At the 2026 Multi-Unit Franchising Conference, one of the most timely conversations focused on a challenge every franchise operator is feeling: how to win when consumers are more cautious, labor is harder to find and keep, and the definition of value has fundamentally changed.

In the general session, “The Great Consumer and Employee Reset: Rethinking Value and Service in 2026,” moderator Gary Robins, multi-unit franchisee and IFA Vice-Chair, led a discussion with Michael Kulp, a 1,000-plus-unit multi-unit, multi-brand franchise operator, and David Henkes, Senior Principal at Technomic. Together, they explored what is shifting in the market, what strong operators are doing differently, and what franchise leaders should be preparing for over the next five years.

Their conclusion was clear: this is not just a period of pressure. It is a reset. And brands that respond with sharper execution, stronger leadership, smarter use of technology, and a more complete view of value will be better positioned to grow.

The consumer is under pressure—and expectations are rising

Henkes began by laying out the broader environment. Consumer confidence is weak, discretionary spending is strained, and many businesses are feeling it in traffic and transaction trends.

“There’s no question that as we look right now at where the consumer’s heads are at, where their confidence levels are at, it’s pretty low,” Henkes said. He added that “the trend line is what’s important,” noting that consumers “have gotten less and less confident about their own situation, about the economy.”

That uncertainty has real consequences. Henkes described a marketplace where “traffic is down,” and where many operators have relied on pricing to offset slower volume. But that strategy has limits, especially when consumers are already feeling stretched.

“We’ve got an affordability crisis right now in restaurants,” he said, pointing to the growing gap between menu inflation and wage growth.

The challenge is especially important for franchise operators because consumers are still spending—but they are doing it more selectively. They are more careful about when they spend, where they spend, and whether the experience feels worth it.

Kulp captured that shift directly: “I think tolerance for a poor consumer experience today is probably at the highest I’ve ever seen it.” He added that when a customer chooses to spend discretionary dollars and “things don’t go well,” the reaction is immediate and stronger than ever.

That means the bar has moved. In a tighter environment, consumers are not simply hunting for the lowest price. They are judging whether the overall experience justified the purchase.

Value is no longer just about price

One of the panel’s strongest themes was that the old idea of value—often centered mostly on discounting—no longer tells the full story.

Henkes said it is easy to misread the current environment and assume price is the only thing that matters. “It’s misunderstood that because consumers are so not confident about their situation and everything, that price is the primary driver,” he said.

Instead, he explained that consumers are often reducing frequency while remaining willing to spend when the experience delivers. “They’re still willing to spend when they do go out,” he said. The key is whether brands are giving them a strong enough reason.

Kulp made a similar point from the operator side. What he is seeing in the market is not just a race to the bottom on pricing, but a stronger competitive advantage for brands that combine value with differentiation.

“It feels like in our world, just this sort of convergence of, you’ve gotta be unique and differentiated, and you’ve gotta have some value associated with it,” Kulp said.

The discussion pointed to a broader consumer value equation—one that includes quality, abundance, trust, relevance, convenience, innovation, and service. Henkes noted that brands that rate highly on relevance, innovation, and trust are outperforming the broader industry. In other words, value today is not just what something costs. It is what the customer believes they are getting in return.

That is especially important in a market where loyalty is becoming more fragile. As Henkes put it, “loyalty is earned on a transaction by transaction basis, and you’ve got to show up every time and prove it to your consumer every time.”

The employee equation still comes back to growth and leadership

The reset is not just happening with consumers. It is also happening with employees.

Henkes shared a sobering look at labor force trends, including declining participation rates and especially sharp changes among younger workers. “The labor pool trends are not in the industry’s favor,” he said, noting that participation among 16- to 19-year-olds “has just plummeted.”

That data matters because many franchise businesses have traditionally relied on younger workers as an entry point into the workforce. Fewer workers participating means more competition for labor and more pressure to create jobs people actually want to keep.

Kulp’s view was that, while the market is harder, the core employee value proposition has not fundamentally changed. “I’m not a big believer that this environment requires you to do things different when it comes to attracting and retaining voice,” he said.

What has not changed, he argued, is what employees want from a workplace. “I think employees have always wanted the same things,” Kulp said. “They wanted a place that you built a strong morale, a place that they want to go to work in, not have to come to work in every day.”

Then he summarized the employee opportunity in especially practical terms: “I think employees want to grow themselves personally. They want to grow themselves professionally, and they want to grow themselves financially.”

That line may have been one of the most useful takeaways from the session. For franchise operators, retention is not only about pay rates or staffing tactics. It is also about creating a culture and structure where employees can see progress, feel supported, and believe the workplace is helping them build a future.

