entre magzus

Jan-Feb 2020

COVER STORY P. 28

The Grinder “If you keep grinding,” Mark Wahlberg says, “you’re always ready to go.” But he didn’t always think that way. Here’s how one of the world’s most accomplished people learned to become so disciplined.

P. 51

THE FRANCHISE 500 ®

Learn who is #1, along with insights from the fastest-growing franchises, the next hot concept (it’s ice-cold!), a revolutionary restaurant from Bar Rescue’s Jon Taffer, and more.

by JASON FEIFER

→ GREEN MACHINE

Wahlberg takes a rare break from making bank. P.28

ON THE COVER AND THIS PAGE Photograph by RIKER BROTHERS Grooming by MAITAL SABB AN Styling by SAMANTHA MCMILLEN

January-February 2020 / E N T R E P R E N E U R . C O M / 1

January-February 2020

→ SLOW COOKER

Jon Taffer will shake up restaurant franchising in 2020 with two words: sous vide. P.102

FEATURES P.36

Prison Briefs An underwear-startup founder and a bank robber meet in jail. What happens next is viral marketing magic. by LIZ BRODY

P.42

People Are Not Data I once ran marketing for Instagram, YouTube, and Spotify, and was convinced that data solved everything. Not anymore. by ERIC SOLOMON

2 / E N T R E P R E N E U R . C O M / January-February 2020

Photograph / D AV I D Y E L L E N

packingmailboxing

printingnotarizing brochuringcopying faxingdirect-mailing scanningdesigning flyeringreturning shreddingfreighting receivingsupplying consultingpostering business-carding theupsstore.com The UPS StoreŽ locations are independently owned and operated by franchisees of The UPS Store, Inc. in the USA and by its master licensee and its franchisees in Canada. Products, services, pricing and hours of operation may vary by location. Copyright Š 2020 The UPS Store, Inc. All rights reserved.

January-February 2020

→ CHANDELIER CHIC

Furniture retailer Wayfair’s headquarters in Boston. P.18

EDITOR’S NOTE

16 Tipping Points

23 Powered by Coffee

Six entrepreneurs on the biggest decision they made for the success of their companies.

By offering strangers $5 Starbucks cards to view his pitch deck, this founder hit on a $1 billion idea.

CLOSER

by LIZ BRODY

224 What Inspires Me

18 Inside Wayfair 10 The Expectations Game

The furnishings company’s headquarters feel a lot like a home, by design.

24 Morning Makeovers

by HAYDEN FIELD

Nine entrepreneurs share the actions (or apps) that jump-start their mornings.

20 Edible vs. Edibles

26 Fight the Good Fight

by JASON FEIFER

The founder of Edible Arrangements once fought against cannabis “edibles.” So what’s he doing launching a CBD brand?

The founder of Mighty Mug went to D.C. to stop cheap Chinese knockoffs from putting him out of business. And he won.

BUSINESS UNUSUAL

by JASON FEIFER

by JAYME SMALDONE

22 Start at the Bottom

27 How to Boost Your Business This Year

No matter what business you’re in, you’re really in the expectations business. So ask yourself: What do your customers want most?

13 Take It Slow

The founder of Lärabar worked at Whole Foods to unlock the secrets to launching a food bar. by STEPHANIE SCHOMER

Ayesha Curry’s cooking videos led to infinitely more opportunities. Her secret to massive growth? Take one deliberate step at a time.

How a raggedy doll became a reminder of resourcefulness. by KATYA DOROZHKINA

→ WHAT’S YOUR ELEVATOR PITCH? Have a scalable product or service that’s ready for investment? Pitch our investors on Season 6. APPLY NOW: ENTM.AG/EEPAPPLY

To break out of a growth rut, you need to take a good, hard look at your operations. Let’s start now. by ADAM BORNSTEIN

by STEPHANIE SCHOMER

4 / E N T R E P R E N E U R . C O M / January-February 2020

Photograph / A D A M F R I E D B E R G

Fast is the nation’s largest Gig-speed network. Beyond Fast is security that automatically protects every device. Introducing Comcast Business SecurityEdge.™ A powerful new security solution that helps protect your business against costly breaches other security solutions don’t cover. Because it’s cloud based, there are no additional hardware costs or software downloads required. And it automatically updates every 10 minutes. Big-time protection on a small business budget. Take your business beyond with speed that’s also secure. ComcastBusiness.com/SecurityEdge

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WORK FROM ANYWHERE

BE YOUR OWN BOSS

Find out how Cruise Planners is right for you as a second career, a way to travel in retirement, or a solid work-from-home opportunity.

S 17 YERAORW IN A

“

I LEFT THE CORPORATE GRIND TO FIND MORE FULFILLMENT

”

Ün¼b± ÀÀ Êb8±´ ¼|b O ± ±8¼b È ± YV bÈ bbYbY ±b nÁ o b ¼ Ê nb¡ Y±b8 bY n È t 8 FÁ´ b´´ b Y8Ê 8 Y 8 È8Ê´ |8Y 8 8´´ n ± ¼±8Çb ¡ ±Á ´b ( 8 b±´ È8´ ¼|b b±nbO¼ o¼l The franchise model made it so easy to get off the ground, even without any industry experience. I am truly passionate about my business and helping clients plan unforgettable vacations.

Dave Rodrigues, Cruise Planners Travel Advisor since 2012

TRAVEL THE WORLD

CruisePlannersFranchise.com 866.584.2424

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Vol. 48, No. 1. Entrepreneur (ISSN 0163-3341) is published monthly (except for combined issues in Jan/Feb, Apr/May, Jul/Aug, and Oct/Nov) by Entrepreneur Media Inc., 18061 Fitch, Irvine, CA 92614. Periodical postage paid at Irvine, CA, and at additional mailing offices. POSTMASTER: Send address changes to En trepreneur, P.O. Box 6136, Harlan, IA, 51593-1636. One-year subscription rates in U.S.: $19.97; in Canada: $39.97; all other countries: $49.97; payable in U.S. funds only. For customer service go to entrepreneur.com/customerservice or mail subscription orders and changes to Entrepreneur, Subscription Department, P.O. Box 6136, Harlan, IA, 51593-1636. For change of address, please give both old and new addresses and include most recent mailing label. Entrepreneur considers its sources reliable and verifies as much data as possible, although reporting inaccuracies can occur; conse quent ly, readers using this information do so at their own risk. Each business opportunity and/or investment inherently contains certain risks, and it is suggested that the prospective investors consult their attorneys and/or financial professionals. Entrepreneur is sold with the understanding that the publisher is not rendering legal services or financial advice. Although persons and companies mentioned herein are believed to be reputable, neither Entrepreneur Media Inc. nor any of its employees accept any responsibility whatsoever for their activities. Advertising Sales (949) 261-2325. Entrepreneur is printed in the USA and all rights are reserved. ©2020 by Entrepreneur Media Inc. No part of this magazine may be reproduced or transmitted in any form or by any means without written permission of the publisher. Unsolicited manuscripts and photographs will be returned only if accompanied by a stamped, self-addressed envelope. All letters sent to Entrepreneur will be treated as uncon dition ally assigned for publication, copyright purposes and use in any publication or brochure, and are subject to Entrepreneur’s unrestricted right to edit and comment.

8 / E N T R E P R E N E U R . C O M / January-February 2020

Do You Meet Expectations? Here’s an even better question to ask: Are you setting people’s expectations?

MY FAMILY and I went out for

brunch recently in Miami. We ordered about $60 worth of food, and when the waiter asked what I’d like to drink, I said what I always do: “Just water, please.” “We charge 50 cents for water because we filter it five times,” the waiter said. That’s ridiculous, I replied. The waiter agreed—in fact, he said, he’d been trying to talk the restaurant’s owner out of this policy for a while now. But the owner wouldn’t budge because he’d invested in some fancy filtration system. I was irritated, but I wasn’t going to buy a costlier drink simply to avoid the small fee. “Fine,” I said. “I’ll take the water.” When the check came, the waiter didn’t charge me the 50 cents after all. It was his small act of rebellion, and I showed appreciation in my tip. Afterward, I thought about why this experience was so frustrating. The economic logic was clear: The restaurant owner had paid up front for an expensive machine, and it provided a fine service to his customers. Also, water isn’t actually free. It’s a scarce resource in some parts of the world. But still, I was an unhappy customer. Why? Then I realized: My expectations weren’t met. As entrepreneurs, we are all in the expectations business. Sometimes we need to only meet expectations—a McDonald’s customer, for example, wants their burger to be exactly like

their previous burger. Other times, we must exceed expectations—like, say, a burger upstart trying to steal a McDonald’s customer’s loyalty. But inevitably, we’ll also challenge consumers’ expectations. We must change something in a way they don’t expect, or do something differently than they’re used to. Maybe we’re forced to add a fee to cover our costs, or eliminate something beloved. When that happens, we must keep a formula in mind: The new value we offer must be greater than what they expected. Or to be simpler about it: value > expectations. We must say, “You wanted X, but I’m giving you Y—and here’s why it’s better.” And our customer has to believe it. Here’s one of my favorite examples of this. Back in 2003, the craft brewery Dogfish Head created a delicious new IPA. The beer was a runaway hit and on track to become 80 percent of all company sales. That was huge! But founder Sam Calagione was concerned because he knew IPAs wouldn’t be super-popular forever. If he let his company become defined by this one IPA—if that was the beer everyone knew him for—then when tastes inevitably changed, he’d be seen as an old brand. So he capped sales of his best-selling product. Many bars, restaurants, and consumers simply couldn’t get it. Talk about challenging expectations! People called Dogfish

10 / E N T R E P R E N E U R . C O M / January-February 2020

just to yell at whoever picked up. But Calagione turned his staff into what he calls a “beer education force”; they explained that the limited supply of IPA meant that everything was very fresh, and then showcased their many other styles of beer. People’s expectations weren’t met, but Calagione understood that their real expectation wasn’t the IPA anyway. It was bigger than that. They expected good beer. So he’d shift them away from a smaller expectation and deliver on the bigger one. It worked. Dogfish became known as a beer innovator, and last year it sold for $300 million. Now consider that restaurant in Miami. I was also presented with a trade-off: I’d have to pay for water, but that water would be finely filtered. And yet, because I already expect water in a restaurant to be safe, that didn’t strike me as a fair tradeoff. The restaurant forgot what

business it’s in. It’s not the water business. It’s the expectations business. When we break it down this way, change becomes easier to manage. We can’t just explain a change. Instead, we need to actively define people’s expectations. We need customers to feel like we’re giving, not taking. We’re adding value, not trying to extract it. We have to show customers that, yes, the individual product or service might change, but they can expect that we’re always looking out for them. They can expect to be taken care of.

Jason Feifer jfeifer@entrepreneur.com @heyfeifer S U B S C R I B E : entm.ag/subscribe

Photograph / N I G E L P A R R Y

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PHOTOGRAPH COURTESY OF FEMPIRE

“It’s Been a Learning Process” Ayesha Curry turned a YouTube channel into a blossoming lifestyle brand, including a book, restaurants, and multiple TV gigs. Her guiding principle: Treat every step as an education. by S T E P H A N I E S C H O M E R

January-February 2020 / E N T R E P R E N E U R . C O M / 13

Q&A

→ TEAMING UP

A

yesha Curry just wanted her family and friends to eat healthier. So in 2014, she started sharing her favorite recipes and tips online—but when people outside her inner circle took note, she saw an opportunity to turn a hobby into a career. Over the past six years, Curry has grown her video-blogging habit into a popular YouTube channel with more than half a million subscribers and built an Instagram following that’s nearly seven million strong. She has segued that success into a best-selling cookbook, her own series on Food Network, a barbecue-focused chain of restaurants, a lifestyle website and e-commerce shop, and, with husband (and NBA star) Stephen Curry, launched the Eat. Learn. Play. Foundation in their hometown of Oakland, Calif., to help kids nationwide. To manage this growth, Curry stayed constantly aware of what she did and didn’t know— and what it would take to get to the next step.

14 / E N T R E P R E N E U R . C O M / January-February 2020

How much of a plan did you have when you began all this? I started with a written blog, and people suggested I make video tutorials. My first one was about making my daughter Riley’s first birthday cake. I put it on Vimeo—I wasn’t even using YouTube yet—and it was god-awful. But for whatever reason, people liked it. So I shifted to YouTube, pretty much posting whatever I wanted to. When I realized this could be a fullfledged business, I had to think about direction. When did you realize the legitimacy of what you were building? This sounds silly, but it was when I started receiving gifts

P H O T O G R A P H B Y G E T T Y I M A G E S / K I M B E R LY W H I T E / S T R I N G E R

With husband Stephen Curry at the 2019 launch of their nonprofit, Eat. Learn. Play.

in the mail from companies. There’s this business called Freshly Picked Moccasins, and I was obsessed—they sell baby moccasins, and they were pretty expensive at the time. I got a box one day, and it was filled with these little moccasins. My husband has a video of me crying and saying, “I made it! Look at this!” It made me realize that people were taking my opinion and thoughts seriously, and I had to build this the right way. So how did your strategy shift? Goal setting became a priority. When I started, I didn’t necessarily have any benchmarks I was working toward. Now I had to come up with a five- and a 10-year plan, and really think about my message, my ethos, and what I wanted to achieve. And what is that ethos? It’s to get people back around the family table and in the kitchen, cooking and enjoying a meal together. I started doing research and realized that even having just one family meal together each week can shift a child’s future. Studies show that it can result in kids having better grades in school, improving the likelihood of attending college, lowering obesity risk. So my business became about making the home a little chicer, more accessible, less scary, less Stepford. Was it difficult to transition from posting videos to running a holistic lifestyle brand? It took me a long time to figure it out because I was kind of wheels-on-the-ground without any knowledge. I was going through the motions and working my butt off, but I didn’t have the structure or infrastructure that any good business needs to thrive. It’s been a learning process, and I feel like I’m finally at a turning point and I’ve got my s-h-i-t together. I didn’t go to

a traditional four-year college, and I had that insecurity: Do I understand business? Am I supposed to be here? And the truth is, Yeah! You don’t necessarily need that traditional education as long as you’re constantly educating yourself. How have you done that? Literally, just last May, I took this eight-week Harvard Business School course online through their executive program, on management essentials. It helped me so much. I actually printed out the coursework and syllabus at the end of the class, and now I am constantly referencing it, making sure I’m always doing better business.

So we turned it into a real operation, and now we’re opening our newest location, at the MGM Grand in Las Vegas. A lot of the work you do—a YouTube channel, a personalitydriven brand, a restaurant chain—attracts criticism. How have you developed a thick skin? There’s been so much criticism outside of my business, when it comes to me as a human. [laughs] That’s what’s helped me develop a thick skin.

Well, that sounds terrible. It’s fine! When you can have a thick skin about yourself, when it comes to business, you’re gonna be OK.

In addition to your lifestyle brand, you also own a chain

Is it just the nature of having a celebrity platform?

of restaurants, International Smoke, with Michelin-starred chef Michael Mina. How did that partnership come to be? Some friends took me to his restaurant in San Francisco, and he happened to be there. I was a big fan, and I had just read an article—actually, I think it was an Entrepreneur article!—that said, when you find yourself in the presence of someone you admire, don’t be afraid to ask a question. So I knew I had to pick his brain. He was so kind, and we found out that our love of food and how we fell into cooking in the first place were very similar. We came up with a concept for a pop-up restaurant that was supposed to last two months, and it lasted for seven.

I think so, and having an athlete husband…a lot of people don’t realize that what they’ve seen on TV for so many years [about athletes’ wives] is not the norm. Most of the women have their own businesses and careers, but it’s just not what’s put at the forefront. So I think when I [started building businesses], it caught people off guard, and they felt like I was taking away from what my husband was doing. It just took people a while to understand that we’re married but we’re also two individuals with different goals. But there are good days and bad days. No one likes their business being talked down. You’ve got to create a sort of wet-wicking coat for your skin—just let it roll right off.

But now you and your husband are working together, on your nonprofit, Eat. Learn. Play. How’s it going? Stephen and I have wanted to form our own nonprofit for a while, but we waited until we had the time and focus to make it successful. Our kids are all born, so we’re ready to do this. The goal is to make sure every child has access to food, a great education, and safe spaces to play. Our model is really simple: We serve as a platform to bring other organizations together and amplify those missions. We’re starting here in Oakland because that’s where we see the most need personally, and because we want to crawl before we walk. This past summer, we were able to fund every single town camp in Oakland, so no child was

turned away. That checked all three boxes. Hopefully by July 2020, we’ll start to expand. Are you able to build this foundation together without it consuming your time at home with each other? We do actually end up talking about it all the time, but we’re so passionate that it comes with a sense of enjoyment. Date nights are more like working dinners. But when you see your partner thriving and passionate about something? That’s the sexiest thing in the world. That’s all you need for a date night. We’ll ideate and talk and catch up and eventually fall into talking about the kids. And that’s balance.

January-February 2020 / E N T R E P R E N E U R . C O M / 15

Six Ways

What’s Your Turning Point? When you’re building a company, every choice you make is a big one. We asked six entrepreneurs for the decision that altered the path of their business.

