FranchisingFeature food franchising - part 1
o cto ber 2019
Family Business is the Bread and Butter of ÂŽ
Subway Restaurants
the revival of
food service franchise systems
special feature
food franchsing - Part 1
four things to look for when
investing in a restaurant franchise
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what’s new!
Huddle House Inc. Makes Strategic Purchase of Perkins
Late-Night Miami Sushi Hotspot Set to Roll Out Nationwide Franchises Sushi Sake, a popular late-night Asian cuisine hotspot in south Florida for over a decade, is spreading its Miami vibes across the nation. In addition to standing out with premium quality seafood and infusing Latin flavor into select menu items, Sushi Sake restaurants offer a flexible model that can be either a combo of a traditional Japanese Teppanyaki house/sushi bar – or a local neighborhood sushi bar. The vibrant restaurants are expected to energize communities with their young, contemporary atmospheres and raise the bar for the Asian restaurant experience. Started in 2009 by Argelio Jr. Aguayo and later joined by brother James Aguayo, the duo have complemented each other’s skills to take the brand where it is today and are both aligned on a vision for the spotlight as the nation’s top Japanese restaurant franchise. The franchise opportunity offers simple operations and a management team with a strong commitment to franchise success and decades of restaurant experience. Sushi Sake is initially targeting Florida, Texas, Illinois and New York for growth, and is available in both urban and suburban markets.
Huddle House, Inc. has made a strategic purchase of Perkins Restaurant & Bakery, the storied and iconic chain with approximately 342 locations, which has become a staple in communities throughout the United States and Canada. While the terms of the purchase were not disclosed, the transaction is expected to close on October 21, 2019. The Huddle House Executive Leadership team will manage Perkins out of its Atlanta headquarters, running each of the concepts as separate brands, yet leveraging resources and proven strategies to build efficiencies. There are no plans to convert any existing units to Huddle House restaurants or vice versa. “Strategically, this is a very good fit. Both Huddle House and Perkins are breakfast-first concepts and we pride ourselves on our ability to bring families together through remarkable food and homestyle meals,” said Huddle House’s CEO Michael Abt, who will be the top executive of both brands. “This acquisition is by careful design and calculation, as the brands fit well together serving complementary markets but supported by similar resources.”
“Sushi Sake has become a staple in South Florida,” said James Aguayo, co-founder of Sushi Sake. “Our devoted fan base has allowed us to grow to 14 locations throughout the Miami area, providing a solid foundation for franchising across the country. There’s no other concept out there that can stand up to our quality of sushi and hibachi like Sushi Sake.”
Combining Huddle House and Perkins results in more than 700 locations open or under development between the two brands that generate collectively over $800 million in sales. The Huddle House Executive Leadership team has reaffirmed its devotion to providing the proper resources and support for the unified organization at every level – for franchises across each system and to all companyowned units.
www.sushisakemiami.com/franchise
www.huddlehousefranchising.com
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Quaker Steak & Lube Signs New Franchise Agreement for First Philadelphia Area Quaker Steak & Lube, one of the nation’s leading family casual-dining restaurant chains, has signed a franchise agreement with Philadelphia commercial construction developer John Tripodi to open a new restaurant in Bensalem, Pa., approximately 20 miles northeast of Philadelphia. The full-service Quaker Steak & Lube restaurant will be located at 2900 Street Road in a space formerly known as The Pub 2900. Evidenced by this agreement and three others that were signed during the previous 45 days, Quaker Steak & Lube is drawing the attention and interest of new franchisees nationwide as a result of the brand being repositioned for strategic growth. The restaurant chain’s
leadership and support teams have elevated the brand through improved food and beverage offerings, heightened service and operations standards and an integrated marketing strategy set to position the chain for continued success. “We are excited to be bringing Quaker Steak & Lube’s award winning food to this new Pennsylvania market,” said Bruce
Lane, Vice President. “Philadelphians are going to love our craveable wings, burgers, steaks and ribs, not to mention all of our handcrafted cocktails. We look forward to the success of this franchise and to becoming the new favorite restaurant in Bensalem and the surrounding area.” Go to www.lubefranchising.com for more information.
Dunkin’ Simultaneously Opens Three Restaurants On Fairfield University Campus to students, including a full-service dining experience located at the John A. Barone
Campus Center, which includes some of the brands Next Generation features such as
Nitro Coffee. More “express” models will be available at the DiMenna-Nyselius Librabry and Charles F. Dolan School of Business.
