How virtual brands can save hospitality

Innovation, resilience, and flexibility are the cornerstones to success in hospitality in 2022. Sam Martin, COO and co-founder of Peckwater Brands, explains how any kitchen can be transformed into a multi-franchise money spinner

The hospitality sector has faced an endless stream of challenges since the beginning of this decade.

The COVID-19 pandemic, of course, hit the trade particularly hard. With numerous social distancing restrictions, followed by a cautious return to ‘normal life’ from consumers, the route to post-pandemic recovery never ran smoothly. And, just as the U.K. eased social distancing restrictions completely, a fresh set of challenges reared its head.

Indeed, the cost-of-living crisis, soaring inflation, staff shortages, and supply chain issues have all hit the hospitality sector hard. Now restaurants, bars, and cafés across the U.K. must face further difficult decisions, including whether to raise prices in line with inflation, absorb costs to appear more attractive to potential customers, or even scale back on operations to remain afloat.

As such, most venues will be looking nervously to the future and considering various options in order to secure their survival.

Resilience and flexibility

Positively, the U.K.’s hospitality sector has demonstrated resilience throughout the previous two years, as well as a willingness to be flexible with operations and long-term strategy.

For example, a survey among 250 decision-makers within the U.K. hospitality sector, commissioned by Peckwater Brands, found that three quarters (75 per cent) of respondents relied on takeaway services to stay afloat throughout the pandemic. Elsewhere, 74 per cent conducted a thorough analysis of their business to see where improvements can be made, 69 per cent sourced new cheaper suppliers to improve profit margins, while 65 per cent increased the number of vegan products or dishes to appeal to new customers.

Such figures are certainly a cause for optimism. They demonstrate that many businesses are willing to adopt new methods of increasing revenue, as well as to conduct honest reviews of their existing offers and operations to identify where efficiencies can be made.

And while this is, of course, a positive start for restaurants, bars and cafes, most hospitality business owners will be all too aware of the fickle nature of the sector. Innovation can’t just be a one-time occurrence. Indeed, it must be a fluid development, which regularly changes with the volatile economic climate as well as customer preferences.

And this begs the question: what would such fluid innovation and development entail?

A virtual future

Indeed, one possible option for hospitality businesses is to explore the possibility of a virtual brand – one which exists solely on third-party delivery platforms (such as Deliveroo, Just Eat or Uber Eats), without the need for a physical store.

The premise of a virtual brand is a simple one. A hospitality business, which has the capacity to take on more orders than it currently receives, takes on a new brand, completely independent from its original one. In doing so, the businesses widen their scope to attract potential customers by adopting new menus. However, the beauty of such brands is that they don’t require any additional resources or dramatic changes to ingredient orders.

So, for example, a fried chicken takeaway would be well placed to take on a Mexican virtual brand. The takeaway already has a key protein in stock, and aside from a few additional condiments or side-dish ingredients, very few additional ingredients will need to be ordered. There will also be no need for additional staff – the virtual brand simply uses the idle resource of the original brand.

And this is where Peckwater Brands can step in – to help venues to capitalise on this option. As franchising experts, the team does everything it can to support its clients and to make the running of their operations as smooth and efficient as possible. Naturally, the team of well-trained franchising experts is sensitive to the different needs of different businesses – as well as the unique challenges they face – and to that end, Peckwater Brands handpicks partners that will best suit their circumstances.

Better still, those businesses that have worked with Peckwater Brands to incorporate virtual brands into their operations are already reaping the rewards.

Success that speaks for itself

Essentially, virtual brands are a means to make more revenue from the same fixed overheads, and Peckwater Brands’ mission is to help restaurants harness the full potential of delivery services, making the process painless and easy to undertake. Accordingly, the team at Peckwater Brands ensures all partners have access to training and support.

Peckwater Brands’ partners have found that incorporating virtual brands into their operations leads to significant increases in the number of orders they receive, more varied and engaging menus, wider customer reach, and an increase in operational margins.

As a result, Peckwater’s partners can earn an additional £12,000-£43,000 each month – this is a result that we’re very proud of.

Peckwater Brands can help its partners achieve such results because its experienced brand strategists create their plans with chefs and operations in mind, ensuring they fit seamlessly into any kitchen. For example, Peckwater clients Flip the Bird and Seoul Chikin brands share 95 per cent of their ingredients; the majority being easy-to-find, off-the-shelf ingredients that partners are likely to already have. This creates less waste and a more efficient supply chain.

Of course, even the most experienced hospitality business owners will likely feel nervous when planning for the coming year. However, they should be reassured to know that options remain available to them. Indeed, virtual brands could provide an innovative solution to make the most of idle resources and bolster revenues. And importantly, franchise experts like Peckwater Brands are always on hand to help business owners find their best virtual brand fit and help them manage throughout the process.

In exploring such options, hospitality businesses certainly deserve to look towards the coming 12 months and beyond with confidence.