Food and franchising october franchising usa 5#12 2

FranchisingFeature food - part 1

october 2017

New Developments a Cause for Excitement for

Growing Dessert Franchise 4 Steps to Resolve Guest Complaints Driving Restaurant Results with the Family Experience Franchising USA

food FR A NCH ISI NG FE AT U R E – part 1

what’s new!

Duck Donuts Welcomes Change in Season with Fall-Inspired Menu Items Duck Donuts is welcoming the change in season with the return of pumpkin, a signature fall flavor. Now through November 24, pumpkin icing is available at all Duck Donuts locations, as well as a fall-inspired donut harvest assortment.

The assortment features donuts such as pumpkin icing with

graham cracker crumbs and marshmallow drizzle, vanilla icing

with caramel drizzle and glazed with cinnamon sugar. In addition to serving its signature coffee blends, Riptide Roast, Light House

Blend and Sunset Pier Decaf, most locations are offering pumpkin flavored coffees to settle into fall.

Duck Donuts was founded in 2006 by Russ DiGilio in Duck, North Carolina. By 2011, Duck Donuts had expanded to four

Outer Banks locations and the donut business was so successful that DiGilio was continuously approached about franchise

opportunities by fans who begged for a Duck Donuts in their

community. The first franchise opened in Williamsburg, Virginia, in 2013, and there are now more than 50 open franchise locations. www.duckdonuts.com

Melted Sandwich Concept, Melt Shop, Launches Domestic & International Franchise Program Melt Shop, the pioneers of the melted sandwich movement, announced the launch of its domestic and international franchise program.

Founded by Spencer Rubin in 2011, Melt Shop has eight corporate locations — in New York, Philadelphia, and Minneapolis — and is seeking experienced entrepreneurs to help the brand grow to 100 locations over the next five years across the U.S. and internationally. Melt Shop recently expanded into the Middle East and will open seven locations in the region, with four opening in Kuwait by March 2018.

“Melt Shop has spent the last six years

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tirelessly perfecting our brand and

Melt Shop’s focus is simple: melted

bring our New York-born fast casual

ingredients. Its bread is freshly-baked

business model. The timing is right to concept to the world,” said Josh Morgan,

sandwiches made with high-quality daily and its high-quality cheese is

Operating Partner of Aurify Brands,

sourced from meticulously selected

sandwiches possess the unique ability to

create melted sandwich masterpieces — it

any market and we see immense potential

in the fast-casual space.

Melt Shop’s parent company. “Melted

dairies. But Melt Shop does more than

be instantly recognizable and familiar in

creates a culinary experience unmatched

to grow through franchising.”

meltshopfranchise.com

MOD Pizza Appoints Tracy Cioffi as Chief Marketing Officer and Names Kate Jaspon of Dunkin’ Brands to The Board Women, Next Generation” list and was recognized by the Los Angeles Business Journal as “Executive of the Year.”

Tracy L Cioffi

Kate Jaspon

MOD Super Fast Pizza Holdings, LLC (“MOD Pizza”, “MOD” or the “Company”), today announced two major appointments: Tracy Cioffi joins as the company’s first chief marketing officer (“CMO”), and Kate Jaspon has been named to MOD’s Board of Directors, effective immediately.

customer insights, local store marketing, digital marketing and communications.

Cioffi brings more than 20 years of expertise in building and developing national retail and culinary brands, and most recently served as senior vice president for Sur La Table, Inc., where she developed and managed the integrated marketing strategy for their 130-plus stores and 75 culinary locations. Cioffi was named to Fortune’s “Most Powerful

As MOD’s first CMO, Cioffi will lead the company’s global marketing strategy, including brand marketing, design,

Kate Jaspon, who joins MOD’s board of directors, is an 11-year veteran of Dunkin’ Brands where she currently serves as chief financial officer. Jaspon has led several key financial initiatives while at Dunkin’ including the company’s IPO and followon offerings, and has steered a crossfunctional team responsible for financial and SEC reporting, debt management, cash management, insurance, enterprise risk management, contract administration and records management.

“Tracy and Kate join the MOD team at a critical point in our growth, and Ally and I are excited to welcome their guidance and expertise as we continue to expand the company footprint across the globe,” said Scott Svenson, co-founder and CEO of MOD. For more information, please visit www.modpizza.com

Captain D’s Opens New Location In Johnson City, TN Captain D’s, the leading fast casual seafood restaurant, has opened its newest franchised location in Johnson City, Tennessee and emphasizes Captain D’s aggressive development plans for Tennessee. There are currently 71 Captain D’s open in the state, with three additional locations slated to open before the end of the year in Cordova, Dayton and Smyrna.

The new restaurant is owned and operated

by Edward and Chris Benner of Trident Holdings LLC, marking their 23rd Captain D’s location. The partners currently operate across five states and recently signed an additional agreement to develop

three locations throughout Roanoke, Virginia.

“We began franchising with Captain D’s in 2015 and haven’t looked back since.

The brand’s commitment to continually investing in its people, products and processes has established it as one of the best franchising opportunities in the industry today, and our success is a true testament to Captain D’s commitment to its franchisees,” said Chris Benner.

Captain D’s expansion in Tennessee is fueled by the outstanding success the brand experienced in 2016, achieving its sixth consecutive year of same store

sales increases and fourth successive year of record high system-wide AUV. This ongoing success has propelled Captain D’s franchise expansion, with agreements signed to open an additional 25 new restaurants in states across the country. www.captaindsfranchising.com

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food FR A NCH ISI NG FE AT U R E – part 1

what’s new!

