Restaurant Franchises Navigate A Changed Landscape in 2009

Restaurant and franchise experts weigh in on how growth is possible in the midst of 2009’s dropping economy.

[President of Franchise Navigator, Craig] Slavin says 2009 will be a test of what restaurants do wrong—not what they do right. “Anything right now that demonstrates excessiveness is incongruent with the mind of the customer,” Slavin says. “Gluttony and excess are over. Customers are going to be focusing on smaller menu items.”

“Anything American—simple—will be hot,” Slavin says. “We are going to a point in ’09 where it’s not just back to basics. We are in survival mode.”

Financing: Laura Tutor of QSR Magazine reports, “the reality of 2009 is that the banking crisis and credit crunch have sharply altered who can get a franchise.” She then goes on to say that multi-unit operators will have an advantage since they have a history that banks can see.

Brand familiarity will help.

Slavin says that brand familiarity is going to be critical with bankers. As the big banks have dried up as funding sources, more franchisees will need local banks and Small Business Administration lenders to fund their plans. Those local and regional banks might not be as familiar with some franchises, so any materials will be helpful.

The article also points out that healthier franchisees are on the prowl to purchase struggling stores in their area in order to increase market share.