Franchise Growth

How to Become a Continuous Learning Franchise Rockstar

By | Franchise Growth, Franchising Trends
continuouse learning franchise

Do you want to be a continuous learning franchise? Doing so isn’t natural or organic – it is something to be created and can go against your instincts. Newton’s first law of motion tends to be true in franchising organization – an object that is set in motion tends to stay in motion unless acted on by an external source.

But, if you are committed to serving your community with your franchise, whether it be through ice cream for families or staffing needs for HR professionals, continuous learning will serve you.

Henry Ford said “Anyone who stops learning is old, whether they at twenty or eighty. Anyone who keeps learning stays young.” Building a continuous learning organization also helps you stay competitive in this fast-changing world.

For example, mobile has come up very recently and marketing professionals know that more people now access the web through a mobile device than a traditional desktop, and young people are doing away with e-mail altogether, using just a phone number instead. Dealing with this shift takes the ability to build on what you have, while adapting it for the modern world.

What is a learning organization?

A learning culture was defined as “a set of organizational values, conventions, processes, and practices that encourage individuals—and the organization as a whole—to increase knowledge, competence, and performance” by a contributor to Oracle. When learning is a habit, workers are constantly upping their games in terms of learning, skills and performance.

The benefits are staggering. According to Pinnacle a learning organization has the following benefits:

  • Increases efficiency, productivity, and profit
  • Improves employee morale
  • Decreases turnover and boosts employee satisfaction
  • Promotes a sense of ownership and accountability
  • Helps workers adapt to change
  • Eases transitions

Einstein said “once you stop learning you start dying” – so, if you want your business to thrive, start now! How can you transform into a continuous learning franchise?

1. Develop Information Sharing Processes

At the heart of the continuous learning experience is to lean through experience. So – having information sharing processes such as the following can be very helpful:

Your organization can complement these technological tools with connections. The annual conference is of course a fantastic way for you to spotlight up and coming initiatives, along with a regular webinar program. According to INC, strategic sharing sessions take one training initiative, and spread it across the team. According to the article:

“When an employee wanted to attend a training program outside the office, they had to complete a continuous education request form. Part of this form required them to present a business case explaining how the desired training aligned to the company’s overall mission and how it would enhance the employee’s ability to do their job.
In addition, they had to agree to schedule a sharing session with the rest of the company so that the knowledge they acquired didn’t reside only with them. This allowed the information to cascade through the company, and benefit everyone.”

2. Shine the Spotlight on Learning

Learning paths developed by Human Resources are a great way to               emphasize learning. Additionally, offering formal training beyond what happens when you are onboarding franchisees is a fantastic way to keep your training fresh.

You can also share the success that works within the franchising environment. According to INC, sharing learnings on projects are fantastic:

“Each quarter, we selected a project team to present on a recently completed project. They had full creative license to present however they chose. Not only did this educate the rest of the company on our skill sets and achievements, it empowered the project managers to look for similar opportunities in their own customer environments.” 

In franchising, this could be shining the spotlight on franchisees who have added a new location, or a new service such as off-premise by allowing them to do a webinar, or creating a “step-by-step” manual on how other franchisees can follow suit. Others will be inspired to make it their own, or franchisees will get curious and try something else that will build on the profitability of their business.  

3. Recruit Franchisees Who Love to Learn

Our last recommendation is to recruit those who are curious. In franchising, you quickly learn that it is all about having those motivated and energized people as franchisees. Having those who are committed to ongoing education is even better. I have personally witnessed franchisees who were over 70-years-old still taking books worth of notes at the annual convention. If you recruit people who are committed to lifelong learning, creating a learning organization will be that much easier.

The Learning Network Effect

Committing to learning is one of those initiatives that touches everyone in your organization, and the effects can stretch to your customers and suppliers as well.  While being a continuous learning organization can go against momentum, it will create a competitive advantage that is uniquely yours.