Dunkin’ Donuts to Open 6 New Restaurants in Atlanta/Macon, GA Dunkin’ Donuts, America’s all-day, everyday stop for coffee and baked goods, announced a signing of store development agreements with franchisees QSR Group, LLC, and Guzaratti LLC to develop six new restaurants throughout Georgia.

QSR Group will develop five Dunkin’ Donuts restaurants in Macon, Georgia, including two multi-brand locations with Baskin-Robbins. Guzaratti, LLC will develop one Dunkin’ Donuts location in a gas and convenience store.

New franchisees Nishith and Navnit Patel of QSR Group, LLC are both experienced multi-unit operators of quick service restaurants.

Nishith and Navnit are dedicated to further developing the brand in the region with their first restaurant scheduled to open in 2018. New franchisee Smita Patel of Guzaratti LLC will include Dunkin’ Donuts in a new “green” gas station and convenience store location in the Buckhead suburb of Atlanta. This new “green” location features three different power sources which will allow Dunkin’ Donuts to continue serving customers if the surrounding area loses power.

The Buckhead location is scheduled to open by the end of 2017.

With more than 190 Dunkin’ Donuts locations in the Greater Atlanta and Macon areas, the company is continuing to recruit franchisees in the Atlanta and Augusta areas.

To learn more about Dunkin’ Donuts visit www.DunkinDonuts.com.

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The Melting Pot Signs Largest Development Agreement In Brand’s History To Bring Additional Restaurants To Mexico World’s Premier Fondue Franchise Partners with GIN group to Open 17 Restaurants The Melting Pot® Restaurants, Inc., the world’s premier fondue restaurant and a leading polished casual dining franchise, announced the signing of its largest development agreement in the brand’s 42-year history – a 17-unit deal to expand the brand’s presence in Mexico.

GINgroup, one of the largest privately held companies in Mexico, will develop 17 new Melting Pot restaurant franchises throughout the country over the next seven years. GINgroup’s next restaurant will be located outside of Mexico City, in a yet to be determined market, and is slated to open in 2018.

A nod to its name, The Melting Pot is known worldwide for providing a blend of traditional and modern fondue – incorporating both global and local flavors. The Melting Pot’s new Mexico locations will feature recipes infused with local flavors and ingredients, such as Manchego cheese from Queretaro and chocolate from Puebla.

The brand operates more than 120 restaurants across 35 U.S. states, Canada, Mexico, Saudi Arabia, and the United Arab Emirates. www.meltingpotfranchise.com

Houston Company BrisketU Expands Its Smoke Ring By Offering Franchises Houston-based BrisketU (Backyard Pitmasters, LLC) is now franchising its three-hour brisket smoking class business model throughout Texas and beyond.

The $74 classes currently take place at local breweries. Class topics include selecting firewood, choosing a rub, trimming a brisket, smoke profiles, and controlling the temperature during cooking.

“Our brand embodies a culture of true Texas hospitality, celebrating life through the pit master’s trinity of family, friends and feasting,” said Jon Kane co-creator.

“This fact, coupled with a quick start-up time and affordable cost, make this the perfect franchise for someone who wants to make money, while having a great time.”

Visitors Authority, Google, Prudential, and NASA are a few companies that have held these events.

In addition to brewery events, BrisketU offers private corporate events. Spirit Airlines, the Las Vegas Convention and

Franchise start-up time is 8 to 12 weeks, and costs are extremely reasonable.

BrisketU offers franchisees support on

promotion and operations. Franchises come with a custom branded trailer pit, eliminating the need for costly overhead like a building lease.

To inquire about a franchise, visit brisketu.com/franchise.

Performance Food Group and NCR to Deliver Powerful Point-of-Sale Solutions to U.S. Restaurants NCR and Performance Food Group Company have announced a strategic referral partnership to bring NCR Silver point-of-sale technology to more restaurants throughout the United States.

Customers of PFG’s 36 Performance Foodservice distribution centers will be able to purchase NCR Silver software and hardware under a subscription service model. Solutions available through the relationship include NCR Silver core and NCR Silver Pro Restaurant Edition, both of which are enabled on iOS and Android platforms.

With NCR Silver, restaurateurs will be able to check out customers quickly and gain access to sales, inventory and employee scheduling reports. They will also be able to offer customers targeted loyalty discounts and promotions. In addition, PFG will soon expand its relationship with NCR by integrating its order management system with NCR Silver to further streamline restaurant operations. The planned integration will enable

restaurant operators to not only ring up orders, manage inventory and employee schedules, but also order from PFG’s vast inventory of food and food-related products – all from one platform.

For more information on NCR Silver, visit: www.ncrsilver.com.

For more information on Performance Foodservice, PFG’s broadline food service division, visit: www.performancefoodservice.com.

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food FR A NCH ISI NG FE AT U R E – part 1

S weetFrog

New Developments a Cause for Excitement for Growing Dessert Franchise “It’s going through construction now, which is really really exciting,” she said.

Franchisee Timothy Barber, who is opening the kiosk on the military base, is also hoping to expand further to other bases in Virginia and Maryland, Pucel added.

On top of that, sweetFrog is also continuing its push to go mobile.

While many businesses have strong traditions they like to follow, one Virginia-based frozen yogurt franchise is going nontraditional with its locations.

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SweetFrog, headquartered in Richmond, is currently opening non-traditional locations for its brand in some promising places.

This year, the brand has added a kiosk at the Fredericksburg Field House and will have its first kiosk ready to open on a military base within the next few months, Director of Franchise Marketing and Development Shemar Pucel said during a recent interview.