1/ Asking for advice.

2/ Hiring for keeps.

3/ Risking it all.

4/ Staying put.

5/ Changing course.

6/ Getting help.

“I hired a business coach seven years ago, and it helped me propel my company forward. As an entrepreneur, running a business feels like something you should be able to figure out on your own, but investing in a coach helped me raise the bar in every way. Not only was I able to shift my behaviors to identify and overcome self-imposed roadblocks, but it allowed me to be more engaged and hold myself accountable.” —KATIE CONOVITZ, founder and CEO, TwelveNYC

“Early on, we hired agencies and freelancers with experience launching a consumer health-and-wellness brand. But it became clear that we needed full-time people who were 100 percent dedicated to our success. So we hired key team members who have been instrumental in the growth of the business, helping us scale and innovate rapidly. We still use outside talent, but bringing key roles in-house has been a game changer.” —RACHEL SANDERS, cofounder and CEO, Rootine Vitamins

“It was when I understood that in order to grow my business, I needed to invest in inventory. I decided to take out a mortgage on my house and purchase goods on spec. I had to believe they would sell. By taking that risk I was able to broaden the product offerings to my current customers as well as attract new ones. In turn, it allowed me to quit my full-time job and commit to MyTagalongs full time.” —NICOLE AUTHIER, founder, MyTagalongs

“It was deciding to keep my company rooted in Indiana, where I was raised. Many podcasting peers suggested moving to Los Angeles or New York, but I committed to growing the podcasting community in the Midwest. Staying in Indiana isn’t only financially beneficial; it’s also allowed me to cater to Crime Junkie’s OG fans—and in doing so, I’ve been able to stay true to the brand and to myself.” —ASHLEY FLOWERS, president, Audiochuck, and host, Crime Junkie podcast

“I closed down our wholesale model of selling rugs through carpet dealers and showrooms and instead decided to build a brand that sells directly to the trade. This move enables us to focus on what matters: natural ingredients, original design, and craftsmanship. We began investing in our own manufacturing, which now accounts for 50 percent of our total revenue, as opposed to just 5 percent five years ago. We’re gaining ground.” —CATHERINE CONNOLLY, CEO, Merida

“For us, it was outsourcing fulfillment. We grew very fast, and without outsourced fulfillment, we wouldn’t have been able to scale as fast. Taking on large accounts like Hallmark, the Paper Store, and Nordstrom—in addition to high-volume web orders—would be challenging with an in-house team. Plus, our product is seasonal. By outsourcing, we don’t have to worry about hiring temporary help during peak season.” —AYSEL GUNAR, founder, MantraBand

16 / E N T R E P R E N E U R . C O M / January-February 2020

Illustration / P E T E R YA N

Listen in as the editors of Entrepreneur talk with inspiring innovators like Martha Stewart, Daymond John and billionaire Ray Dalio to better understand the mindset and strategies that make excellence possible.

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Office Space

CORNELIUS DRISCOLL/ Manager, employee tech

TESS MCNAMARA/ Process and learning specialist

“For my team of about four or five people, Thirsty Thursday is when we grab beers and talk about the problems we’ve had during the week, tech or otherwise. It helps reinforce that feeling that everyone’s working on stuff as a team. We can have those loose moments and vent about an annoying issue or joke around. Once a month, we do a pod outing as a group to either get food in Chinatown or go to an escape room—usually nerdy things.”

“I’ve been at Wayfair for five years now, and it’s become like a second home to me. In my role, I’m able to travel and welcome employees to the team at some of our other offices, where people may feel more isolated because they’re not part of the 5,000-person HQ here in Boston. I want to make sure they recognize they’re a major part of our community.”

JIAYI LI/ Senior manager, ocean delivery operations “I’ve been with Wayfair for a little over four years, and I think this is my sixth role here. The company encourages internal migration because it helps optimize what people are good at and make sure we’re happy in what we’re doing.”

BRENDAN POMMILLS/ Director, global supply chain operations “Before we moved to this office concept, the thought of having a meeting slowed everything down. People didn’t like them. But this new layout helps us to move much faster and more in sync. Instead of having hundreds of conference rooms, we’ve got collaboration spaces equipped with TVs, video cameras, and teleconferencing. It drives productivity through the roof.”

18 / E N T R E P R E N E U R . C O M / January-February 2020

Photograph / A D A M F R I E D B E R G

SILPA GOLLAPALLI/ Director, customer service innovation “We do problem-solving sessions a few times a month with a fairly unstructured group of people from different teams. We put it all out there: What are the challenges? Why is this not working? It’s collaborative and transparent, and we always involve someone from R&D. They’re able to tell us whether they think something is a great idea, whether it will take too long to build, and other ways to approach it.”

MOLLY DELANEY/ Corporate communications manager

SUNISH OTURKAR/ Senior product manager, delivery experience “Most of my day is spent thinking about how to make the delivery of our largest and bulkiest items the best possible experience for customers. In the past we’ve been able to give four-hour delivery windows, and we’re really trying to tighten that—we’re testing a two-hour window now. We’re still gathering feedback, but raising the bar is exciting.”

“We have a costume contest for Halloween. Our social media team dressed up as social butterflies, with wings and different social platforms on their T-shirts. People go all out here.”

Inside Wayfair Interviews by H AY D E N F I E L D

WORKING AT Wayfair’s Boston headquarters is a lot like shopping on Wayfair online. Each of its

four floors, which were designed by IA Interior Architects, channels a different style featured on the $8.6 billion home-furnishing e-com giant’s site—from farmhouse to terrace and villa to lodge and beyond. Employees on the “brownstone” floor work alongside scroll furniture and classic wallpapers, while the “apartment” floor features cozy, comfortable couches and a pastel-colored kitchen. But no matter the aesthetic, each floor is designed to foster collaboration. Instead of staff wasting time attending (and dreading) meetings in isolating conference rooms, for example, the new office’s open layout lends itself to impromptu conversations and efficient problem-solving sessions.

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Problem Solvers

Is It a Threat or an Opportunity? It’s easy to fear change. It’s harder (but morefulfilling!) to embrace it. That’s why Edible Arrangements finally embraced a new definition of edibles. by J A S O N F E I F E R

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ariq Farid thought he had a lock on the word edible. For more than 20 years, his company, Edible Arrangements, was famous for its bouquets of fruit and platters of chocolate-dipped fruit, and customers had begun casually referring to the company as simply Edible. In 2013, Farid went all in—trademarking the name Edible by itself and dropping Arrangements. Then, in 2016, California passed Proposition 64, which legalized recreational marijuana. Farid read the text of the bill and was horrified: The word edibles was in there— familiar to any pot lover, and now enshrined into law to mean weed-laced food. We can’t let it happen, he recalls thinking. We have to do something about it. Do what exactly? He wasn’t sure. But he tried to fight it— and as he did, he learned an important lesson about business: Sometimes the greatest threats are opportunities in disguise. This is an issue many industries grapple with, as consumer tastes and culture change. The beef industry, for example, has lobbied for laws to protect the word burger from booming plant-based companies like Beyond Meat and Impossible Foods. Meanwhile, the dairy industry has tried to protect the word milk from oat, soy, and other plant-based competitors.

Farid felt similarly protective. Back in 1997, he owned a few flower shops in Connecticut and had developed an eye-catching product he called Delicious Designs. It was slices of fruit, speared onto sticks and arranged like flowers in a vase. As his team brainstormed a description for Delicious Designs, someone proposed the term edible arrangements. Everyone loved it so much that they changed the product’s name—and from that, a successful national franchise company was born. So when cannabis moved in on Farid’s word, he was spooked. “I mean, I had never done marijuana, and didn’t want anything to do with it,” he says. Shortly after California passed its law, he called his lawyer to develop a plan. Then he started lobbying, telling lawmakers that marijuana edibles were a modern-day version of cigarettes being marketed to kids. But he wasn’t getting anywhere. Then, during one lobbying trip in 2017, someone told him this: “You can look at [the situation] two ways. You can look at it as a tsunami—and if it’s a tsunami, get out of the way. Or you can look at it as a really nice wave—and go get your surfboard out.” This made Farid pause. I may be fighting a really uphill battle, he thought. What’s the alternative?

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He decided to educate himself about cannabis. Farid subscribed to every industry magazine he could find, took meetings with experts, and traveled to Colorado to visit production facilities. He discovered a world of CBD and other wellness-oriented products—stuff that doesn’t get anyone high but still comes from cannabis and hemp. Farid heard from a friend whose mom uses CBD, “and for me, that word, mom, was like—oh!” he says. His own mom had been the first to predict that Edible Arrangements would be a huge hit. Farid believed in the wisdom of moms. After a year of research, he felt convinced: There was a way for him to embrace this. He hired a team and partnered with a research university, and his company planted 40 acres of hemp to develop an edible CBD powder. To sell it, he decided to

go big. He wouldn’t just create a product—he’d launch, he says, “a retail experience.” The new brand is called Incredible Edibles. It’ll be a line of edible CBD, but also a chain of stores that offers CBDinfused juices, smoothies, and other foods. The first opens in January 2020, in New Haven, Conn.—not far from where Edible Arrangements began two decades ago. Farid plans to expand soon. Now that he’s gone through this process, he has some advice for other businesses that feel threatened by a changing culture. “Understand the threat,” he says. “Look at it, study it, spend some time on it. And you may just see an opportunity—a big opportunity.” Hear Farid on our podcast Problem Solvers, available on iTunes or wherever you find podcasts. Illustration / Z O H A R L A Z A R

My First Moves

FOR MORE HOW-TO STORIES OF WOMEN IN BUSINESS, VISIT ENTREPRENEUR.COM/WOMEN

1/ Solve your own problem. At age 23, Merriken discovered she had a food allergy. That sparked an obsession with the world of natural foods—and what was missing from it. “Why hadn’t someone made a truly healthy snack that tastes indulgent?” she says. She started making datebased concoctions in her Cuisinart, emulating the flavors of cakes and pies with simple mixes of fruits, nuts, and spices. Then she’d go to her friends’ offices to see what people thought—her very first focus groups.

2/ Pay your dues. Merriken thought there might be an opportunity to sell her bars, so she wanted to understand the retail space. To do that, she left social work behind and took a gig stocking shelves at Whole Foods. “It didn’t sound good on paper, walking away from a job like that, but I wanted to learn,” she says. She spent two years absorbing the marketing of new products and various tactics to get them in front of customers.

3/ Spot your opening.

Lärabar founder Lara Merriken wanted to create a healthy snack food but didn’t know anything about retail. So as she developed her now-famous bar, she took a different kind of job—stocking shelves. by S T E P H A N I E S C H O M E R

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ara Merriken needed to make some changes. In 2000, after an intense decade spent earning a psychology degree and building a career in social work, she could no longer ignore her entrepreneurial itch. She thought about how her own wheat allergy had forced her to rethink her diet—and to find her own solutions. What began as kitchen experiments to benefit her own health eventually grew into Lärabar, a snack brand that launched in 2003 and won over fans with its dessert-flavored bars (cashew cookie, cherry pie) made from a handful of natural, whole ingredients. Merriken’s commitment to keeping her products simple became her biggest asset, and when she sold Lärabar to General Mills in 2008, it was because she trusted the food giant to stay true to that ethos. Today, Lärabar has five product lines, and Merriken still serves as creative director, helping to ensure that the brand continues to grow in the same way she built it: One step at a time.

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4/ Make it work. By 2003, Merriken reached a turning point: She understood the market and had developed her Lärabars to the point where they could be stocked on shelves. That Whole Foods buyer gave her some local shelf space, and the product was an instant hit. “We didn’t even have the right equipment,” she says. “I had to roll the bars out with a rolling pin and cut them with a pizza cutter. The first 500 bars took us about 15 hours to make and package with, like, a zillion people helping.”

5/ Find help. Lärabar hit its five-year goals during its first year in business, and Merriken realized she would need help for the next step. She identified areas where she could outsource work. “We finally got a distributor after six months and it was like: Wow,” she says. “It meant that we were already set up for the next increment of growth. When retailers would call, we never had to say we weren’t ready to partner. We were.”

PHOTOGRAPH COURTESY OF L ÄRABAR

Starting at the Bottom

As she was taking out the trash during a Whole Foods shift, Merriken bumped into a buyer, who politely greeted her and asked what was new. “I was like, ‘Let me tell you!’ ” she recalls. “I don’t think he actually wanted an answer when he said, ‘What’s new?,’ but I gave him some samples and explained the product.” Impressed with her innovation, the buyer told her to keep in touch.

Strategies

Turning $5 Gift Cards into a $1 Billion Brand Can’t raise funds? That might be for the best. Here’s how one entrepreneur scrapped his way to unicorn status…at a coffee shop. b y L I Z B R O D Y

P H O T O G R A P H B Y S H U T T E R S T O C K / C R E AT I V E L A B

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tuart Landesberg started his career at Lehman Brothers and TPG Growth, but he felt a pull toward the sustainable-living industry. He’d grown up composting in his family’s backyard and had a vision of selling eco-friendly products online. “I was filled with the hubris of a 26-year-old guy who works in finance,” he says. So in 2012, he did what he thought he should: He looked for two cofounders, scrambled for meetings with investors, and showed off his grand plan for a company called ePantry. It would sell multiple existing brands. Nobody was interested. “It hurts me to even think about it,” he says, laughing. Those rejections turned out

to be a great fortune, however— because they forced him to be scrappy and inventive and understand his customer in perfect detail. His business transformed as a result. But of course, he didn’t know that at the time. He was just trying to survive. After the start, after those investor rejections, Landesberg didn’t have much. His team didn’t have the money to develop a functional e-commerce site, so all they had was a PowerPoint presentation explaining their plan. One day, when not much else was going on, Landesberg decided to see what everyday consumers thought of his company. Where to find them? He chose Starbucks. He showed up, bought a bunch of $5 gift cards, and then went table to table with

his laptop. “Hi; I don’t mean to be rude,” he said, “but if you have five minutes, would you mind just clicking through a prototype of a product that we’re launching?” He offered a gift card in exchange for their time. Two thirds of people said no. But a third said yes. He’d ask for five minutes, but the review usually took 20, and half of them sat through all of it. “Total bait and switch,” he admits, “but you’d usually get really good feedback.” It was so good, in fact, that he kept going…for a year and a half. It became a routine. Landesberg would arrive around 8:30 a.m. and go for hours. He guesses he handed out at least 900 gift cards. Some of his caffeinating subjects actually wanted to make purchases—a slight problem, since Landesberg didn’t have inventory. So he bought products on Amazon, marked them up, and resold them to these customers. But the real benefit came from people’s feedback. Landesberg learned that his vision was all wrong. He thought convenience would be his major value proposition. It wasn’t; people wanted a company that made them feel virtuous and good about themselves. Also, Landesberg figured that he was his main target—a busy urban professional from the coast. But he wasn’t. His core customer was a 29-yearold mother of two working as

a substitute teacher in Kansas (or Utah or Tennessee, or somewhere other than New York and California). “When I realized this is my customer,” he says, “I knew the potential for my company was way bigger than I thought.” By 2016, he was ready to take action. He changed the name of the company to Grove Collaborative, to spark the emotional connection people craved. He launched a line of products and targeted it to a mass-market audience. And he reacted to something else he’d learned at Starbucks. Many people said they believed eco products were too expensive and wouldn’t work as well as conventional products. So he created a robust team of customer service “Grove Guides” to educate customers. It worked. Today, Grove Collaborative has some 1,000 employees, carries 100 brands, including five of its own, and logged more than $200 million in revenues last year. Investors are in, too. With its latest $150 million Series D, the company is valued at $1 billion. “If I’d had investors calling me at the beginning, I wouldn’t have been in Starbucks trying to figure out the product,” says Landesberg. “People can get hooked on the growth treadmill, but companies that win are often the ones that are not initially well-funded.” He is still addicted to talking to customers, but the caffeine? “I quit,” he says. “No more coffee!”

January-February 2020 / E N T R E P R E N E U R . C O M / 23

Self-Care

Getting a Good Start Morning Veggies

Sports Talk

Muscle Massage

“I recently began drinking celery juice every morning. It’s known for its healing benefit, and especially in colder weather, it has alleviated my dry skin and helped increase my energy level.” —BILL GLASER, cofounder and CEO, Outstanding Foods

“I listen to Philadelphia Eagles podcasts during my 40-minute drive to work in the morning. It helps me get my brain out of entrepreneur mode for a small part of the day.” —MIKE CESSARIO, cofounder and CEO, Liquid Death

“My morning routine includes a workout, a quick sauna, and then using the Hypervolt massager on muscles I’ve worked hard. It helps me recover faster and improves flexibility.” —RICK BATES, cofounder and CEO, RxSense

Facts and Figures

Caffeine!