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Franchise Growth Trend Hunting: On-Demand Food

By | Franchise Growth, Franchise Operations

Pretty much every Franchise Coach has heard this from their franchisees: one of the biggest trends for customers of franchise locations is on-demand food or off-premise. But, as discussed in an earlier post, there are two options when it comes to delivery for the franchisor as an organization, and the franchisees themselves.

  1. Creating ordering capabilities in-house
  2. Using a third-party service or food delivery service app

Today, we are going to look in-depth at the third-party services, and explore key considerations for restaurants in franchising working with these services. There are many new considerations to understand when looking at this trend, and what matters in terms of supporting your franchisees with this transition.

What is a Food Delivery Service App?

Whether it is the ubiquitous GrubHub or UberEATS, high-end Caviar or 45-minutes or less hub, DoorDash, a food delivery service app is more like having a virtual foodcourt in your pocket. There are a lot of these apps right now in a “land-grab” for space, which are both regional and national. If the customer does not have a specific restaurant in mind, they can simply scroll through the app and browse by city, address, cuisine or menu. Do you have a very specific craving for Korean Pork Bone Soup, “Fall Off the Bone” Texas ribs? Well, with a food delivery service app, you can even search by menu item.

If your franchisees are considering signing up for one or many of these services, you will want to take a few things into consideration.

Market Dynamics

As your Marketing Director will tell you, different areas have different advertising dynamics. For Pay Per Click (PPC) advertising on Google for example, the franchisee in Brooklyn, New York will have a different experience than the one in Tulsa, Oklahoma. Why? Because there is more competition in Brooklyn for just about… everything, driving the cost of advertising up.

The same dynamic is at play in Food Delivery Service Apps. There are some cities that will rely on the most popular apps-only, such as GrubHub or UberEATS. There are other cities where there is such a proliferation of apps, that franchisees need to have several iPads to keep up.

Take Mighty Quinns BBQ based in New York for example. In order to keep up with the different apps they manage their different ordering system using several iPads for each delivery service. For Christos Gourmos, co-founder of the company, he says that the back-end would be the biggest headache – as in – it is not about bringing in the customers, it is about defining who is paying.

The opposite is true for markets where there is no proliferation of apps. For some Australian businesses for example, the 35% premium just one app charges means that the cost of entry is too high.

Finances and Fees

Food Delivery Service Apps offer a challenge for franchisors, because of the added fees can put a lot of pressure on the franchise model. For example, while the apps can offer up to 35% onto the price of a meal, a franchise like Dominos can charge their franchisees just 1% for their delivery service. This is why so many brand aggregators and large franchisors are either building this capability in-house, or are partnering or taking ownership in some of these outfits. For franchisors without this option, here are some things to consider. Note, that all quotes are different according to the application and the region, so the percentages are just for illustration.

  • Non-Sponsored Post Commission: A “non-sponsored” listing, means you will simply be listed on the site, with no special treatment in terms of priorities. In some markets, it can be 15% for this cost.
  • Sponsored Post Commission: A “sponsored” post means that your offering will move up in the rankings, and can cost about 20%.
  • Delivery: While it is possible to use these applications without using delivery, there is an added 10% for the delivery for those who need it.

In franchising, we are able to take advantage of economies of scale – and creating the ability for franchisees to do their own delivery is a great start in terms of helping them take control of the costs. Another strategy restaurants use is to have one price on the apps, and another price in the restaurant or on their own website.


Similar to the “daily deals” website such as Groupon, the risk of food delivery apps is that the customer may move the relationship from the restaurant to the application. The flexibility the consumer gets with the app can be at the expense of the franchisee. As a result, you want that food and packaging to “hook” the consumer so the next time they order they will go directly to the restaurant. Also, the data behind the consumer behavior is lost to the app, meaning some of your market intelligence abilities will be limited.