“Fairfield University is excited to welcome Dunkin’ to our beautiful campus. Two great brands….exceptional coffee and
an exceptional Jesuit education go hand
in hand…Stags do run on Dunkin,” said
Jim Fitzpatrick, Assistant Vice President, Fairfield University.
Grand opening celebrations took place
throughout the day at all three locations,
including ribbon cuttings at each restaurant, complimentary giveaways and tastings, in
addition to a chance for participants to win
the opening of three restaurants on
The restaurants mark the first to open on the University grounds and will be replacing a Starbucks and Einstein Bros Bagels.
Fairfield University campus in September.
Three different models will be available
www.dunkindonuts.com/en
Dunkin’, America’s all-day, everyday stop for coffee and baked goods, announced
free coffee for a year for those who visited each location.
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what’s new!
Baskin-Robbins Signs Multi-Unit Deal to Develop 10 Shops in Upstate New York
Slater’s 50/50 Partners With Walmart to Launch its Famous 50/50 Burger Patties Nationwide
Baskin-Robbins, the world’s largest chain of ice cream specialty shops, announced the signing of a multi-unit agreement to develop 10 new locations across Upstate New York, including in Syracuse and the Southern Tier, in addition to Wilkes-Barre/Scranton, Pennsylvania.
The Signature 50% Bacon and 50% Beef Patties Are Available Now At All 2,500+ Walmart Locations
With a portfolio of 40 Dunkin’ restaurants and one multi-brand location, the deal was signed with franchisees Manish Patel, Sarika Patel, Krunal Patel and Tarak Patel of Bapa Chambers Rd Ice Cream, LLC. The first store of the 10-unit deal celebrated its grand opening in Horseheads, New York in mid-July. The Horseheads BaskinRobbins marks the brand’s first stand-alone “Moments” store location to open east of the Mississippi and overall third “Moments” design location to open. The new “Moments” store brings contemporary décor with bright colors paired with menu innovations to spark joy and happiness in customers.
Slater’s 50/50, the full-service restaurant concept known for creating the 50/50 burger patty made with 50% ground bacon and 50% ground beef, has finalized an exclusive partnership with Walmart to bring its iconic 50/50 burgers to all 2,500+ locations across the United States. The burger patties, which will be sold in individual packages, are now available in-stores in the freezer section and will soon be sold via the Walmart website.
Looking ahead, the team plans to develop two additional Baskin-Robbins shops in Painted Post, New York and Bradford, Pennsylvania, as part of their 10-unit deal. In addition to the Baskin-Robbins deals, the team will be growing their portfolio with Dunkin’ locations in key markets across New York.
“The Slater’s 50/50 patty started a major craze when the restaurant first debuted in 2009, and we’re proud to finally bring this beloved bacon-infused burger patty to homes across the United States,” said Michael Nakhleh, CEO of Elite Restaurant Group, which owns Slater’s 50/50. “Making this product available nationwide has been a focus of the brand since day one, and we finally found the perfect partners in Walmart who recognize this product’s limitless potential. We plan to expand Slater’s product offerings to include even more fan-favorite menu items in the near future.”
Franchise opportunities remain available in Los Angeles, California, Phoenix, Arizona, and Washington D.C. BaskinRobbins combines delicious treats with a simple operating model. Franchisees enjoy convenient hours of operation, minimal equipment and little product waste. They also benefit from awardwinning training programs and comprehensive operating systems designed to help build their business.
Slater’s 50/50 operates 11 restaurants in California, Nevada, Texas, and Hawaii, and has 7 restaurants being built and in development across the country. The restaurant concept is owned by Elite Restaurant Group, a multi-concept operator focused on fostering growth for emerging restaurant chains, which plans to aggressively grow the Slater’s 50/50 brand across the U.S. in the next few years.