“Our mobile trucks are really taking off now,” Pucel said. “We’ve added two new units already and I have several more in the works for the end of the year. So, we’re much more than just the traditional shop nowadays.”

Those two new mobile units are in Fort Worth, TX and Cleveland, OH. They join the three mobile trucks already in use in Richmond.

But sweetFrog hasn’t forgotten about its traditional locations. In fact, the company wants to get to 400 opened locations by the end of next year, Pucel said.

“Over the next six months, that’s pretty much the main goal,” the director of franchise marketing and development noted.

SweetFrog is busy holding two discovery days per month that usually have three to eight potential franchisees taking part.

Currently, the brand has 342 locations open in 27 states and three countries, including Egypt and eight in the Dominican Republic.

While sweetFrog is well represented in the eastern United States, there are still many opportunities in places like New York, New Jersey, Connecticut, Vermont, Maine and Massachusetts. The company has its sights set on expansion in Minnesota, Illinois, California, Nevada, Arizona and Texas.

“We are making a very strong push to get more and more people in the midwest, the west coast as well as the southwest to open up sweetFrog locations,” Pucel said.

Mobile units and kiosks aren’t the only new things sweetFrog has been exploring.

Pucel said the company is always testing new products with the public to see how it might potentially expand its offerings.

Recently, sweetFrog has tested both donuts and Rolled Froyo.

Support and Training SweetFrog has a number of active duty and retired military members as franchisees, as well as families who own a location together. No matter their background, they all have some common elements.

“Our owners are all strong, business savvy professionals who have great managerial skills, are outgoing and like connecting

with the community,” Pucel said. “We look for that bubbly, vivacious personality to become owners.”

“We’re much more than just a place to go to grab frozen yogurt and walk out,” Pucel stated.

When franchisees come on board, they meet Director of Training Alan Delano for their initial training in sweetFrog’s corporate training store and classroom in Richmond.

Along with its community involvement, the brand’s two beloved mascots, Scoop and Cookie, help it stand out. Children love to run up to the frog mascots and hug them, the director of franchise marketing and development said.

Delano walks them through all facets of the business, both front of the house and back of the house. They also receive training in marketing tactics and how to use the various platforms sweetFrog has set up to help their franchise businesses grow.

The company also holds monthly owners calls and an annual three-day convention that is held in different locations each year.

Many of the higher up executives also like to get out into the field and the company ensures they are visiting the stores at least once or twice per year.

Community involvement Another area sweetFrog offers training for its franchisees is how to connect further with their communities. They encourage franchisees to join their local Chambers of Commerce, sit in on Parent Teacher Association meetings, attend fairs and festivals, connect with nonprofits and churches and ask those places if there is any way sweetFrog can help them.

In addition to serving frozen yogurt, sweetFrog holds paint parties, spirit parties, birthday parties, fundraisers, it has a field trip program and it also partners with the Girl Scouts and Boy Scouts so the youngsters can get their financial literacy badges.

It also has 12 proprietary frozen yogurt flavors; including cookies n’ cream, cake batter, NSA Vanilla and original tart; plus two proprietary soft serve ice cream flavors.

The community involvement, along with its comprehensive support network has garnered sweetFrog numerous accolades from various franchising organizations.

Started in 2009 by founders Derek and Ana Shaw, the brand was purchased by Boxwood Capital Partners in 2015.

Pucel became involved after CEO Pat Galleher found her profile on business networking site LinkedIn. She was working for another Richmond-based franchise company at the time when Galleher invited her for coffee and explained the sweetFrog concept and its vision for growth to her.

“After several meetings and some hardnosed negotiation, he convinced me to join the team.”

And now Pucel wants to convince others to join the sweetFrog team as franchisees.

Whether as owners of a traditional location, a nontraditional location or a mobile unit, sweetFrog has a franchising opportunity suitable for everyone. www.sweetfrog.com/franchise

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food FR A NCH ISI NG FE AT U R E – part 1

Featu re

b y G i n a G i l l Fr a n c h i s i n g U S A

FOOD

FRANCHISING FEATURE

~PART

“Though there are consider, fast food top guns. Their reputation to keep them well

Some consider the first franchisee of America to be John S. Pemberton who invented Coca Cola. Pemberton set the path forward for a different approach to business that included mass marketing and production.

Coca Cola is associated with the food industry, and a lot of restaurants align

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OOD

RANCHISING EATURE

ART 1~

are many franchises to food restaurants are the reputation alone is enough well ahead of the game.” themselves with a specific soda brand or market directly off the brand name of the beverage. Pemberton truly had a great influence on the food franchise of his future and the food industry is now considered one of the most recognizable franchises in America.

In fact, the largest franchise chains are primarily restaurants because it’s become a vital part of the American economy and it’s in demand. The golden arches of the McDonald’s restaurant mark every corner of Main Street, with a Starbucks mermaid posed as its friendly neighbor.

The food industry is familiar, plentiful and comforting.

Which also means it’s profitable. With a

definitive branding and highly established reputation, the food franchise is one of the easiest markets to consider as a new franchisee. The process has become tried and true for the consumer, it’s quick and easy to learn and already a part of the country’s culture. Plus, everyone eats and will always have to eat in order to survive.

It’s a win win situation with never ending demand.

The success rate is almost guaranteed and therefore it comes with a price; start up costs are pretty hefty. As someone considering a food franchise as a career, the cost is worth considering but you wouldn’t want it to be too big of an investment that you couldn’t catch up with after the fact. Though the money would eventually come back around, consider all the numbers before committing fully.

Another downfall is the over saturation of the great food franchises. There is likely a lot of well known restaurants directly in your desired neighborhood. Consider a lot of research of territories and locations that would be best for a work life balance.

