It’s no secret that the global Quick Service Restaurant (QSR) market is vast. In 2021, it was valued at $173.72bn and is forecast to grow at a CAGR of 4.9 per cent. The opportunity for franchise brands to leverage demand and opportunity is at an all-time high. But so many time-honored, independent players are being left behind. Why? Very simply, consumer expectations and buying trends have changed – dramatically so – over the last two years and those who have failed to adapt either their services or products have been exposed as dinosaurs in a digital age.
The brands that are thriving have several key things in common. Agility, innovation a renewed focus on customer values, and, perhaps most importantly, significant investment into technology. Interestingly, the playing field has been well and truly leveled in this respect with both emerging and established franchisors making huge strides in their segments of the market.
Sustainable innovators
For the past two years, the German street-food concept, Döner Shack, has been disrupting the U.K.’s fast casual restaurant industry with its aim of becoming the number one kebab franchise brand in the world. However, with the restaurant sector constantly evolving for both owners and customers, the brand has had to ensure it remains at the forefront of technological innovation to meet modern-day consumer demands and expectations. What’s more, stakeholders have increasingly turned their attention to the sustainability and environmental credentials of the brands they engage with. Those able to ride high on the wave of approval are those who know that lip service is out and ‘receipts’ are in. A position which fast-casual restaurant franchise, Döner Shack, proudly occupies.
In a U.K. first, the brand led the way last year by becoming the first kebab restaurant to introduce robotics and advanced operating procedures for preparing the food in its kitchens. By designing state-of-the-art robotic cutters, Döner Shack reduced labor-intensive food preparation time and minimized food waste. The robots also simplify processes by consistently cutting the exact quantity and proportions of meat required for each day, which means the probability of errors was minimized, if not eliminated. The introduction of kitchen robots has also seen the fast-casual brand reduce operating costs by automating repetitive tasks that staff would usually have done, freeing up time to focus on enhancing the customer experience.
“A bedrock to our success is an inbuilt culture of adaptability,” explains co-founder and managing director of Döner Haus and Döner Shack, Sanjeev Sanghera. “Through the implementation of automation, artificial intelligence and robotics, Döner Shack offers various unique solutions which not only streamline our business but differentiate us for prospects and consumers alike.”
Reframing customer service in line with consumer needs saw Döner Shack improvise, adapt and overcome challenges during the pandemic. The learnings from this have since been permanently embedded in the business model.
“As we’ve seen over the last two years, businesses need to be agile and adapt quickly so they can continue to operate efficiently. Döner Shack showed its business agility during the pandemic by revamping our contactless ordering solutions, which not only boosted customer convenience but reduced waiting times and kept everyone safe and healthy. Customers were allowed to browse digital menus and quickly place orders to ensure a touch-free experience. QR codes directed customers to digital menus and payment options, removing the possibility of touch contamination via physical menus and payment terminals. Now, contactless ordering helps manage the full-order life cycle and ensures customers receive their food faster and to detailed preferences.
“With the restaurant industry constantly having to adjust to consumer behavior and preferences, brands need to have the ability to be nimble, innovate and find ways to serve customers on their terms whether that be dine-in, delivery, takeaway or click & collect,” says Sanjeev.
Data disruption
Not content with disrupting the market with AI and robotics, Döner Shack’s commitment to data analysis is equally impressive. Using various digital tools such as its loyalty app and click & collect, Döner Shack is able to capture how its customers order and pay for their meals. As a result, it now offers better customization and personalization by analyzing data from its customer order history. Moving forward, data will play a pivotal role in helping restaurants understand their customers on a greater level, which in turn will open new revenue streams for increased sales and customer traffic.
Rocking the boat
Ísey Skyr Bar has been disrupting the ‘traditional’ make-up of the QSR franchise industry since its inception.
The only franchise in the QSR industry that pays homage to 1,100 years of true Icelandic heritage, Ísey Skyr Bar is redefining what the modern, urban consumer wants and needs from a fast-food experience… and that’s exactly what the progressive brand is all about – giving consumers an experience as much as an on-the-go snack!