Scheduled Sweat

“I started putting on CNBC every morning. It gives me a more macro-level understanding of everything happening in the current global marketplace, which really helps me to make more informed decisions at the micro level for Pura Vida.” —GRIFFIN THALL, cofounder and CEO, Pura Vida Bracelets

“I’m often up late collaborating with our teams in Hong Kong and China, where we create our custom wedding dresses. The Ordinary’s Caffeine Solution for under-eye puffiness makes me look like I’ve had a full night’s sleep.” —LESLIE VOORHEES MEANS, cofounder and CEO, Anomalie

“The TrainingPeaks app helped me prepare for the New York City Marathon this year. It offers weekly training schedules that helped me use my limited morning time to focus on training itself, rather than planning how and when to train.” —FIELD FAILING, founder and CEO, Fields Good Chicken

Home Brew

The Power of Protein

Ancient Tea

“I stopped buying my Americano on the way to the office and instead wake up a little earlier and make it at home with a Bialetti espresso maker. The ritual gives me 10 minutes to prepare for the day.” —LISA BUBBERS, cofounder and CMO, Studs

“I always started my mornings with a glass of chocolate milk, but recently I swapped it for a protein-packed chocolate smoothie— protein powder with oat milk and fresh peanut butter—and it has totally changed my mornings! It keeps me full for five hours and gives me the energy I need.” —JEAN THOMPSON, CEO, Seattle Chocolate and Jcoco

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“I steep a cup of Lapsang souchong tea. According to legend, it was invented hundreds of years ago when the threat of an invading army resulted in a tea grower quick-drying his tea under a pinewood fire. It tastes like you’re drinking a cigar, but in a good way.” —COULTER LEWIS, founder and CEO, Sunday

PHOTOGRAPH BY GET T Y IMAGES/HUEPHOTOGRAPHY

A strong morning leads to a strong day—so how do you begin things right? We asked founders to share the most impactful part of their sunrise routine.

Small business is no small task. So Progressive offers commercial auto and business insurance that makes protecting yours no big deal. Local Agent | ProgressiveCommercial.com

→ HEAD TO THE HILL

Smaldone inside the office of U.S. Representative Kenny Marchant.

To Save My Business, I Went to Congress You don’t need to be a billionaire to create major change. Just look at me—a guy whose business was almost killed by knockoffs, until I rallied lawmakers to my side. This year, we make history. b y J AY M E S M A L D O N E

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n 2009, I knocked over a mug of coffee and destroyed my computer. In 2011, I launched a product to prevent that from ever happening again: the Mighty Mug, a travel mug that clings tight to any surface and is nearly impossible to knock over but seamlessly lifts up when you’re ready for a sip. I knew it would be a hit. And it was. We closed deals with Target, Bed Bath & Beyond, and Office Depot. When I started noticing knockoffs on the web a couple of years later, I wasn’t scared. But when Bed Bath & Beyond canceled a $5 million annual program— one they replaced with a knock-

off—I went to my lawyers. They said I had two options: Fight it in court (at a likely cost of $2 million), or send a complaint to the International Trade Commission (at a far more reasonable price). I chose option B. To research my case, I had to buy all the Mighty Mug knockoffs I could find. I noticed they were all being sent from China— with free shipping! One was being sold and shipped for $5.69 total, which blew my mind. Shipping alone cost me $6.30 per mug in the U.S. How was it possible for Chinese-based companies to sell and ship their goods from 8,000 miles away for less than what we spend to ship within our own state?

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Soon I found the answer. It was because of an international treaty called the Universal Postal Union (UPU), which is now the UN’s postal arm. When it was established in 1874, it granted China incredible shipping rates (often 75 percent less) due to its classification as a developing country. Today China is the world’s largest e-commerce market, but the agreement was never updated— forcing the U.S. Postal Service to deliver Chinese items below their cost, therefore subsidizing foreign shippers to the tune of $300 to $500 million per year. I was so mad, I got on a train to Washington, D.C., and showed up outside the White House. I

brought a bucket of KFC—I’d heard President Trump likes it— and told the Secret Service I had to meet with him. Shockingly, that didn’t work. I thought about who else could help and started making noise. I met with major trade associations and politicians, some who knew of the problem but hadn’t found a solution yet. I sat in on meetings with the National Association of Manufacturers and the Chamber of Commerce. I wrote columns in The Wall Street Journal and The Atlantic. I sent an 18-page letter to the president. In April 2018, with the help of plenty of politicians and business owners, a bill to consider these policies entered the House and the Senate, attracting even more attention from American companies that hadn’t realized they were being hurt by this treaty. Six months later, the White House announced that it would leave the treaty if the shipping-rate problem wasn’t resolved. That would have created chaos for international shipping—but the threat did the trick. The UPU voted to fix the issue. In July of this year, the change goes into effect. The U.S. will be allowed to charge foreign-based shippers higher rates, putting our companies on fair footing against our foreign competitors and drastically reducing the number of counterfeits sold online. Entrepreneurs are up against a lot, and we often think our suffering voices aren’t heard. But they can be. If you want to enact real change, you have to realize your deficiencies— and in my case, it was that we were just one small business. I needed allies. I had to find the power players, make them care, and get them involved. It worked, and it can work again. My advice to anyone in a similar situation: Get loud!

PHOTOGRAPH BY NANCY NGUYEN

Personal

HAVE A PROBLEM WE CAN SOLVE FOR YOU? TELL US AT HELPME@ENTREPRENEUR.COM

What’s Your Problem?

Set Yourself Up for a Big Year With a new year come new pressures—and every entrepreneur wants to spend the next 12 months growing. Here’s how you can engineer success. b y A D A M B O R N S T E I N

STEP 1/ Assess your hypocrisy.

Great leaders need to worry less about looking good and focus more energy on achieving primary goals. Outline your biggest priorities (and their intended impact), and then examine where you and your team are spending the bulk of your time. Do those projects actually align with your primary goals? From there, it becomes easier to see where you might be misaligned. And if you are misaligned, I recommend stealing a strategy from our former client Tim Ferriss, who loves to ask: “If this were easy, what would it look like?” Use the answer to start building your new strategy. STEP 2/ Strengthen your strengths.

My business stalled out in 2019. What can I do to give myself the highest likelihood of growth in 2020? —ADEN, MINNEAPOLIS

THE CHALLENGE of growing a business is surprisingly similar to the difficulties of losing weight. It’s something I realized after growing my first business, a fitness consultancy called Born Fitness. Each year, people set resolutions (goals, KPIs), start off strong (lots of early-year focus), get frustrated (friction from the process), plateau (return to old habits), and watch apathy set in (panic and lack of focus if goals are not met).

Illustration / F E D E R I C O G A S TA L D I

Instead of searching for a magic bullet, a systematic process makes it easier to identify breaks in the system, create pathways for progress, and take aggressive bets that could lead to big successes. It works with your health, and it works with your business. To ensure that you don’t face the same questions next January, follow this four-step plan to adapt your business, provide clarity, and spark new growth.

When you reassess your business, the natural inclination is to focus on your weaknesses. But this might not always be the best way forward. Instead, look at what you do best. Is there an opportunity to grow even more by focusing on where you’re already succeeding? Oftentimes, your current customers hold the keys to your future growth. When working with Four Sigmatic, a flourishing CPG brand, we found that customer satisfaction and retention were phenomenal. But our first question wasn’t “How can we get more customers like this?” Instead, it was “How can we deepen the relationship with existing power users?” That led to research that unlocked a new strategy to reward current customers, which has increased

lifetime value, average order value, and referrals—a massive step forward for the business. STEP 3/ Question your weaknesses.

Every business has weaknesses, and leaders often feel required to plug those leaks immediately. But that’s not always the right move. You can’t do everything at once, and growth can be a by-product of going narrow on one or two areas of focus. That might mean putting your energy into your strengths. And while your gut might tell you to also immediately address your weaknesses, take stock first. If they’re not preventing your business from moving forward, the best use of your time or money (for now) may be elsewhere. STEP 4/ Take big swings.

Founders are tempted to play things safe, for fear of failure. It’s logical: Business is hard, and failure is possible! But think of it this way: Even when you play it safe, the odds are still against you. When you take bigger risks, the odds aren’t that much worse—and the rewards are exponentially higher. As long as you are financially responsible, you can be strategically bold. That’s the best way to give yourself the highest likelihood of success. Adam Bornstein is the founder of Pen Name Consulting, a marketing and branding agency, and the creator of two12, a mentorship experience for entrepreneurs.

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The Way of the Wahlberg

To start the year 2020 right, take some lessons from the business world of Mark Wahlberg—who diligently, thoughtfully built himself into the most disciplined man in Hollywood.

by JASON FEIFER 28 / E N T R E P R E N E U R . C O M / January-February 2020

Photographs / R I K E R B R O T H E R S

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H Hollywood movie premieres tend to follow a script: Tons of press and industry VIPs pile into a theater for a private screening and then migrate somewhere nearby for a blowout party. I was part of this scene in 2010, when the Mark Wahlberg movie The Fighter debuted. We watched the film, then went to a hip hotel, where elevators were to take us to a club on the top floor… except the hotel lobby was not equipped to handle all of us at once. Hundreds of people soon overwhelmed the place. We were crushed together, shoulder to shoulder, while a few measly elevators took small bunches of us upward. It took a while. People were annoyed. Then we heard a booming voice. “Make way!” the voice shouted. “Make way!” The voice, it turned out, belonged to a very large security man. He was carving a path through the crowd, from the back of the lobby all the way to the elevator in the front. And when he reached the front, he turned to the back of the room and yelled, “Right this way, Mr. Wahlberg.” With that, everyone in the lobby turned to find Mark Wahlberg standing in the back. Wahlberg was startled. He clearly did not ask for this. “What?” he said. “No, no, no. Please.” Then he gestured for us to continue toward the elevators ourselves. The pathway in the crowd closed. And Wahlberg, stuck behind the crowd, presumably made his way upstairs last. Those are the details as I remember them. I was a junior editor at a different magazine at the time, and it left an impression on me: Mark Wahlberg, the star of the movie, the man of the hour, the VIP among the VIPs, did not want the royal treatment. Was he humble, or just image-conscious? I hadn’t met the guy, so I didn’t know. But it struck me as a model for managing success. When you’re confident in who you are, you don’t need to flaunt your status.

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G R O O M I N G , M A I TA L S A B B A N ; S T Y L I S T, S A M A N T H A M C M I L L E N

son who focuses only on what they care Time passes. After repeating this tale to about to one who can focus on it all? The friends for the past decade, I am talking answer is: discipline. to Mark Wahlberg for Entrepreneur. So I decide to tell him the story, too. I want to know what he makes of it—how he became TODAY, Wahlberg’s discipline is legend. a man with instinctual modesty. When training for a role, he famously starts But Wahlberg isn’t very philosophical. He days with a 3:30 a.m. workout. He’s either doesn’t remember the scene, but he underat work or at home, and rarely, it seems, stands his response. “The whole idea of anywhere else. When he’s on a movie set, some guy barging through and pushing peohe creates a routine that intersperses actple out of the way, it just sounds obnoxious,” ing and business calls, and he prefers to he says. “Like, it’s all good. We’re all going to never deviate from it. (When we spoke, for the same place.” example, Wahlberg was in London filming a movie—so to accommodate the time differAs I was telling him the story, howence, he had a business partner on Eastern ever, he started thinking about what else Standard Time wake up at 5 every morning he was doing at the time. He was shooting to talk.) He’s able to knock out successive a movie in Louisiana, so he’d flown into Hollywood blockbusters while still personNew York just for the screening. And while ally scouting future Wahlburgers locations. he was there, he would have had a ton of He’s detail-oriented enough that while meetings to talk about the film’s marketappearing on The Ellen DeGeneres Show to ing and release. The party was just another promote a movie, he can also casually dispart of the job, one of many obligations cuss the exact square footage of a car dealerthat day. “I was probably just tired and ship he owns in Ohio. over all of it,” he says. “I was getting done What drives this? The morning workouts what I needed to get done, to get home to hold a key—because truly, why get up that see my wife, my kids.” early? Is it because he loves working out? Getting done what I needed to get done. The answer is no. That did not always come naturally to “My favorite part about working out is Wahlberg, just as it doesn’t come naturally when it’s over,” he says. The same is true for to many. “When I was younger, I was able the movies he makes. “I mean, I love the proto focus on things I was interested in,” he cess when the camera’s rolling, but all the says, “but I had no time and no desire to downtime and everything focus on or be disciplined else starts driving me about things I wasn’t intercrazy after a while.” ested in.” Those were the “If I don’t think What he loves is being Marky Mark days, which there’s real value fit, and having made the included a lot of success, I can bring movies. So he focuses on yes, but also a lot of partythe outcome of his time, ing and a short stint in [to a business], not the minutiae of it. jail for assault. “And I then more than And he’s learned that he realized that I needed likely I’m not going can grow that outcome to be disciplined all by staying in stride. “It’s around, in every capacity— to get involved.” never too late to start and that would allow me over, which I get,” he says. to become successful, or “But it’s a lot easier to stay in shape than it is at least have the best chance to succeed.” to get in shape. So why fall out of it? If you This is the core of what drives Wahlberg— keep grinding, you’re always ready to go.” at the back of that hotel in 2010, but also Consistency breeds discipline. Or maybe in the front and back of so many ventures discipline breeds consistency. Either way, in 2020. He’s an actor, of course, but now one feeds the other. also cofounder of the franchised burger Though entrepreneurship will challenge chain Wahlburgers, which has 38 locations both. across the world; the production company Every experienced entrepreneur will run Unrealistic Ideas; investor and adviser to the up against their own abilities. In the course fitness studio franchise F45, a fast riser on of building a business, they’ll discover what Entrepreneur’s Franchise 500 list; and he’s they’re good at…along with what they only involved in a number of other businesses as thought they were good at. They’ll believe well. It’s all predicated on doing the boring they’re good leaders, until their company stuff as well as the fun stuff, and handling culture tanks. They’ll believe they’re good each part with equal rigor. builders, until profits stall. Then they’ll be So the big question is, how does someforced to make a choice—to bulldoze their one make that change—going from a per-

WAHLBURGERS’ KEY TO SUCCESS:

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n Wahlburgers’ early days, the company surveyed its audience with a simple question: Who do you believe our competitors are? Patrick Renna was sure he knew the answer. He’d joined the company as CFO in 2015 and would become president in 2019. The way he saw it, the competition was full-service restaurants—Red Robin, Chili’s, Applebee’s, and so on. But to his surprise, some customers disagreed. “Consumers compared us to Shake Shack, Five Guys, and burger concepts that played in the fast-casual space, which is primarily counter service,” he says. That was a problem, because Wahlburgers wanted to be something else. “We want people to know that we serve alcohol and that you can come to our restaurants and sit down and have an experience.” The Wahlburgers team realized they’d created this confusion themselves. They’d originally split restaurants between a full-service side and a counter for quick service. They’d wanted to serve diners both ways, but now they realized it was a mistake. So they let the market determine which areas would get a dine-in restaurant, and which would get smaller counterservice locations. To Renna, this is how it’s supposed to go. He’s a food industry veteran who studies data deeply—weekly sales reports, surveys and panels, and the results of testing new products and services. The results often challenge his assumptions. “Don’t worry about what you think as the leader,” he says. “Certainly, you need to guide your people, build the company, and establish its values. But if you listen to the guests coming to the restaurant, they’ll tell you everything you need to know.” That’s how he’s now wrestling with Wahlburgers’ biggest challenge. The brand has 38 locations, but thanks to Mark Wahlberg and 10 seasons of an A&E show called Wahlburgers, its visibility is much larger. How does it capitalize on that? To find out, Renna is selling beef in grocery stores,and exploring locations in high-traffic areas like casinos, airports, and universities. What will work? “Sometimes you’ve just got to take the chance and test it,” he says. Then he’ll listen to his customers and decide what to do next.