While most experts see consolidation and specialization in the future, the reality today is that there are a lot of these apps out there. As a result, taking orders from multiple apps will create duplicate data entry, which creates opportunities for human error. Also – the disconnected systems creates some administrative challenges – ones that can create a subversion of royalty fees.

Another new trend noted by McDonalds is that on-demand has created new occasions for eating. They have found that late-night eating is a new “thing” that would not be covered by a standard restaurant operating hours.

One interesting form of consolidation for brand aggregators to consider is the trend of Ghost Kitchens also known as “Virtual Kitchens”. This is where there are several brands under one roof, and it is delivery only. These kitchens are growing in popularity across North America and the UK creating a need for highly versatile chefs, but removing the need for “front of the house” staff.

The Future?

Restaurants are not going away… but they are changing. One way to navigate change is by having flexible technology that goes with it. At FranchiseBlast, our brand promise is “You set the course, we’ll help you get there. Let’s enjoy the journey.” Our flexible system can move and grow with you, whether you are a traditional brick-and-mortar restaurant or a ghost kitchen. Request a demo to get started.

9 Important KPIs for Health and Fitness Franchises

By | Franchise Growth, Health and Fitness, KPI

If you are in the health and fitness industry, according to research you have two important things on your mind: the success of your clients and the contribution you are making to your community. But you cannot help your members OR your community if you are not properly tracking the health of your business.

Just like your members need to measure repetitions and step on the scale in order to succeed, you as a business owner need to measure the health of your business on a regular basis as well. Below are some recommendations on 9 Important KPIs in for health and fitness franchises.

1.    Cost Per Lead (CPL)

If you are going to only measure one metric in your marketing programs, cost/lead is the one most worth the effort. It helps you understand how much you are spending on leads, and if the methods that you are using are effective. For example, if you are getting $25/lead off of Google, and $100/lead off of your print advertising, you will want to reconsider that print ad buy in the future.

CPL=Cost of Marketing Program/Total Number of Leads

Note when calculating, a lead has two aspects:

  • They are actively searching for the service
  • They provide a way for you to contact them for follow up

Ensuring you have the above, creates a fair measure for your sales team later down the line. It is a good idea to dedicate about 10% of your budget to experimental initiatives to make sure your marketing mix continues to be the right one.

2.    Conversion Rate

Conversion rate helps you understand your gym’s ability to turn leads into members. Typically seen as a sales metric, it shows how your sales team is doing with the leads provided by marketing.

Conversion Rate=Total New Members/Total Number of Leads

If this metric is weak, it may be an indicator that your facility is not up to par – you may want to look at renovations, or a refresh of equipment.

3.    Active Members

This is a basic but necessary metric will outline your success on the most elemental level. Measuring the growth and decline of members compared to the previous year is a fantastic way to track where you are in terms of the big picture. It is calculated below:

Growth Rate = (Present-Past)/Past

If your absolute member count is low compared to benchmarks, and your growth rate isn’t high, then you need to focus on increasing your member base through marketing efforts or by reducing churn.

4.    Revenue Per Client (RPC)

This commonly-used KPI provides a sense of clarity in terms of where you are in your business.

RPC = Annual Revenue/Total Number of Clients

If this is low, look for upsell opportunities such as personal training, niche classes or supplements.

5.    Revenue Per Square Foot (RPSF)

With the rent or mortgage costs associated with the space typically being the biggest cost associated with the industry, it is healthy to look at this often-neglected metric. In a multiple-location environment, this metric tells you what spaces are working, and what ones are not working for you. Also – if your RPSF is very low, you may want to consider a smaller space unless you intend to grow rapidly.

RPSF=Annual Revenue/Total Square Footage of Facility

6.    Utilization Rate

Utilization Rate is an amazing metric in this industry because it measures how much you are actually using your resources. If you offer personal training, for example, how much is the trainer actively engaged in the process of training? If you are renting a room for 8 working hours a day, and only using it for 4, then there is an opportunity to add more classes.