With the pandemic causing local businesses and restaurants around the world to close their doors, the responsibility to provide consumers with a bespoke, luxury dining experience predominantly fell on the QSR industry. It is because of this that the rise of Ísey Skyr Bar is widely unmatched. Proudly championing a menu designed by Icelandic Michelin-starred chef, Agnar Sverrission, Ísey Skyr Bar’s sleek dining experience has raised the bar for the global QSR industry and helped it move into the post-pandemic consumer landscape.
The three primary elements that contribute to a successful QSR experience are speed of service, the nutritional value of the meal and the taste of the product. However, it’s common for well-established, leading brands to only tick one or two of those three boxes. If looking for a speedy, tasty snack, the nutritional value will generally be sacrificed. Something nutritionally optimized may take longer to make, whilst a fast and healthy snack is usually taste-compromised. Ísey Skyr Bar is the only fast-food product today that has been built on the foundation of ticking all three boxes. Their range of products is not only incredibly healthy, but they are easy to access for today’s busy consumer and, with the help of Agnar Sverrssion, taste great.
Despite the traditional belief of convenience superseding all other considerations for consumers, the market space that Ísey Skyr Bar has disrupted has ultimately set new standards for the entire industry. Ísey Skyr Bar’s rise has highlighted the growing demand for healthy options on fast food menus. In fact, in 2021, 58 per cent of consumers said healthy options on a menu were important, with millennials rating this factor at 71 per cent. QSR menus across the industry are undergoing a widespread scaling back of products available to maximize efficiency and reduce waiting times, and brands have been able to focus on the nutritional value of their meals more than ever – something consumers are thanking them for.
Today, consumers are substituting the occasional burger or sweet treat for low-fat, ‘superfood’ alternatives. Ísey Skyr Bar has caught the imagination of the modern, urban and socially-conscious consumer, and has made Skyr impossible to ignore. With its high calcium, B12 and iodine content, Skyr is an essential product for healthy bones, the nervous system and thyroid health. As well as this, there is evidence to support these live cultures and bacteria lifting emotions and moods. Built on the foundation of paying homage to 1,100 years of heritage, the super-healthy, protein-rich snack is not only nutritious and delicious but offers something for everyone. And thanks to this rarely-seen versatility that is becoming more and more important to the modern consumer, Ísey Skyr Bar has helped reform the go-to snack food for consumers today.
The universal language of pizza
Marco’s Pizza is one of the fastest-growing pizza brands in America, spanning 1,100 locations in 34 states with locations in Puerto Rico and the Bahamas, plus further international development on the horizon. The brand is utilizing national television advertising to cement its household name and drive awareness and demand – from consumers, franchisees, and multi-unit investors.
Marco’s recently unveiled a major project to accelerate its digital capabilities and drive growth. The brand’s strategic investments in technology and innovation centre around migrating to a 100 per cent cloud-based proprietary technology platform – Marco’s Order Management System (MOMS). This platform is designed to improve the customer experience as well as simplify operations for franchisees and store team members. Testing is currently underway with plans to roll out first into all company-operated stores by year-end, with franchise locations to follow in 2023. The fully integrated system supports payment processing and the point-of-sale (POS) system, with integrated conversational ordering, labor scheduling, inventory management, and a cloud-based reporting dashboard with centralized data management capabilities.
“This will allow us to be very nimble as we continue to implement new technologies while saving our franchisees money and providing best-in-class customer experience,” says Rick Stanbridge, executive vice president and chief information officer of Marco’s Pizza. “It’s a truly remarkable project and we see immense value in the ROI of this endeavor, which many QSR brands have not pursued due to its massive undertaking. We’ve been building upon strong platforms and adding exceptional additions and functionality that will be a benefit to both our franchisees and customers as we prepare for the future.”
By housing its own data, MOMS can also enable all sorts of applications both now and in the future, allowing Marco’s to respond to, if not lead, rapid digital change. Marco’s can pivot and plug in additional features for customers as they become available, such as:
- Ordering from virtual assistants such as Alexa, Siri and Google
- Remote kiosk ordering
- GPS pinpointed delivery
- Instant ordering via social media
- Automotive app integration such as Apple CarPlay
The MOMS is one of many projects Marco’s is embarking on after announcing the investment of millions of dollars in innovations through the next few years. Such projects include its recently announced voice-to-text initiative, the continued adoption of third-party delivery, utilizing AI for generating automated promise times, vetting and testing automated kitchen innovations, ghost kitchens and new operational equipment.