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way through a problem they may not be equipped to solve, or to shift their focus onto their strengths, and surround themselves with complementary people. Wahlberg has felt this himself as he has transitioned from actor to entrepreneur. “Every business I had been in, I started as a novice,” he says. “And so I’m still learning as I go along.” His instinct is to get into the weeds, to a level that sometimes isn’t helpful. (Try scouting a restaurant location as Mark Wahlberg; it doesn’t take long before being mobbed by selfie takers.) So in each

case, he’s trying to understand what he’s good at and what he’s not. “Like, I’m not going to get into a situation with my brother Paul, arguing about how he makes a specific sauce for the restaurant fresh to order,” he says. (Paul Wahlberg is the chef of the family and is a co-owner of Wahlburgers.) “But I am going to have a conversation with him if those costs of goods are becoming a problem.” Wahlberg has another way of solving these problems: He doesn’t enter a relationship if he doesn’t understand his role. “If I

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don’t think there’s real value I can bring to it, then more than likely I’m not going to get involved,” he says. He wants to know up front where he’s useful—and where he’s not. That’s the story of how he got involved in the fitness franchise F45. Though it took longer than F45 cofounder and CEO Rob Deutsch would have liked. fitness studio franchise that began life in Australia in 2013 and has become popular for its high-intensity, ever-changing 45-minute workouts. It expanded easily

F45 IS A

throughout its home country and New Zealand. But in 2015, as it expanded into the United States, it wanted a partner to help build awareness. “Obviously, it needs to be someone who lives and breathes health and fitness,” says Deutsch. Deutsch knew someone who knew Wahlberg, who mentioned him as a possiblity. So Deutsch tried to send a message to the movie star. No reply. “I wasn’t really interested,” Wahlberg admits now. People are always asking him

for one thing or another, so he keeps his guard up. But over time, he started to hear more about F45—not just from Deutsch’s people but from friends and contacts in the fitness world. “So I said, You know what, let me go and check it out,” Wahlberg says. There’s an F45 a few miles from his home, so he arrived unannounced and took a class. He enjoyed it—and frankly, he says, he probably liked it more because he’d gone on his own, rather than at the company’s invitation. After that, he visited F45’s Los Angeles headquarters. A conversation developed from there. The way Wahlberg remembers it, F45 wanted to sign him to an endorsement deal. (“We weren’t sure exactly how it was going to work,” says Deutsch.) But after doing enough due diligence, Wahlberg wanted more. This, he thought, was the kind of company he understood how to help. “I said, ‘Well, I’d be much more interested in putting a group together and bringing people who bring real value to the business,’” he says. An investment deal was drawn up. Wahlberg’s team then provided help on everything from marketing to real estate, and Wahlberg himself has been an active promoter of the brand—particularly on Instagram, where he’s regularly posting clips of his workouts. Deutsch has been thrilled with the results. As of September 2019, F45 has opened more than 1,000 units, and it earned a giant bump on Entrepreneur’s annual Franchise 500 list. (See page 156.) But above all, Deutsch has been amazed at how accessible Wahlberg has been. “Every time I contact Mark, every time I need anything or just want to have a chat, he always has time,” Deutsch says. “That’s the thing that just shocks me about someone who’s so busy. I think it comes back to the fact that if you really want something in life, you’ll always find the time.” For Wahlberg, this is by design. It’s the outcome of all that diligence, and the years of refining his focus. When he was younger, he says, “anytime something didn’t go the way I wanted it to, I realized that I didn’t give it the effort and the focus I should have.” Learn that lesson enough, and it sticks. Successes become self-reinforcing. “And now,” Wahlberg says, “it’s like, even with all the stuff I have going on, I still feel like there’s enough time in the day to do other stuff.” That’s the miracle of discipline: In strictness, you create freedom. Jason Feifer is Entrepreneur’s editor in chief.

F45’s’ KEY TO SUCCESS:

Execution!

F

45’s fitness studios are uncluttered. The open rooms have minimal equipment off to the side and large screens everywhere. This allows F45 to constantly change workouts, unencumbered by large treadmills or rowers. The screens guide people through each class—showing which moves to make, when to pause and hydrate, and, by syncing with a device each member wears, tracking their heart rate. But not long ago, some F45 employees got to thinking: Could the screens also create some friendly, live competition among studios— calculating how hard everyone in one location is working and putting them up against everyone in another studio? So they brought up the idea at the company’s Los Angeles headquarters, and F45 did the thing that it prides itself on: It started testing the idea—fast. “We’re always willing to change things. We’re always willing to hear ideas,” says cofounder and CEO Rob Deutsch. “We basically get people to put concepts together, present their concepts, and then we put an execution team together to make them happen.” Deutsch didn’t come from the fitness world. He was an equities trader, but he got bored and drew up this new business concept on the side. He teamed up with Adam Gilchrist, an experienced franchisor he played rugby with, and for a while F45 was just the two of them. To scale, they realized, they’d need to bring on amazing people—and to excite those amazing people, they’d need to give them the ability to make an impact. That’s where the commitment to execution comes from. Deutsch wants to build a fast-moving company that’s powered by its smartest people—and now, even with 110 employees, F45 still has what Deutsch calls a “flat management system,” with very few layers between him and Gilchrist and anyone else. “It enables decisionmaking to be done super quickly and efficiently,” he says, “and still gives people the ability to have some flair and give input.” This way, the company can execute its best ideas fast…and its members can execute even better workouts.

January-February 2020 / E N T R E P R E N E U R . C O M / 35

THE FOUNDER & THE IDEA MAN The founder of

MeUndies

would have never met a man named Grease if both of them hadn’t ended up in the same federal prison. But their friendship changed everything (including the business). by LIZ BRODY

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Illustration / M A X- O - M AT I C

→ BRIDGING WORLDS MeUndies founder Jonathan Shokrian (top center, in sunglasses) with Joe Nickson.

January-February 2020 / E N T R E P R E N E U R . C O M / 37

It was too EARLY. Shok—as the founder of MeUndies had become known in federal prison—shook himself awake, pissed. The 29-year-old from Beverly Hills had gotten used to sleeping in a cell, but actual sleep was sometimes hard to come by, given that his bed was across the hall from the “black TV room” (as everyone called it). Guys could get noisy in there. And on this morning, as the halls of the prison were still largely quiet, they were having a heated conversation about politics with the door wide open. So, scrawny as Shok had become behind bars, he got out of bed determined to shut their door—even if it led to a confrontation. What he found, in the middle of that room, was an intimidating dude named Grease, who couldn’t have been less happy to see him— and who, to both of their great surprise, would help define a new direction for MeUndies. But at that moment, nobody was talking business. The question was which one of them would end up on a stretcher. And really, it wasn’t much of a question. Where to start.

SHOK/ Zip Code 90210

EVERY [UNDERWEAR] AD I SAW OUT THERE WAS SO ALIENATING, LIKE YOU HAD TO HAVE A SIX-PACK OR WINGS ON YOUR BACK.

In early 1985, Jonathan Shokrian was born into a clutch of Persian Jews in Beverly Hills. Most had fled the 1979 revolution when Iran became Islamic, figuring they’d go back when it all blew over. But Shokrian grew up sensing the struggle of a community that realized they were stuck here. “There was a big identity crisis between the old world that our parents came from and this new world that we were living in,” he says. “I was told how I had to dress, who I could date. I was forced to take Farsi classes and groomed into taking over the family business.” He hadn’t even graduated college at Southern Methodist University in Texas when he started working for his dad’s real estate company. But Shokrian found that business cutthroat and impersonal. At the same time, he compared himself to his childhood friends, who were doing amazing things. Escaping like a heady steam from their tiny pressure cooker of a Persian Jewish community, they’d been launching some of the buzziest startups of the moment—companies like FabFitFun, Alfred Coffee, and Sweetgreen. Shokrian could feel the intensity of their entrepreneurialism; it pushed them not only to be part of this American culture but to define it. “I had never been more excited by anything,” he says. “I started obsessively thinking about what my own thing could be.” In 2011, Shokrian was packing for a European vacation with 38 / E N T R E P R E N E U R . C O M / January-February 2020

Sweetgreen’s cofounder Jonathan Neman and ran to Macy’s to pick up a pair of underwear. There in Dallas’s Northpark mall, he was embarrassed to have to ask a female employee where the men’s underwear was. (“I know it sounds silly,” he says.) Then he dropped nearly $30 for a pair of Calvin Kleins that turned out to be a bad fit. On the trip, he vented about it. “We were jetlagged, drinking coffee in a café in Amsterdam, and Jon’s like, ‘Someone should make underwear better and sell it online,’ ” says Neman. “And then literally right there, he logs on to the internet and finds the guy who had UnderwearClub.com and offers him, like, $5,000 for the URL. That’s how Jon works.” That deal fell through, and anyway, as they traveled, Shokrian decided that the name of his nascent underwear company should have more attitude. “I personally struggled with body image and confidence,” he says, “and every ad I saw out there was so alienating, like you had to have a six-pack or wings on your back.” He wanted to build a company that made everyone feel good in their skivvies, which meant the messaging had to be as comfortable as the fabric. He liked the cheeky way the English called their intimates “undies,” and because at the core the company would be about self-expression, Shokrian stuck the “me” in front. And there it was: MeUndies. Back home in L.A., he found a student designer on Craigslist to sketch out prototypes. Then he set out to raise money. He’d previously invested in his friends’ startups, so they now returned the favor. He also took money from a new incubator called Science, which was helping to build some of the biggest direct-to-consumer, subscription-based companies. Dollar Shave Club was starting there. So was DogVacay. Shokrian wanted MeUndies to run on a subscription model as well, which in theory would create recurring revenue while saving his customers from awkward trips to Macy’s. “When Jonathan showed me his artwork,” says Science cofounder Mike Jones, former CEO of MySpace, “it was like this beautiful blend of a non-gender-conformity-building, modern, fresh approach. It felt like the anti–Victoria’s Secret, the anti-Jockey. And that felt very next-generation.” But Shokrian wouldn’t be the star of Science. That honor went to Dollar Shave Club, which quickly exploded in popularity (and would later sell for $1 billion). At MeUndies, six months after launching in December 2011, Shokrian’s team of three was cramped in his father’s office, out of cash and pretty much out of inventory. He considered quitting but decided to give it one last shot, taking a loan from his dad to buy more product. That tided them over into the holidays and led MeUndies to its first $100,000 month. And

. And too LOUD. on that momentum, Shokrian went on another fundraising tour and found some interest. “The basics market was just stale,” says Tyler Winklevoss, who’d become an investor, “and didn’t speak to the modern consumer either in sensibility or purchasing channel. It was ready for a fresh newcomer.” Shokrian raised $1 million and moved MeUndies into its own warehouse. As he relentlessly pushed to sell product, his tactics were sometimes at odds with his ambition to build a body-positive brand. “Every major brand at the time used some form of sexualized content in order to drive attention,” he says. “In the early days, that’s all I knew.” And so MeUndies hired seductive models to flaunt its underwear and even launched its socks on a new high-end porn site. “Some of our early campaigns I’m really proud of and others, you know, I’m not,” he admits. Say what you will, and people said a lot, the strategy tripled revenues. By 2013, the team—now around 10 strong—was relieved to be over the hump. “And then EPA agents showed up at my door,” says Shokrian. “They told me they were prosecuting me.”

to get some money, come holler at me,” the man said. The envelope contained $5,000 in cash. Nickson hollered and was soon robbing banks. In four months, his crew hit more than 10. “We got out of hand,” he says. But one time really sticks with him: He was masked and armed, heisting a Bank of America on March 12, 2001. He’d already stuffed his long johns with cash and was heading away from a sign that said, of all things: “Easier Access: What are you waiting for?” Then, a kid—maybe 4 years old—popped up out of nowhere. “He runs up to me and he puts his hand like mocking a gun and he says, ‘Freeze!’ ” Nickson recalls. “And I say, ‘Little man, where’s your mommy?’ And she says, ‘I’m right here.’ ” Nickson grabbed the boy by the hand and brought him to his mother. This was the first time he really thought about the people he victimized. And he said to himself, I’m not supposed to be doing this. He quit hitting banks, but the police still caught up with him. Nickson was convicted of conspiracy and bank robbery and took a plea on three additional bank robberies. On June 6, 2005, he was sentenced to 20 years in federal prison. He was 25.

GREASE/South Central L.A.

SHOK/ Dallas

While Shokrian was growing up in one of the world’s fanciest neighborhoods, a boy named Joe Nickson was coming of age in South Central L.A., infamous for gangs like the Neighborhood Crips and the Bloods, and crack. Nickson’s father managed logistics for a security company; his mother worked as a home nurse. They split up when Nickson was about 6 but sent their son—their only child together—to school in suburban San Fernando Valley to keep him out of trouble. Nickson loved his classes but felt torn between two realities. “I would go to different sleepovers, have different vernaculars,” he says. “I would hear about Tony Hawk in elementary school and when I went back home, the new Eazy-E and Snoop Dogg albums. I could relate to both worlds, but I never felt that I belonged to either. So in my adolescent years, I started acting out, just to try to reversely fit in.” At 16, he joined the Neighborhood Crips and started “flocking.” It worked like this: Nickson, who inherited the street name Grease because he was too slick to get caught, would set out with his crew, dressed like basketball players selling candy, or they’d put on white shirts with black ties, get some pamphlets, and pretend to be Jehovah’s Witnesses. Then they’d “flock” to wealthy parts of town like migrating birds and knock on doors. If no one was home, they’d break in. It all ended rather abruptly, he says, when one of the houses they burglarized belonged to a district attorney. The laptop Nickson stole had a tracker in it. Nickson was sent to fire camp, an alternative to prison for first-time offenders. He was there only a few months. On the day he returned back home, a member of the Bloods pulled up in front of him in a Camaro, rolled down the window, and tossed out an envelope. “When you ready

Shokrian’s run-in with the feds—the reason the EPA showed up at his door—went back to a critical mistake he made when he was 23. Before starting MeUndies, when he was working for his father, he convinced his dad to buy and fix up a huge, run-down 1950s shopping center called Fazio’s. The place was a wreck—rats, holes in the roof, buckled floor tiles, asbestos allegedly in the glue holding them together. Some forms of asbestos are unregulated and don’t require the full, heavily controlled (and expensive) removal process. Shokrian’s construction consultant, according to court records, said the building contained this kind of asbestos. So, eager to make his dad proud and get the place renovated quickly, Shokrian outfitted his workers with masks and respirators, and went about renovations. But the project made news when workers used gasoline to clean the tiles, which caught the attention of the EPA. The agency decided to investigate and determined that the asbestos did need to be removed according to regulations. “I tried to tell them it was an honest mistake,” says Shokrian, “and that I would never intentionally put someone in harm’s way.” The Shokrians paid a $500,000 fine, took asbestos removal training, and started monitoring the workers for health issues. And everybody moved on. Except that, four years later, out of the blue, the case came back. After the agents showed up at Shokrian’s door, he was accused of failure to notify under the Clean Air Act. “I never thought a judge in his right mind would send me to jail,” says Shokrian. But that’s what happened. “This was not a case in which [Shokrian] set about to injure the environment,” Judge Sidney A. Fitzwater said at his sentencing hearing in Dallas. But the law is the law: He sentenced Shokrian to federal prison for a year and a day. f January-February 2020 / E N T R E P R E N E U R . C O M / 39

GREASE AND SHOK/ Terminal Island Nickson was 12 years into his sentence and doing time at Terminal Island, in L.A.’s harbor—transferred to the minimum-security facility for good behavior—when Jonathan Shokrian showed up there to begin his own imprisonment. It was April 15, 2014. Shokrian had left MeUndies in good hands. He’d chosen a CEO to run the business and had taken his team out to dinner to buoy their spirits. He knew that, as a federal prisoner, he’d be prohibited from conducting business while incarcerated, but he planned to stay in as close touch as he could. At the office, the MeUndies staff set up a special Golden Eagle Trimstyle phone—red for drama—just for when Shokrian called. “I felt very confident the company would survive my absence,” he says. His own survival felt less certain. “I was scared,” he says. “I mean, I’m from this very sheltered Jewish Persian family in Beverly Hills.” He hired a prison consultant (an actual thing), who prepped him on how to stay out of trouble. And once inside, that’s what Shokrian did. The other inmates started calling him Shok, and he kept focused on journaling daily, reading, and, as soon as he could get sneakers, running 50 miles a week. Shok thought a lot about MeUndies and was frustrated by not being able to contribute more. He could send emails via the prisonmonitored CorrLinks and make limited calls, but he had to be careful. “I was able to make suggestions and get updates,” he says. “But there was this very, very fine line I had to walk.” Shok’s firstever hire, Noah Taubman, came regularly to the visitors room, with its sad vending machines. “Jon would always show up with a piece of paper and go, ‘How’s this going? How’s that going?’ ” says Taubman, senior project manager. “He would have us print out the MeUndies Instagram feed and mail it to him, then go through it and comment and mail it back. It was surreal to see his complete reversal. He always wanted to control everything, and he had controlled everything. Now he was in an off-white jumpsuit, three sizes too big. His hair was short. He had lost a crap-ton of weight. That was scary.” But then, one fateful early morning, Shok said, Screw it. He’d had enough.