For additional information, visit the Baskin-Robbins franchising website at www.baskinrobbinsfranchising.com
For more information, please visit www.slaters5050.com
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Potbelly Sandwich Shop Accelerates MultiUnit Franchise Growth Potbelly Corporation, the iconic neighborhood sandwich shop concept, announced the signing of three new franchise agreements and the continued momentum in its franchising program. Over the last six months, Potbelly has signed franchise agreements that, when fully built out over the coming years, will nearly double its franchise footprint with multi-unit development deals for a total of 38 units spanning Las Vegas, Nevada; Tampa, Florida; and the Carolinas. In addition, Potbelly has opened a number of franchise stores this year that are driving brand penetration across several areas of the country, including recently opened shops in Irvine, California; Odessa, Texas; Richmond and Charlottesville, Virginia; Rochester, Minnesota; and Charlotte, North Carolina. While it expands franchising strategically across the country, Potbelly continues to refine its operations and introduce new
initiatives designed to grow shop revenues, specifically as it relates to new initiatives including an enhanced menu, a national partnership with DoorDash and its “Shop of the Future” platform. As the brand continues to expand throughout the United States, Potbelly
is awarding franchise opportunities to qualified multi-unit groups who are looking to add another successful segment to their portfolio. For additional information about the Potbelly franchise opportunity, visit www.potbelly.com/franchising
Empire Franchise Group Formed to Dominate Food & Beverage Industry Franchise leaders Dennis McKinley of Detroit Equities and Greg George of Rising Phoenix Group officially closed a deal to form Empire Franchise Group. In this agreement, they will acquire 100% of Franchise Genies to create one of the nation’s largest franchise development companies. Rising Phoenix will invest in current Detroit Equities brands and together they will develop corporately own brands and will also seek to strategically acquire performing brands that have under five units. The deal will bring a total of 12 brands under their management umbrella. All are expected to close by the end of August.
Food & Beverage Franchises under Franchise Genies include: Roll On In Sushi Burritos & Bowls, Buzzed Bull Creamery, Mr. Bagel Meister, Barry’s Cheesesteaks, Burrito Shak, Thumbs Up Diner, and Peño Grill “The Franchise Industry is constantly evolving,” says George. “With Dennis and I bringing our resources and experience together, the Franchise Genies brand will serve as a one stop shop and source for everything related to franchising.” “The future brings opportunity, adds McKinley. “Today we are deciding to be a part of the future.” Empire Franchise Group has a significant
amount of experience in owning franchises, being the franchisor and taking multiple brands from one off to multi-million-dollar brands. They have been franchisors, franchisees, franchise representatives, venture capitalists and investors so they know what to look for in an emerging brand. To learn more information, please visit the Franchise Genies website at www.franchisegenies.com
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Cover Story: Subway® Restaurants
Family Business is the Bread and Butter of Subway® Restaurants For many, family provides a necessary reprieve from the everyday stresses of work life. But what happens when business is a family affair? At Subway® restaurants, working with family means having a community that will celebrate your successes and where trust is a given. In August, the world’s largest restaurant chain celebrated the 54th anniversary of its founding. Throughout its history, families have been a key ingredient to Subway’s success and without the brand’s world-class employees, Franchise Owners, Business Development teams and their families, the past 54 years would not have been possible. Subway began as a family-owned business and remains so to this day. Across the
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globe, Franchise Owners, Managers and Business Development Agents have created their own family-run businesses. Multiple generations of families have provided their communities with affordable, delicious, better-for-you meals. At Subway’s global convention this past July, three families gathered to discuss what inspired them to help grow Subway within their own families, each with a unique story. The Dalton family has been with Subway for 34 years and considers the brand their second family. The father-and-son team are responsible for nearly 1,000 Subway restaurants across the Southern U.S. Since 1989, the Grewal family has built their business of more than 50 owned Subway restaurants and nearly 1,800 others in their territories across the U.S. and Canada, and they have over 30 family members working for the company at some capacity. For more than 30 years, the development of Subway restaurants in West Virginia has
been led by a member of the Hammond family, with the second-generation Hammond team now taking over. For the company’s younger generation of Business Development Agents (BDAs), there are a few whose childhoods were filled with days of watching their parents work various roles throughout the Subway system. This exposure provided insight into the ins and outs of running the business and into all that can be achieved through hard work and dedication. For some, it even provided early job inspiration. “I had the privilege of watching my dad build something from nothing, and I experienced the fruits of his labor. I grew up with the brand and learned the business every step of the way. My parents even have a video of me saying at my Kindergarten graduation that I wanted to be a Subway manager when I grew up,” said Tara Hammond-Canfield, who became a BDA in 2018.
While many of Subway’s youngest BDAs benefitted from growing up with the brand, their parents had the opportunity to watch their children evolve as leaders. Even though Hardy Grewal has decades worth of memories with Subway, getting to witness his children grow in the business has been a highlight of his career. “It’s an honor when a child chooses to follow in your footsteps. Watching your kids find their own niche and excel is an even greater feeling,” said Grewal. “My son Shawn has done an amazing job in the leasing space, while my son Jesse has been able to produce sales growth in his territory over the past two years.” “My earliest memories are of being in the restaurants. It was my summer and weekend job through high school and college. I’d make sandwiches, sweep floors – starting from the ground-up, you get a great understanding of the nuts and bolts of the business. After working as a CPA for a few years after college, I got into the family business as I wanted to work for myself and for my family,” said Jesse Grewal. Although working with family members may have its obvious challenges, the multigenerational families at Subway believe that working together has allowed them to work in an environment where loyalty and trust are prioritized. By instilling these values into every aspect of their business, the Dalton family has created an environment that celebrates everyone’s contributions and puts the business first.