Utilization Rate=Total Hours Used/Total Hours Available

7.    Net Promoter Score (NPS)

Member satisfaction is both a customer service measure and a marketing measure. Why? Increasingly, brand is a verb, and you want to make sure that the experience that people receive at your gym is one that leaves them satisfied. Technically a loyalty measure, the Net Promoter Score (NPS) is a fantastic way to measure this on a quarterly basis.

This measure compares your biggest fans (promoters) compared to your biggest critics (detractors). Learn more about Net Promoter here.

NPS= % Promoters-% Detractors
Your NPS can help you in your marketing efforts, by asking promoters to leave reviews or recommend to their friends and family and it can help prevent churn.

8.    Retention Rate

Retention rates is something that the fitness industry has struggled with for a long time and churn of members is a common conversation topic at franchise conventions. In general, having a strong retention rate means that you are keeping your brand promise. You can measure this over the course of a month, quarter or year.

Retention Rate: Existing Clients at End of Period/Existing Clients at Beginning of Period

If this is low, it is a good idea to do a root cause analysis on why people leave. Having a “leaky bucket” of customers, means that you have to spend more on marketing upfront.

9.    Earnings before interest, tax, depreciation and amortization (EBITDA)

EBITDA is a measure of a gym’s operational effectiveness. It is a way to evaluate a company’s without having to factor in financing decisions, accounting decisions or tax environments. Although difficult to say or even fully comprehend for gym owners who have come up through the health and fitness operations side, it is a key indicator.

To calculate the adjustments needed for EBITDA, please see this article from Quickbooks.  

EBITDA shows how good your business is at generating cash thus your business is valued as multiples of this metric.

Just like your clients, it is important for you to measure the right things. With these 9 metrics in place, your business will be set up for success.

KPIs Fit for Your Business

Looking for more KPIs for your Franchise? Look at our post on how to use KPIs in Franchising.

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Sustainability – Franchise Growth Trend Hunting

By | Franchise Growth, Franchise Operations, Franchising Trends

smart sustainable franchiseOne of the hottest topics right now in franchising is sustainability. Basic steps like employing reusable cups only scratch the surface of the sustainable franchise, and consumers know this – if it’s easy, then chances are, it’s not enough. According to Spoon University as quoted in the Huffington Post:

“Sustainability is all about moving in an eco-friendly direction by reducing waste, composting, recycling, and focusing on conservation. Many restaurants throughout the U.S. have been trying to become more sustainable and are now serving more organic food than ever before.”

Sustainability from the Inside Out

Although sustainability is often viewed as an idealistic vision divorced from every-day concerns, the truth is, it is an important part of every business. There is a business case for  the sustainable franchise.  The biggest reason is our increasingly interconnected world. “Fands” or “Brand Fans” will defend you if they know what you stand for. Increasingly, brand is a verb, and you want to show your customers, franchisees and franchisee teams alike what your in “for” – that you care and that you are there to help.

Here are three sustainable franchise brands who are leading the way in terms of sustainability:


freshii sustainable franchiseUnits: 286 in 15 countries
Overview: Freshii is expanding at a rapid rate, offering healthy options to consumer. In fact, the CEO, who founded the company when he was just 24, recently wrote open letters to both McDonald’s and Subway encouraging them to convert their locations to Freshii:

According to the CBC: “Let’s explore a partnership in which we together convert select Subway stores to Freshii restaurants in a quick, low-cost way,” said the letter from Freshii founder and CEO Matthew Corrin published as a full-page newspaper ad in the Globe and Mail on Tuesday.”

When you compare the unit growth, the differences are dramatic:

“Freshii aims to have between 810 and 840 franchise locations by the end of its fiscal year 2019, according to regulatory documents filed before its initial public offering… Subway’s expansion also slowed dramatically from 2014 to 2015. Subway opened a net total of just 34 franchises in fiscal year 2015, down from 313 in 2014.”

