Article

Millennials blazing trends trail as franchisees

Millennials are crazy about fast casuals, healthy menu options and the independence restaurant technology affords, but are they a generation likely to be interested in owning a restaurant?

April 29, 2015

Millennials are crazy about fast casuals, healthy menu options and the independence restaurant technology affords, but are they a generation likely to be interested in owning a restaurant?

The data tells us over and over millennials value autonomy, diversity and brands that align with their values. They grew up educated and dining out in restaurants more than any previous generation. These factors added together suggest a generation who, already familiar with the restaurant business, just might be the perfect franchisees.

'It's not all about the bottom line'

Juice It Up! franchisee, Sandy Elliott, a 25-year-old owner of a top-performing San Clemente, California location, said that her generation is prepared to take on the restaurant industry: "Millennials have the ambition to own their own franchise, and they have the tools to do so. Millennials are an extremely educated generation putting more people through college than previous generations. Buying my own Juice It Up! location represented a chance for greater intrinsic and financial rewards in direct correlation to my ability to perform and create the environment I wanted for myself and those that work for/with me."

Elliott touches on two characteristics of millennials the data have shown: they value intrinsic satisfaction and are interested in creating their own environment, one that allows them the independence and autonomy their generation is known for.  

Millennial franchisee Moses Hernandez of Wienerschnitzel echoed a similar sentiment, "Millennials are interested in aligning with brands that they themselves love and believe in. It’s not all about the bottom-line; it’s about passion and longevity. It’s also about investing in a brand that is committed to the success of their franchisees. Millennials will do their homework and actively seek out the brands that are doing this well."

Millennial CEO Mitch Roth of barbeque fast casual Southern Hospitality can relate to the QSR/fast casual craze because of his own involvement in transforming the fast casual experience himself. Knowing that millennials are focused on fast, local and quality food, Roth is attracting a new generation. At 26 years old, he is spearheading efforts at Southern Hospitality for high quality barbeque.

"I think that a food and beverage franchise might be more appealing to today’s young professionals for a couple of reasons," Roth said. "As we know, millennials and today’s young professionals grew up eating out with greater regularity than the generations that came before them. I think this has caused them to become more aware of the restaurant business, specifically fast casual restaurants which are known to serve a high quality product demanded by their peers in a convenient manner that fits their lifestyles. Secondarily, it has been suggested that millennials are very wary of traditional investments, like the stock market or residential real estate, given the financial collapse of 2009. Millennials understand the restaurant business, are passionate about it and feel more confident in their ability to create wealth and value with a brick and mortar business than a portfolio of stocks." 

A generation with 'so many advantages'

"No generation has been so well equipped or has had so many advantages at their disposal. We have various tools like social media to connect and engage with customers that provide innovative ways to reach a larger audience. In my opinion, the millennial generation is very health conscious and lives an active lifestyle. As more and more millennials start franchising I can see the restaurant landscape becoming tailored to the ‘farm to table’ type of mindset. I believe healthier brands will continue to thrive," said Elliott.

Millennials have the advantage of being raised with new technologies, Elliott added, that allow them to "harness the potential of social media, software and IT." They're comfortable navigating the Internet, apps, smartphones and beyond – a skill that older generations have had to develop along the way.

The generation's influence has been strong enough to transform industry giants like McDonald's and spawn the popularity of Chipotle. The group shaped these trends before they ever owned restaurants. As they age and take over leadership positions, we're likely to see changes that are characteristic of the group as we know it.

According to Hernandez, "Millennials are generally a very vocal and active generation who are more likely to take risks. We also enjoy being a part of the process and are not afraid to make suggestions that we believe can help our business and the brand overall."

A vocal, active and risk-taking generation that will continue to push 'higher quality,' such as "all-natural, organic, antibiotic and hormone free, cage free, etc., in additional to a driving a greater emphasis on local sourcing," Roth said.

"The implementation of new technologies, more efficient and streamlined systems will be a byproduct of a younger franchisee contingency," Roth said. "Ultimately, this should allow new concepts and franchisees to increase consistency and decrease cost to the consumer, both of which are good things. I also believe this generation is more idealistic than those that came before it regarding food service, which again will drive the push for higher quality food.

'It's as much about food as it is experience'

How are millennials as franchisees catering to customers' demands?

According to Hernandez, listening and allowing criticism is key: "I am very interested in what my customers have to say and how they feel about their experience at my location. I do a lot of listening and I appreciate criticisms. It’s the quickest way to learn what needs improvement.  I understand the importance of building relationships and that it’s one of the reasons guests come back. Today, it’s as much about the food as it is the experience. I also try to think and plan ahead to get in front of opportunities."

The trend-setting generation is forging ahead with customizable menu options that cater to today's diverse diets as well: "Transforming the way people think about barbeque motivates me. At my direction we're taking Southern Hospitality into the fast casual space in a way that will change the expectations of barbeque for the consumer. We will comply with many of today’s diets to include gluten free, paleo, Atkins, and others with far less modification than our competition."

'Understand what makes millennials tick'

Millennials demonstrate innovative ideas, but to garner their attention as potential franchisees, it's important to show both support and interest in their ideas.

"Franchisors need to make Millennials aware that they have the means to be just as successful as an older generation. They need to demonstrate a strong support system to the franchisee, ensuring the stability of the company and its success," Elliott said.

Innovation and forward-thinking are important for franchisors scouting this generation:

"I think the franchisors who embrace new marketing techniques and work towards expanding their customer base will appeal to millennials interested in entering the franchise space," according to Hernandez.

And of course, cater to their generation with what appeals to them, Roth added:

"Franchisors need to understand what makes millennials tick. This is certainly not limited to a small handful of things, but for starters: streamlined technology, high standards of quality, convenient offerings, and most importantly, authenticity," he said. "Authenticity is something that the largest fast casual operator in the world, Chipotle, has gained, and it cannot be faked. Of course, Chipotle does not franchise, but its standards of quality, culinary focus on a simple product, and its intentions to meet the wants and needs of a very broad consumer base are something that gets the attention of millennials – as well as everyone else apparently!"