Food and Franchising July 2020

FranchisingFeature food franchising

Food

Franchises

A Staple in the American Economy

amid a growing appetite

for plant-based foods is your brand staying current

3 important trends in

the current restaurant industry

ju ly 2020

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what’s new!

THE ORIGINAL HOT DOG FACTORY tO OPEN 15 FRANCHISE LOCATIONS WITHIN THE NEXT 90 DAYS

New Franchise Owner Re-Launches Bold, Bad Ass Coffee Brand It’s Badass! Royal Aloha Coffee Company (RACC), the new visionary franchise owner of Bad Ass Coffee of Hawaii, has opened its first, new location featuring the ground-up brand rebuild of the iconic Hawaiian coffee franchise.

Marking the national launch of Bad Ass Coffee of Hawaii, last week RACC opened its flagship store in West Jordan, Utah, just outside Salt Lake City. The first of the rebranded stores, the new store features a Hawaiian store décor that reflects an authentic Hawaiian vibe that is fresh, cool, and full of badass attitude.

“There’s an enduring love and consumer connection with this brand that has extended far beyond its current locations, and that’s very exciting,” said Scott Snyder, CEO of Bad Ass Coffee of Hawaii.

Bad Ass Coffee of Hawaii was founded on the Big Island of Hawaii in 1989 and named for the generations of donkeys of Kona, Hawaii.

Franchising on the mainland since 1995, Bad Ass Coffee of Hawaii currently has 24 locations in the U.S. and Japan. With no significant design upgrades to the stores for over 25 years, 2020 marks the year that the brand will roll out a new and authentic evolution of the Bad Ass Coffee brand.

The Original Hot Dog Factory is proud to announce that they are now opening 15 new locations all over the United States within the next 90 days. This includes five new locations in Atlanta, four in Philadelphia, and others in Birmingham, Houston, Brooklyn, Charlotte, Raleigh, and Detroit.

The Original Hot Dog Factory’s menu consists of a wide range of selections including: specialty hot dogs, hamburgers, chicken sandwiches, salads, french fries, onion rings, milkshakes, and related foods and beverages.

Owned by Dennis McKinley, The Original Hot Dog Factory has received national exposure as it has been featured on BRAVO’s “Real Housewives of Atlanta” numerous times.

“At the Original Hot Dog Factory, we offer a wide variety of mouthwatering hot dogs that will make you ask for more,” says owner Dennis McKinley. “We are looking forward to sharing this deliciousness all over the country.”

Qualified applicants who are awarded the opportunity to own and operate a franchise will be provided with an exceptional business model, extensive training, and consistent, ongoing support from senior management.

“We take our Hawaiian roots very seriously,” said Snyder. “Our brand would not have the following that it does today without a commitment to quality coffees produced by relationships developed with multi-generation Hawaiian Coffee farmers.”

“With economy cranking back up, we are seeking experienced single or multi-unit franchisees to acquire and develop locations in shopping areas, colleges, and more,” says McKinley. “We bring strong financials and a culture that promotes community and great eating.”

For more information, visit www.badasscoffee.com Stay connected to Bad Ass Coffee of Hawaii on Facebook www.facebook.com/badasscoffeeofhawaii and Instagram www.instagram.com/badasscoffeeofhawaii

www.theoriginalhotdogfactory.com

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To qualify financially for The Original Hot Dog Factory’s franchise ownership, you must have a provable net worth of at least $100,000, and liquid assets of at least $40,000.

Garbanzo Mediterranean Fresh Unlocks Trio of New Flavors for Fifth Annual “Free the Falafel” Celebration “GARBANZO’s signature falafels are always made fresh throughout the day, every day. They are preservative-free, plant-based, dairy-free, meat-free (vegan), gluten-free and totally free, as a sample, every time you walk through our doors.” said Devin Handler, VP of Marketing. “But while the traditional falafel is nearly perfect and craveable GARBANZO prides itself on being inspired by tradition, but not bound by it.

We continue to push the limits of what’s possible to enhance and advance the awareness of how delicious nutritious can be.”

GARBANZO is running its fifth annual “Free the Falafel” campaign, a month-long crusade to spread the brand’s “Feel Brighter Movement.” GARBANZO is breaking the restraints of falafel sameness by featuring a different, uniquely delectable falafel flavors For those who have never experienced a falafel before, Free the Falafel invites you to tap into your sense of adventure and fearlessly explore these unexpected mash-ups of something familiar with something new.

