrons can order online anywhere within a few miles of the restaurant or in real-time at an in-store kiosk. Once customers order and agree on a pickup time, they receive a barcode to wave in front of their designated food locker. The locker opens automatically, and the customer receives their hands-free order from the temperature-controlled (dependent upon order type) locker.
The shop recently announced expansions into Texas, Florida and Georgia and anticipates rapid growth nationwide.
With his new full-service restaurant concept, Jon Taffer, an industry-leading hospitality expert and star of Paramount Network’s Bar Rescue, is taking safe, contactless pickup to the next level.
Taffer’s Tavern is the first full-service restaurant to fully embrace fast casual to-go techniques. Eliminating the traditional experience of placing a to-go order at the host stand, Taffer’s offers diners an advanced, state-of-the-art contactless pickup experience with the first thru-wall installation of the Carter-Hoffmann Pick Up Cabinet (PUC). The pickup technology enables street-side, walk-up access for carryout. A guest or third-party delivery service accesses one of eight to-go lockers outside without the need to enter the restaurant. Outdoor food retrieval reduces traffic inside the restaurant, enhancing indoor restaurant workflow protocols.
“Taffer’s Tavern is an industry-leading concept. Not only do we want to give our customers an outstanding dine-in experience, but also ensure when they carry out, it is just as exceptional,” Taffer says. “Using the most advanced restaurant technologies in both the front and back of the kitchen, catering to our clientele is the most important job we have. With this in mind, we chose the most innovative, safest and convenient option available to meet the high expectations of our takeaway customers.”
Taffer’s answer to the labor shortage was to engineer the “kitchen of the future.” Thanks to the adoption of sous vide cooking methods, approximately 50% of Taffer’s kitchen work takes place outside of the kitchen. Although a key goal of sous vide cooking is to ensure a high-quality guest experience and better consistency, it also reduces the need for extensive cleaning and prep. The concept requires half the kitchen staff of a traditional restaurant, giving franchisees the flexibility to pay their staff more and improve employee retention.
The bottom line
The current market for real estate presents unprecedented opportunities for new franchisees to act aggressively and get an immediate ROI on a fast-growing and “future-proof” restaurant franchise. Entrepreneurs should seek out restaurant concepts that are not afraid to invest in technology and have a watchful eye towards the future.
*Data based on Item 19 outlined in the Rise FDD issued June 14, 2021.
Entrepreneur Leadership Network Writer