Grewal Family
Hammond Family
“Having a shared sense of integrity makes it easy to make the right decision. We exhibit strong family ties around the office, and this has rubbed off on our staff,” shared Mark Dalton. “Our shared values have helped everyone feel a sense of ownership of the company’s mission.” While reminiscing, there was also talk of the future. “What’s not exciting about Subway’s future?” asked Chelsie Hammond-Kelly. “With the recent product innovation and branding, I can’t think of a time where it’s been more exciting to be a part of the Subway family.”
Dalton Family
www.subway.com
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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 1 Everyone loves to eat - it’s not just a means of survival, it’s a way of life. Americans have taken food to the next level and made it an experience, rather than a necessity. Whether it’s fast food on the run, or high dining in a romantic setting, it’s one of the most enjoyable parts of the day. The food and drink industry reached over $745 billion in the US in 2015, 20% of Americans visit a quick service restaurant once a week and 20% also visited a full service restaurant. With people paying money for experience, rather than goods and tangibles, the industry is rising. More people are opting to eat out and take in moments, rather than wasting time cooking and cleaning. Consumers have embraced the idea of paying for convenience as well as a means to save time to be with their families and friends.
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The food industry not only offers a service, but provides an experience for customers to sit back and relax with the people they love. There are a huge amount of franchises specializing in food and drink and its expanded its doors well beyond the fries and burgers. From speciality kiosks and food trucks, you can’t walk a block without smelling something delicious. The competition may appear thick when you see the many venues available across any given community, but people tend to try them all out, more than once.
Fast Food If familiarity and consistency is something you find comfort in, than a fast food franchise might be the best bet. It has a large start up fee, and you have to secure a spot in the territory of choice (there might already be several fast food restaurants in that area), but the profit is nearly guaranteed. Fast food is familiar and reliable in America, it’s lined along the highways
“There are a huge amount of franchises specializing in food and drink and its expanded its doors well beyond the fries and burgers. From speciality kiosks and food trucks, you can’t walk a block without smelling something delicious.”
for long drives and family trips and it’s propped with a drive thru for those quick fixes. Nowaway days, fast food restaurants come with more than burgers and nuggets, but appeals to the masses with smoothies, desserts, salads and wraps. The menu is larger to garner even more customers and its accessibility keeps people coming in for more. The branding alone brings in many people on a day to day basis, in the case of fast food, people like to know what they are getting. They appreciate the value of the experience, but also will pay to get the exact same thing they got the last time. According to one study, 85 million Americans eat fast food everyday (source). People are busy, working hard and spending time on the road, making room for quick and fast meals to become a part of everyday life. This ongoing trend has created a well known profit in the franchising world - it brings in over $570 billion (source) - the money alone speaks for itself.
“The food industry not only offers a service, but provides an experience for customers to sit back and relax with the people they love.”
Coffee Shops With some coffee being sold at just $2 a pop - it’s hard to imagine such a small cafe creating success and it seems like there are places to get your caffeine fix saturating the place. Yet, if you walk by a one at any given time, the seats are full and the lines are long. With the ability nowadays to order from your phone to grab a quick latte or have it delivered to your door, the customer base is even higher. The coffee shop competes with small
businesses owners, but similar to the fast food restaurants, people do appreciate the familiarity. They know what is on the menu and what flavours to expect from a franchise. Americans consume 40 million cups of coffee a day, (source) and that’s not a luxury they are willing to give up. Just like food, it has also become an experience - a time to catch up with friends, or a small moment away from work or to treat yourself after a long day. You can pop in for a visit or order at the drive thru, it’s catered to the many desires of everyone.
Franchising USA
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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
“People are ordering food trucks for parties, and weddings or expecting certain options at festivals and community events. The initial door opening might need an extra push but that’s where franchising allows an upper hand compared to small businesses.”