Aligned with consumer preferences for healthier, fresh meal options, GARBANZO is well on its way to making Mediterranean cuisine a staple across the United States.

For more information on Garbanzo Mediterranean Fresh, visit eatgarbanzo.com.

FARMER BOYS PROMOTES DAVID WETZEL TO PRESIDENT AND CHIEF OPERATING OFFICER The promotion comes alongside the announcement that Farmer Boys’ current President and COO, Karen Eadon, has retired after six years with the company and nearly 40 in the restaurant industry.

Farmer Boys®, the farm fresh fast casual chain known for its awardwinning burgers and exceptional service, has announced that David Wetzel, the current senior vice president of operations and a quick-service industry veteran, has been promoted to president and chief operating officer.

In his new role as President and COO, Wetzel will be responsible for driving overall brand strategy, corporate and franchised development, and restaurant performance. Wetzel joined the Farmer Boys team in January 2020 as senior vice president of operations, where he oversaw systemwide restaurant operations and field execution and helped to define the strategic direction for the Farmer Boys brand.

“I am truly humbled and excited to be leading this legacy brand. In the last three

months, I have had the great privilege to watch true leadership from Karen while we have navigated through this unprecedented challenging time for both the world and the restaurant industry,” said Wetzel. “I have big shoes to fill in this new position, but I will work fervently alongside our talented team, franchisees and suppliers to continue Farmer Boys’ calculated growth plan while building the next chapter of hospitality for Farmer Boys guests and team members.”

To learn more about Farmer Boys, view their menu of farm fresh fare, or find the restaurant nearest you, visit www.farmerboys.com and follow the brand at @FarmerBoysFood on Instagram and Facebook, and @FarmerBoys on Twitter.

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Greek from Greece (GFG)’s fast casual empire is growing at a rapid pace

Greek From Greece (GFG) Café Cuisine, the authentic Greek fast casual phenomenon, has signed the lease for a new location at 100 Purchase Street in Rye, New York.

Known for delicious Greek cuisine, pastries and café items imported directly from Greece, GFG Café Cuisine is building on strong growth from the first half of 2020, including the merger and rebranding of its largest competitor in Manhattan and a 31-unit expansion deal.

Located in a mixed retail area near the Rye train station with heavy foot traffic, the 1900-square-foot storefront is one of more than 40 GFG Café Cuisine locations in development across several states.

Construction is expected to begin immediately, with an opening date tentatively scheduled for the fall of 2020.

“Rye is the perfect area for GFG,” said Georgios Drosos, founder and CEO of GFG Café Cuisine. “It has a good variety of restaurants and retail, with plenty of parking. The train is popular with commuters, and we’ll be in a great spot for grab-and-go and café items as well as meals for dine-in and take-out.”

“GFG is on the fast-track,” said Dan Rowe, CEO of Fransmart.

“They have not only signed a deal with their first franchisee in Philadelphia, but they have more than 40 corporate stores opening in New York, Connecticut, Pennsylvania, and New Jersey. It’s the perfect time for franchisees to get on board with this rapidly

growing brand, particularly given the significant opportunity right now, when low-cost restaurant conversions can boost, and possibly double, their ROI.” To learn more about GFG Café Cuisine franchising opportunities, please visit http://go.fransmart.com/ GFGbakery-Cafe.

Donatos Pizza Hires Pasquariello as Senior Vice President of Marketing Donatos Pizza is pleased to announce the hiring of Carol Pasquariello as Senior Vice President of Marketing effective June 23, 2020.

served in 62 non-traditional locations.

Meanwhile, Jane’s Dough Foods products are available in 8,000 grocery stores nationwide.

“We are so fortunate to have someone of Carol’s caliber join the Donatos team,” said Tom Krouse, President and CEO of Donatos. “She is an experienced professional who deeply understands both the consumer and the restaurant operator.”

“I am thrilled to join the Donatos team, a brand that I’ve always respected for its commitment to product quality, the customer and its people,” said Pasquariello.

“Bringing people together is so important, especially in today’s climate, and I look forward to helping the brand connect even more meaningfully with customers through great products and a great experience.”

Pasquariello will be charged with creating and leading an innovative marketing strategy that aligns with and supports the Donatos and Jane’s Dough Foods brands.

