The Pandemic Has Made Restaurants’ Corporate Offices More Open to Franchisees’ Digital Efforts

Across corporate communications, since the start of the pandemic, restaurants’ c-suite executives have been emphasizing a narrative of collaborations with their franchisees through this difficult period. However, a handful of very public complaints from restaurants’ franchisees have been calling this account into question. Still, it seems that, when it comes to the digital shift, restaurants and their franchisees are on the same page.

Brandon Stewart, president and chief operating officer at Kensington Hill Capital, which owns and operates 55 Jimmy John’s locations across Alabama, Florida, Georgia and Ohio, spoke with PYMNTS about what goes into trying out new technologies in stores.

“We have to get it all approved by corporate and, but I think they’re open to it much more so than they were in the past as long as it doesn’t affect the overall chain,” he said, adding that, for his part, he would like to try out artificial intelligence (AI) ordering, which could help the restaurant weather the current labor shortage.

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Since March 2020, restaurants have been upping their digital efforts, investing in creating or revamping their web and mobile ordering platforms and in finding new technologies to minimize labor costs while maximizing consumers’ experience. With so many of these developments still in the works, franchisees are tasked with keeping their tech goals compatible with brands’ overall efforts.

“It needs to integrate with their system pretty seamlessly,” said Stewart. “They’re working on enough stuff on their own that they’re not really open to allowing the vendors to focus on anything else, so it’s got to be ready to go if we’re going to use it.”

The Context

On the mass scale, large restaurant brands’ corporate offices have been investing in going digital, with major players such as Yum Brands going on sprees of tech acquisitions. On a smaller scale, franchisees have been similarly bold.

Take, for instance, Yum subsidiary Taco Bell. In August, plans were released for franchisee Border Foods’ Taco Bell Defy design, a double-lane digital drive-thru, which includes contactless checkout, three mobile ordering lanes and a “bell-evator” by which food is sent down from the top floor, with audio and video technology allowing customers to communicate with staff in the kitchen above.

“Franchisees are truly our partners, and we’re able to leverage their local market insights and trade areas of expertise to continue growing both strategically and creatively,” Mike Grams, Taco Bell president and global chief operating officer, told PYMNTS in an interview. “Franchisees are truly our partners, and we’re able to leverage their local market insights and trade areas of expertise to continue growing both strategically and creatively.”

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The Counterpoint

Despite this corporate collaboration, many restaurants have been struggling with franchisees since the start of the pandemic, with the dire situation putting strain on relationships. McDonald’s, for one, was in conflict for the better part of a year over tech fees that the company said it would charge restaurant owners for its technology.

Read more: McDonald’s Hopes To ‘Reset’ Franchisee Relationships

Large groups of 7-Eleven and Subway franchisees have also publicly spoken out against corporate offices’ behavior in the past couple of years. Most recently, at the end of September, The National Coalition of Associations of 7-Eleven Franchisees (NCASEF), announced a petition calling on the U.S. Federal Trade Commission (FTC) to investigate the corporate office’s “predatory and opportunistic” practices.

See also: Labor Shortages Challenge QSRs’ Franchisee Relationships, Threatening Sales And Loyalty