Henkes also underscored how much local leadership still matters. “People leave bosses. They don’t leave jobs necessarily,” he said. For operators trying to improve retention and performance, that puts added weight on hiring, developing, and empowering strong general managers.

Technology should elevate the experience—not replace it

Technology and automation were another important part of the conversation, but the panel framed them less as simple labor-reduction strategies and more as tools to improve execution, reduce friction, and free people up to deliver better service.

Henkes said technology creates the most value when it removes friction from parts of the experience such as “payment and ordering,” while allowing team members to focus on more meaningful guest interactions. The real return, he argued, is not always headcount reduction.

“The ROI that comes from investing in technology is not necessarily in the people cost,” he said. “What it’s doing is it’s allowing those people to elevate other parts of the experience.”

Kulp offered one of the most memorable examples of the session: a technology solution his company is testing that acts as “effectively a 24/7 monitor of everything that happens in a restaurant.”

According to Kulp, it is “listening to every conversation, it’s watching every customer interaction,” and then building a dashboard around the things the company says matter most—from customer barriers to upsell effectiveness to coaching opportunities at the unit level.

The point is not simply measurement. It is better coaching and more consistent execution. Kulp said that after initially gathering information in the first seven restaurants, the company showed teams the resulting dashboards and “we saw 20 and 30 and 40% jumps in behaviors that we wanted to see just by showing them the outcomes of the data.”

That example speaks to a larger shift in how franchise operators may think about technology in the years ahead. Some of the most valuable tools may not be the ones most visible to consumers. They may be the ones that help leaders coach faster, diagnose performance issues sooner, and create more consistent hospitality across locations.

Health and wellness is evolving into a broader lifestyle expectation

The panel also touched on health and wellness, a category that continues to influence consumer behavior across franchise sectors.

Henkes said that while health and wellness remains strong, what consumers mean by “healthy” is changing. “Healthy means something different today than it did five or ten years ago,” he said.

Rather than thinking only about traditional healthy menu items or simple calorie messaging, consumers are increasingly approaching health more holistically. That includes attention to sourcing, transparency, portion size, functional benefits, and broader lifestyle choices.

Henkes said consumers are investing heavily in health and wellness and described the category as “booming.” He also noted that younger consumers in particular are forming different habits around food, drink, and wellness than previous generations.

For franchise operators, that does not necessarily mean every concept needs to reposition itself around health. But it does mean brands should understand how wellness expectations are influencing customer choices, brand perception, and category growth.

The basics still matter more than operators think

As the discussion turned to lessons learned, the panel returned repeatedly to one central idea: operators cannot lose sight of the basics.

Kulp was especially direct on this point. “I think we as a company are guilty of underestimating the impact that still being really, really good at four walls with the consumer makes in today’s environment,” he said.

That is a powerful reminder at a time when so much conversation in franchising focuses on macro conditions, digital disruption, labor shortages, and new technologies. All of those things matter. But so do the fundamentals of greeting the guest, delivering warmth, being consistent, and executing well every day.

Kulp pointed to details that can sound small but often have outsized impact: “the warmth about the greeting” and “the warmth about the closing.” In an environment where consumers are quicker to notice disappointment, they are also quicker to reward brands that make the experience feel easy, human, and dependable.

The panel also warned against choosing growth at the expense of excellence. Both speakers touched on the danger of expansion that outpaces operating discipline. Henkes said many brands that struggle have “overexpanded” or become “too big with bad operators.”

By contrast, he said, a stronger long-term path starts with operational health inside the existing business. “If you’ve got a successful business within the four walls and your same store sales are solid, and the business within those four walls are solid, that’s a great base to grow from.”

The next five years will reward disciplined operators

Looking ahead, both panelists suggested that the next five years will belong to operators who stay disciplined while adapting to a changing marketplace.

For Kulp, that includes better organizational structure, stronger support systems, and thoughtful diversification. He said his company has learned hard lessons about holding onto structures that worked at one stage of growth but no longer fit the scale or complexity of the business. Growth alone is not enough; the structure behind it has to evolve too.

For Henkes, success will continue to come back to local leadership and operating excellence. Even as consumer behavior changes and technology advances, the quality of the person leading the unit remains foundational.

“People leave bosses,” he said again, reinforcing a point that likely resonated well beyond restaurants.

Taken together, the session offered a realistic but constructive view of the current environment. Consumers are under pressure. Labor remains difficult. Margins are tight. But the operators who respond with better execution, stronger managers, smarter use of technology, and a broader understanding of value still have meaningful opportunity ahead.

The reset is real. But so is the opportunity for franchise leaders who are willing to rethink what today’s consumer and employee actually value—and build their businesses around delivering it.

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