Donatos and its franchise partners operate 162 traditional restaurants in 10 states, while Donatos’ products are also proudly

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For more information about Donatos Pizza, visit donatos.com, like on Facebook or follow on Twitter and Instagram.

Jeremiah’s Italian Ice Unveils New CoBranded Concept in Tampa Bay

Wienerschnitzel Franchise Signs 20Unit Area Development Deal in Louisiana Wienerschnitzel, the world’s largest hot dog franchise, is proud to announce a new area development agreement with Lake Charles-based, Henderson Family Restaurants, LLC, to build 20 new Wienerschnitzel restaurants throughout the State of Louisiana over the next 13- years.

Wienerschnitzel is actively expanding outside its historic footprint and is targeting new regions for expansion. The Henderson group is one of several multi-unit food operators who see the value in bringing Wienerschnitzel and Tastee Freeze to new markets that stands out in an otherwise crowded segment.

“We couldn’t be more enthused about our new business venture with Wienerschnitzel,” said Tyler Henderson, of Henderson Family Restaurants. “This is a family-minded business relationship that will continue to grow and prosper in the State of Louisiana.”

“Wienerschnitzel is expanding in Louisiana in a big way and we’re confident the passion and experience of Henderson Family Restaurants will drive this state to be a great success,” said Ted Milburn, Director of Franchise Development for Wienerschnitzel.

With a refreshed focus on franchise expansion, Wienerschnitzel is aggressively pursuing new growth via multi-unit partnerships and area development programs. Wienerschnitzel has fared remarkably well during the pandemic, realizing a spike in sales across the brand through its already popular drive thru, delivery and familyoriented meal options.

Wienerschnitzel has 325 franchise locations in 10 states. To learn more about the benefits of owning a Wienerschnitzel franchise, please visit www.wienerschnitizelfranchise.com.

Jeremiah’s Italian Ice, a Florida-based franchise, is rolling out a co-branded concept in its effort to bring its tasty frozen treats to the Southern U.S. The Florida favorite is expanding its Tampa Bay area footprint to the city of Riverview and will be opening its first ever Jeremiah’s co-branded convenience store location within Tuva Food Hall.

The co-branded model allows current and prospective franchisees the flexibility to invest in Jeremiah’s Italian Ice in a way that works best for their needs. The built-in flexibility of the co-brand model will allow the brand to grow in a wide variety of markets and available footprints.

“Jeremiah’s is the perfect concept for an adaptable space like Tuva Food Hall,” said Co-Chief Development Officer Cameron Cummins. “We want to ensure that we’re giving our franchise partners the tools to make them as successful as possible. The ability to create a full service Jeremiah’s in a little as 175-250 sq. ft. is a clear way to do so. It turns what once was blank space into additional revenue opportunity.”

Located at 8624 U.S 301 in Riverview, the first of three new locations is owned and operated by Divyesh Patel and his business partners who also own and operate several other businesses throughout the area.

“Jeremiah’s was the missing piece to our concept,” Patel said. “We wanted to create a one-stop-shop for families in the surrounding communities, and Jeremiah’s is a family-first brand. It was a perfect fit for our vision, and we are excited to bring such a well-loved brand to Riverview. We can’t wait to start serving up treats to everyone.”

For more information about Jeremiah’s, visit www.jeremiahsice.com

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

Food Franchises:

A Staple in the American Economy

One of the most enjoyable activities for many Americans is going out to dinner. Known as a great time to spend time with friends and family, most of us enjoy an outing to a restaurant or even a drive-thru to take a break from our everyday, busy lives.

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Food franchises are a staple in the American economy – an ideal that was essentially born and grown within the country. The food industry is dominated by restaurants and take out; it also covers grocery stores and beverages. The global food and agriculture industry totalled nearly 8.7 trillion dollars in 2018 (source) – because not only is it a desire for consumers, it’s also a necessity.

And as technology allows the world to grow a little smaller, accessing food, traditions and resources from across the globe has widened the economic palate.

Fast-Food The fast-food industry is essentially a franchise staple. What was once considered to be quantity over quality, has now grown to reach a larger breadth of customers. A lot of fast-food restaurants came under scrutiny when the population became more aware of their health needs and less concerned with fast-paced convenience. The benefit of a franchise is that the model can always be updated and quickly responds to the needs of its consumers. Drive-thrus that used to offer cheeseburgers and fries, with a side milkshake, now come equipped with specialty coffees, desserts, salads and healthy meal options. The fast-food industry now offers choices representative of many Americans.