The TV Room Terminal Island is home to some 1,150 inmates, and, as is common in prison, they tend to divide themselves by race. Shok’s bed was across the hall from a TV room used by black men—“like a barbershop,” as Nickson describes it, where the guys would hang out and converse. And they kept the door open so it wouldn’t get too hot. “So one day around 7 o’clock,” Nickson says, “Mr. Privileged comes in, looks around, and closes the door.” Mr. Privileged was, of course, Shok. And Nickson—or Grease to 40 / E N T R E P R E N E U R . C O M / January-February 2020

everyone in prison—reopened the door. From there, the men forget exactly how they nearly came to blows. Grease: “I already have it in my mind that if he closes [the door] again, I’m going to smash the collarbone off his shoulders. Can you believe what his first words to me are? ‘All I hear is your fucking mouth.’ ” Shok: “Well, no. He said, ‘If you touch the door one more time, you little punk-ass bitch, it’ll be the last door you touch.’ And then I was like, ‘I wouldn’t be touching the door if I didn’t have to hear your loud-ass mouth.’ ” Grease: “And as sure as the sun came up, he came in and attempted to [close the door] again.” Shok: “I forgot where I was. I mean this guy’s like six feet and ripped. I’m like five nine, a skinny Jewish kid, and he’s about to knock me out.” Grease: “I was going to beat the—oh, yes, I was. And then one of the other guys, said, ‘Hey, man, come on.’ ” Shok apologized, and the two ate dinner together that night. “The connection,” says Grease, “was instantaneous.” After that, they started walking the track, working out, and making special meals together. They talked about life, family, and integrity. If the two had led impossibly different lives, they shared a sense of being torn between worlds. Shok wanted to understand how a guy as smart as Grease was robbing banks. Grease wanted to know everything about MeUndies. “Grease’s energy was beyond anything I had seen,” says Shok. “He was passionate, full of life and ideas, resourceful. He was always laughing. We were very, very close.” One day Grease came racing from the TV room with news about a Dallas Cowboys running back, telling Shok, “Joseph Randle just got arrested for stealing underwear from Dillard’s. You have to do something with it.” Grease had a point; the player could → TEAM MEUNDIES The staff at a have just bought underwear company dinner online! It played right into the before Shokrian’s MeUndies brand story. prison sentence. Back at HQ, the red phone rang. Greg Fass, senior brand manager, picked it up. “Jon was like, ‘We’ve got to reach out. We’ve got to get involved in the conversation,’ ” he says. So they jumped on it. Adam Schefter, NFL insider at ESPN, was tweeting about how expensive Randle’s stolen underwear was, considering the fine the Cowboys organization was about to slap him with. So using the MeUndies Twitter account, Fass tweeted back: “@AdamSchefter if you see him, tell Joseph Randle that we’ll pay his fine. We hate buying underwear from dept stores too #DirectToConsumer.” Schefter responded by putting them in touch with Randle’s people. MeUndies worked out an endorsement deal where it would help cover the $29,500 fine in return for Randle doing charitable appearances and donating $15,000 in underwear to those in need. Back in prison, Grease and Shok ran to the nearest TV to watch their stunt unfold on the news. “I had to get him an honorary seat in the black TV room,” says Grease. Then they saw it, right there on the screen—Grease’s idea, transported from behind bars and out into the world. It was nothing short of an awakening. “When I was robbing banks, I was doing it for the adrenaline rush,” he says. “This was that feeling times 10. I thought: This is euphoria. This is

PHOTOGRAPH COURTESY OF MEUNDIES

The founder of MeUndies had 45 days to self-surrender. “We were shocked,” says Neman, the Sweetgreen cofounder, who flew in for support along with others. “It felt like a final supper.”

what I want to do for the rest of my life.” The Randle story quickly went viral. In the crush of media, MeUndies got slammed for sponsoring a thief. (And as it turns out, Randle has gotten in repeated trouble since.) But Shokrian leaned into the controversy. If MeUndies was under fire, it was also in the spotlight, and the team responded by emphasizing the charitable outcome. “It really proved to me the power of timing and going live with something that’s socially relevant,” he says. He also saw Grease’s potential and encouraged him to come up with more ideas for MeUndies. “Jon told me, ‘Bro, you got it,’ ” says Grease. Three months later, Grease spotted another opportunity on the news. With the Super Bowl approaching, Seattle Seahawks running back Marshawn Lynch was fined for grabbing his crotch. Grease and Shok knew Lynch’s cousin from prison, and he got them an intro to the athlete. MeUndies announced it would donate $20,000 to Lynch’s charity to cover the fine plus $20,000 for every touchdown he scored at the big game. They ended up spending $40,000 total—a pittance for Super Bowl exposure. “Those two campaigns,” says Shokrian, “put us on the map.”

SHOK/ MeUndies HQ November 3, 2014, after 202 days inside, Shokrian walked out of Terminal Island, released five months early. His entire family was there to greet him. They gave him his cellphone, which had been off since April 15, and took him home, where he changed out of his prison sweats and had breakfast with some old buddies. A few days later, he was back at work. The transition was easy, he says. Shokrian had stayed connected to everyone while locked up and even shared his journals with some of them, so there wasn’t much catching up to do. But he did carry a new lesson with him, hard-learned from the asbestos fiasco: He needed to think through decisions more carefully and get good expertise. “It’s on me to do the diligence and to slow down,” he says. “Now I go into everything asking as many questions as I can, so I feel confident in the decision we’re making.” This would filter into MeUndies at large. “It wasn’t like Moses came down and gave us the new values of the company,” says Taubman. But employees did notice a subtle shift. During MeUndies’ first years, Shokrian myopically followed competitors into sexy marketing and a lot of unoriginal branding. Now, says Taubman, Shokrian started thinking differently: “We can’t just be another brand that does the same thing, that has the same photo shoot, that pays the same influencers. It was like he was given the thumbs-up to do things another way. It was very slight but powerful.” Shortly after Shokrian got out of prison, MeUndies partnered with the edgy digital media platform Arsenic— but when he saw the sexual content it was planning, he pulled out of the deal. From then on, MeUndies stopped going for the quick clicks. The company came out in support of the LGBTQ community and partnered with restaurateur Eddie Huang, who stood in front of the camera in just his MeUndies and talked about body insecurity among Asian men. In August 2019, the brand launched Feel Free, a range of larger sizes—and then, “because maybe even they won’t fit, and someone will be left out,” Shokrian says, they added a button for people who need more room. The button makes no financial sense,

but it’s a show of commitment to inclusion. The formula seems to be working. In January 2019, Shokrian took back his role as CEO and has grown the company to 250 employees. It anticipates $100 million in sales for 2020. MeUndies’ model also seems to be paying off. The underwear-andsocks category overall hasn’t grown in the past year, but the shift to online purchases is profound—an increase in the U.S. of 9 percent, to $5.2 billion, during the year ending September 2019, according to The NPD Group. And MeUndies is moving offline, too. In November, it opened its second brick-and-mortar store—this one in the Del Amo Fashion Center, which is owned by Simon Property Group, the real estate giant whose venture arm invested in MeUndies. (It has raised almost $11 million.) “So there is definitely a very big strategic partnership there as we look to expand and open more stores,” says Shokrian.

GREASE/ On the Outside When Shokrian left Terminal Island, he gave Nickson a note that said: Always stay positive and evolve, learn, and grow. “That shit was so profound,” says Nickson now. The two men talked often in the years that followed. Then, on July 15, 2019, after 17 years in prison, Nickson was released. He breathed in the fresh air, and a lady friend picked him up from the facility. A job was waiting for him at MeUndies. He’d learn the product in the warehouse and then move into a marketing role. But it’s not so easy, both men say, to walk away from a criminal past. For Shokrian, having a record as a convicted felon has meant often explaining the case to new acquaintances or potential partners. “That has definitely impacted me and our business,” he says. And for Nickson, it’s meant that every part of his new life is an adjustment—and the structured environment at MeUndies, it turned out, just wasn’t an easy fit. Less than five months after Nickson joined the company, they parted ways. No hard feelings. “That’s my friend forever,” explains Nickson. “I’ve got a lot of love for him,” says Shokrian. Both, in fact, look forward to the next chapter of the story that is still unfolding. “From the Jonathans to the—I mean, the way we met and the friendship that spun from it,” says Nickson. “They have a saying that we make plans and God laughs. This is my destiny.” Another friend of his from Terminal Island, Vincent Bragg, had seen how Nickson’s ideas helped MeUndies— so when Bragg got out in 2016, he cofounded ConCreates, a marketing agency that crowdsources ideas from people currently incarcerated or affected by the system. To whatever extent good marketing is essentially a con job, there’s a voracious thirst for erupting originality, and ConCreates has already secured a partnership with global agency 72andSunny. Now Nickson works with them, too. Shokrian, meanwhile, is grateful for the perspective he found in prison—one that, he believes, will continue to shape his company in the future. “Although I wish it didn’t happen,” he says, “it’s not something I would want to take back. Considering no one got hurt, I’m grateful for the tough lessons it gave me. There’s still an opportunity, no matter who you are, to turn a negative into a positive.”

WHEN I WAS ROBBING BANKS, I WAS DOING IT FOR THE ADRENALINE RUSH. THIS WAS THAT FEELING TIMES 10. THIS IS WHAT I WANT TO DO FOR THE REST OF MY LIFE.

Liz Brody is a contributing editor at Entrepreneur. January-February 2020 / E N T R E P R E N E U R . C O M / 41

42 / E N T R E P R E N E U R . C O M

Illustrations / D O U G C H AY K A

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People Are NOT DATA Want to really connect with consumers? Take it from me, a guy who ran marketing at YouTube, Spotify, Google, and Instagram: You can’t rely on data alone. IT’S TIME TO BUILD SOME TRULY HUMAN CONNECTIONS.

by ERIC SO LOMON

January-February 2020 / E N T R E P R E N E U R . C O M / 43

didn’t know it at the time, but I was about to join my very last “performance calibration session.” This was late in 2018, when I was a managing director at Instagram, and these sessions had been a common part of my life—just like they are at many big companies. They’re a time for senior managers to discuss the performance of their individual team members, applying common organizational standards across job levels. HR specialists moderate performance discussions on a biannual, sometimes quarterly, basis. Conceptually, there’s nothing all that weird about calibration. But that’s conceptually.

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I have held senior-level marketing roles at YouTube, Spotify, Google, and Instagram, so I’ve sat in on a lot of these. And the reality is this: A group of highly opinionated, often outspoken managers get together in a room shielded from prying eyes. Most managers gather in a physical conference room; others dial in by phone or video, making it nearly impossible for everyone to weigh in equally. The HR representative says a few obligatory words toeing the company line, and then the verbal battle swords come out. For the next several hours, we go around the room, screens, and phone lines making the best case for why one manager’s team member deserves an “exceeds expectations” rating (“She’s a rock star!”), while another’s should be a “meets expectations” (“He’s solid but hasn’t gone to the next level”) or, worse, a dreaded “meets most expectations” (“Her peers sometimes find her difficult to work with”). During one particularly memorable calibration session at Google, a young man’s rating was under scrutiny because his manager argued that this employee needed to “grow a pair of balls.” Every so often, HR will step in to suggest that the group bump a few people down

because we’re aiming to hit a normal distribution of ratings. We’re not looking for a perfect bell curve—very few people are rated at the lowest or highest ends—but the bell can’t be too top-heavy. Although positioned as an objective method to evaluate employee performance, I have found calibration to be an almost entirely subjective experience, with sometimes dire consequences. One below-average rating means less bonus money; two in a row triggers a performance improvement plan that routinely ends with getting fired. But I’ll be honest; for years, these problems never really sunk into my brain. I was a devotee of data. That was the best way to reach customers, I believed—and, naturally, that meant it was the best way to manage employees as well. Data was core to my Ph.D. work and the thing I dedicated my career to. And even when I was emotionally shaken—a moment, only a few years ago, when I lost my father in a tragic and haunting way—I reacted by submerging myself even further into a data-driven, analytical, emotion-free world. That space just made more sense. But during this performance calibra-

4 4 / E N T R E P R E N E U R . C O M / January-February 2020

tion session, something inside me started to crack. I had a thought: By plotting performance on a normal curve, we’re treating people as data points, not as human beings. I had been videoconferencing into this meeting and felt an urge to leave it. So I turned my camera off. I sat and thought. It was unclear how much time had passed when I turned the camera back on to rejoin my Instagram colleagues. I stared into the lens, past the lens, to see the looks of silent victory or resignation on the faces of my peers, most of them crammed around a small conference room table in Menlo Park, Calif., nearly touching elbows. I had entered a rare moment of silence, as if everyone were leaning in to hear the barely whispered secrets of the universe. And that’s the moment when I knew I was done. Done with Instagram. Done with the career that I had been building for the past two decades. Done with the notion that turning everything into data—especially human beings—is anything other than personally and professionally damaging. It was time to do better. t the age of 20, like so many college students, I was in search of some kind of “truth.” Math and the harder sciences lay outside my mental wheelhouse, so I settled on cognitive psychology, with a focus on language and reasoning. This was a bull’s-eye on people skills, but backed by brain biology and a heap of statistical analyses. I became enamored with the vernacular of objectivity. People who participated in my experiments became subjects. To get published in the field, I was instructed to be in constant pursuit of statistically significant results. I learned how to run t-tests and ANOVAs and other math-y things that allowed me to abstract away from the individual in order to talk about populations. This was a version of truth I could identify with, and I was hooked. After college, I entered a graduate program in psychology. I found new ways to experiment on subjects. By the time I was 26, I had earned my master’s and my Ph.D. Then I went into advertising, where I was something of a corporate unicorn—the guy with a Ph.D. in quantitative psychology who employs a data-driven skill set to help sell mainstream products like Cheetos and Slim Jims. I found this intoxicating, but I wanted even more. So after a few years at ad agencies, I made the leap to a marketing role at YouTube, and later to Spotify. With their well-known missions to organize the world’s information in different ways, there seemed to be no better space for someone infatuated with the hunt for truth and objectivity. f

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I joined YouTube in 2011, and my timing was good. I’d been invested in data-as-truth for a long time, and suddenly data became the central currency of corporate America. Topics I had delved into as a doctoral candidate—A/B testing, artificial intelligence, rational versus emotional decision-making— became mainstream business parlance. Everyone began talking more excitedly about adopting data-driven approaches to everything, and I watched as leaders across industries started to demand increasingly more data in order to inform—and, in many cases, guide—critical business decisions. The field of marketing in particular has embraced the quantitative mindset. In part, this is due to a correction of the “Don Draper” era of advertising, where big, transformative ideas materialized toward the bottom of a martini glass. There’s a logic to this: Marketing used to rely upon the whims of a few, but now we have the technical capacity to understand the interests of the many. And that, in turn, has enabled us to track and calibrate exactly how people react to different messages—a perfectly reasonable interest for any business. Then this capability was democratized—Facebook and Google, along with other technology platforms, have made it famously easy for any business to target people down to an exact science. These massive digital advertising platforms quickly changed what it means to be a successful marketer—it’s no longer about establishing real, human connections with people as customers, assuming that was ever the goal. Today, the Holy Grail of advertising can be framed as personalization meets attribution. This is the mechanical process of delivering highly relevant and valuable communication to customers (personalization at scale), and then understanding in great detail the impact and result of that effort while gleaning new insights (attribution). That’s why it seems like just thinking about buying a new pair of pants can result in chinos following you around the internet until you’re beaten into clickable submission. Data drives statistically significant results. I got this. I built new tools and strategies to optimize it, and I saw a return. And then: My own data set changed. Coming back home from a work trip, just before wheels-up takeoff, I received a call alerting me that my father was in the hospital. He had been found in his suburban backyard that morning suffering from two critical blows to the head—and there was no chance he would recover. Dead. Murdered? It appeared that way, although there were no witnesses and not enough evidence to know for sure. He was gone by the time I landed,

and I had absolutely no clue how to process the noxious human cocktail of denial, anger, sadness, fear, and unabashed grief. I took to the task of managing these emotions like an unflinching robot. I ate up the procedural minutiae as a proxy for feeling anything on a human level. There wasn’t much conscious about the shift, but I reverted to seeing the world as divided objectively into two parts. There was the task of conquering the soul-sucking tactics of sudden loss, and there was proving to the world that nothing—not even a tragedy—would stop me from blindly achieving. The idea of pouring myself into work came so naturally that I never once paused to think about it. This didn’t make me an especially pleasant colleague. I was fired from Spotify. Then I went to Google, and onward to Instagram—a believer in data as a corporate strategy but also, personally, as a method of separating work from my humanity. I wasn’t ready to blend the two. But then I realized that this is exactly what we must do if we’re ever to succeed in business (or, for that matter, in life). We’ll never really reach people if we just focus on their output. We’ll never build truly great, resonant brands if we don’t connect with people as individuals. So to start, I quit Instagram. fter corporate life, I did what anyone in a career crisis does: I worried. Then I relaxed and traveled a bit, discovered the value of sleep, and enjoyed quiet mornings that didn’t begin with an overflowing inbox. I learned that there’s more to this world than the narrow band I’d been laboring in. I started speaking with others who felt stuck or were looking to make change. I confronted the issues I had put off; I properly grieved for my father and started, slowly, to learn how to talk about it with others. And then I tried to find my new place in this world. Which meant starting with new ideas. As an oversimplification, I’ve come to think about business activity—spanning departments, companies, even entire industries—as running along a two-dimensional axis. On one end lies the operational, tactical, or transactional aspects of how organizations get things done. In marketing, these are activities like making a piece of advertising, running a story through a PR outlet, creating customer experiences, or deciding how and when to run a promotion. These, and other transactional activities, are tactics we can easily measure to tell stories about why what we’re doing is working or not. On the other end of the axis lies the foundational elements of how a business runs.

