Food Franchise Industry & Technology Essay

Submitted By muhammadkarim
Words: 896
Pages: 4

Food Franchise Industry
Food franchises are considered to be the foundation of franchising. An approximate 57% of franchise industry employees work in areas of full or table service restaurants, quick service restaurants and retail food. The consistent experiences of well-maintained premises, tasty foods, and value for money in franchise restaurants provide customers good reasons to patronize there restaurant choices. After the recession of 2008, the food service spending in US has started increasing for last couple of years. As per the Consumer Expenditure Midyear update from Bureau of Labor Statistics (BLS) for July 2012 to July 2013, the average American household spending on away-of-home food was same as of 20081. Overall, the restaurant industry has shown a tremendous growth within the last century.
According to the National Restaurant Association (NRA), there was a 2,000 percent increase in the number of restaurants in US, from 43,000 restaurants in 1919 to 990,000 restaurants in 20142. Though the restaurant industry consists of small businesses, it is inducing large impact on the nation’s economy. NRA projected the industry sale to be a total of $683.4 billion in 2014 which will equal 4% of the US GDP3. The industry is also projected to employ 13.5 million people in 2014 — about 10% working Americans. Whereas 90% of the restaurants have fewer than 50 employees and 70% of those are single-unit operations (see Exhibit for NRA 2014 projection facts at a glance).

Technology in Food Franchise Industry
Technology is now playing a vital role in the restaurants dining experience and weaving its way into the day-to-day operations of full service restaurants like never before. Customers now expect full service restaurants, franchised and non-franchised alike, to provide technology options that will make their visit efficient and provide them information to make decisions before they even walk in the door. According to a recent research by NRA, 36% of the respondent consumers are willing to use technology now than they were two years ago and 65% of them have noticed that the restaurants are providing these options much more than before. These options include – online reservations, smartphone ordering and in-store kiosks. As these technologies are becoming more commonplace, customers already have started recognizing the benefits and depending their eating decisions on those more than ever. These options enhance convenience, speed up services, increase order accuracy and make restaurant interactions more fun for customers (see Exhibit 3 and 4 for how customers using technology for restaurant information). The technology norm of the industry today is that the customers are actively educating themselves about their choices.
On the other hand, in many cases the restaurant community is still facing challenges to offer customer-facing technology options due to cost of implementation and per-usage cost. The single-unit operating small business model of restaurants make it difficult to invest heavily in the technology options. However, franchising business model helps restaurant owners to share the burden of huge investment among the franchisor and franchisees. The software and hardware developing industry is also innovating technologies which are more robust and cost efficient.
In addition to customer facing technology options, there are many other operating technologies are been developed and used in the restaurant industry (see Exhibit 4 and 5). Some are third party technologies, and some are in-house innovated and developed by larger chain restaurants and franchisors. These systems provide operators the ability to organize promotions, marketing, social media updates, and email blasts. These improvements could speed up the ordering processes, cut labor costs, and bring efficiency to restaurant operations. Some of the systems integrate multiple operating aspects that increase the overall…