The restaurant franchise industry, after navigating a challenging five-year period, is now entering a phase of renewed optimism fueled by advancements in technology and creative strategies, according to a TD Bank survey.
Conducted at the 2024 Restaurant Finance and Development Conference in Las Vegas, Nevada, the survey asked restaurant operators and financial professionals about expectations for 2025 and innovations like mobile ordering, artificial intelligence (AI), and automation regarding growth and operational efficiency.
Key Survey Findings: Optimism Rooted in Technology and Value Strategies
The survey, which collected insights from 175 industry professionals, revealed that 46% of respondents believe lowering interest rates will have the greatest impact on the restaurant industry in 2025. Close behind, 42% highlighted the influence of AI and automation. Value menus continue to be a focal point for franchises, with 60% of operators reporting that the boost in foot traffic from these programs outweighs the margin compression they create.
Additionally, over half (52%) of participants noted improved foot traffic trends compared to three months ago, indicating a positive shift in customer behavior and engagement.
Franchise 2.0: Embracing Mobile and AI
The industry’s focus is firmly on investments that simplify operations and enhance customer experiences. Mobile apps emerged as a top priority, with 77% of respondents identifying mobile ordering as the leading revenue driver for the next 12 months. Moreover, 59% believe that mobile apps offering seamless online ordering will have the greatest operational impact.
“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 at TD Bank. “The continued emphasis on mobile apps and online ordering tools underscores the need to align with evolving consumer expectations and employee needs.”
AI and automation are also poised to play pivotal roles. The survey found that 43% of respondents view AI-driven customer data analysis and market prediction as game-changers for operations. Additionally, 34% believe automating administrative tasks will enable managers to focus on supporting employees, enhancing overall productivity and workplace satisfaction.
Investment Trends and M&A Activity
With optimism on the rise, restaurants and franchises are expected to prioritize investments in digital platforms, mobile apps, and automation technology. Approximately 36% of respondents foresee significant investments in these areas to improve customer experience and streamline operations.
The outlook for mergers and acquisitions (M&A) is equally robust. A striking 84% of survey participants anticipate increased M&A activity in the next year, driven by improving interest rates and profitability.
“Restaurant franchising as an industry is gearing up for an exciting time,” Wasilefsky noted. “With a combination of technological innovation, better interest rate prospects, and value-driven strategies, the industry is poised for growth in revenue, margins, and dealmaking.”
Methodology and About TD Bank
The survey was conducted at the 2024 Restaurant Finance and Development Conference, held in Las Vegas, Nevada, from November 11-13, 2024. Participants included 175 restaurant franchise operators and financial professionals.
TD Bank, known as “America’s Most Convenient Bank,” is one of the largest U.S. banks, offering a comprehensive range of banking services to over 10 million customers. To learn more about TD Bank and its services, visit www.td.com/us.
As the restaurant franchise industry embraces technological advancements and adapts to shifting consumer expectations, 2025 is shaping up to be a pivotal year of innovation, growth, and renewed opportunity.