Quick service restaurants were said to be worth an estimated $256 billion in 2018 (source). As the founder of fast food, 50 million Americans eat fast food every day (source) – making it popular and guaranteed for profit.

The most significant benefit of the fast-food industry is the reputation and brand. You will likely have a huge team of marketers behind you, selling your products without having to do any of the work. Everyone recognizes and loves their favourite quickserve meal deals, and a franchisee would directly benefit from the long-standing reputation of the majority of franchises.

“Food franchises are a staple in the American economy – an ideal that was essentially born and grown within the country. The food industry is dominated by restaurants and take out; it also covers grocery stores and beverages.”

On the other hand, a lot of these restaurants are well established and set up for success in a lot of territories, so finding the right location might be difficult. While it also carries a pretty hefty price tag, it’s definitely worth the investment.

Retail and Grocery Stores There is a tendency to view food franchising as the restaurant industry, but it also includes supermarkets and grocers.

There are over 38 thousand grocery stores in the US alone (source) with Americans preferring traditional supermarkets as their primary source of food supply. While there is competition with warehouses and independent grocery stores, supermarkets dominate this field – with US sales in supermarkets reaching $638 billion in sales in 2014. (source).

If the idea of owning a huge retail store feels overwhelming, with a high price range than one anticipated, there are choices for smaller supermarkets that come with the credibility and reputation of the franchise brand. On the other hand, if you have the budget to invest in a larger supermarket, the profit can be huge. The supermarket specializes in groceries but covers a lot of products, allowing customers a one-stop-shop experience.

People can now pick up all their essential needs, including clothing, toiletries and even home décor while pursuing the aisles.

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“Speciality grocery stores are also a franchising option. Honing in a particular consumer need is the basis of this industry which mainly focuses on the health food trend.”

Speciality Grocery Store Speciality grocery stores are also a franchising option. Honing in a particular consumer need is the basis of this industry which mainly focuses on the health food trend. If you have a passion for a specific market, you could pursue it in a smaller store. As consumers grow more knowledgeable about the benefits of eating healthy, they prefer to invest in such foods. There are health food stores that specialize in particular diets and allergies, while others have extensive knowledge of supplements and vitamins, that aren’t available at regular supermarkets.

It is estimated that the US Organic food market will be worth nearly $70 million (source), especially as Americans become more globally conscious, they are willing to pay for quality over quantity. A drawback of this industry is that it could merely be a fad. Eventually, consumers will find themselves back in the larger supermarket stores, and it’s also a franchise focused on a specific type of customers.

However, it has proven to be a successful smaller form of business over the last decade.

Coffee Shops A franchise that has gained ongoing popularity over the last ten or so years is the coffee shop franchise. A smaller

investment for franchisees, but a hugely profitable one because of the popularity of the product.

Over 50 percent of Americans consume coffee daily and consume over 400 million cups of coffee per day. Similar to fast food joints, a lot of coffee franchises have dominated the majority of territories, but there is still a lot for new venues on other street corners. These type of franchises do live within relative close space, so a lot of consideration regarding population and consumer-based would be necessary. Find a franchisor that would support you before investment and determine the best location for a successful endeavour.

Small businesses are direct competition with coffee franchises, and there is a trend amongst consumers to buy locally. Look at different ways a franchise gives back to the community and how your choice

would allow you to have a leg up on the small business competition. Independent coffee shops make 12 billion dollars in sales alone, and it would be wise to keep a physical distance from any direct competition.

One of the safest, but yet most expensive franchise option is within the food industry, but with some much choice, there are different means to invest less money and gain a great profit and successful outcome. As someone who might be passionate about mixing food with business, the branding that reinforces the success of a franchise is the best route to take when it comes to investment and starting a business.

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:

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Expert Advice: Gary Norris | CEO and Founder | Norris Ventures

3 Important Trends in the Current Restaurant Industry “Restaurateurs who focus on their story are winning in their markets. What do I mean by “story”? What I mean is the how and why. Both independent and franchised restaurants have a story; a reason for doing what they do and where it all began.” who really need to hear it. Telling the story behind the counter, is the trend.