Food Trucks Food trucks used to be a rare site with deep fried food served at festivals or lined up on the streets of downtown. There’s been a change in the food industry to be more unique, more palatable, and fancier even in the smallest spaces. What once served fries with gravy and hot dogs with a few fixings, is now showcasing menus with variety and flavour in a more gourmet style. Lunch on the side of the street never tasted so good. The industry has risen 12.4% and there are approximately over 4,000 food trucks in America. Franchises have recognized the increased need and expanded to the food truck industry. Some options come directly from well known restaurants expanding their business to the street, while others are only known in the food truck industry. For those looking for a smaller start up fee and a mobile business in the food market, this is a great choice that is gaining more and more customers and profit. People are ordering food trucks for parties, and weddings or expecting certain options at festivals and community events. The
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initial door opening might need an extra push but that’s where franchising allows an upper hand compared to small businesses. A franchisee will support you with your customer base and reputation through marketing and advertising. Easy branding comes through in social media posts made by locals for free and hashtags linked to your business. This type of food franchise would be well appreciated by someone involved in the community and willing to work hard for word of mouth credibility. Though the food truck could be a limited business for those living in areas with a harsh distinction between the four seasons What was once considered to be pizza joints and walk-in family restaurants, is now a huge category of franchising with many options. Those interested in taking a bite out of the food franchise ave a lot of different options to consider. The market has been flooded with easy and quick franchises that cater to the busy lives of Americans, while also appealing to the many taste buds, with a high end gourmet
choices at a great price. People appreciate good food, while franchisors appreciate a great profit, which can come easy with the most suitable franchise in the food market. Take the time to look over the territory directly and speak with locals about their expectations and where they currently enjoy eating to get a sense of demand and flavour within your community. An area assessment of your surroundings can help narrow down the path you would consider before investing. There’s more to bite off than chew in the food industry; you just have to pick one that best appeals to your senses. Look out for our next special feature:
FOOD FRANCHISING PART 2 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.
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FOCUS: L i t tl e Ca e s a r s
Convenience, Quality, and Value
Little Caesars Pizza Has the Recipe for Growth “Little Caesars brand, history and simple business model are great benefits to franchise developers.” - Ed Ader
As the largest carryoutonly pizza chain in the world*, there’s no denying that Little Caesars is doing something right. The company is an international brand and household name – it’s come a long way since its start as a single store in metro Detroit in 1959 and the opening of its first franchise in 1962. Today, Little Caesars is seeking additional growth opportunities, and is looking for franchisees to help bring HOT-N-READY® pizza to traditional markets in a wide range of communities nationwide. “Little Caesars brand, history and simple business model are great benefits to franchise developers. We have a simple operating system that works, and franchisees appreciate the strong foundation we provide which allows them to focus on what is important to them – growing their business,” said Ed Ader, Director of Franchise Development for Little Caesars.
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“We have a simple operating system that works, and franchisees appreciate the strong foundation we provide which allows them to focus on what is important to them – growing their business.” - Ed Ader
A Brand You Can Believe In
Innovation At The Core
The brand equity built throughout the
“Little Caesars takes pride in its ability
Little Caesars is known for breakthrough innovations like Pizza!Pizza!, HOT-NREADY, and now, Pizza Portal Pickup. With the Pizza Portal, customers can create their own pizza and prepay on the Little Caesars mobile app and receive a notification when their order is ready. When they arrive at the store, they bypass the counter and go directly to the Pizza Portal pickup, inputting their 3-digit pin or scanning a QR code to retrieve their hot, fresh order.
sacrifice quality for convenience or price,”
Support You Can Rely On
past nearly six decades has grown Little Caesars fan base and is a driver of the
company’s development. Little Caesars
distinction of being named “Best Value in
America”** for the past eleven consecutive years is proof of its commitment to
satisfying those customers by providing one of America’s favorite meals at an affordable cost.
to appeal to consumers who don’t want to added Ader. “Our operating model – to provide affordable pizzas made using
quality ingredients that are ready when you are – means customers never have
to choose. They can have it all. It’s a win across the board.”
Little Caesars has a dedicated franchise development team that supports qualified franchisees in implementing the processes and systems that have helped so many other franchisees excel. Franchisees are equipped with the tools
they need to follow the brand’s proven system, including ongoing training, architectural services to help with design and construction, preferred lenders to assist with financing, sustained research and development of new products, and continued, effective marketing promotions.