A lot of home offices are open and accessible to a lot of interested investors making research simple. Discussing the process with current franchisors should be considered before investment as well.

Franchise names are now competing with small business restaurants. Local chefs and professionals have decided to step outside of the franchise and start their own food

business. These restaurants are becoming more popular with the use of social media and though they are a competition within the field they have not had much of a hit on the food franchise. These are specialty restaurants with less frequent visits, while franchises have a constant flow of customers who come for all meals at all times of the day.

That being said, local restaurants are usually situated within the same area with high foot traffic. Is it best for a brand named restaurant to be within this neighborhood or veer outside the strip of local cuisine to get a leg up on the competition?

One of the biggest food franchises is the fast food industry. The American family is busy and strapped for time, especially in bigger cities. Working families are stuck in traffic and need to eat quickly.

For the most part, mealtime has become a necessity in the day-to-day life, rather than an enjoyable and lengthy moment.

McDonald’s changed the way food was produced, making its mark as a quick and easy means to access food. The McDonald brothers transformed the food economy into a quick service production and by last year the restaurant had 14, 155 restaurants in the country and 22, 744 locations globally. Not bad for a barbeque joint in the 50s.

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food FR A NCH ISI NG FE AT U R E – part 1

Featu re

b y G i n a G i l l Fr a n c h i s i n g U S A

“Franchise names are now competing with small business restaurants. Local chefs and professionals have decided to step outside of the franchise and start their own food business..”

The success has many factors behind it including recognition, affordability, brand name and consistency to name a few.

Many other chains have followed suit in the McDonald’s success template: from the Big Mac to the Whopper, from Ronald McDonald to Colonel Saunders, kid’s meals toys and drive thrus – the big league fast food industries have formulated a guaranteed process.

For a safe and profitable franchise, this is the way to go. In 2015, the fast food industry produced $200 billion in revenue in the US. If you’re looking for an easy transition, a quick process, a great success rate, it’s the best option. Of course, no great feat comes without its work. Though most fast food restaurants have great supports, training and marketing, there are times franchisees will have to put the work in. The industry employs over 4 million people, but it has a fast turnover rate, keeping a committee and consistent staff makes it difficult to step away from the plate and allow the business to run itself at all times.

That being said, the supports are a safe and sure way to keep the work life balance at its peak. Most fast food franchisees can live a comfortable lifestyle, checking in from time to time, while enjoying the perks of a profitable business.

There is no need for past experience or understanding of how such a restaurant operates, but a passion for the food

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industry would be helpful. Just like its food, the running of fast food restaurants is quick, easy and consistent.

by all family members. Though it’s

There are over 200, 000 restaurants to choose from and research would be the best way to narrow down your top choice.

Reaching out to current owners, the community and franchisors would help a franchisee determine what market best suits them. Though a lot of the franchises run on the same platform, their structure and expectations might differ.

million people eat at a fast food restaurant

The franchising world has been redefined and recognized mainly as a fast food industry. Though there are many franchises to consider, fast food restaurants are the top guns. Their reputation alone is enough to keep them well ahead of the game. Though some have gained a negative connotation as being an unhealthy food choice, a lot of adhered to the demands of its consumers and offered a healthy choice option. They tend to cover a lot of bases: breakfast, lunch and dinner menus that are enjoyed

taken a hit for being unhealthy, many

Americans are still enjoying it. About 50 everyday in this country alone.

If profit and success are your main goal

with easy and quick training, the fast food

industry is your fit. If your pockets are big, but your dreams are even bigger, it’s the best first line franchise to consider.

ABOUT THE AUTHOR: After receiving an English Degree, followed by a Journalism Diploma, Gina Gill became a freelance journalist in 2008. She has worked as a reporter and in communications, focusing on social media. She currently works as a community information officer with Epilepsy Society, while pursuing her writing career at the same time.

Look out for our next special feature:

food FRANCHISING part 2

OPPORTUNITY IS KNOCKING. GET YOUR FOOT IN THE DOOR BEFORE IT CLOSES.

Visit LittleCaesars.com or Call (800) 553-5776 to Join the Fastest Growing Pizza Chain in America *

*Based on 2015 U.S. store growth. © 2017 LCE, Inc. 62622

food FR A NCH ISI NG FE AT U R E – part 1

Christopher Conner, President, Franchise Marketing Systems

People are

eating up

food franchises!

Food Franchising has always been front and center for the entire franchise industry. After all, the industry was essentially brought main stream by some of our favorite hamburger and chicken food purveyors in the 1950’s.

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The recent movie, The Founder, helped retell the story of how the franchise industry was brought to the general public by an excitable Ray Kroc who discovered the McDonald’s brothers invention.

Chicken, hot dogs, burgers….more burgers and now sushi seem to have a never ending assembly line of new concepts and innovative food service franchise brands always coming into the franchise market.

The food service segment of franchising has taken it’s lumps over the recent past and in 2008 and 2009, the food service industry was as close to going extinct as the market segment ever has been. Now, in 2017, The Entrepreneur Franchise 500 has McDonald’s at #2, Dunkin Donuts at #3, Jimmy John’s at #5, a reinvented Dairy Queen at #6 and a surging Wingstop at #8.

The Food Service franchise market is as alive and well today than it has ever been.

How is this all possible when you hear again and again that restaurants are so high risk, the food service business has no profit margin and other negative slants towards food service businesses?

