Will Pizza Franchises Be a Good Investment in 2021?
COVID-19's impact on the restaurant industry has actually been a boom for some franchises. Thanks to a business model that was already heavily focused on delivery and continuing demand for quick and easy comfort food, you’re probably seeing many more pizza deliveries in your neighborhood than ever before.
We believe that pizza franchises are poised to continue their strong returns in 2021, as they will deliver a similar experience regardless of the pandemic’s status (aside from leaving a pizza on your porch as they drive away instead of ringing the doorbell) and food delivery will grow by billions in 2021.
According to The Business Research Company, food delivery is projected to grow from $90.87 billion in 2019 to $95.37 billion by the end of 2020, with this compound annual growth rate (CAGR) of 4.96 percent expected to increase further in 2021. The growth is primarily related to the COVID-19 pandemic, which is influencing Americans to order delivery more than ever.
Escalent, a top human behavior and analytics firm, found in a study that 17 percent of US consumers have used restaurant delivery in the past month, with 21 percent of those orders coming from new users. Recurring users have increased their spend by 26 percent as well, and 84 percent of all food delivery customers expect their activity to remain this high if not increase over the next three months as the pandemic shows no signs of slowing.
While food delivery app purchases continue to grow, franchise restaurant concepts with in-house delivery are likely to have a competitive advantage due to lower costs, smaller delivery fees, and faster service due to delivery staff being on-call at the location. These advantages can also translate to higher customer satisfaction due to the level of care an employee will take with an order compared to a contracted at-will delivery app driver.
This familiarity of service from before the pandemic, paired with the format’s built-in delivery advantages, gives pizza franchisees a strong edge heading into 2021. Here are some of the best pizza franchises to invest in today: