Another Foodie Friday in the midst of the pandemic. For me, it’s impossible to think about food on Friday without thinking of some of my friends in the food business who have been adversely impacted over the last six months. Heck, for my friend Craig who runs our favorite watering hole, the loss of our weekly bar bill alone is significant!
Here in North Carolina, restaurants, foodservice, and lodging is a $23.5 billion industry. More than 482,300 people are employed in the foodservice industry in the state – about 11 percent of the state’s workforce. When the governor shut bars and restaurants down, the impact was felt by those of us who couldn’t drink or dine out but that was nothing like how it hit those who provided that food and drink. I’m sure the situation is comparable to where you live.
Restaurants are back open here, albeit with reduced capacity. Bars are too although many of them are only serving outside. It’s better for the proprietors and staff but some of the jobs haven’t come back and many restaurants have closed up for good.
You wouldn’t think this would be a great time to look at opening a food business, would you? Well, you’d be wrong. As reported by QSR:
Quick-service chains had recovered to just a 13 percent decline year-over-year. Certain counter-service franchises have recently even reported positive year-over-year sales during the pandemic. After experiencing an initial hit on sales, A&W Restaurants announced sales were up by double digits, Papa Johns has noted a 24 percent increase in North American sales and Popeyes has boasted that sales are up by the “very high 20s” percent.
In other words, even in one of the worst-hit industries in the midst of a horrible economic time, there are opportunities. Would I invest in a full-service sit-down restaurant? Of course not. But if the business was predicated on carryout and was part of a franchise system, I very much might. I say that because franchise organizations have the infrastructure in place to help the system survive. A good franchisor can develop and implement systems – online ordering, contactless delivery, etc. – that give franchisees the ability to cope with the challenges. As an individual restaurant or any business, that’s more difficult and often requires capital that the individual unit might not have.
It’s something to think about even if you have no interest in owning a food business. Many other business sectors such as hair and nail salons, gyms, travel businesses, after-school programs have been hit hard over the last six months and yet I’m aware of dozens of franchise brands in these sectors that have modified how they do business. Their franchisees are doing well despite the pandemic. Going it alone is hard even in good times. Working as part of a proven system is especially valuable in bad times.
The ability to adapt is key for any business and never more so than now, don’t you think? Even in a crisis, there is an opportunity! And if you’re interested in learning more about franchise opportunities, you can reach me here.
Filed under food, Franchises
I’ve never jumped out of an airplane and I probably never will. I’ve had a number of friends who have done so, however. Most of them were excited about making the jump but even they had what I call the “Stuff Got Real” moment. OK, I usually use another word in place of “stuff”.
The moment comes when they reach the open door, feel the wind rushing by, and look down. That’s when whatever fear they have hits them. My guess is that there’s something in our DNA that says leaving a perfectly good aircraft when it’s several thousand feet above terra firma isn’t so smart but our DNA doesn’t know about parachutes.
That same SGR moment is something I deal with on a regular basis. The folks I work with to help them change their lives through business ownership inevitably hit the SGR moment as they realize that they can change their lives and live their dream. They have the money, we’ve found a business that they like, the numbers work, etc. That’s when they hit the open door.
No, they don’t see the ground. In some cases they know they have to leave a job even if it’s one they hate. In others, it means they have to invest (read that as risk) a chunk of their life’s savings in their new venture even if it’s a venture that dozens or hundreds of others have proven to be successful. It’s scary and because of that, quite of few of the people who travel this road with me vanish at this point. They quit returning calls and emails. They go back to what Thoreau termed their lives of quiet desperation.
Maybe it’s a good thing. Starting your own business, even one that’s an established business model with a known brand is hard. Sure, you’re given an operations manual and a marketing plan. You’ll be trained by people who have been running the business for years. You might even have a mentor assigned to you for a period of time to guide you. That’s all well and good but YOU have to stand in the open door and jump, even though you’re strapped to people who have made the jump many times before. You have to commit to the jump and not everyone can do that.
I tell myself when a prospective owner balks or disappears that they are probably part of the 99% for whom business ownership isn’t the best path. Lately, I’ve taken to warning folks early in the process that they’re going to face the SGR moment and I’m here to help as are any franchisors we decide to investigate. Hopefully, that helps when the wind hits their faces and just maybe they step through the door. Could you? Let me know if you want to try.
I was having a conversation this morning with a fellow who represents a number of the franchises with which I do business. He asked me how things have been going during the pandemic and how I thought things had changed. I thought about it for a minute and this is the gist of what I said.
For most folks, investing in a franchise, or starting a business of any sort, is a scary process. It involves risk, both professional and financial. Oh sure, there are some well-to-do folks I’ve worked with who are just looking to start something up on the side while they keep their day job, but the risk is still there. While the risk is decreased when you go with a franchise (proven system, strong support team, etc.), you’re still jumping out of that airplane. Maybe you’ve got someone strapped to your back who has jumped a hundred times before, but it’s still a scary process.
The pandemic has only intensified that fear. Every person that goes into the process to any deep degree has hit the “stuff got real” moment when they have to make the leap or back away from the door. When almost every news story each day is bad and when neighbors, friends or family might be hurt by the pandemic, it’s a lot more difficult to convince people that they’re making the right move. Couple that with the fact that many 401K’s became 201K’s almost overnight and many people would rather not add to the risk it seems we all take just by waking up each day.
Many of the folks who express interest in learning more are, unfortunately, not good candidates for many brands. They don’t have much liquid capital and due to what’s been going on, their credit may be damaged. Honestly, some are pretty desperate to buy themselves a job which is not a great reason for them to be looking at starting a business. The virus has made it harder to find really well-qualified folks in many ways.
It hasn’t all been negative. Getting financing has rarely been less expensive for those who decide to move forward. The government has been delaying loan payments to help borrowers out. Some business sectors – in-home care, home repair and remodeling, cleaning, and some others – that were good businesses before are even better businesses now. I had one person who was looking at some food businesses shift overnight to wanting handyman businesses. That’s smart thinking because he is looking at the business as something that makes his goals possible and is unconcerned with the means to that end. Shifting on the fly is something we all need to be doing more of these days, right?
Those are my general thoughts about what’s happened to my business over the last few months. What’s going on with yours? How can I be helpful?