As a franchise law attorney who is deeply invested in the realm of franchising, it's fascinating to observe the changing trends and their impact on the restaurant franchise industry.
Last quarter, Chili's Grill & Bar noticed a significant shift in consumer behavior. Customers, who were traditionally thought of as spenders, started opting for value meals, often choosing appetizers such as chicken wings and quesadillas as their main course. This trend suggests a potential move towards thriftiness, possibly fueled by broader economic or social factors.
Chili's parent company, Brinker International, is leading the charge in acknowledging and adapting to this trend. They believe the American consumer is pivoting towards frugality. As a response, they are strategically adjusting their menu to cater to both budget-conscious and regular diners.
Such a trend could entail fundamental changes for franchises across the board. To remain profitable, franchises may need to reevaluate their offerings, pricing, and promotion strategies. More focus might be needed on creating appealing value meals, without compromising on the demands of patrons who are willing to spend on premium items.
Interestingly, Chili's move to focus more on showcasing premium items could also reflect a calculated risk to balance their customer base. While some patrons will turn conservative, a segment of customers will continue their regular spending habits.
For franchises, this implies that a one-size-fits-all approach towards menu curation and pricing might be less effective in 2023. The key will lie in understanding the customer segments and strategically planning offerings to cater to both budget and premium diners.
Notwithstanding the shift towards thriftiness, Chili's reported a rise in same-store sales by 5%, indicating that attentive franchise management can still lead to growth. As franchises brace for the changes in customer attitudes this year, it's essential to keep an eye on the evolving trends and adapt swiftly. I look forward to sharing more about such industry shifts in my future posts.
#restaurants #franchise #franchising
Vice President, Franchise Development at Smoothie King
3moJoin Us!