Are food service entrepreneurs defying logic with businesses that work around traditional issues in managing a profitable food service business? Has the restaurant business changed for the better significantly in some way? There are a variety of factors that drive the food service space and probably at the top of the list is the fact that food service has been so prominent and has more established brands than any other market segment of franchising. This maturity has helped a wide range of franchise brands grow from large systems to very large franchise systems over the past ten years since the recession. With mature franchise brands comes people’s willingness to look into the category, even if in some cases people do not invest in well known food service franchises, they end up investing in the market segment itself. The pizza franchise market is a good example, brands such as Pizza Hut and Little Caesar’s have global recognition and bring people into the category who to some extent have chosen to invest in new, more innovative pizza franchise models like Blaze.

The next reason that the food service market in franchising has performed

well is the shrinking profitability in food service establishments. One would think that this would work against franchising, but the opposite is true. Food supplies, inventory costs, restaurant supplies and cost of labor are all increasing faster than sales have been for the food service market segment. Franchise systems offer franchisees the benefit of purchasing power negotiating better rates with food suppliers and more marketing power for food service establishments.

The individual franchisees have the opportunity to leverage these economies of scale and “win” at the unit level. This paradox is seen to an even greater extent in the pizza segment where an increasingly large percentage of sales are being driven through online ordering platforms. Large scale pizza franchises have the capital to invest in technology and systems that a mom and pop couldn’t afford and the growing difference in online sales supports the case for franchising.

Another area where food service franchises seem to be beating the system is in managing labor costs and operational expenses. Recently in the U.S., the labor board made their most recent attempt to take a swing at franchising by declaring that the Franchisor should be deemed a joint employer for the staff employed by all franchisees in the system in a case against McDonald’s. With the support of the IFA and a group of franchise industry professionals, the case was overturned and the concept of independent franchise ownership was successfully defended.

In a franchise system, each business is independently owned and operated, through the Franchise Agreement all businesses operate under a common brand and are able to leverage the volume of business and resources available to the sum of the units in the network. This combination of small business owners working together and as a team offers benefits to each owner and to the growth potential of the entire network.

Finally, the food service franchise market has gone through a massive overhaul since the recession in 2008. With the rebirth of our global economy, there has been a reinvention of many mature brands and the development of new and exciting food

Chris Conner

service franchises. The Middle Spoon is a Halifax, Nova Scotia food service franchise that offers high end cocktails with fancy dessert options and recently established new ownership of a location in Sugarland, Texas. The concept is exciting, full of personality and offers the franchisee an incredible financial model.

Blaze Pizza went ahead and reinvented the pizza market with the “Subway-version” of pizza restaurants making pizza quick, easy and convenient for everyone. Sushi has been reinvigorated and re-established as a market segment with quick serve Poke Sushi offerings such as a new Atlanta franchise brand, Poke Burri. Poke Burri offers a compact, efficient and simple operating model with incredible food quality.

Long story short, the food service franchises are back. Today’s food franchises are full of innovation, technology, excellent branding and systems that allow for scale. If there’s ever been a good time to look at becoming a Franchise Foodpreneur, that time is now.

Christopher Conner is the President of Franchise Marketing Systems and has spent the last decade in the franchise industry working with several hundred different franchise systems in management, franchise sales and franchise development work.

His experience ranges across all fields of franchise expertise with a focus in franchise marketing and franchise sales but includes work in franchise strategic planning, franchise research and franchise operations consulting. www.franchisemarketingsystems.com

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food FR A NCH ISI NG FE AT U R E – part 1

Tania Haigh, CEO, Magnolia Insights

Driving Restaurant Results with the Family Experience A growing franchise restaurant concept is unique, has a cool appeal, and legs to expand across the country.

However, these attributes don’t always

guarantee what restaurants want most – repeat visits.

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Our company, Magnolia Insights, conducted a comprehensive study on franchise marketing efficacy and we have found that the most successful concepts spend precious marketing dollars to position themselves to win with families.

When a restaurant leverages its assets to appeal to the Family, it sets itself up for repeat business and long-term success.

There is no one silver bullet to win business with families. Restaurants need to have a stellar combination of menu offerings & service that appeal to the

entire family. The best restaurants are

strategic with their approach because it’s

often hard to please people at different life stages with differing tastes in food.

It’s important to note that this does not mean that a restaurant should try to

be “all things to everyone”. The best

restaurant brands have attributes that are

integrated with family insights that drive repeat visits. Here are some blocking-

and-tackling basics to win with the entire family:

“When a restaurant leverages its assets to appeal to the Family, it sets itself up for repeat business and long-term success.”

1

Make Mom (Woman) Happy

This is not a sexist cliché. The business data and consumer insights are clear and reinforce the fact that mom (or woman in the scenario – read: aunt, grandma, sister) is the primary food decision-maker and if she sees something appealing on the menu at the restaurant, then chances are she will bring along her brood. In addition to the food, this influential consumer values cleanliness and customer service. A restaurant can win with women by keeping tables clean, bathrooms clean and training staff to be attentive to family needs such as potty emergencies for young children.

Everyone has head the old saying, “If mama ain’t happy, ain’t nobody happy…”

The best restaurant concepts understand this implicitly.

2

Menu Variety Makes Everyone Happy

As outlined above, a restaurant wins with mom when she identifies something on the menu that she likes. Now it’s time for her to find something that can keep her toddlers happy (simple menu items without too much of a fuss) and the older kids who may want larger menu items.

We have found that the most successful restaurants offer shareable menu items that can be split amongst a group, like Carl Jr.’s festive Jalapeño Poppers or McDonald’s unstoppable Chicken McNuggets. The best restaurants can appeal to kids, parents and grandparents. Everyone wants to reach across the table to grab a McNugget!