Fresh food is more difficult to sell as a “value play” – for example, even the best-managed locations have to throw 10-20% of their food away.

According to the Globe and Mail, a recent report found that “the Millennial age cohort is willing to pay up for meals that they perceive to have higher food value and more personal relevance to them.”

Sustainable Takeaway:  Consumers are choosing healthier and more sustainable options – and are willing to pay for it.

Mixt Greens

mixt greens sustainable franchiseUnits: 11 in San Francisco and Los Angeles
Overview: Mixt Greens focuses on sustainability as part of the DNA of their brand. The restaurant ensures that they source the best ingredients, ensuring that they are GMO-free.

“We know what we eat impacts the earth as much as ourselves, so sustainability is at the core of everything we touch, make and do— even if it negatively impacts our bottom line. We’re not just dedicated to being “green,” we’re passionate about protecting the natural systems that sustain us— a philosophy we hope is shared with our customers.”

On their website, they claim to have the following under “the mixt movement”:

mixt greens metrics

Sustainable Takeaway: Taking a holistic approach to sustainability creates “fands” in a very meaningful way – with the average customer eating at Mixt Greens 21 times/month.

Red Rooster

red rooster sustainable franchiseUnits: 360 across Australia
Overview: According to Franchise Business, Red Rooster has been serving roast chicken since 1972. However, today they do so with a twist: “Their chickens are fresh, not frozen, and are free from artificial colours, flavours, hormones, and MSG. The cooking process is simple too; just a sprinkle of seasoning and then into the oven to be roasted.”

Sustainable Takeaway: Even established brands can reposition food to be more sustainable. Franchisors have to invest in everything from computers, to office supplies to client dinners to help the bottom line. The consumer appeal of disposability isn’t what it used to be – now sustainability strengthens your brand.


jack morton brand experience

According to Experiential Marketing Agency Jack Morton Worldwide, “Brand is a Verb”. They say “Marketers must change the route of their brand experience by moving the brand’s actions ahead of its messages.”

To drive value for customers, showing, and not just talking about sustainability is a solid start.

How FranchiseBlast Can Help

With any change, you need the systems to support it. FranchiseBlast’s Auditing tools help brands stay on track with simpler workflow, reminders and even required photos when there is a violation (such as not-locally-sourced food). These tools help strengthen your brand, and make it more consistent. Let us know if you would like to chat further!

Want to see another restaurant trend? Check out our post on off-premise.

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Is Franchisee POS Polling Enough to Capture Franchisor Royalties?

By | Franchise Growth, Franchise Point Of Sale


serverOnline menus, email marketing, mobile ordering and third-party ordering and delivery options have fundamentally changed the restaurant industry over the past several years. They have enabled restaurants to attract new customers and retain existing customers by expanding their off-premise dining revenue which includes both delivery and takeout. The National Restaurant Association reports in their 2017 Restaurant Industry Pocket Factbook:

  • 42% = Consumers who say the ability to order online would make them choose one restaurant over another
  • 30% = Consumers who say technology makes them dine out or order takeout or delivery more often
  • 20% = Consumers who say they would rather use technology than interact with restaurant staff

According to a 2016 Morgan Stanley report, Pizza Paradigm for Online Food Delivery, aggregate off-premise restaurant dining accounted for $210 billion or 42% of the industry’s revenues with $30 billion accounting for the delivery market. Of that $30 billion delivery market, $11 billion was online of which $7 billion (64%) were attributed to pizza orders. This compares to $9.6 billion worth of all pizza delivery orders or 32% of the $30 billion.

According to Pizza Today, “nearly 80 percent of U.S. pizzerias offer delivery.” PMQ Pizza Magazine claims the popularity of online ordering can be attributed as follows:

“The growing importance of online and mobile ordering cannot be overemphasized. Despite carrying their phones everywhere they go, many customers don’t want to actually talk on them—at least not to a harried pizzeria staffer who may put them on hold or botch the order. Online ordering will likely overtake phone orders by the end of the decade, and it fits hand-in-glove with delivery service.”


