Following recent industry challenges, appetite for expansion and investment in mobile apps and artificial intelligence grows

CHERRY HILL, N.J., December 12, 2024--(BUSINESS WIRE)--The last five years have provided significant challenges to the restaurant franchise industry. However, the industry has renewed optimism, driven by the adoption of digital and mobile ordering, menu creativity and heightened expectations around AI. This is according to a survey conducted by TD Bank at the 2024 Restaurant Finance and Development Conference in Las Vegas, Nevada. The poll collected insights from 175 restaurant operators and financial professionals to uncover their expectations for 2025.

Continued technological advancements, better value meal strategies, as well as a better interest rate outlook are driving optimism. In fact, respondents believe lowering interest rates will have the greatest impact on the restaurant industry in the next 12 months (46%), followed closely by artificial intelligence and automation (42%). The industry's addiction to value menus appears to be moderately paying off, with a slight majority of operators indicating that the associated increase in foot traffic (60%) offsets the margin compression from these programs (40%). Furthermore, more than half (52%) of respondents say they've seen improved underlying foot traffic trends as compared to just three months ago.

Franchise 2.0: Prioritizing Investments in Mobile Apps and Artificial Intelligence

Looking ahead, restaurant operators and financial professionals are focusing on investments that drive revenue and simplify operations – especially mobile apps. When asked about their predictions for the top three revenue drivers for restaurants over the next 12 months, more than three-fourths (77%) of respondents ranked mobile ordering number one. Similarly, 59% of respondents believe mobile apps that offer easy online ordering will have the greatest impact on operations over that same time period.

"The push for convenience and efficiency to improve customer and employee experiences is driving the industry's focus on mobile ordering," said Mark Wasilefsky, Head of Franchise Finance, TD Bank. "The continued focus on mobile apps and online ordering tools signals a demand to better accommodate changing consumer expectations and employee needs."

Meeting these consumer expectations and employee needs is pushing restaurant franchises towards artificial intelligence and automation. The survey found 43% of respondents believe that using AI to analyze customer data and predict market shifts will have the greatest impact on operations, followed by the automation of admin tasks to let restaurant managers spend more time helping employees (34%).