3

A Meal Bundle Makes it Easy

Meal bundles make it easy for restaurants to increase sales and provide value to customers by offering discounts over a

la carte purchases. Almost all successful restaurant concepts provide multiple bundling options. Even Starbucks has dabbled with meal bundling to compete with fast casual “combo meals” during the highly coveted lunch rush hour. In 2016 they launched a limited-time Power Lunch Bundle. It remains to be seen if they will decide to continue meal bundling on a permanent basis going forward.

4

A Kids Call Out

Incorporating tactics that make a restaurant kid-inclusive drives repeat business. Something as simple as coloring sheets & crayons let customers know that children are welcome and a dedicated kids menu helps to keep the children engaged.

Russells BBQ, a local restaurant in Elmwood Park, IL offers tokens to every child that walks in the front door. The kids put the token into a large gumball-like machine and out pops an inexpensive prize like a sticky-hand or wax figurine or a temporary tattoo. Kids love it! An example of kid-inclusive menu integration on the national level is at Denny’s. Their kid’s menu variety is a dream—ranging from classic meals like spaghetti to a section for building your own sundae. The most successful restaurant concepts find value in being kid-inclusive.

5

Keep up the Fun!

Depending on the restaurant concept, a dedicated family night or a themed night may boost revenue and drive repeat business. In an age of social media, restaurants often find that they are more likely to receive free publicity when running specials that involve price discounts. Many restaurants offer

Tania Haigh

“Kids Eat Free” specials on Mondays or Tuesdays, which are typically the slowest nights of the week in the restaurant industry. The restaurant chain O’Charley’s has taken a bold approach and recently announced that kids eat free “all day every day” with the purchase of a dine-in adult entrée. It remains to be seen whether they will keep this policy in place permanently, but it certainly shows that they are targeting families with this bold approach.

The most successful restaurant concepts leverage their money and resources to appeal to moms and families and turn them into repeat customers. By offering the right food variety and kid-inclusive touches, restaurants can appeal to the entire family.

Tania Haigh is CEO of Magnolia Insights, a Chicago-based integrated marketing communications company that supports franchise brands and organizations. Prior to launching Magnolia Insights, Tania spent a decade at McDonald’s USA and was recognized for her thought leadership by the Association of National Advertisers and Brand Innovators. Tania has been featured in Advertising Age, Chicago Tribune, Chicago Sun-Times, Chief Marketer Magazine and the Wall Street Journal; and has written articles for Chicago Woman magazine and Chief Marketer. She is also a TEDxWomen organizer and curator. magnoliainsights.com

Franchising USA

food FR A NCH ISI NG FE AT U R E – part 1

Page 35

food FR A NCH ISI NG FE AT U R E – part 1

Simona Krebs, Brand & Guest Services Manager at Togo’s

4 Steps to Resolve Guest Complaints 1

Acknowledge

In today’s socially connected environment the voice of the customer cannot be ignored.

Social media and direct corporate channels allow Guest feedback to be instantaneous – often customers are still in line as they document their experience.

This new way of giving instant feedback is a real-time report card of how your restaurant is performing. Good feedback is easy to read, accept and reward while the F’s and 1 Star reviews are not so easy.

Sadly, the negative ones matter most to

Franchising USA

customers making a decision between your restaurant and another brand.

The challenge in a Franchise restaurant

system is that the brand is affected by each

customer visit. Great customer experiences at one location will often lead to repeat

visits, brand loyalty and the willingness to visit other franchise locations. A bad

customer experience at one location can

permanently damage brand perception. It’s not just one location that loses a customer, it’s the entire system. Handling customer complaints is truly a focus on customer recovery.

Having responded to thousands of

customer complaints over the years, I’ve found they tend to play out the same -

regardless of what the issue was initially - leading me to develop four key steps to handling customer complaints:

Hearing negative feedback about your business is tough. However, you must read them as a customer, not the business owner. Choosing to quickly address the complaint with empathy signals to the customers that they have been heard, and everyone wants to be acknowledged.

It’s the first step to winning them back.

Typically, customers who take the time to share their feedback are loyal to your location and the brand. Either something happened that was atypical or they’ve recently seen a pattern that should be corrected. Sometimes new customers have a bad first visit and the level of response they receive will determine whether they will give your restaurant a second chance.

Plus, with today’s social media a response to one customer is then seen by thousands of future customers.

2

Apologize

This is often the hardest step because you have to accept that your team failed the customer somehow. However, whether the complaint is truthful or colorfully inflated, the best remedy is to quickly apologize. Apologize because the customer made a choice to spend their money in your restaurant, and for whatever reason, they perceived their experience to be less than excellent. Offering a quick and sincere apology is the easiest way to smooth over any issue and regain the customer’s goodwill and loyalty. Failing to apologize sends a message that you don’t care or value your customer’s feedback.

Not surprisingly you’ll then lose that customer.

Page 37

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Franchising USA

food FR A NCH ISI NG FE AT U R E – part 1

Simona Krebs, Brand & Guest Services Manager at Togo’s

“Offering a quick and sincere apology is the easiest way to smooth over any issue and regain the customer’s goodwill and loyalty.”

3

Resolve

We’ve all read our share of “fake” reviews and complaints, and while they shouldn’t be given too much thought, a public apology for the sake of future customers is never out of line. Customer complaints that are genuine and clearly from a regular guest, necessitate going beyond just an apology. Inviting the guest back in for a free meal or sending a gift card shows the guest that you’re taking appropriate steps to correct the issue and that you value their business.

4

Improve

While the first three steps are often about current customers, the last step is about future damage control.