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For all organizations, this is about spending the time to craft or revisit the authentic mission and vision of a company, the core values the company holds, and how that business is positioned for greatness in the world beyond just the top and bottom lines. This work is based on telling human stories that resonate emotionally, not just rationally—and, clearly, this type of foundational work is much harder to measure. And that makes it harder to think about. All points along this transactional-tofoundational axis contribute to the success of any organization, but corporate obsession with Big Data has made it far too easy to ignore the foundational elements of business entirely. After all, it is so much easier to focus on measuring KPIs and crafting stories about success by exceeding agreed upon, but often arbitrary, metrics. For a long time, I simply didn’t see this as a problem. Who needs emotional resonance when you have metrics? But once I stepped outside corporate life and started looking at business as a regular, feeling, grieving, unemployed consumer, I started to really appreciate the disconnect. When businesses ignore the foundational elements of relationships, it can result in failure of epic proportions. Across the past few years alone, the marketing world has offered a constant string of cautionary tales. Pepsi launched an expensive ad starring Kendall Jenner in 2017 that had nothing to do with Pepsi’s mission or core values; in the same year, Audi ran a Super Bowl ad talking about empowering young women, but its entire board consisted of older men; and just recently Gillette produced an ad aimed at tackling toxic masculinity without any regard for how it made its core customer—men—feel. These all made news, and they were discussed as boneheaded missteps. But I know what they really are. They’re cases of blindly embracing data (“Fifty-two percent of people say a brand needs to stand for something bigger than just its products and services”), without much recognition that there are humans on the other end, and that those humans have finely tuned bullshit detectors. This is what happens when organizations execute without clearly defining or aligning to their operating system, which comprises such foundational elements as the core reason why the company exists (beyond making money), why it does what it does or makes what it makes, and how it goes to market and positions itself to the world. But this is exactly the direction we need to head in if we want to thrive in business and, more important, as human beings.

oday, I consult. I know, I know—it’s clichéd and expected: the man who left corporate life and now serves his old masters in new ways. But I find it satisfying in that I can now walk into datadriven places and say, Stop. In corporate life, we are tempted to separate human emotion from business practice, just as I separated data from humanity for most of my career. But I have come to realize that the line between these things is completely arbitrary. Drawing a stark distinction puts us at a big disadvantage as businesses and as people. I hope I’m not alone in thinking this, and perhaps I’m not. In the summer of 2019, it was heartening to see executives from the Business Roundtable assert for the first time that companies need to invest in the well-being of customers and employees rather than focusing solely on shareholder value. We’ll see how committed they truly are to doing that. But it is, if nothing more, a good way to start the conversation. The reality is that marketers have long understood the need to build and foster meaningful emotional connections between businesses and customers. The quality of these connections helps to define the world’s most iconic brands. But as technology, data, and metrics have moved to the forefront of corporate discourse, the context in which to establish these emotional relationships has changed. The net result of the connected world is that people are producing more signals about who they are, what they talk about, and the things they like. So the temptation—one I understand all too well—is to move away from individuals and to look for human patterns in the tangled web of data. There is value in doing that, of course. I’m not saying that advertising is pointless, or that targeted marketing doesn’t work. But I am saying that you can’t confuse those tools for what it means to build relationships with humans. So how do businesses do the more important work? First, they need to acknowledge that there are living, feeling human beings at the beginning and end of every transaction—and that a shift in thinking must be employed to really build emotional connections with their customers. For example, I’ve started to think about how businesses can construct a “business relationship arc” to help simplify their marketing goals. Whenever a person interacts with a brand, they experience milestones or feelings. It’s exactly like how they first interact with other people. At first, a consumer will only know that a brand “exists”—they see it, maybe they try it and form some early opinion about

T

it, but that’s it, just like meeting a new person at a party. Over time, the relationship can develop. Consumers will attach deeper meaning to some brands, or will think about them in certain ways, or will attach some new meaning to the brand. Now the business relationship arc is developing. Things get interesting as they move further up the arc, where customers might incorporate a business or a product into a part of their lives, or think of the brand as something that shapes or defines them. Very few companies (or people!) are able to take the relationship beyond that, to a place where they are indispensable and would be forgiven no matter what happens. But it’s possible. Successful companies are the ones that find ways to move people up the arc—to go from merely existing to being something people care about, and then something they’ll defend. This requires thinking about what moves people as humans, not just what motivates them as groups. Businesses also need to establish what I

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just the things they make and sell. Belief is at the heart of any company’s OS. But belief can’t be established without good leadership. So here’s where a business turns inward—where it takes its philosophy on reaching customers and applies it to its own employees. Data got us those “performance calibration sessions.” But a focus on humanity can get us somewhere else entirely. Many employees, across all levels, care about what they do beyond a written job description. They might not do everything well, but they double down on their strengths, building successes from the things they’re good at. Performance calibrations, as I’ve experienced them, are rarely about identifying or evaluating strengths. They seem designed to weed out employees who defy expectations or who don’t check off all the mandatory boxes, arbitrary as they may be. There has to be a better way to get the most out of a human workforce. So consider the advice I was given years ago. Originally meant to apply to quali-

Successful companies

are the ones that go from merely existing to being something people care about, and then something they’ll defend. This requires thinking about what moves people as humans.

call their “brand operating system.” In technology, operating systems support basic functions that enable more complex tasks to happen. Similarly, for companies, a brand operating system is what delivers a clarity of purpose to inspire and catalyze the potential, power, and humanity of any business. At the heart of a company’s operating system is a core brand essence, a central idea. It’s what the company is about—and it’s an internal thing, not a tagline or campaign. At Nike, for example, there is the central belief that “if you have a body, you are an athlete.” This is at the heart of who Nike is, serving as a north star for how it operates and communicates as a company. With that in place, Nike can build a holistic operating system that includes details about why the company exists, what it’s trying to achieve, the distinct value it offers to its customers, fundamental beliefs that provide norms for how it makes decisions, and the collection of characteristics that represent the style in which it communicates. These are precisely the ingredients that make us unique as individuals, and they are essential to building companies that mean more to people than

ties of leadership, I think the sentiment is best applied to how we can nurture human talent in the workplace and in daily life, beyond any traditional evaluation methods: Big or small, have a vision. People need to understand why you get out of bed in the morning. Then, discover and describe the passion in that vision. If you don’t really care about what you’re doing, neither will anyone else. Vision and passion fall on deaf ears without persuasion—the ability to get others on board. And most important, embrace humility. This means bucking against the trend—fueled by data—of committing to being right and defensively closing yourself off. Humility means being curious about other people, being open to what they offer, and realizing that we all have a lot to learn about what makes us tick. It took me a while to get there. And now, I believe, this can go a long way in allowing us to treat each other properly—not as data points, but as fellow human beings. Eric Solomon is a New York-based writer and a marketing and leadership consultant.

January-February 2020 / E N T R E P R E N E U R . C O M / 47

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CONTENTS 56

Welcome to the 2020 Franchise 500®

Food is shrinking. Maintenance is growing. Here’s what the data says about the state of franchising today.

61

The Top 10 Find out how Dunkin’ earned its number one spot, along with the rest of the best in franchising this year.

90

How to Jump the List These five franchises made massive gains on the Franchise 500. Here are their growth strategies.

98

Franchising’s Coolest New Thing Cryotherapy is having a moment. How do you know if something is a passing fad or a service that’s here to stay?

102

Does Franchising Need a Rescue?

Jon Taffer, host of Bar Rescue, has a bold plan to reinvent the restaurant franchise.

140

Suppliers of the Year

The top companies that help franchises thrive.

148

112

The Franchise 500® Directory of Categories

As delivery and pickup orders skyrocket, franchises are rethinking how much space they really need.

152

The Restaurant with No Dining Room

124

Understanding the Ranking Our data, explained.

Franchising for the Next Generation

156

How companies can attract younger franchisees (and then younger customers!).

217

The Franchise 500® List

Index

128

Your Most Important Relationship Franchisees and franchisors can help each other succeed.

136

Joint Employer Update A government rule known as “joint employer” looms over franchising. Here’s what happened to it in 2019.

54 / E N T R E P R E N E U R . C O M / January-February 2020

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WELCOME TO THE FRANCHISE 500 56 / E N T R E P R E N E U R . C O M / January-February 2020

COMPANIES ON THE FRANCHISE 500, BY INDUSTRY Food: Quick-Service Restaurants 86

Maintenance 70

Personal Care 66

Children’s Businesses 42

Services 38

Business Services 33

Lodging 29

Home Improvement 25

Automotive 22

Retail 20

Recreation 15

Financial Services 14

Food: Full-Service Restaurants 9

Health 9

Food: Retail Sales 8

Pets 8

Tech 6

THE

FRANCHISE

his year’s Franchise 500 raises a philosophical question: Would you rather serve customers’ wants—or their needs? Businesses of all types, of course, are designed to serve consumers’ wants or needs. But franchising does it in a particularly stark way. A franchise brand must be exceptionally clear-eyed and mission-focused; it must develop a system so crisp and efficient that it can be replicated tens or hundreds or thousands of times. Therefore, a franchise must truly stake its ground: Its purpose is to either fulfill a want or be there in times of need. Throughout the history of franchising, as well as the history of our 41-year-old list, the want has won out. But will it always? For example, the largest category in our list—and in franchising as a whole—is, of course, food. More than one-fifth of ranked franchise companies are in the business of feeding people. And although everyone needs food to survive, we’d argue that this is a category all about want. McDonald’s and Sonic and Culver’s and others all compete for who has the most desirable burger. And because people want good food over and over again, there’s plenty of opportunity for repeat business—and, therefore, a very scalable business. But intriguingly, the food category is shrinking slightly. There are 103 food franchises ranked in our Franchise 500 list this year, compared with 120 last year. Of those food franchises, 86 are quick-service brands; last year, there were 94 quick-service brands on our list. And fullservice brands seem to be struggling: There are only nine ranked this year, compared with 18 last year. Of course, that’s not to say food franchises are in real trou-

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ble. A full quarter of all applicants to the Franchise 500 this year came from food companies, and seven out of the top 10 on our list—as well as more than a quarter of the top 100!—are food franchises. But the smaller numbers are notable, especially in light of our second-largest category: maintenance. Because that is a category all about need. Repair, cleaning, restoration, lawn care—these are the kinds of businesses that fall into our maintenance category. Whereas customers frequent a food franchise when they want to be delighted, customers turn to a maintenance company when something is wrong. This makes for a very compelling business. Franchises in this category are generally considered recession-proof, they cost considerably less to operate than a restaurant does, and they can often be run from home or a van. Maintenance has long been the second-largest category in the Franchise 500, and it appears to be constantly gaining strength even as the food category slips. There are 70 such companies ranked on our list this year, compared with 62 last year, and 14 of them made the list’s top 100. There’s even been a notable growth in crime-scene-cleaning businesses—so much so that, this year, we created a stand-alone subcategory for them. This is why we’ve been pondering want versus need. There’s obviously plenty of opportunity in both—but each year tips the balance a little more toward one or the other. As for the franchise industry as a whole, our list brings good news: It’s growing even stronger! The companies that ranked in the Franchise 500 this year had a total of 555,142 units open and operating as of July 31, 2019 (our marker for data submissions), which is an increase of 18,343 (3.4 percent)

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over the previous year. That compares with an increase of 14,503 (2.8 percent) from 2017 to 2018. Growth is particularly strong internationally. Our ranked franchises added a total of 10,929 new units outside America this year, bringing the total number of open international units to 222,522. Of the 555,142 units operating by the companies on our list, 511,325 (a little over 92 percent) were actual franchised locations. The rest were company-owned units—and those units did increase slightly this year (after dipping dramatically the previous year). However, the general trend in the industry still appears to be toward opening franchises instead of company-owned units. Some of the largest brands in the industry, including McDonald’s, Pizza Hut, and Supercuts, are also actively selling off their company-owned units to franchisees. And of course, each year reflects the ever-changing marketplace. Personal care businesses, particularly fitness and hair care, continue to rank well this year. A total of 22 fitness brands landed on our list this year, but that only tells part of the story: A total of 60 fitness companies applied, and more than half of them began franchising just in the past five years. That speaks to a lot of new entrants—and, if those companies can continue to gain strength, it hints at even more fitness brands showing up

on our list in the years to come. Smaller categories of note include health (while only nine companies ranked, five of those are in the top 100), as well as recreation. In recreation, trends tend to wax and wane. Paint-and-sip studios, which were hot a few years ago, have now slowed—but similar DIY studios are booming, where customers can make wooden signs and other crafts. Meanwhile, trampoline parks are still going strong, but most are trying to expand by adding other attractions like go-karts and climbing walls—which is why our old trampoline-park category has been renamed adventure parks/entertainment centers. And what will come next? Well, four ax-throwing companies applied to be on our list this year…though none of them ranked. They’ll have to sharpen their aim for next time. In looking through it all, the only conclusion we can draw is this: Times change, but some things really do stay the same. People will always desire great food, and they’ll always have broken windows and shaggy lawns that need fixing. They’ll want to try the latest fun activity, and then they’ll want to move on to the next latest fun activity. So no matter whether a franchise is serving a want or a need or something in between, its success will depend entirely upon its ability to evolve. This year brought changes. Next year will, too.

Whereas customers → frequent a food franchise when they want to be delighted, customers turn to a maintenance company when something is wrong. This makes for a very compelling business.

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1

FRANCHISE

Dunkin’ — — STARTED FRANCHISING

How Dunkin’ dropped the word Donuts, sold more doughnuts anyway, and rose to #1. BY MAGGIE GINSBERG

he brand once known as Dunkin’ Donuts turns 70 this year. The first 68 are inextricable from the word Donuts. They were a beloved treat for founder Bill Rosenberg, a working-class eighth-grade dropout in Depression-era Boston. By the time he died in 2002, he’d built his brand into 5,000 stores in 38 countries.

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and Chicken from its name. Dunkin’ Donuts, minus the Donuts. It was once unthinkable. But the weirdest thing has happened: Doughnut sales grew. It’s happening at the nearly 500 U.S. stores that have adopted a store redesign. It turns out people became more impulsive when the doughnuts jumped from behind the counter to a front-facing pastry case by checkout. It didn’t matter if the word was in the title. Now, worldwide, Dunkin’ is moving two billion doughnuts a year—in 70 varieties, no less. That’s just how powerful this brand has become. The company debuted at #17 on our first-ever Franchise 500 list in 1980, and it’s ranked every year since. Seventeen times, it broke the top 10, including five years consecutively now. And it has ranked #2 three times in three different decades. This year, finally, for the first time ever, Dunkin’ is #1. It’s the just result for a brand that has innovated through the decades while never losing sight of what makes it so strong. 12,957

COST TO OPEN

But the most recent 20 years of history have been an evolution toward something bigger. The brand evolved into the largest coffee-and-baked-goods chain in the world, as well as one of the fastest-growing in the U.S. Of its 13,000 stores, about 9,500 are in the U.S., and it plans to double that number over the next 20 years. It might even pull it off, with rising samestore sales now driving $1.3 billion in hot and cold drinks. Today the company also sells bagels and sandwiches and low-calorie wraps, and customers can purchase creamy,

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$395.5K–$1.6M

nitrogen-infused cold brew from tap handles. The foam cups it used for decades are actively being phased out in favor of a double-walled paper cup that won’t be too hot to the touch. Using the company’s DD Perks app, customers can even order on their phones before leaving the house. So given all this, the brand didn’t want to be limited by its doughnutfocused name. In September 2018, it announced that it was changing its name to simply Dunkin’—a change as big as when Kentucky Fried Chicken eliminated Kentucky, Fried,

always had a hustle. He was born in June 1916 in Boston’s Dorchester neighborhood, and family legend has it that he was selling ice from his tricycle at 3 years old. He had a watermelon stand at age 9, bought and sold ice cream for a markup by age 11, and dropped out of school at 14 to work full-time and support his family. Even then, Rosenberg had a soft spot for doughnuts. In his 2001 memoir, Time to Make the Donuts, Rosenberg reflects on visits to a diner in Boston, where they sold the “biggest nickel jelly doughnuts you ever saw.” And at home, his mom would fry hot-cake BILL ROSENBERG

T O TA L U N I T S N U M B E R S A N D C O S T T O O P E N A M O U N T S A S O F J U LY 3 1 , 2 0 1 9 .