The growing popularity of third-party ordering and delivery services create new challenges for franchisors as they can no longer rely on POS polling alone to capture franchisee revenue and, therefore, royalties. In fact, Grubhub, the leader in third-party restaurant ordering and delivery services currently only partners with Upserve Breadcrumb POS, Oracle Hospitality and Toast. Yet, franchisors must rely on franchisees to record these transactions in their POS systems, for example as department sales, if POS polling is uniquely relied upon to calculate and validate royalties.

How large is this challenge? According to, Grubhub and Seamless, who merged in 2013, accounted for 50% of third-party restaurant ordering and delivery sales for the fourth quarter of 2016. If you delve a bit into Grubhub’s financial statements, you’ll find a story of double-digit growth in transactions and revenue. The percent of revenue earned also reflects the company’s greater focus on providing an ordering platform versus a stronger mix of ordering and delivery services. They reported:

The industry continues to see new providers of the third-party restaurant ordering and delivery services. Amazon Restaurants was launched in November 2015 and recently announced its partnership with the third-party ordering service provider Olo, In 2014, Uber launched its UberFresh service and in 2016 relaunched the service under its own app, UberEATS. Although these services eliminate the need for restaurants to operate their own delivery services, they also come at what some are called a steep price to both the restauranteur and consumer. But the demand seems clear both domestically and internationally which is highlighted in Amazon’s recent need to hire Uber drivers in Singapore to meet that region’s demand.

The industry is also consolidating. Grubhub is leading the way with its Seamless merger in 2013 and recent acquisitions of competitors such as Eat24, LABite, Foodler and OrderUp.


  1. new_scorecard_restaurantProactively search leading third-party delivery sites to discover franchisee partnerships.
  2. If a material number of franchisees participate in these partnerships, initiate conversations about integrating with third-party delivery services.
  3. Sync this information with your franchisee scorecards to track the impact of sales on top-line revenue growth while also considering the commissions and other costs of third-party delivery partners.
  4. Add supplier purchase data to benchmark profitability. A decrease in profitability may indicate the omission of this additional revenue.

By recognizing the impact of changes in the industry and the growing impact of third-party delivery services, franchisors should re-evaluate how they collect revenue data to ensure they are receiving the appropriate royalties. This may require collecting information from third-party sources and aggregating it into scorecards, dashboards and other monitoring tools. Taking these steps also ensures the franchisee’s performance is being measured and scored correctly to provide the coaching and training that drive unit-level economics and the growth of franchise systems.

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Franchise Growth Through Benchmarking and Scoring Mobile Order, Payment and Loyalty Programs

By | Franchise Growth

online_order_benchmarking“We delivered record shattering Mobile Order & Pay performance metrics in Q1. Rapidly accelerating customer adoption of MOP, particularly over the last three months contributed to a growing number of stores being challenged to keep up with the increased volume demands and introduced an operational challenge that Kevin will speak to in his remarks. We are now laser focused on fixing this problem, but the nature of it, too much demand, is an operational challenge we have solved before, and I can assure you we will solve again.” Howard S. Schultz, Executive Chairman, Starbucks Corp., January 2017 Investor Relations Conference Call.

Starbucks was challenged in 2016 with the quick adoption of the mobile ordering and payment solutions which are tied to their loyalty program. This new option created too much demand at peak hours and the result was a bottleneck in meeting order volume. The end result was a loss in business and a threat to their brand. As an early adopter of technology solutions and loyalty to drive additional revenue, they have experienced operational challenges in the past and have found solutions to the challenges of being earlier adopter of ordering, payment and loyalty solutions.

Over the past 10 years, both digital ordering and loyalty programs have matured in terms of digital technology, integration and sophistication. Over this time, digital ordering, payment and loyalty programs have also proven effective in providing a lift in dining frequency, check size and customer conversion. Restaurant are using these programs to differentiate their offering and to improve operational performance.