2nd Trend: The Infrastructure

The impact of COVID 19 on this vital industry.

Let’s be clear. The content of this article is quite different from what I would have written the first week of 2020; even still, we have seen restaurateurs and food service franchises rise to meet the challenge this pandemic has posed to their businesses. We have seen resilience and poise in the face of complete uncertainty.

It is my hope that this article celebrates these brave leaders in the restaurant industry, encourages those of you who are looking for light at the end of the tunnel and provides clarity for those of you considering this industry for your future.

The Trends Since January, I have noticed three trends that are driving successful restaurateurs during this time.

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1st Trend: The Story Restaurateurs who focus on their story are winning in their markets. What do I mean by “story”? What I mean is the how and why. Both independent and franchised restaurants have a story; a reason for doing what they do and where it all began. If you are a franchisor, you have the original story. If you are a franchisee, you became a part of that original story when you signed your franchise agreement; however, you now have your own unique addition, as to how your two roads converged. Often, that version will resonate more intimately on a local level to make an even greater mark in your community. Tell it. Tell that story in a way that draws your customers in. It’s how your loyal customers and future customers will connect with you. It matters to all of us. If you read this and understand the importance of your story but you are not sure how to tell it, there are firms who can help you present your unique story to those

The second trend I am noticing is having an infrastructure to pivot. In early February, a client of ours reached out in a bit of a panic. She was not prepared to survive and thrive on third party delivery and carryout service, only. PreCoronavirus, her core revenue stream came out of the dining room and the sudden changes in her downtown location left her wondering what to do. Within a day, we equipped her for online orders, online checkout and staff-delivery within a multimile radius of her downtown location.

This meant selecting a payment processor, plugging in the tech that was needed to process online payments, new photography of a reduced menu offering and several test-runs to ensure ease of ordering, seamlessness order deliveries and cohesion in checkout. When it launched, she saw a couple days of loss; but, after several social media posts pointing her customers to the new service offerings, she saw the modifications gain traction and allow for not only more orders to come in, but larger, catering opportunities she wasn’t expecting.

Infrastructure to pivot, is the trend.

3rd Trend: The Mobility The third trend I have noticed, is a spike in mobile offerings. The mobile concepts I have encountered are still growing in spite of COVID-19. They are food truck franchises and food cart franchises. I like these opportunities right now because they are low-cost entry, lower-cost launch and are able to follow the buyers.

In addition, contactless delivery is the predominant method of serving customers and social distancing during the order process is simple to accomplish. We have helped clients during this season convert a dining in only or dining in mostly engagement to a mobile engagement.

Offering online alone is sometimes not enough to meet your daily sales goals.

Offering a mobile service can bridge the gap between breakeven and profitability.

Consider the potential of bringing your reduced menu to the consumer. Mobile offering, is the trend.

“Offering a mobile service can bridge the gap between breakeven and profitability. Consider the potential of bringing your reduced menu to the consumer.�

To summarize, when it comes to this season of stay at home orders and social distancing: 1. Tell your story.

2. Be prepared for an online revenue stream.

3. Be willing to make your offerings mobile.

Gary Norris is the CEO and founder of Norris Ventures, a firm that helps turn successful restaurant and retail concepts into sustainable, scalable systems; market-ready for either franchising or corporate replication. With over 30 years entrepreneurial experience, Gary and his team at Norris Ventures lock arms with their clients to ensure success and sustainable growth, every step of the journey. Whether you are considering franchising for your business or you need to kick start franchise growth, Gary and

Gary Norris

the Norris Ventures Team are the true turn-key solution.

You can reach Gary at 828-578-3718 or email him at GaryGale@NorrisVentures.com Learn more about Norris Ventures at www.NorrisVentures.com

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Expert Advice: Heather Ripley | CEO | Ripley PR

Amid a Growing

Appetite for Plant-Based Foods, is Your

Brand Staying Current?

Heather Ripley

Food Business News featured a headline story in December of 2019 that read, “Trend of the Year: Plant Based Foods.”

As we hit the middle of 2020 it looks as though the upward trend will continue.

By all measures, though, it’s more than that. It really is a lifestyle, and it seems that everyone is jumping on the plant-based food train. The question your business

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should ask itself is; will your brand be a part of this health- and planet-friendly movement?