Join Our Franchise Family As part of an aggressive growth strategy, Little Caesars is looking for franchisees to expand traditional stores in a wide range of communities nationwide. The company also offers opportunities in non-traditional franchise venues, including convenience stores, college campuses and military bases. In such cases, Little Caesars works closely with franchisees to develop locations with customized architectural and build-out plans. For more information about Little Caesars and to view available markets, visit www. LittleCaesars.com or call 1-800-553-5776. *Largest carry-out only pizza chain in the US – based on net number of stores in 2017 **Highest-Rated Chain, “Value for the Money” based on a nationwide survey of quick-service restaurant consumers conducted by Sandelman & Associates 2007 – 2017.
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Expert Advice: Larry Sidoti, Chief Development Officer, Garbanzo Mediterranean Fresh
Four Things to Look for When Investing in a Restaurant Franchise Differentiators in the segment Franchises that succeed are those that have notable differentiators allowing it to stand out to consumers. This is especially important if you invest in a crowded space. Is the concept different than anything else out there? What makes it stand out? These are important questions to consider.
Larry Sidoti
So, you’re thinking about investing in a restaurant franchise. It’s a big step. There are plenty of factors to consider on your search – the restaurant space has thousands of options. Deciding between an established concept or an emerging one, fast casual or fast food or between a crowded segment or something entirely new only scratches the surface of what needs to be assessed. I’ve been in the franchising business for more than 20 years and even founded my own concept. Below I’ve outlined the four factors I believe to be among some of the most important things to vet out before “you sign on the dotted line.”
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One crucial element to look at is menu innovation. If a restaurant’s menu looks comparable to competitors’ menus, it may not be enough to win over consumers. That is, unless there are other factors that differentiate the menu. For example, at Garbanzo Mediterranean Fresh®, our core differentiator in the fast-casual Mediterranean space is our preservativefree ingredients, bold flavors and scratchcooking, which sets the brand head and shoulders above the rest. Looking for qualities like these will lead you on the right path. Other differentiators to seek out include unique ways of implementing technology, a one-of-a-kind marketing strategy, the restaurant atmosphere (or look and feel) and anything else that contributes something extra to the customer experience. Essentially, when you’re there, it should feel like a remarkable experience – it should feel “fresh.”
Effective unit-level operations and economics It is critical to vet the effectiveness of the unit-level operations and economics a
restaurant franchise has in place before investing. When scrutinizing a restaurant franchise opportunity, check out one of the existing restaurants and observe how things are run for your own eyes. From the processes in place in the kitchen to the technology used, seamless operations are a strong indicator of success. Economics, of course, are equally as important. Take a hard look at the unit-level costs and revenues; financial efficiency is the key to a successful business. Another item to evaluate is the restaurant’s additional revenue streams, like off-premises. For example, Garbanzo restaurants offer catering which generates additional revenue and allows our product to reach new consumers.
Strong corporate leadership team fit for franchising Whether you are a veteran franchisee or just starting out, having a solid team at the top of the franchisor organization is a key factor in franchisee success. To start, the corporate team needs to be well-versed in the segment the concept lies in. Another trait to seek out in a franchisor team is their dedication to franchising, especially if the concept is new to franchising or has a heavy corporate footprint. If they aren’t committed to growing through franchising and supporting their franchisees, your journey will be rockier. That being said, some concepts that are
“If you want your restaurant to succeed, you need differentiators, a proven model, effective leadership and the right markets available for development. By focusing in on these four factors, you will have an easier time assessing concepts and investing in the right one.”
committed to franchising yet have a strong corporate footprint in place can benefit franchisees. A corporate presence, means the franchisor has “skin in the game” and operational credibility. They can test new initiatives at corporate units before rolling them out to franchise locations, bringing franchisees only proven processes. Also, make sure you look at what the franchisor does to support new and existing franchisees. You will want to work with a team that will help you get your restaurants off the ground and be successful on an ongoing basis. By looking into the leadership teams’ ability to grow, maintain and evolve a franchise, you can get a firm idea of how they’ll support you in your next endeavor.
Available, smart territories Having available territories is among the most important things to look into when considering a restaurant franchise. If a concept has oversaturated every possible market, it will likely experience difficulty growing.