Franchisors are also taking advantage of these programs with mixed results. Solutions such as benchmarking and associated scorecards can aggregate and present performance metrics which provide insights into factors that may be influencing digital order, sales and loyalty purchases. The franchisor may discover through these reports that their online revenue versus total sales may vary by 20% with a median of 5%.

To understand these variances, benchmarking and scorecards provide the franchisor and franchisee with areas of focus for their operational analysis and discussions. They can quickly explore the operational reasons for the gap in performance and find possible solutions. Reasons for these gaps may include demographics such as locations that serve predominantly the 18-34 years old age group or geographic such as rural areas. They may also discover through their franchise coaches that it is a question of reluctance to adopt the solutions or a lack of training.

How Has Mobile Ordering Grown?

Mobile and online ordering now lead some restaurants revenues including Starbucks and Domino’s. According to The NDP Group, “[t]he use of mobile apps, text messages, and the internet to order food from a restaurant or other foodservice outlets grew by 18 percent last year and now accounts for 1.9 billion foodservice visits.”

How Have Loyalty Programs Matured?

The number of restaurant loyalty members has grown significantly over the past 10 years. According to the biannual Colloquy Loyalty Census, a jump in restaurant memberships occurred between 2008 and 2010. During this time, loyalty programs matured with companies such as Starbucks consolidating its two existing programs into My Starbucks Rewards in December of 2009. Currently, Starbucks reports a lift in revenue of as little as 20% for its high-spending customers to 70% for its low-spending customers. More information about Starbuck’s use of digital ordering, payment and loyalty follows.

According to Colloquy, restaurant loyalty members outpaced the average for all industries who averaged a 15% growth in 2016. Overall, restaurant membership grew from 6.7 million in 2006 to:

  • 8.4 million in 2008, an increase of 25%
  • 9.7 million in 2010, an increase of 15%
  • 26.5 million in 2012, an increase of 173%%
  • 54.8 million in 2014, an increase of 107%
  • 125.6 million in 2016, an increase of 129%

How Are Restaurants Using Mobile Ordering, Payment and Loyalty Programs?


Panera launched Panera 2.0 as they believe “technology is a differentiator in the restaurant business.” This program includes digital ordering, line busting and operational improvements. What this has produced 17% of system-wide e-commerce sales and 23% of Panera 2.0 cafes sales. This equates to 125 – 130 thousand daily e-commerce orders and $600 million in system-wide ecommerce sales.

Panera is also taking advantage of loyalty programs. At the end of 2016, 25 million customers were enrolled in their loyalty program and 51% of their transactions were associated with the MyPanera loyalty program card. They have used membership data from the program to evaluate customer preferences, adjusting their marketing message and menu design.

Dunkin’ Donuts

In 2016, Dunkin’ Donuts surpassed 6 million loyalty members (DD Perks members). In their fourth quarter of 2016, 10 percent of transactions were by loyalty members. In all, their loyalty program produced almost $1 billion in system-wide sales with more than half generated through a mobile device. This is a growth rate of nearly 70 percent year over year. The company also launched On-the-Go for DD Perks members as a line busting solution which enables members to order ahead and speed past the line in-store. “On-the-Go gives us the power to drive customer loyalty and the power to drive efficiency and speed of service in our restaurants.”


Domino’s reported in its 2016 Annual Report and 2017 Investor Day presentations:

● Over 60% of U.S. sales were through digital channels in 2016 compared to 50% in 2015 with 25% growth year over year

● Estimated $5.6 billion in annual global digital sales in 2016 compared to $4.7 billion in 2015

● In late 2015, they launched Piece of the Pie Rewards, a digital loyalty program

● They expanded their AnyWare digital ordering platform which now includes: Samsung Smart TV®, Twitter, and text message using a pizza emoji as well as Apple Watch, Facebook Messenger, Zero-Click ordering via mobile, “Alexa” on Amazon Echo and the Google Home platform


Starbucks has been an early adopter of mobile order and pay options (MOP). These options are part of the company’s Digital Flywheel Program. MOP was originally designed to be a line busting technology but created too much demand as highlighted at the beginning and originally reported in January 2017 by the Howard S. Schultz, Executive Chairman, Starbucks Corp. and explained further by Kevin R. Johnson, chief executive officer, Starbucks Corp.

