HOMEWOOD, Illinois., July 22, 2020 / PRNewswire / – Franchise sales in the restaurant franchise industry are about to explode according to franchise industry veterans. “It’s tragic, but we have seen unprecedented restaurant closures over the past four months, many of which will be permanent,” he added. Marc Siebert, CEO of franchise consulting firm iFranchise Group, recently said, “But this tragedy will create a tremendous franchise sales opportunity for restaurants that weathered this storm in early 2021.”
While the exact number of permanent closures won’t be known for months, and estimates vary widely, Yelp research has indicated the number could reach 53%, while National Restaurant Association research places permanent closures at 3%. “The exact number will almost certainly be somewhere in the middle,” Siebert said, “but with 660,000 restaurants in the United States, we’ll likely see more than 100,000 empty shells where restaurants once were. And restaurants that are ready. to expand are likely to find many qualified buyers eager to take advantage of the opportunity to open in prime locations at lower cost. ”
Siebert went on to explain that the large number of closed restaurants across the country will provide the surviving concepts with plenty of opportunities to expand into prime locations with significantly reduced investment and occupancy costs. These opportunities will also present themselves at a time when the number of displaced restaurant executives, including those with capital to invest, is at an all time high and interest rates are at their lowest. “Once an effective vaccine is found, we anticipate that the demand for restaurant meals will quickly return to pre-COVID levels, providing restaurants that survive with a unique opportunity for growth,” Siebert said.
“Obviously, in order to be able to franchise, the restaurant must be able to prosper regardless of the current market conditions,” said the president of the iFranchise group. Dave hood. More than ever, any franchise expansion plan needs to go through detailed analysis and financial modeling to make sure it works for both the franchisor and the franchisee.
The consultants added that those looking to take advantage of the market opportunity should start by analyzing whether the restaurant remains franchisable under current market conditions. And until a vaccine is in place, it will be more important than ever to identify ways to increase delivery and take-out opportunities to help maximize revenue. Sanitation and food security have never been more important. Franchisors should be able to document policies and practices for disinfection, social distancing, contactless service, use of protective equipment, and communications with guests.
“When you consider that it usually takes at least four months to get the franchise documents in place, those who are likely to profit from the market in 2021 will be the ones preparing for that growth now, ”Hood concluded. “It has been inspiring to see the resilience of restaurateurs over the past few months, although certainly not a surprise. In our franchise advice Practice, we have consistently seen the perseverance and creativity of entrepreneurs all over the world, and we expect this to continue in the months to come as the restaurant franchise industry experiences a marked increase in activity. “
About the iFranchise group: IFranchise Group brings the skills of the nation’s top franchise experts to strategic planning, operational training and documentation, franchise marketing and sales, and best practices for emerging and established franchise companies around the world.
iFranchise Group, Inc.
SOURCE iFranchise Group