Consumption and demand for plant-based foods is growing Plant-based food options are increasing not only in grocery stores, but in fast-food and fast-casual franchise restaurants.

According to The Good Food Institute (GFI), 58 chain restaurants offered at least one plant-based food option on the menu in 2019. In addition, GFI reports that sales of plant-based foods are still climbing rapidly.

Its data revealed purchases increased 11 percent in 2019 and 29 percent over the last two years.

GFI also reports that sales of plant-based meats from U.S. food distributors to food service companies (which includes restaurants, corporate lunchrooms, college campus dining halls and other dining operations) increased 37 percent in 2019.

If you want to appeal to the millennial or Gen Z consumers (who make up over 30 percent of the U.S. population) you will definitely want to consider adding plantbased food choices to your franchise menu.

“According to a study by NPD Group, 95 percent of people who ordered plant-based burgers in 2019 were not vegans or vegetarians. These consumers purchased 228 million servings of plant-based burgers in 2019.”

How big is consumer demand? According to the Plant Based Food Association: • One third of Americans are actively reducing their meat and dairy intake • 79% of millennials (aged 24-38) surveyed already eat plant-based meals • 30% of millennials surveyed want to eat more plant-based foods • 79% of Gen Zers (aged four-24) surveyed eat plant-based meals one to two times a week • 60% of Gen Zers surveyed want to eat more plant-based foods

Consumer demand isn’t a vegan or vegetarian thing According to a study by NPD Group, 95 percent of people who ordered plantbased burgers in 2019 were not vegans or vegetarians. These consumers purchased 228 million servings of plant-based burgers in 2019, up 10 percent from 2018, while beef burger purchases remained flat.

People who identify as vegan comprised one percent of the population in 2014, and about six percent in 2017, an increase of 600 percent. While vegans and vegetarians are fueling some of the increase in plant-based food demand, it’s obviously something the general public is interested in too.

The reasons people want to eat more plant-based meals are varied. Consumers who don’t want to eat animals are looking for protein options, folks who have high cholesterol or have heart issues are also looking for healthier meat alternatives, and

people who want to reduce their impact on the environment by reducing their meat consumption are all part of the emerging plant-based food market. But whatever the motivation, you do not want to miss out on reaching this new breed of consumer.

Adding plant-based options will increase your profits Smart brands are making profits by listening to consumers and taking action. In the New York Post, a Burger King spokeswoman said the plant-based Impossible Whopper was “one of the most successful product launches in brand history, leading to outstanding comparable sales of positive five percent” in the period of one quarter. Burger King and White Castle were two of the early adopters, and success stories, in the U.S. plant-based fast food burger launch.

Brands that didn’t join in right away watched others enjoy early financial and business successes and have since decided to give it a try. In 2019, according to Business Insider, top chains offering

plant-based options included Taco Bell, Hard Rock Café, Cheesecake Factory, Red Robin, Carl’s Junior, Blaze Pizza, Dunkin’, Hardees and Denny’s and other chains are in talks about adding to their menus.

But the bottom line for a franchise restaurant is profitability, and according to some in the food industry, plant-based meats are a win-win for both consumers and the restaurant. Profit margins can be much higher with some plant-based menu items, because the product costs less for the restaurant to purchase than animal meat products. For the consumer, some of the cost savings can be passed on, and as an added benefit they will get a healthier meal.

Heather Ripley is CEO of Ripley PR, a global public relations agency specializing in B2B and franchising.

Orange Orchard, a division of Ripley PR, champions franchisors that cater to environmentally-conscious consumers.

For additional information, visit www.ripleypr.com or www.orangeorchardpr.com

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Expert Advice: Mitch Cohen | Multi-Unit Franchisee and Founding Partner | PerforMax Franchisee Advisors

Why Restaurant

Franchisees Should Consider Diversifying with Non-Food Concepts

“Owners and operators with an array of concepts have capitalized on the investment strategy of diversifying to gain more market share in a desired territory and increase the potential for a greater profit.”

Mitch Cohen

Whether you’re a singleconcept franchisee diversifying for the first time or a franchise industry veteran looking to add another brand to your multi-concept portfolio, diversification is not only a smart investment strategy, it’s a recommended one.

