Foodservice News and Insights | Blog | Lindox Siegel

Biggest Challenges Faced by Chain Foodservice

Written by Lindox Siegel | Sep 6, 2023 4:17:44 PM

Running a restaurant is challenging, with many new establishments going under within the first year. Operating a chain restaurant can be more appealing, thanks to its built-in fanbase and established branding. However, the challenges of chain restaurants are still just as intense, so owners/franchisees must plan accordingly.

As the foodservice industry adapts to a post-pandemic world, here are the factors that can make or break a chain's success both now and into the future.

Operational Efficiency

When guests enter a chain restaurant, they know what to expect before walking through the door. Unlike an independent commercial kitchen, chefs must follow pre-determined recipes to ensure consistency across each location. A single location with low-quality food could impact the reputation of the entire restaurant chain, meaning that operators have a narrow margin of error. Also, franchise owners who don't meet these standards can lose their licenses. 

Finally, the supply chain has yet to fully recover to pre-pandemic levels, mainly when it comes to sourcing ingredients and equipment. Because operators have to source their foods from the same supplier (as established by the brand), they can't just switch vendors when the going gets tough.

Rising Costs and Profit Margins

Everything is getting more expensive across the foodservice industry, and that's true of both independent and chain restaurants. Unfortunately, operators at a chain can't raise prices without corporate oversight or approval. So, as expenses rise, franchisees need to make some tough decisions.

As utility costs increase, some cities are considering bans on gas stoves and ovens. Switching to electric equipment can be expensive, and electricity bills are often more costly than natural gas. Food prices are also rising. Because chain restaurants often rely on slim profits, these increases can hit hard.

And, as rent prices skyrocket in larger cities, operators are strained in two ways. First, they have to contend with a more expensive monthly payment. Second, workers need higher wages to survive, and getting employees from less expensive areas means they'll have a much longer commute, which is not always feasible.

Regulatory Compliance and Food Safety

While independent restaurants only have to worry about inspections from the health department, chain restaurant operators must also contend with corporate compliance. Again, consistency is necessary to maintain the brand's identity, so corporate inspectors come by to verify that the right ingredients, cooking methods, and service standards are all being met.

As the pandemic illustrated, safety guidelines can change on a dime, even if they're disruptive to the commercial kitchen. As cities and counties update their foodservice standards, operators must work hard to keep up, even if that means expensive training programs and certificates.

Overcoming These Challenges with Lindox Siegel

While running a chain restaurant can potentially lead to higher sales and a stable bottom line, the process is not without significant obstacles. Fortunately, Lindox Siegel can help operators overcome some of the challenges of chain restaurants so that operators can focus on other parts of the business.

Having a partner like Lindox Siegel means that restaurants can be sure any foodservice equipment needed will be in stock. Lindox Siegel helps get equipment to chains faster, causing less downtime.  

By working with chain restaurants from Maryland to the Florida panhandle, Lindox Siegel knows how to help overcome obstacles, improve consistency, and increase profits with a vast selection of foodservice equipment.

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