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Donuts. Over the next five years, he opened four more stores. And that’s when he set his sights on franchising. a new concept in the early 1950s, and not particularly well-respected. Howard Johnson’s was one of the first to do it, and across the country in California, Ray Kroc was just discovering and wooing the brothers who’d started McDonald’s. But Rosenberg believed franchising could be transformative, so in 1955, he bought out his brother-in-law and sold his first Dunkin’ Donuts franchise. By 1960, the company was on its way to 100 stores, and at a convention in Chicago, Rosenberg began rallying his fellow franchise companies— brands like Chicken Delight, Burger Chef, and A&W Root Beer—to organize into what would become the International Franchise Association. Today the IFA is the world’s oldest and largest franchise organization, representing more than 733,000 franchise establishments… including Dunkin’ units. “It’s safe to say that Dunkin’ is a very active and wellrespected franchise brand,” says Stephen Worley, an IFA spokesperson, clearly careful not to show preference for one member over another. “In many respects, it’s one of the more recognizable franchise brands in the country.” f

FRANCHISING WAS

doughnuts in a kettle with rendered beef fat, which she’d drain on kraft paper bags. “I’ll never forget licking the grains of sugar off my lips and fingers,” he wrote. “This great experience left an indelible memory of how doughnuts meant so much to me and every other kid.” Rosenberg went chasing dough, but originally, it wasn’t with Dunkin’. In 1946, starting with a single truck, he founded what would become Universal Food Systems, New England’s largest food-service business. In addition to running commissaries and vending machines for factory workers, the company built trucks with sidewalls that opened to the street, so workers could buy sandwiches, pastries, doughnuts, and coffee—precursors to

today’s food trucks. Rosenberg was committed to quality, and to get the drip flavor right in his coffee, he ran boiling water over leaching bags in custom-designed 100-gallon stainless steel tanks. The diligence allowed him to charge 10 cents a cup, rather than the standard five. And for his doughnuts, he bought from bakeries that produced fresh batches multiple times each day. In time, coffee and doughnuts came to account for 40 percent of his food-service business, so he opened a stand-alone retail shop where customers could come to him. In 1948, with brother-in-law Harry Wintour as full partner, Rosenberg went brickand-mortar with a place called

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Open Kettle in Quincy, Mass., just outside Boston. It was the first retail doughnut store with dine-in seating. The coffee was freshly ground and brewed in small batches, and while the typical doughnut shop offered four or five choices, Rosenberg—inspired by Howard Johnson’s 28 varieties of ice cream—made dozens. Business boomed, and in 1950, Rosenberg rebranded Open Kettle to Dunkin’

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Rosenberg claimed that alongside Dunkin’ Donuts, forming the IFA was his proudest achievement. “In 1960, when franchising was in its infancy, most people looked upon it as an outcast or a misfit, but I believed it was the epitome of entrepreneurship and free enterprise,” he wrote. “When you share with others, everyone benefits. That’s the whole concept behind franchising. If the franchisees do well, I do well; we all do well.” Perhaps for this reason, Dunkin’ moved to embrace franchising in a way that even its famous franchise rivals hadn’t. For most of its history, Dunkin' has been 100 percent franchised—meaning it's owned zero corporate-owned stores. That was way ahead of its time.

Other franchise giants ran a mix of franchised and corporate locations, though in the past few years, many of them are actively trying to sell their corporate locations to franchisees, in part as a way to take those financial burdens off the parent company’s bottom line. Pizza Hut, for instance, had 649 corporate U.S. locations in 2009; now it has only 23. Many other competitors, like McDonald’s, hover at around 93 to 95 percent franchise ownership. Grant Benson, Dunkin’ Brands’ senior VP of franchising and business development and 34-year company veteran, believes this is what set up the brand for its initial success. It has 1,100 franchisees—and “if you think about it,” he says, “that’s really 1,100 volunteers

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that are choosing every day to invest and reinvest in your brand based on their faith and confidence in the concept.” That puts a big onus on the corporate company. “Franchisees are only made profitable when the brand is relevant, innovative, and meeting the needs and expectations of the guests,” he says. So as times changed, Dunkin’ had to change as well. DUNKIN’ HAS LONG been selective about its franchise partners, but the cost of entry can actually be less than that of other well-known brands. While lowend price tags for Krispy Kreme and McDonald’s are $440,500 and $1.26 million, respectively, motivated entrepreneurs can buy into Dunkin’ starting at just

less than $100,000 for a kiosktype operation. That value play was one of many things that got David Baumgartner’s attention. He’d spent his career in print distribution, but when the economy crashed in 2008, he knew it was time to find a new line of employment. He didn’t know much about franchising—or, for that matter, about Dunkin’ Donuts (as it was still known then). But he was aware of the brand’s loyal following, and after doing his homework, he was impressed by the company’s growth goals, especially given the sputtering economy. (A 2009 Entrepreneur article called Dunkin’ a “recessionresistant franchise.”) Baumgartner opened his first Dunkin’ in Chattanooga, and business was brisk. But “everybody thought we were a doughnut store,” he says, so coffee took a while to catch on—especially cold coffee, which was virtually nonexistent in the South. But that wasn’t unheard of. Dunkin’ was big back then, but it still wasn’t as nationally known as today. The brand was coming out of a few rocky decades. It had a successful IPO in 1968 but began suffering in the 1970s as founder Bill Rosenberg began a long fight with cancer and diabetes. (Rosenberg’s doughnut habit eventually landed him in a weight-loss program.) Stock plummeted. Franchisees sued over an equipment-purchasing dispute. Rosenberg retired in 1989, and the company sold to British food conglomerate Allied Domecq that same year. (Allied also owned BaskinRobbins, which is how all those Dunkin’-Baskin combo locations came about.) But there was also an

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upswing. The brand’s famous 1980s “Time to make the doughnuts” ad campaign, featuring a fictional Fred the Baker, was a national hit. Allied Domecq’s restaurant business would become Dunkin’ Brands Group and start working toward a second IPO. So that’s what Baumgartner was walking into when he opened his Chattanooga location in 2009, confusing locals with all those doughnuts. Then Dunkin’ really started making moves. In 2009, it brought in former Blockbuster and Papa John’s leader Nigel Travis as CEO—and for the next nine years, he’d grow company revenue by 60 percent and add 6,000 stores. He also took the company public again, in 2011. Then in 2018, former McDonald’s executive David Hoffmann took over as CEO and quickly announced a three-year strategic plan called Blueprint for Growth. It laid out an aggressive pledge to add more than 200 new U.S. locations annually through 2021. Long-term, it plans to grow to 18,000 stores—mostly outside the Northeast, where the brand has long dominated. The company soon upgraded its app, called DD Perks, to allow its 12 million subscribers to order ahead. It also presented a vision for what it called a Next Generation redesign, which would give stores a modern look, a cold-beverage bar, and quick-grab deli cases for on-the-go customers. Through all this, franchisees like Baumgartner saw their customers change. People once thought he ran a doughnut shop but started to see it as their morning coffee destination. “Now it’s almost flipped. All you have to do is get [the coffee] in people’s hands, and

they become regulars.” Experiences like Baumgartner’s are largely responsible for Dunkin’s decision to drop Donuts from its name. Coffee has long been the company’s big sales driver, and focusing on the winning product has proven successful. In 2018 Dunkin’ invested $100 million to reinvigorate and expand its espresso platform and install the new icedbeverage tap systems. In Q1 2019, the upgrades culminated with 5.5 percent system-wide sales growth and the company’s largest quarterly same-store sales increase in four years. Opinions about the name change weren’t all positive. As one Wall Street Journal headline lamented, “Dunkin’ Fans Say Losing the ‘Donut’ Leaves a Hole.” But it certainly got a lot of attention, and signaled its bigger ambitions. “There were millions and millions of impressions [on social media],” says Benson, the Dunkin’ senior VP. “In every possible venue and media outlet, there was an opinion being bantered around about it.” But sales spoke louder than anything else. Espresso became Dunkin’s fastest-growing product category, and the company credits it for a year of growth that, through Q3, saw 135 stores open and same-store sales grow by an average of 1.9 percent. Baumgartner now owns and operates 41 stores in Tennessee, Georgia, and Alabama, with plans to double his footprint by the end of 2023. Custom spins on the Dunkin’ slogan—Knoxville runs on Dunkin’, Birmingham runs on Dunkin’, and so on— have helped secure local followings in every new market. After building the company’s first freestanding Next

68 / E N T R E P R E N E U R . C O M / January-February 2020

Generation store, he now runs seven Dunkin’ locations with the new branding. says it’s growing on the strength of its franchisees. Through peer-elected advisory councils, they meet regularly with corporate leaders at the local, regional, and national level. That’s where the good ideas are born, says Benson. And the meetings prove critical to mobilizing the large network in support of big brand initiatives. In return, franchisees benefit from nearly universal brand recognition, powerhouse marketing support, and flexible build-out options. In the spirit of Rosenberg’s doughnut truck, Dunkin’ stores today can be located inside gas stations, airports, hospitals, and supermarkets. In addition to the strip-mall and stand-alone stores (with and without drivethroughs), you can find Dunkin’ inside Walmarts, and some still cohabitate with sibling brand Baskin-Robbins. “How many opportunities are there where you can get involved in a 70-year-old brand that has 10,000 stores in the United States and more space to develop?” says Baumgartner. “And they’re going to give you the support and the field staff to help you be successful.”

TODAY DUNKIN’

What’s most interesting about Dunkin’ isn’t the degree to which it’s changed. It’s the degree to which it’s maintained its core values. “Change is hard, but not changing is harder,” says Benson. Consider the fact that Dunkin’ still offers the original coffee blend it first brewed seven decades ago. The iconic Dunkin’ font is the same as it was in the 1970s, and the “America runs on Dunkin’” slogan has been in play for 14 years. When Dunkin’ decided to phase out its environmentally unfriendly foam cups, it undertook 10 years—10 years!—of weekly meetings, testing, and focus groups to settle on a more sustainable paper alternative. The trick the company has pulled off is to be at once old and new, to give its customers something fresh without betraying its founding principles or significantly upending the daily ritual that brings them through the door. “We’re talking about coffee and doughnuts,” says Benson. “These are the highlights in people’s busy days. So we’re being very true to that legacy, retaining all the goodness and richness that’s been earned one cup of coffee or one doughnut at a time.” Maggie Ginsberg is a writer based in Madison, Wisc.

The trick the company → has pulled off is to be at once old and new, to give its customers something fresh without significantly upending the daily ritual that brings them through the door.

2

FRANCHISE

Taco Bell — — STARTED FRANCHISING

stole second base in the World Series this fall, it was tacos on the house for everyone in the country. As part of an annual Taco Bell promotion (the brand calls it “Steal a Base, Steal a Taco”), the freebies sent America a subtle reminder that, yes, the chain faces increasing competition in the crowded Mexican fast-food market it created, but no, you can’t beat it on value—just try. If America got a little pudgier that Wednesday, Taco Bell WHEN TREA TURNER

1964

TOTAL UNITS

7,136

COST TO OPEN

itself has continued to grow in every direction, including two notches higher on our list. Sales were up 6 percent, to $11 billion, in 2018, and as of third quarter 2019, year-todate same-store and overall sales were up 5 and 8 percent, respectively. Driving the growth, in part, is the company’s focus on convenience. To better serve pickup customers, Taco Bell was the first restaurant to integrate its POS system directly

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—

$525.5K–$2.96M

into the Grubhub app, which provides a geofence function that allows franchisees to hand over food within a minute of the driver’s arrival. And with more than 4,800 U.S. Taco Bells now offering delivery, the brand has inspired more than 14 million customers to register for at-home taco service. “Already, we see about double the check size for delivery orders compared to what we see in-store,” says Mike Grams, global chief operating officer.

Those healthy sales are fueling the next big Taco Bell boom. In 2018, the company added 329 franchise locations, and through its Cantina concept, it’s continuing its reverse sprawl from strip malls into cities, with upscale, urbanized, booze-pouring Taco Bells. So what happens when the taco giant runs out of corners to put new stores on? Simple: It’ll travel abroad. As of 2018, only 7 percent of Taco Bells were international. “Earlier this year, we signed our largest master franchise agreement to date,” says Grams. “We’ve committed to opening 600 restaurants in India in the next 10 years.” —LIZ BRODY

T O TA L U N I T S N U M B E R S A N D C O S T T O O P E N A M O U N T S A S O F J U LY 3 1 , 2 0 1 9 .

P H O T O G R A P H C O U R T E S Y O F TA C O B E L L

THE

YOUR BIG BREAK Avg. Second Year Total Revenue for Top 25 Stores

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$120K Contact Brynson Smith

877-224-4349 Franchising@uBreakiFix.com *As published in Item 19 of our FDD dated April 19, 2019, as amended October 31, 2019 and updated November 12, 2019 these JXUHV UHSUHVHQW WKH DYHUDJH WRWDO UHYHQXH DQG QHW LQFRPH WRWDO UHYHQXH PLQXV FRVW RI JRRGV VROG DQG H[SHQVHV H[FOXGLQJ LQWHUHVW DQG LQFRPH WD[HV IRU WKH WRS RI RXW RI 86 IUDQFKLVHH RSHUDWHG 8%5($.Ζ)Ζ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Ζ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

Franchise Opportunities www.uBreakiFix.com/Franchising

3

FRANCHISE

McDonald’s — — — STARTED FRANCHISING

island of Mauritius to the distant deserts of Kuwait, you can’t escape the Big Mac. The world is home to more than 38,000 McDonald’s. So what’s left to conquer? Try Silicon Valley. Ronald McDonald has landed in tech land, not with burgers but with newly acquired technology that aims to disrupt the fast-food world it helped build. McDonald’s has ranked near the top of the Franchise 500 for the past three years, and much of the credit goes to its push toward modernization. With its $10 billion sysFROM THE REMOTE

1955

TOTAL UNITS

38,108

tem-wide store redesign nearly complete, McDonald’s is now uploading new tech to accelerate its race toward the future. In 2019, the company acquired two companies that signal its ambitions: Dynamic Yield, which builds digital menu displays that tailor suggestions to the time of day, weather, and items already in customers’ orders; and Apprente, a voice-based AI company that will kick off the newly minted McD Tech Labs in Mountain View, Calif. But despite $21 billion in 2018 revenues, the fast-food

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COST TO OPEN

$1.3M–$2.2M

OG faced some challenges last year. CEO Steve Easterbrook was fired over a consensual relationship with an employee, and despite a 5.9 percent increase in global same-store sales, third-quarter earnings fell short of expectations. (The company would not make an executive available for an interview for this story.) That said, revenues spiked by $61.2 million, and redesigned stores are seeing mid-single-digit uplifts in sales. The good news has insulated the company from the bad, and it’s currently riding on 17 consecutive

quarters of growth. During his last earnings call in October, Easterbrook said he expected McDonald’s recently added delivery program to drive $4 billion in sales by the end of 2019; McDonald’s is now filling 10 delivery orders every second. It may be too early to assess the company’s tech gamble. “But if it brings down the speed of service, it’s worth it,” says longtime restaurant analyst Howard Penney at Hedgeye Risk Management. “McDonald’s is the first. They are leading the way. Nobody is doing what they are.” —LIZ BRODY

PHOTOGRAPHS COURTESY OF MCDONALD’S

THE

4

FRANCHISE

Sonic Drive-In — — — STARTED FRANCHISING

ON NOVEMBER 20, 1953, pilot Scott Crossfield took a Douglas Aircraft Skyrocket up over the dusty California desert, blasting through the sound barrier and setting a world record that helped usher in the space age. That same year, the first Sonic Drive-In opened in Shawnee, Okla. Its slogan: “Service at the Speed of Sound.” Today, nearly seven decades and 3,600 restaurants later, the company is sonically booming in another direction—this time, into the era of machine learning. “We’ve heard from our guests,” says Sonic president Claudia

1959

TOTAL UNITS

3,600

COST TO OPEN

San Pedro. “They still want us to be fast, but they also want their favorite customized food.” So through a partnership with Mastercard, Sonic is piloting an AI-powered car-side menu board that updates its offering in real time based on the customer, weather, and time of day. Fueled in part by the robust analytics Sonic gathers from its new order-ahead app, the restaurant’s offerings will grow increasingly personalized, with the goal of creating a tailored experience that’s unrivaled in fast food. But the upward trajectory

74 / E N T R E P R E N E U R . C O M / January-February 2020

$1.2M–$3.5M

hasn’t been without hiccups. In 2018, Sonic’s income rose from $63.7 million to $71.2 million, yet the restaurant saw overall revenue drop. It was then acquired by Inspire Brands in late 2018 for $2.3 billion, meaning it now shares a corporate parent with the likes of Arby’s and Buffalo Wild Wings. The new ownership could be a boon to franchisees: System-wide sales are moving upward, and the partnership provided improved access to delivery services like DoorDash and Uber Eats. Even as Sonic’s menu con-

tinues to rotate in creations like deep-fried Oreos à la Mode and Red Bull Slush, the restaurant isn’t sitting on its laurels. In August, it announced that it was using a new creative agency, Mother, and it promised to deliver a revamped brand logo in 2020. So what can we expect? Something Googie? A rocket? A Footlong Coney dressed in a space suit? “It’s a little bit of making sure we are grounded in our roots, but with a much more forward-looking view,” says San Pedro. “That’s all I’m going to say.” —LIZ BRODY

PHOTOGRAPH COURTESY OF SONIC

THE

THE

FRANCHISE

The— UPS Store — — STARTED FRANCHISING

THE UPS STORE can thank dissat-

isfied customers for its recent success—though, of course, we’re not talking about its own customers. “About a third of online purchases are returned,” says Tim Davis, president of The UPS Store. “And that’s become a very attractive business segment for us.” To cash in on the returns of dissatisfied e-commerce companies, UPS has signed deals to be the official return courier for several major retailers. (Davis won’t say exactly which ones.) The UPS Store is also under

1980

TOTAL UNITS

5,166

COST TO OPEN

contract to ship hardware, such as cable boxes, back to utility companies when customers are done using them. “We’re reducing the touch points in the return process,” says Davis. Tapping into predictable shipping helped drive a net gain of 104 UPS Stores in 2018. But that doesn’t fully explain the company’s recent success. The other key lies in its efforts to meet customers where they already are. Over the past two years, new UPS Stores have increasingly opened in nontraditional

$138.4K–$470K

locations such as pharmacies, supermarkets, hardware stores, hotels, and military bases. You’ll now find small-footprint UPS Stores inside major chains like Meijer (a Midwestern supermarket) and Omni Hotels & Resorts, and all together, these new locations account for some 26 percent of the company’s sales. According to Davis, increasing the company’s footprint is just one part of a bigger plan to serve more customers. Soon, he says, UPS will begin experimenting with drone deliveries,

1.4M 53.6% 80%

$

Average revenue for stores.*

Merchandise margin for top quarter of our stores.*

Stores owned by multi-unit owners.