[T]he success of Mobile Order & Pay has also created a new operational challenge that has been building in lock step with volume growth, and it’s most pronounced in our highest volume stores at peak, significant congestion at the handoff plane. This congestion resulted in some number of customers who either entered the store or considered visiting a Starbucks store and then did not complete a transaction. Adam Brotman is already driving action in our top 1,000 highest volume Mobile Order & Pay stores to address this issue, including introducing new in-store procedures and tools, adding new roles and resources to specifically support Mobile Order & Pay, and the testing of new digital enhancements, including text message notifications when a mobile order is ready for pickup.”


To test how to solve this problem, Reuters reported in March 2017 that Starbucks will open a Mobile ordering and payment-only store at its Seattle headquarter which only serves employees. This location is one of its top three store in the United States for mobile ordering. The headquarter houses two stores that serve over 5,000 employees. The store will offer with a large pick-up window to try an offer the same in-store experience which includes the ability to view the order preparation by baristas. If the tests lead to more of the new format, this would create member-only stores or Starbucks will have to rethink its program.

Some mobile ordering and payments statistics are highlighted in the Goldman Sachs Global Retailing Conference presentation by Scott Maw, CFO, Starbucks in September 2016. The velocity of MOP adoption and bottleneck issues were already becoming clear:

  • Mobile Payments represented 25% of U.S. transactions, 30% at the end of Q3 2017
  • Mobile Order and Payment represented 5% of all U.S. transactions, 9% at the end of Q3 2017
  • 10% of all transactions at peak times in 2,700+ stores
  • 20% of all transactions at peak times in several hundred stores

Overall success of Starbucks’ mobile order, payment and loyalty programs are reported in the presentation by Matt Ryan, EVP, Global Chief Strategy Officer and Gerri Martin-Flickinger, Chief Technology Officer, Starbucks growth of rewards + mobile order and payment technology for 2016 compared to 2013 , the company’s 2017 Annual Meeting of Shareholders presentation and the company’s Q3 2017 financial press release:

  • Rewards members grew from 5 million to 12 million (FY 16 vs FY 13), 13.3 million at the end of Q3 2017
  • Rewards members equaled 1/6 of all Starbucks customers (Oct 2016)
  • Starbucks Rewards represented 36% of U.S. company-operated sales (Q3 2017)
  • Mobile Pay grew from 10% to approximately 25% (FY 16 vs FY 13), 30% of U.S. company-operated sales at the end of Q3 2017
  • Mobile Pay member equaled 8 million, 66% of rewards members (Oct 2016)
  • Mobile Order and Pay members 2.5 Million, 33% mobile paying customers (Oct 2016)
  • Mobile Order and Pay 0% to approximately 5% (FY 16 vs FY 13), and to 9% of transaction at the end of Q3 2017
  • Mobile Order and Pay member grew to 0 to 2.5 million of loyalty members ((FY 16 vs FY 13)
  • Spend Lift After Joining Rewards (Oct 2016)
    • High-spending customers increased their spend by 20%
    • Medium-spend customers increased their spend by 30%
    • Lower-spend customers increased their spend by 70%

Regardless of the stage of mobile ordering, payment or loyalty program maturity, a franchise system will face challenges in franchisee adoption and reporting. This is compounded as the amount of revenue and top-line growth in revenue is attributed to these options and programs. Franchisors can address these issues by implementing, calibrating and analyzing their unit performance with benchmarking and scoring.

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