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It was clear during one of the early General Session panels at this year’s Multi-Unit Franchising Conference that franchise operators aren’t riding out a downturn—they’re navigating a full-scale reset.
During the session “The Great Consumer and Employee Reset: Rethinking Value and Service in 2026,” Gary Robins, a multi-unit Supercuts and Waxing the City operator, led a discussion with Michael Kulp, a 1,000-plus-unit, multi-brand restaurant operator, and David Henkes, a Sr. Principal at Technomic. Together, they outlined what has changed and what operators must do to stay competitive. The consensus was that fundamentals still matter, but expectations around them have shifted.
Henkes opened with data and a direct assessment. Consumer confidence remains low, and that uncertainty shows up in traffic and spending behavior.
Consumers are still spending, but more selectively. They are making fewer visits, watching their budgets, and reacting quickly when an experience falls short.
Kulp said, “Tolerance for a poor experience has never been lower.” When customers choose to spend discretionary dollars, they expect it to feel worth it. If it doesn’t, they won’t return.
That shift raises the stakes for operators. Price alone won’t win. In what Henkes called an “affordability crisis,” driven by rising menu prices and slower wage growth, brands must deliver a complete experience that justifies the spend.
The panel pushed back on the idea that today’s consumer only cares about cost. Henkes said while consumers feel pressure, they are still willing to spend when the experience delivers. Many are cutting back on frequency, but not eliminating spending altogether.
Kulp sees the same trend. The brands that stand out combine value with differentiation. They offer something unique while still meeting expectations on price.
Today’s value equation includes quality, trust, convenience, and service—not just cost. And in a tighter environment, loyalty becomes fragile. As Henkes noted, brands must earn loyalty “transaction by transaction.” Every visit matters.
The reset extends to employees as well. Henkes pointed to shrinking labor participation, especially among younger workers, as a long-term challenge.
But Kulp emphasized that employee expectations haven’t fundamentally changed. People still want a workplace where they feel supported, where morale is strong, and where they can grow. That growth remains central to retention.
For operators, that puts the focus on leadership. Strong general managers drive culture, performance, and consistency at the unit level. As Henkes put it, employees often leave managers, not jobs. In a tighter labor market, leadership quality becomes a competitive advantage.
The panel also addressed technology as a tool to improve execution, not a replacement for labor.
Henkes said technology delivers the most value when it “removes friction from ordering and payment,” freeing employees to focus on service.
Kulp shared an example from his operation where they use a system that tracks customer interactions and performance in real time. By turning that data into actionable dashboards, his team improved behaviors across units by as much as 30 to 40 percent.
The panel agreed that technology works best when it strengthens coaching, speeds up problem-solving, and drives consistency.
At the end of the day, the basics still matter. Kulp noted that operators often underestimate the impact of strong in-store execution. Simple actions such as greeting customers warmly, delivering consistent service, and closing interactions well can carry more weight in today’s environment.
In a market where customers are quick to notice disappointment, they also reward brands that deliver a reliable, human experience.
All agreed that a disciplined approach is important. Growth still matters, but only when supported by strong operations, capable leaders, and scalable systems. Henkes warned against overexpansion without operational strength. Kulp added that organizations must evolve as they grow, rather than relying on outdated structures.
The next five years will favor operators who execute well, invest in leadership, and adapt to a more demanding customer. The environment is tougher. Consumers are cautious. Labor remains tight. But the opportunity is still there.
Operators who understand the new definition of value and execute consistently at the unit level will not just survive this reset, but they will grow through it.