{"id":5778,"date":"2024-09-13T20:09:49","date_gmt":"2024-09-13T20:09:49","guid":{"rendered":"https:\/\/hamraenterprises.com\/?p=5778"},"modified":"2024-10-16T20:10:17","modified_gmt":"2024-10-16T20:10:17","slug":"how-some-restaurant-franchisees-are-adapting-to-2024s-economic-realities","status":"publish","type":"post","link":"https:\/\/hamraenterprises.com\/es\/how-some-restaurant-franchisees-are-adapting-to-2024s-economic-realities\/","title":{"rendered":"How Some Restaurant Franchisees are Adapting to 2024\u2019s Economic Realities"},"content":{"rendered":"

Revista QSR<\/a><\/p>\n

September 13, 2024<\/p>\n

Operators face rising costs, labor shortages, and shifting consumer behaviors in 2024, forcing them to innovate.<\/p>\n

Restaurants are braving rough waters in 2024. Inflation has eased from its pandemic-era peak. Commodity and labor markets are showing some signs of stabilizing after a volatile few years. But franchisees are still contending with higher input, occupancy, and development costs. Plus, they\u2019re grappling with a consumer base that\u2019s feeling the pinch of price increases and pulling back on discretionary spending in a murky macroeconomic climate. All of that is pushing franchisees to rethink their strategies, prioritize cost efficiency, and explore fresh solutions to maintain growth and profitability.<\/p>\n

Hamra Enterprises, a Springfield, Missouri-based franchise group operating around 200 Wendy\u2019s, Panera, and Noodles & Company locations, is seeing a growing demand for value across all of its brands, particularly in the fast-casual segment, says CEO Mike Hamra. Pricing is a baseline for delivering on that proposition, but it\u2019s just one piece of a much larger puzzle.<\/p>\n

Ultimately, Hamra says, value is about providing the right experience for guests \u201cfrom the interaction to the follow through, to making sure that the orders are executed with the speed and accuracy that the customer expects.\u201d That cuts right back to a restaurant\u2019s biggest asset: its people.<\/p>\n

\u201cIf you\u2019re not supporting your team members, they\u2019re not going to support your guests,\u201d Hamra says. \u201cAnd if you\u2019re not supporting your guests and providing those exceptional experiences, people stop coming in. It\u2019s simple math. Transactions start to drop. People come back less frequently or stop coming back at all. That\u2019s where I\u2019ve seen a lot of people get in trouble. They think it\u2019s a P&L problem. They try to cut costs instead of investing back in people. Pulling back on that is the worst thing you could do. The best thing you could do is lean in and invest in people, because that translates back into a great guest experience and supports a business that\u2019s going to succeed long term.\u201d<\/p>\n

Beyond training and development, Hamra says franchisees need to provide comprehensive support and benefits to remain employers of choice in a tight labor market. His company offers tuition reimbursement for those who wish to continue their education and provides an on-site homework program for student workers. Employees are paid to work on their homework for an hour before or after their shift. They\u2019re also rewarded for good grades with bonuses.<\/p>\n

Additionally, Hamra Enterprises runs a program funded by employee contributions and company matching to provide financial assistance for extended medical leave, funeral expenses, and transitional housing. It also aids in financing home ownership and covering daycare costs.<\/p>\n

\u201cCompetition for the brightest and best employees is pretty fierce out there right now, so it makes a big difference for people when their employer is supporting them not just with a paycheck, but in other areas of their lives that are important to them,\u201d Hamra says, \u201cWe typically find that when our support structures are in play, and people are utilizing them and engaging with them, those employees are happier and stay with us longer. They also spread the word about us as an employer to their friends and family, and that makes a big difference in attracting and retaining people.\u201d<\/p>\n

The recent uptick in bankruptcies in the restaurant world underscores just how challenging the landscape is. This past year has seen filings from large franchisees for a growing number of major brands, including Burger King, Hardee\u2019s, Wendy\u2019s, Popeyes, McDonald\u2019s, Subway, and Arby\u2019s to name a few.<\/p>\n

Hamra says it isn\u2019t all doom and gloom out there, with successful franchisees looking inward and focusing on the factors they can control to stay on course, he says.<\/p>\n

\u201cWe\u2019ve seen these kinds of dynamics happen in the past before, maybe in different ways, and certainly in different combinations,\u201d he says. \u201cIt\u2019s part of our industry. We\u2019re used to dealing with headwinds like this and getting on the other side of them.\u201d<\/p>\n

Some brands and franchisees are targeting a turnaround by closing underperforming units. Others are putting a pause on development to focus on maintaining successful locations. Those that are growing are finding the price tag for new stores is still higher than it used to be.<\/p>\n

\u201cBuilding costs have certainly gone up, too, which makes it harder to pencil out how to make it work,\u201d Hamra says. \u201cEverything costs a bit more to get a brick-and-mortar building up. That\u2019s definitely created some challenges.\u201d<\/p>\n

In response, quick-service brands are value-engineering new prototypes to lower investment costs for franchisees looking to build new stores. Franchisors are shrinking footprints and enhancing the efficiency of restaurant designs, enabling operators to achieve the same volume with less square footage.<\/p>\n

Nontraditional locations also offer a cost-effective path to unit growth. Along with opening new streamlined and digital-focused Wendy\u2019s and Panera stores, Hamra Enterprises has opened new units inside of travel centers and hospitals.<\/p>\n

Despite the wave of bankruptcies and mounting pressures, success stories and pockets of growth are still emerging. Franchisees seeking to diversify their portfolios and drive expansion are focusing on fast-growing, traffic-boosting concepts in high-growth categories like beverages and chicken.<\/p>\n

Hamra Enterprises branched out and brought a new brand into the fold for the first time in a decade last year. It inked a deal to open two dozen Caribou Coffee locations throughout Missouri.<\/p>\n

\u201cWe\u2019re looking for things that are growth vehicles,\u201d Hamra says. \u201cConsumers are seeking out craveable products and looking for innovation. They\u2019re sharing where they\u2019re getting new things and trying new products. All of that elevates the competitive nature of the business that we\u2019re in. We were blown away by the different offerings Caribou has and the innovation that they\u2019re doing around beverages. For us, it was about getting into that category, because it\u2019s different from anything else that we have in our portfolio right now.\u201d<\/p>","protected":false},"excerpt":{"rendered":"

QSR Magazine September 13, 2024 Operators face rising costs, labor shortages, and shifting consumer behaviors in 2024, forcing them to innovate. Restaurants are braving rough waters [\u2026]<\/span><\/p>\n","protected":false},"author":2,"featured_media":5779,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[18],"tags":[],"class_list":["post-5778","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"yoast_head":"\nHow Some Restaurant Franchisees are Adapting to 2024\u2019s Economic Realities - HAMRA<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/hamraenterprises.com\/es\/how-some-restaurant-franchisees-are-adapting-to-2024s-economic-realities\/\" \/>\n<meta property=\"og:locale\" content=\"es_MX\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Some Restaurant Franchisees are Adapting to 2024\u2019s Economic Realities - HAMRA\" \/>\n<meta property=\"og:description\" content=\"QSR Magazine September 13, 2024 Operators face rising costs, labor shortages, and shifting consumer behaviors in 2024, forcing them to innovate. 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