In 2019, the unemployment rate is expected to continue to fall, and with that comes benefits for the consumer and for business. With a nearly full employment economy and higher wages come more discretionary income – and more competition among businesses to attract customers.
To win the battle for new, loyal customers, franchise brands will focus on convenience, speed, and personalization. In this exclusive Q&A, five leading franchisors offer their predictions for 2019 in their respective industries:
- David Graham, CEO, Code Ninjas
- Larry Sutton, Founder, RNR Tire Express
- Neil Gill, CEO, Dogtopia
- Ashley Morris, CEO, Capriotti’s
- John Kutac, President, Growler USA
Franchise Chatter (FC): What is your overall prediction for 2019 for small businesses?
Larry Sutton, Founder, RNR Tire Express: Small business will go through an economic boom in 2019 and see a record rise in both new store openings and revenues. Rising wages and higher employment will lead to an increase in disposable income, giving entrepreneurs a chance to capitalize on new consumer demands and invest in new business opportunities.
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FC: In 2019, what is the outlook on the importance of social media on business?
David Graham, CEO, Code Ninjas: Facebook advertising will remain the most cost-effective direct method for advertising to consumers, but consumer engagement on social media platforms will decrease.
FC: Convenience is a driving factor in whether a consumer is satisfied with a business product or service. How efficient and convenient will business become in 2019?
Ashley Morris, CEO of Capriotti’s: I think the biggest new trend that you will see in 2019 will be “Ghost Kitchens.” As we have seen, delivery continues to increase its share of sales in the restaurant space. In addition, occupancy costs, labor costs, and other semi-controllable costs continue to increase. In certain major markets, retail real estate rental rates can be over $100/sq. ft. This means that if you are not a concept that can achieve $2 million in gross revenue, your chance for making any profit is very low.
To combat this, I believe restaurants will open what is being referred to as “Ghost Kitchens.” Ghost Kitchens are non-retail, not open to the public, kitchens that serve food to customers only through delivery, and in rare cases window pick-up. The occupancy costs of this kind of new restaurant is much lower and gives restaurateurs the ability to open in major urban markets with an economic model that works. They will primarily use delivery aggregators to distribute their product. This concept will be a major growth factor for the restaurant industry in 2019 and beyond.
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John Kutac, President at Growler USA: In 2019, we are predicting a spike in “to-go” beer and beer delivery services. As legislation changes in states across the country, we are expecting to see more restaurants and micro-brew pubs offering both food and spirits delivery. With large restaurant chains already integrating such systems into their stores, we feel this trend will spread like wildfire in 2019, expanding to businesses across the country.
In our Texas locations where beer delivery services are legal, we have personally seen up to 10-15% of sales coming from to-go options, including crowlers. Crowlers, to-go cans of beer created from the taps at our microbrew pubs, are increasing in popularity as we meet millennials’ demand for efficiency and convenience.
FC: Gen Z as well as younger adults are shaking things up and demanding efficiency and accountability from their favorite places. How are you keeping them interested?
Neil Gill, CEO, Dogtopia: Gen Z will be a major influencer with a strong voice. Why? Gen Z is the largest demographic by sheer numbers outweighing millennials and are more determined to make a difference because they see the need for change. Specialization and regulation will become the norm. Any sector that is distracted or fragmented eventually works through a consolidation period. The consolidation period is upon the dog daycare sector driven by the needs of the female millennial looking for a Trusted Authority to care for her fur baby.
David Graham, CEO, Code Ninjas: Because 90 percent of parents think their kids need to learn to code for future jobs, the kid’s coding phenomena will continue to grow globally. There will be more “family learning centers” where the whole family can fill in their tech gaps in education.
John Kutac, President at Growler USA: With the common stereotype of pubs serving unappealing “bar food,” in 2019 we predict to see an increase in quality and creative food in the pub space. With the booming brewery and bar industries, such entities are no long hard to come by. To differentiate themselves from competitors and attract new energy and customers, we predict to see more pubs, bars and breweries stepping up their food game to entice more customers to their place of business, especially GenZ and millennial customers.
Furthermore, to create more of an experience within the pub, bar and brewery space, we anticipate to see more companies offering beer and food pairings to create a fun and creative atmosphere within the industry.