Poncheon’s local presence began as a casual dining atmosphere with 2,500 to 3,000 square feet that was “heavy in service.” But before COVID, the chain was looking at ways to improve value and return on investment for franchisees in smaller 1,800-2,000 square feet locations.
In late 2020, Bonchon moved its headquarters from Dallas to New York City and announced plans for a rapid prototype with a streamlined menu, updated interior, and new service model. The change made perfect sense for the chain, which has seen digital sales grow from about 12 percent to 50 percent in the past two years thanks to the implementation of an advanced online ordering platform, native delivery capabilities, a unified point of sale system, and a partnership with DoorDash.
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Similar moves are being made all over the world.
“Thailand until the pre-pandemic period was a very upscale and informal experience,” Decker said. “…Now I think they are all making a similar transformation as in the US, which is the fast go. Thailand very quickly switched to take out kitchens, takeaway/delivery only, express kitchens.”
However, poncheon is not immune to the macroeconomic factors that affect the entire industry. The fast casual saw record increases in chicken and oil prices and had to search for more alternative products last year than ever in Decker’s career.
The industry veteran believes that inflation will remain at least until the end of 2022, and that operators will have to learn to live with supply chain disruptions. This means moving away from just-in-time ordering and moving forward with six-month lead times until there is enough stock for new restaurants.
Dekker attributed the persistent labor shortage to transitional issues such as government subsidies, individuals fearful of COVID, parents facing uncertainty regarding childcare, and long-term effects such as lower birth rates and lower immigration to the United States.
He thinks it’s a problem that everyone will have to deal with for an indefinite period, and that means incorporating more technology. Dekker said that Bonchon wasn’t too involved in technology innovations at the start of the pandemic, so the brand is still playing catch-up in terms of point-of-sale simplification and robust CRM delivery.
But the CEO knows the future is coming.
“If you asked me three years ago about my philosophy on automation, I would probably have formulated it, if people want to work, I want to give them a place to start their career or build their career and get a job,” Dekker said. “Today, the reality is that there are not enough people in the pool. This is because so few people are entering the labor market. … Now we have no choice but to simplify and automate business.”
Despite these headwinds, Dekker remains confident in Bonchon’s growth trajectory.
Data tells him that Bonchon will have 800 units globally by 2026. Amid this expansion will be two to three company-run restaurants to test formats and menu iterations, but most of the new stores will be under franchise leadership.
“This one has a lot of legs,” Decker said. “There is a lot of demand. And so it is just a matter of smart and thoughtful growth, but I think we are going to create a huge slope here.”