When it comes to the foodservice industry, the restaurant landscape has become increasingly overcrowded. Prior to the COVID-19 pandemic, the limited service restaurant segment was growing at an average 3.8 percent per year since 2015, according to research by IBISWorld. While this trajectory has most certainly shifted,

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foodservice franchisees still face fierce competition. As the economy recovers and they become ready to invest again, franchisees in this segment should be looking at alternative concepts that allow them to continue expanding their portfolios while potentially softening the blow of major economic disruptions. One way to do so is to venture outside of foodservice and develop emerging concepts to broaden a book of business, which can potentially minimize risks and maximize opportunities.

Navigating the Congested Foodservice Industry Today, restaurant franchises make up more than half of the foodservice industry and have become increasingly crowded in the last few years. Due to competition within the industry, the trend has surfaced for aspiring or existing multi-unit franchisees to segue into new concepts as a strategy to combat this saturated segment.

When diversifying for the first time, most existing restaurant franchisees will traditionally start by staying in the same industry and adding another restaurant brand to their portfolio that won’t cannibalize their other concept(s).

However, as franchisees continue to expand

their portfolios and develop additional units in different subcategories, many eventually hit a roadblock and struggle to find opportunities that are a fit for them.

Diversifying Opportunities for an Investment Advantage While some franchisees start off with non-competing food concepts to evolve their portfolios, there’s a broader book of opportunities in non-food franchises.

Reaching the next level as a multi-unit franchisee requires one to build a portfolio that not only displays a diverse group of brands in the industry they’re currently invested in, but outside of that space all together. Unique franchise concepts, aside from those in the foodservice industry, are noticing a shift as more signed agreements have been made with seasoned professionals primarily experienced in the restaurant business than others.

One brand that’s seen this change in landscape is Sola Salon Studios. Now with more than 500 locations, Sola has become the fastest growing salon studios franchise with its network being comprised of multi-unit owners, as well as franchise groups with much of their investments in restaurant brands such as Panera Bread, McDonald’s, Taco Bell, Pizza Hut and

“Franchisees seeking to grow their unit count are encouraged to step outside their comfort zone and traditional mindset of what a successful franchise model looks like.”

more. Restaurant operators, like myself, are attracted to the simplicity of Sola’s model when compared to the complexities of today’s foodservice concepts. At the heart of Sola is a compelling real estate model combined with high-level support. Each Sola location features 20-40 boutique, move-in-ready salon studios all under one roof where beauty professionals can individually operate their own businesses without the risk and overhead of traditional salon ownership. This is one example of many that multi-unit franchisees can tap into.

Owners and operators with an array of concepts have capitalized on the investment strategy of diversifying to gain more market share in a desired territory and increase the potential for a greater profit. As small business owners invest in their brands and compound the return on investment by acquiring diversified units, they are ultimately minimizing the risk that can occur from a fluctuating economy, which is now clearer than ever. During unprecedented times like we’re facing now, there’s not one industry that hasn’t

been impacted, but how a brand comes out of this differs. Having a diverse portfolio gives entrepreneurs more flexibility as they work out a recovery plan.

Opportunity for a New Passion A perk of being an entrepreneur in the franchising industry is having the ability to invest in a brand that fascinates or speaks to you. For instance, many owners and operators of restaurant concepts tend to be “foodies” either by nature, going into the business, or as a result of being part of the industry. Exploring investment options that are different than the traditional investment portfolio will not only give franchisees the opportunity to step outside their comfort zone, but also invest in a passion they may not have otherwise given much attention to.

Over the years, my partners and I have developed a passion for empowering and supporting aspiring business owners fulfill their dreams of being in business for themselves, but not by themselves.

Sola is a concept all franchisees can relate to as their business model helps other entrepreneurs achieve their dreams with a

structure in place to help alleviate some of the pressure of running their own business.

Take Away Franchisees seeking to grow their unit count are encouraged to step outside their comfort zone and traditional mindset of what a successful franchise model looks like. Not only will this help embellish a portfolio but will allow for an increase in market share availability rather than competing solely in a saturated market.

Mitch Cohen has 37+ years of experience operating top-performing restaurant concepts like Jersey Mike’s Subs, Dunkin’, Baskin-Robbins and Nathan’s Famous Hot Dogs. He is a founding partner of PerforMax Franchisee Advisors and has been a longstanding pillar in the franchising community, serving on the International Franchise Association’s Board of Directors since 2016. In March, he expanded his portfolio outside of food for the first time and is developing six Sola Salon Studios in New York.

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