“Whether you are a veteran franchisee or just starting out, having a solid team at the top of the franchisor organization is a key factor in franchisee success.” In addition to available territories, make sure you go into a market that is compatible with the concept. Understand market dynamics and how it ties to restaurant concepts you are considering. For example, a restaurant concept that is very old school may not be well received in metropolitan, trendy markets, and vice versa. In addition to these tips, one critical and often overlooked place to start is with yourself. You have to recognize that in franchising, you’re signing up to be an implementer, not a creator. If you’re ready for franchising, then a ready-made business model along with training, guidance and support await. With so many factors that go into deciding on a restaurant franchise, it’s easy to get overwhelmed. If you want your restaurant to succeed, you need differentiators, a
proven model, effective leadership and the right markets available for development. By focusing in on these four factors, you will have an easier time assessing concepts and investing in the right one. Larry Sidoti is the Chief Development Officer at Garbanzo Mediterranean Fresh. Larry is a veteran in the food and beverage industry with over 20 years of restaurant and franchise experience. Larry began his career in the mid 1990’s when he founded the raw juice and smoothie concept, Juice it Up, which he grew to more than 180 units. Since departing in 2008, Larry has served in key operational and development leadership roles with several highlyrecognized and respected concepts. eatgarbanzo.com
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Expert Advice: Christopher Conner | President of Franchise Marketing Systems
The Revival of Food Service Franchise System Food service has long been the foundation of franchising and in most people’s opinion, started what has become the franchise industry. Certainly, McDonald’s, Kentucky Fried Chicken and Subway made generations of consumers realize and begin to understand what franchising was and opened the doors to countless other brands both in food service and outside of the segment. During the great recession, when financing and capital were tight and people were running for their lives, the food service segment of franchising clammed up and slowed it’s incredible growth pattern. People either couldn’t get the money to open their favorite food service brand or were just scared to pull the trigger on a food service brand. Since 2010, as the economy has improved and people’s excitement for franchising has grown at exponential rates, food service has come back with a vengeance. Franchise Marketing Systems team of franchise consultants works closely with brands to help launch franchise platforms and develop the necessary systems and
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processes to scale models. Chris Conner, Alan George, Zac Bletz and Levi Tran all meet with brands to discuss franchising and help analyze whether franchising could be an effective growth channel. Over the past ten years, food service brands have increased from 20% of the businesses considering franchising to over 40% of all companies who connect with Franchise Marketing Systems to review the franchise model. This growth is driven by innovative, fun, simple and duplicable food service brands. Some of the fun, great brands that have come forward in the franchise market recently include brands in the pizza market, coffee, ice cream, Indian, Mexican and many others. Sankranti is a brand which has recently launched in the Atlanta market and offers a quickserve, simple and high-octane Indian menu bringing great Indian food to the masses in a simple QSR platform. Chicago’s Pizza with a Twist is also an Indian-infused pizza model based in Sacramento which has sold their first 50 franchises since 2017. SLICES pizza is a new pizza system just coming to market which has redefined the simple food service operation and created a model that maximizes profitability and minimizes labor in the operating unit. In coffee, the incredible Foxtail Coffee brand is
coming to the franchise market offering hot branding, strong operating systems and a great high-margin coffee franchise model. Green District is knocking it out with healthy product offerings and great branding in the salad franchise segment. The dessert market is booming with great ideas and awesome new franchise offerings including SMOOSH Ice Cream Cookies, Red Circle Ice Cream and Presotea is a 400+ unit franchise system that has recently entered the U.S. These brands are just scratching the surface for new ideas and exciting potential ways to capitalize on the food service franchise market. What should an aspiring food service entrepreneur look for in brands to determine which option might be the best one and how do you analyze which franchise offers the most value? First, it seems clear that the simpler the model is the more successful the overall franchise system is which makes sense. Look for strong, well-defined menus which have been “costed” and offer high-margin products which are easy to produce and replicate. Branding is REALLY important, be critical of the franchise’s color-scheme, logo design, web presence, social media presentation and overall messaging. Younger people are choosing where to eat based on what the brand
“Since 2010, as the economy has improved and people’s excitement for franchising has grown at exponential rates, food service has come back with a vengeance.”
ms
“The growth in food service has been exponential in off-premise, so make sure the franchise has a strong delivery, carry out and web-ordering system in place you can leverage when you invest in the franchise brand.”
means and says to them – make sure that the food service franchise you choose
is saying the right things to get people eating more of your product. People
want quick, convenient service, but still
with high-quality food. You want a food service franchise that can drive volume and move people through the location
efficiently with a reasonable labor cost. The growth in food service has been
exponential in off-premise, so make sure
the franchise has a strong delivery, carry out and web-ordering system in place you can leverage when you invest in the franchise brand. 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. For more information on food service franchises and how to evaluate the food service market, contact Chris Conner at Chris.Conner@FMSFranchise.com www.fmsfranchise.com
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Expert Advice: Glynn Chambers, Vice President of CAPMastery, Capriotti’s Sandwich Shop
Changing the High-Cost Stigma of Restaurant Ownership:
How to Cut Costs, Boost Profitability as a Restaurant Franchisee Pursuing entrepreneurship in the restaurant industry can be an exciting time for new business owners, but it comes with its own unique set of challenges. One of the primary challenges being the overall cost of running a restaurant and sometimes, the fear of financial failure. With rising food prices, shortages in products forcing change in menus and operations, on top of the other financial obligations of today’s restaurant owner, entrepreneurs are asking if it’s even worth getting into the restaurant business.