With its new digital capabilities driving growth, Marco’s is equipped with a roadmap to truly disrupt the industry and challenge the competition, fuelling its long-term strong growth and performance.
But exactly what is driving such remarkable innovations in the QRS sector? Consumer demand and increasing expectations or an internal, strategic decision to propel the business ahead of the competition rather than simply maintaining pace? Or are the two inextricably linked?
“Bottom line, technology plays a major role in QSR and must be prioritized,” says Rick. “We want to own that experience, remain agile and pivot, control in-house via our own platform and evolve over time. Projects are completed in an order that provides the best ROI to our franchisees, employees and consumers who buy our products. It is a holistic approach that, in turn, will propel our brand ahead of the competition.”
Global expansions
“The drive toward innovation is being driven both by consumer expectations in how they prefer to engage with and access our brands, aligned with our strategic goal of creating operational efficiency and excellence in the near term while remaining on the forward edge of the technology adoption curve longer term,” says David Bloom, chief development and operating officer for Capriotti’s Sandwich Shop and Wing Zone. “We believe that brands that are successful in creating a strategy that achieves both of these goals in a way that is meaningful to the consumer and the operator will continue to experience success in an ever more challenging environment, while those that do not may find themselves being left behind.”
Far from being ‘left behind’, this month, Capriotti’s and Wing Zone announced the signing of a 50-unit master franchise agreement to expand the brand in the Republic of India. The agreement gives the company the opportunity to launch both brands exclusively within Village Food Court’s (VFC) venues and select delivery kitchens throughout the republic of India over the next five years. VFC is a co-fooding platform offering multiple branded food options within local shopping centers and on major highways.
“Over the past decade, Indians have begun experimenting with different international cuisines and there is a great demand for high-quality brands to offer world-class food options to consumers,” says Suraj Arora, managing partner of VFC. “Capriotti’s and Wing Zone fit perfectly into our growing portfolio of premium food concepts and we plan to scale quickly to offer Indian consumers authentic hand-crafted sandwiches and chicken wings.”
The deal marks the first international agreement in Capriotti’s history and will further grow Wing Zone’s international presence from its current 30 non- U.S. locations.
“We are very excited to be working with such a great team to expand both the Capriotti’s and Wing Zone brands together throughout the Republic of India,” says David. “We are prepared to develop successfully and aggressively throughout the region. Deepak, Suraj and the entire Village Food Courts team are, no doubt, going to be the very best partners to help us expand our footprint outside the U.S.
He concludes: “Culturally, franchisors can position themselves ahead of the competition or as a market disruptor by demonstrating a commitment to forward investing ahead of growth by building their teams, processes, platforms, and capabilities. We invest in franchise partner success first and foremost as that is foundational, especially in high-growth brands such as Capriotti’s and Wing Zone. Brands that are well positioned to make these long-term investments are able to attract the top talent and create significant points of differentiation from both a consumer and business model standpoint.”
Vertical integration
From technology to logistics and quality control, one brand well and truly tipping the operational process on its head is Creams Cafe. Its vertical integration sees the franchisor with full control of its key product from manufacture to franchisee.
Since opening its doors in 2008, Creams has become the U.K.’s favorite dessert restaurant brand, making waves in the hospitality sector as an award-winning market leader. Due to its innovative ideas and core values, Creams has built a worldwide reputation and, thanks to the irresistible menu, now has over 30 multi-unit franchise partners within its network. With plans to become the number-one dessert restaurant in the world, the franchise is well on its way to reaching its target by creating a plethora of own-brand products and utilizing its strong worldwide connections.
As the now famous saying by Henry Ford goes, “Quality is doing it right when no one is looking.” Here, the fast-casual restaurant franchise comes to the fore, having owned and operated its gelato factory in London since launching almost 15 years ago.
3 primary elements of successful QSR
- Speed of service
- Nutritional value
- Taste/quality of product
India’s F&B market
- Accounts for circa three percent of India’s GDP
- Single largest employer in the country
- Evolving market for international cuisine
- Unprecedented opportunities for growth
- Fifth-largest economy in the world overall
- Will become global leader in 2023