In a franchise system, utilizing readily available customer feedback is an opportunity to see how your brand and location are doing. It shows you a clear

Franchising USA

picture of what needs need to be corrected.

Sort through the one-off customer complaints and learn to recognize the pattern in the issues. If you look closely enough you can identify key service or product quality issues. These are opportunities to make improvements to your business by streamlining processes and retraining the crew in order to prevent future complaints. Remember, few customers take the time to complain, so ignoring one complaint here and there can cause you to miss the big picture.

Your Customer Service Department can help turnaround a negative review but the best defense against complaints and growing compliments is a properly trained restaurant crew team. It’s vitally important to take feedback as information to help retain loyal guests and make improvements. Failure to listen and take action will only cause more complaints

Simona Krebs

and loss of business, as well as erode the brand.

Simona Krebs is the Brand & Guest Relations Manager at Togo’s and she oversees all guest response and engagement for the Togo’s brand. She has vast experience working with individual operators, corporate support and outside partners to maintain one brand voice. ww.togosfranchise.com

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food FR A NCH ISI NG FE AT U R E – part 1

Chris Boyles, Vice President of The Steritech Institute at Steritech

Why It’s Important to Food Safety Culture A a Franchise The term “food safety culture” is widely used, but not widely understood.

Fundamentally, it means making food safety a valued, integral, and indivisible part of a company to achieve and sustain reduction in risks.

Food safety programs may sometimes be seen as something that the Quality Assurance Department wants to “add-on” or is being mandated by corporate offices, without communication as to why they are being implemented. However, when it becomes a priority, this shift positively impacts all levels within a franchise to safeguard the business and mitigate risk.

With this in mind, how should a franchise create a culture of food safety and, once created, how can you determine if it’s working?

This concept is important as it creates uniformity across locations and franchisees.

When changing how a franchise functions, thinks, and talks about food safety, leadership must be aligned. If you don’t

Franchising USA

It starts from the top

have participation at every level, then it will not be a united franchise ethos. If leadership incorporates food safety into written statements and when they speak to their team, others will see this and will adopt methodologies from management to line level. When embracing this change, strive to put the mission into action. For example, encourage leaders, including those from above the restaurant level, to implement policies surrounding items including handwashing and wearing proper hair restraints. Line level workers need to believe in the fairness of the expectations set out for them. While learning facts about safety is beneficial, it is observing action that drives this shift home.

effective to simply tell food workers they have to avoid contacting ready-to-eat food with their hands because studies show they could have invisible norovirus germs. A better approach is to use stories about a real norovirus outbreak and how it affected not just those who got sick, but everyone who worked at the location. This storytelling educates on the “why” behind policies for employees to understand that their actions could affect not just them and their families, but also their friends, coworkers, and the franchise brand’s reputation and livelihood.

Chris Boyles

Build momentum across the company

Create Across Provide skill and will It’s important to teach skills and reinforce through motivation. Regarding training, food safety shouldn’t be a separate exercise. Instead, it should be infused into everything. When you’re discussing loading a dishwasher, discuss food safety and how correctly handling dishes helps to ensure proper cleaning and sanitizing.

When you’re teaching how to fry a chicken, discuss food safety and how to know when the chicken is fully and safely cooked. When food safety is not incorporated into every training touch point, it appears to be optional, when it should be a priority. Beyond training, it is personal stories that motivate employees to commit to food safety culture. It’s not

When a culture of food safety is created, it is incorporated into company values, budgets, job descriptions, and performance indicators. For budgeting, food safety may manifest itself by supporting technology, including purchasing automated temperature monitoring system for walk-in coolers, online training with electronic checklists that can be completed on a smartphone, and more. Budgets may also incorporate items such as food safety certification courses for managers. These budgetary choices are an investment in your team that in turn can offer significant ROI for your brand. When a cultural shift occurs, it will also be evident in job descriptions. For example, for managerial jobs, a requirement could be to acquire and maintain a Certified Food Safety Manager credential. A job description could also require completion of internal food safety training and compliance with franchise hand washing policies and wellness policies.

Assess how your culture is working Any periodic measurements of food safety should demonstrate the results: regulatory inspections, self-assessments, third-party assessments. While assessment scores are only a measurement and do not drive change, it’s what a franchise does with an assessment that matters most. With regular and consistent assessments, it’s been shown that teams perform best when feedback purposefully highlights

the positive attributes of what the team is doing, as well as suggesting opportunities for change. When a team is complimented on a procedure, they are more receptive to hearing critique and changing behaviors. It is a difficult feat for one person to change culture. Franchises can also consider recruiting an advisory committee, with representatives from across the brand, to serve as champions of change and tie new food safety initiatives into other projects, such as when a new menu item is introduced to infuse food safety training.

The concept of “food safety culture” has been an industry buzzword, but is only effective when put into action. Through encouraging genuine, comprehensive behavioral shifts, your franchise will protect the brand, safeguard employees and sustain a reduction in risk, thus propelling your company for exponential growth and ROI. As Vice President for The Steritech Institute at Steritech, Chris Boyles is responsible for the Consulting, Training and Quality Assurance functions within Steritech’s Brand Standards Business. He manages the design and implementation of configured audit programs that meet and exceed clients’ expectations. Chris holds a M.S. in Microbiology and B.S. in Biology, from the University of North Carolina at Charlotte, and the Certified Professional - Food Safety credential from the National Environmental Health Association. www.steritech.com

Franchising USA

food FR A NCH ISI NG FE AT U R E – part 1

Page 41

H AV E YOU R SAY

Paul Bosley, Managing Member of Business Finance Depot

The Best Working Capital Loan Available Today In 2014, the Small Business Administration (SBA) introduced the Small Loan Advantage loan program often referred to as the SLA loan.