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At Capriotti’s Sandwich Shop, we’ve been able to maximize unit-level profitability by 85 percent, on average, by diligently tracking performance metrics and adjusting our strategy accordingly. Stores leveraging these profit-based best practices have also seen an average 10 percent increase in EBITDA over the past year. We continue to stay committed to quality while finding new ways to bolster profitability for franchisees to change the stigma of entrepreneurship in the restaurant industry. Cost of goods sold (COGS) is one of the most important performance metrics to track as a restaurant franchise owner. Not only does it tie directly into menu engineering and innovation, but it should also be a key consideration guiding
inventory and purchasing decisions. Most importantly, however, your cost of goods has a controlling stake in your restaurant’s profit margin. And, reducing your COGS by just a few percentage points can significantly boost your bottom line. Here’s what we’ve learned about driving revenue and cutting costs – without cutting corners on quality – to boost your bottom line:
Track Store Performance to Keep a Pulse on Profitability Regularly track and dive deep into sales, COGS, inventory and other metrics to provide visibility into store performance. This allows your team to see if there are any areas of improvement to boost
“By keeping external costs low and concentrating efforts on building your business from within, maintaining consistent growth as a single-unit operator becomes very realistic.”
“Evaluate whether there’s an opportunity to drive down prices on the highest-cost items. This often means adjusting the quantity of goods purchased, re-negotiating vendor pricing or finding comparable brands with lower costs – but never at the expense of quality.”
sure it runs parallel to or alongside the longer length of the restaurant to maximize square footage, while putting guests directly into the ordering queue when they walk through the door. profitability. As a rule, the cost of goods in the food sector will increase every year, so it’s important to incorporate even a small price increase to account for that change to help yield substantial results.
Optimize by Eliminating Extra Expenses Take an in-depth look at invoices and P&L statements to see if you can adjust the number of goods you order, or if you can eliminate unnecessary items and waste altogether to maximize goods purchased, minimize waste and optimize your inventory. In turn, this reduces COGS and boosts profitability.
Refine Your Partnership Strategy to Streamline Operations and Boost Profits Evaluate whether there’s an opportunity to drive down prices on the highest-cost items. This often means adjusting the quantity of goods purchased, re-negotiating vendor pricing or finding comparable brands with lower costs – but never at the expense of quality. For instance, we switched brands for our store cleaning products, which reduced that line item by 50 percent. Among other changes, we also reduced the cost of our linens, security systems and phone and internet services – each by 50 to 70 percent.
More Costs Less? Add More Options to Your Menu for Increased Value Instead of skimping on quality ingredients, try adding smaller sizes to your menu. For example, Capriotti’s added a halfsub sandwich to the menu, giving guests another option beyond the traditional sizes. Because these half-subs offer guests a lower price point and great value, it also encourages add-on purchases and meal combos, like chips and drinks, which are much more cost-effective for franchisees. As part of the new menu and sandwich sizing, Capriotti’s created a 3-4 percent lower overall COGS when compared to stores who have not yet implemented the new menu.
Glynn Chambers is Vice President of CAPMastery at Capriotti’s Sandwich Shop. Her specialties lie in restaurant development, operations and training. At Capriotti’s, Glynn has spearheaded development of the brand’s CAPMastery program designed to aid in the development of franchise partners in operations, marketing and overall business growth. She is dedicated to helping franchise partners at more than 100 locations across the United States optimize their business opportunity while remaining true to its 40-year tradition of slow-roasting whole, allnatural turkeys in-house every day. www.ownacapriottis.com
Stimulate Streamlined Operations with Linear Design Boosting profitability isn’t just limited to food costs – another factor to consider is the design of your space as well. For quick-serve restaurants, pick-up cubbies and windows are a central component of operations, especially as more consumers opt for on-the-go food options. These pickup sections should remain near the kitchen and sandwich-making area, so guests can quickly retrieve their food as soon as it’s made. If you have a POS system, make
Glynn Chambers
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