Franchising USA

One lender created an “SBA Express Loan� and capped the loan request amount at $150,000 to limit the risk since real estate collateral is not required.

Instead, only business assets are used to collateralize the SBA Express Loan. The main approval requirements are good personal credit & a reasonable amount of liquid assets which includes $ in checking, savings and retirement accounts as well as marketable securities. New and existing

business owners are eligible for this unique loan product.

Small Business Administration (SBA) Express Working Capital Loan This government backed loan is designed to provide working capital ranging from $20,000 to $150,000 for start-ups and

existing businesses. The main purpose of

Page 43

The public and policymakers need to understand franchising.

Our purpose

@OurFranchise is an industry-wide campaign created to spread the word about the value of franchising and share the stories of men and women just like you, who are leading the way as franchisors, franchisees, and franchise employees. The franchise business model has been proven time and time again to work, but it’s threatened when the public and politicians don’t understand how it operates to benefit local, independent franchise establishment owners and their communities. Putting a spotlight on real leaders succeeding with the franchise model is how we’ll ensure franchising is stronger than ever before.

Follow us

Share the tools and resources offered on AtOurFranchise.org/resources

Help us keep the momentum going

Since our launch in June 2016, we’ve reached 1.7 million people through outreach efforts, including events in key cities and states, where we spoke directly with business owners, employees, policymakers, and the media. Additionally, we’ve reached people across America through our website and social media channels, digital advertisements, and the promotion of We the Franchisees on Politico – but there is much more work to do. As a franchisor, franchisee, or franchise vendor, you are a leader in your community – and we need your support, now more than ever.

You benefit by joining

By joining @OurFranchise, you’ll get access to exclusive stories and resources that can help grow your franchise business, educate employees at all levels about the franchise business model, and share the economic importance of franchising with consumers. You will also have the opportunity to share your franchise success story with your peers.

b

a

x

Our Franchise

@OurFranchise

@OurFranchise

This is just the beginning

Make sure you stay up to date with the campaign’s latest efforts through email updates and social media.

Visit our website to read and share the latest stories of franchisors and franchisees making an impact in their communities. Become a franchise advocate to help ensure Americans, now and in the future, have the opportunity to start franchise businesses. Take the lead today!

Visit AtOurFranchise.org Contact Erica Farage, Senior Director of Political Affairs and Grassroots Advocacy and Multi-Unit Franchisee Engagement International Franchise Association efarage@franchise.org (202) 662-0760

Franchising USA

H AV E YOU R SAY

Paul Bosley, Managing Member of Business Finance Depot

“If a business has high interest debt, this loan product is perfect for refinancing existing business debt if the resulting monthly loan payment be at least 10% lower than the current debt repayments.” this loan is to provide the funds necessary to support the company until the business generates positive cash flow. The loan process takes between 30 to 90 days to complete before the loan funds. The SBA loan process requires attention to detail to complete the application and contingency requirements.

The interest rate for this loan is calculated by starting with the prime rate as published in the Wall Street Journal which is currently 4.25%. The bank charges a risk premium ranging from 2.75% to 4.75% on this loan so the interest rate will range from 7% to 9% depending upon the loan amount. The larger the loan amount, the lower the interest rate. For example, a $25,000 loan has an interest rate of 9% while a $150,000 loan has an interest rate of 7%. This loan has a variable rate which will change when the Federal Board of Governors raises or lowers the rates. The most recent .25% rate increase raised the SBA loan payments on a $150K loan by approximately $18.00 per month. All SBA loans have closing costs which are typically 3% of the loan amount. The loan’s repayment term is 10 years and there is no pre-payment penalty so if the business is profitable, the loan can be prepaid to save interest expense.

Franchising USA

A Wide Variety of Business Uses • Financing a New Business - If the use of the loan funds is to help finance a new business, the loan can be approved in advance to the business’s opening, however the funds will not be distributed by the bank until the new location has received a certificate of occupancy. This insures that the money will be used to operate the new business & will not be used to pay for build out construction costs.

• Consolidating Existing Debt for an Existing Business – Many existing businesses have turned to alternate lenders to provide financing after the financial crisis because banks have tightened their lending standards. If a business has high interest debt, this loan product is perfect for refinancing existing business debt if the resulting monthly loan payment be at least 10% lower than the current debt repayments.

This is almost a given in all cases because the interest rate is 7-9% and the repayment term is 10 years. The best part is that existing businesses should fund in 15 days or less!

• $25,000 SBA Working Capital Loan for New and Existing Businesses -

Paul Bosley

The $25,000 loan amount deserves its own paragraph because it is a totally unsecured loan! No business or personal assets are required to be pledged as collateral for this loan! It is a quick process that can take less than a month to close if the business owner focuses on the required forms. There is absolutely no competitive product available to a new or existing business owners now! In short, this is the best product on the market today for a $25,000 business loan that can be used for any business purpose!

The purpose of using SBA loans is to access other people’s money (OPM) and preserve the business owner’s capital. The goal is to borrow the money at a cost that is less than the business profit percentage.

For example, a SBA working capital loan has a 7% interest rate. Assuming the business operates at a 15% profit margin, the business owner is using OPM at a cost less than half of your anticipated return on capital! The best part about the SBA Express loan is that the collateral is your business assets… not your home … just your business assets!

Paul Bosley is a Managing Member of the Business Finance Depot. www.businessfinancedepot.com

Page 45

I’VE ALWAYS WANTED TO:

Run a bakery

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