• Multiple revenue streams, including retail, B2B & eCommerce • Marketplace leaders in speed, selection, service & expertise Let’s talk. Learn more by calling 1-800-274-9155 or visit batteriesplusfranchise.com. *Net revenue average of $1,394,889, average unit volume, and average merchandise margin is based on the net sales average for the 158 stores that represent the top 25% of all 633 stores open during the entire 2018 calendar year. See Item 19 of our 2019 FDD for further details. © 2020 DURACELL, Bethel, CT 06801. Duracell is a registered trademark of Duracell U.S. Operations, Inc., used under license. All rights reserved.

and already, it’s begun putting pressure on franchisees to stay open seven days a week. But the company’s biggest change might be symbolic. This year, in a stark revolt against UPS’s traditionally brown branding, many stores received splashes of blue, white, and yellow as part of a new store concept test. —GORDY MEGROZ

PHOTOGRAPHS COURTESY OF UPS

5

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6

FRANCHISE

Ace Hardware — — — STARTED FRANCHISING

like there’s an Ace Hardware everywhere you go, that’s because it’s true. Over the past five years, 836 stores have opened in the U.S., which brings the total count to 5,312. According to the company, 75 percent of all U.S. homes and businesses are within 15 minutes of an Ace store, and by leveraging that ubiquity, the retailer managed to hit record sales of $16.6 billion last year. The figure is big any way you slice it, but it’s more impressive given the competition brickand-mortars face from e-comIF IT SEEMS

1976

TOTAL UNITS

5,312

COST TO OPEN

merce. “We’re in a war for relevance,” says John Venhuizen, the company’s president and CEO. “The Amazon effect on retailers is significant.” But Ace is bringing its massive footprint to the online battlefield. The company recently began locking in exclusive distribution deals with major companies, such as Benjamin Moore and Stihl. Now customers can find those products only online at Ace’s website. And 10 months ago, it began allowing customers who shop on its website to have orders delivered at

78 / E N T R E P R E N E U R . C O M / January-February 2020

$286K–$2.1M

their nearest Ace. “People don’t like these things sitting on their porch all day,” says Venhuizen. “It’s a safety strategy.” And once customers are in the store— who knows? Maybe they pick up a couple more items on the way to the register. The efforts bolstered Ace’s online sales 81 percent for third quarter. And they come as icing on what already amounts to a stellar reputation for keeping customers happy. “We have an irrational pursuit of amazing service,” says Venhuizen. Example: Buy blinds from Ace

and a store employee will come measure your windows, order the blinds, then return to hang them for you. The company, now 95 years old, could rest on its own brand strength. But it’s not. In September, Ace acquired Handyman Matters, a Denverbased franchise that offers in-home handyman services. It will be rebranded as Ace Handyman Services, and as a brand extension, it proves the point: Some things are just better in the real world. —GORDY MEGROZ

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OwnAGoddard.com 877-256-7048 *Based on annual Franchisee Satisfaction Survey (August 2019) performed by Franchise Business Review. The Goddard Schools are operated by independent franchisees under a license agreement with Goddard Systems, Inc. Substantiation available upon request. Goddard Systems, Inc., 1016 West Ninth Avenue, King of Prussia, PA 19406 © GSI 2019. MN #F-4335

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Planet Fitness — — — STARTED FRANCHISING

of Americans don’t have a gym membership. That’s bad for the health of the nation, but it’s good for Planet Fitness’s bottom line. The New Hampshire–based gym franchise has built a seemingly foolproof business by going after customers often ignored by the fitness industry: the newcomers. “Forty percent of our members had never belonged to a gym before joining Planet Fitness,” says CEO Chris Rondeau. “We’re really going after that casual first-timer.” EIGHTY PERCENT

2003

TOTAL UNITS

1,859

The company reaches its target customer with bargain pricing (basic memberships cost $10 a month) and the promise of acceptance (the gym calls itself a “judgment-free zone”). And the plan works: In five years, Planet Fitness memberships doubled from seven million to more than 14 million. “People who love to work out will spend $150 to join CrossFit or Orangetheory,” says Rondeau. “But for most people, working out is a need to do, not a want to do.”

80 / E N T R E P R E N E U R . C O M / January-February 2020

COST TO OPEN

$1.1M–$4.2M

For the low-cost model to succeed, the company keeps its own costs in check. “We don’t have pools, we don’t have classes, we don’t have instructors to pay,” Rondeau says. “We run our stores with 15 people.” What comes next? More growth, says Planet Fitness. It had 1,859 locations as of last July, and with a steady flow of first-timers coming in, it wants to double that figure in the years ahead. The company is also as committed to selfimprovement as its members.

Unlike many gyms, Planet Fitness retires all its cardio machines after five years and weight machines after seven, and every 10 years, each location undergoes a full remodel. “It all keeps driving sales for our franchisees,” Rondeau says. That’s also making investors happy: Its third-quarter 2019 results showed a 7.9 percent increase in same-store sales, leading to a jump in stock price. —STEPHANIE SCHOMER

PHOTOGRAPHS COURTESY OF PL ANET FITNESS

7

FRANCHISE

8

FRANCHISE

Jersey Mike’s Subs — — — STARTED FRANCHISING

decade, Jersey Mike’s has nearly quadrupled its total store count, and since 2015, 80 percent of that growth comes from existing franchisees opening new stores. “That’s telling you two things,” says Mike Manzo, the company’s COO. “One, the franchisees are happy, and two, they’re profitable enough to be investing back into their brand.” The stats are a point of pride, but they’re especially impressive given Jersey Mike’s OVER THE PAST

1987

TOTAL UNITS

1,592

COST TO OPEN

unlikely trajectory. The sub shop was founded as a single location on the Jersey shore in 1956, and 15 years later, the third owner, Victor Merlo, sold it to a 17-year-old counter worker, Peter Cancro, who is still CEO today. Manzo worked alongside Cancro in the original store, and while the two are no longer kids, they continue the push to reach new, often young customers. This year, Jersey Mike’s updated its mobile app to allow

82 / E N T R E P R E N E U R . C O M / January-February 2020

$237.4K–$766.97K

remote ordering and Apple Pay. To promote it, the company ran a 16-stop tour of college campuses, using pop-up shops to hand out free subs to students who downloaded the app. The promotion ties into a deeply held company principle: “We give to give.” Nine years ago, Jersey Mike’s dubbed March the “month of giving,” and it began inviting customers to donate to a local charity partner. On the last Wednesday of the month, each franchisee

kicks in 100 percent of the day’s sales, and many employees even volunteer their paychecks. “Last year, we raised more than $7 million,” says Manzo. “And this year, we’re looking to go over $8 million.” By the end of 2020, Jersey Mike’s expects to have nearly 2,000 restaurants and $2 billion in system-wide sales. It all goes to show: Sometimes the most reliable growth comes from the most humble roots. —TERRY RICE

PHOTOGRAPHS COURTESY OF JERSEY MIKE’S SUBS

THE

9

FRANCHISE

Culver’s — — STARTED FRANCHISING

you might think that Culver’s primary products are frozen custard and burgers. But internally, the company lays out a more ambitious mission: It’s in the business of making happy customers. And business is good. In a recent consumerexperience poll conducted by Market Force Information, Culver’s desserts ranked higher than better-known rivals like Cold Stone Creamery, Baskin-Robbins, and Dairy Queen. In fact, among burger chains, Culver’s FROM THE OUTSIDE,

1988

TOTAL UNITS

715

COST TO OPEN

landed among the top four in eight categories. Reviews like that don’t arrive by chance. They’re the result of honest reflection and a relentless drive toward improvement. “I see so many areas of our business that we can get even better at,” says Joe Koss, the company’s president and CEO. “We have an engaged group of franchisees who never settle for the status quo, and we [in the corporate office] have the same mentality at our support center.”

—

$1.97M–$4.7M

The company culture begins at Culver’s ButterBurger University in Wisconsin, where training goes far beyond POS systems and brand messaging. During an intensive 16-week program, all new franchisees will scrub floors and pick up garbage in the parking lot. The point is that nobody is above dirty work— not even the bosses. In the business of making happy customers, there’s no such thing as a job too small. That message travels

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through company ranks via a formalized mentorship program wherein ButterBurger University graduates work closely with general managers who aspire to one day own their own stores. So far, the program has produced 175 new franchisees—a number that testifies to the strength of the company’s culture. Lately, happy customers have been paying handsome dividends. Beyond stellar poll results, they’ve also galvanized Culver’s expansion efforts. In March, the company celebrated its 700th store opening, and for the remainder of 2019, it averaged 5.5 openings per month. —TERRY RICE

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The franchise sales information in this communication does not constitute an offer to sell a franchise. The offer of a franchise can only be made through the delivery of a Franchise Disclosure Document. Certain states require that we register the franchise disclosure document in those states before offering and selling a franchise in that jurisdiction. NY NOTICE: This advertisement is not an offering. An offering can only be made by a prospectus filed first with the Department of Law of the State of New York. Such filing does not constitute approval by the Department of Law. Moreover, we will not offer or sell franchises in those states until we have registered the franchise (or obtained an applicable exemption from registration) and delivered the franchise disclosure documentt to the prospective franchisee in compliance with law. AmeriSpec, Minnesota File No. F7441; Furniture Medic, Minnesota File No. F7440; Merry Maids, Minnesota File No. F7439; ServiceMaster Clean and ServiceMaster Restore, Minnesota File No. F7462. The ServiceMaster Co. LLC, ServiceMaster Franchise Services Group, 150 Peabody Place, SMC-7000, Memphis, TN 38103-3720 Financing is available through The ServiceMaster Acceptance Company L.P. (“SMAC”), a ServiceMaster company, to credit qualified individuals. © 2019 The ServiceMaster Co. LLC. All rights reserved.

10

FRANCHISE

Pizza Hut — — STARTED FRANCHISING

IN AUGUST, Pizza Hut made news

by announcing that it would close 500 of its U.S. dine-in locations. So what’s it doing on our top 10 list? Well, for starters: In the past three years, it has also opened up thousands of franchises internationally. That growth has allowed the Hut to thrive even as new entries to the domestic market leave a smaller slice of the pie for everybody. “It’s an incredibly crowded category,” says Artie Starrs, CEO of the company. “But we’re constantly innovating and trialing new concepts

1959

TOTAL UNITS

17,176

COST TO OPEN

to stay top of mind with our customers and regularly deliver new products and experiences.” To hold the line in the U.S., Pizza Hut is going big on three things: faster delivery, new menu items, and partnerships that put the brand in the daily lives of customers. That’s what led to the store closures; the brand is strategically shifting toward delivery and takeout, and away from dine-in. And there’s more. After Pizza Hut acquired the software delivery company QuikOrder in 2018, Pizza

—

$357K–$2.2M

Hut’s mobile app now boasts millions of users. The company just tested a new vegetarian option, the Garden Specialty pizza, which includes a plantbased Italian sausage called “incogmeato.” And through an initiative launched in late 2017, Starrs expects 1,000 of its 6,000-plus domestic restaurants to be delivering beer this year—with more to come in the future. The biggest play of all is in football. When Papa John’s fumbled its partnership with the NFL in 2018, Pizza Hut was

there to pick up the ball. And thanks to a deal recently signed with EA Sports, Madden NFL gamers battle for $200,000 in prize money inside the game’s brand new Pizza Hut Stadium. But while the game may be virtual, the food isn’t: Gamers and fans can order pizza (and possibly beer) from the comfort of their couches. —GORDY MEGROZ

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To learn more, visit PrimroseFranchise.com/E500

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FRANCHISE

FIVE STRATEGIES FOR FRANCHISE GROWTH Every year, a few companies show massive gains in our Franchise 500 list by either leaping hundreds of spots or making a strong debut. How do they do it? We called them to ask.

by CLAIRE ZULKEY and MADISON SEMARJIAN

90 / E N T R E P R E N E U R . C O M / January-February 2020

Illustration / N I C O L Ă S O R T E G A

January-February 2020 / E N T R E P R E N E U R . C O M / 91

THE

FRANCHISE

Strategy #1

Strategy #2

Focus on your (faster!) fundamentals

Be very, very franchisee-friendly

Company

Company

Scooter’s Coffee

GarageExperts

Franchise 500 Placement

Franchise 500 Placement

#460 last year; #225 this year

Unranked last year; #231 this year

eople will reward the company that serves them fastest. That’s the theory at Scooter’s Coffee, at least—and it’s showing results. “If you look at the national data, the average drive-through wait time at Starbucks is just over four and a half minutes,” says Tim Arpin, VP of franchise recruitment. Scooter’s aims to do it in 40 seconds. And customers don’t even have to leave their cars, since the coffee arrives via a drive-through kiosk window. This superfast concept has helped Scooter’s open about 30 locations annually for the past six years. Last year, that number more than doubled to 65 (which helped send it 235 spots higher on our list), and next year the company expects to open 100 more units. To explain the growth, Scooter’s points to a COO hired from Starbucks in 2017 and a chief development officer formerly at Arby’s in 2018. But the real story comes from the years leading up to the hires, when Scooter’s invested more heavily in its foundation than it did in recruiting franchisees. “Often franchises bring in a franchise seller and sell a bunch of units, thinking the rest will solve itself,” says Arpin. “It’s a cautionary tale in franchising; brands get out over their skis.” Scooter’s has maintained balance by never allowing its ambition for growth to overtake its focus on the customer experience. And even now, as the company ramps up its expansion efforts, it continues to work toward faster service with a new POS system, a new suite of analytics tools that will help it anticipate growth, and a pilot program for preordering drinks. “Everything we roll out is focused through the lens of creating a frictionless experience,” says Arpin. “It takes a lot of foresight, investment, and patience, but it’s the right way.” In this brand-building vision, growth follows the service, and not the other way around. “We have a clear understanding of what works and what doesn’t for our model,” says Arpin. “That has allowed us to accelerate our growth efforts without spending too much time second-guessing ourselves.” The company has several new initiatives to celebrate, such as a mobile app and a canned cold brew it can sell in supermarkets. And in a recent survey, 90 percent of franchisees reported they were happy enough with the company to recommend a franchise to friends and family members. But Arpin insists success will continue to follow its ability to impress customers. “Often, you get one swing at somebody,” he says. “If you focus on speed and customer service, they will come back. And they’ll bring their friends and family, too.”

hen the 2008 recession hit, Mike Meursing saw an opportunity. The country had a surplus of highly motivated people who weren’t earning what they were worth, and he wanted to put them to work. So Meursing built GarageExperts, a low-cost franchise that would pick up the self-starters that other franchise companies overlooked. The company provides pro-level makeovers on neglected garage space. And the entry costs are easy to swallow. Franchisees pay a $15,000 fee to launch their business, and if they don’t bring in at least $750,000 during their first three years, the corporate office will refund that franchise fee. “We want them to have a little bit of skin in the game,” says Meursing. “But more important, we want them to have money to use for their marketing and everything else they need to build up the business.” The model all but demanded slow, careful growth. Unlike a company that charges, say, $50,000 in franchise fees—with no guarantee on revenue—Meursing put himself in a position where he was fully reliant on his franchisees’ success. If they didn’t succeed, he wouldn’t make money. So he onboarded franchisees gradually and spent time making sure each one knew how to follow the company’s strategy. For instance, the company coaches franchisees to manage their supplies carefully, buying only what they need for each specific job. “We don’t want franchisees buying material that’s going to sit in their garage and collect dust,” says Meursing. “This way, they don’t have too much money tied up in inventory.” In 2018, after a decade of success, Meursing finally felt comfortable scaling. “We were confident that the systems we had built were now at a point where we could begin a hypergrowth strategy,” he says. That year, GarageExperts added a record 31 franchisees. It also boasted its lowest rate of franchisee turnover—a testament to its ability to better screen for successful franchisees. All that helped create a strong return to our list after dropping off it. And by all evidence, the company’s growth is just beginning. GarageExperts recently introduced new rules that would make it easier for current franchisees to purchase more territories, and last year, it launched a national commercial ad campaign. The system now includes 90 franchise units in 30 states, and as the growth threatens to create distance between the franchisees and the corporate office, Meursing is introducing new methods for making sure that each owner still has a voice. GarageExperts recently surveyed its partners to learn where exactly they need more support. “We’re going to release those results and talk about them at an upcoming convention,” says Meursing. “We want to have transparent communication with our franchise partners, and we want to be as good as we can to help them grow.”

P

92 / E N T R E P R E N E U R . C O M / January-February 2020

W

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FRANCHISE

Strategy #3 Differentiate with more than just product

Company Burn Boot Camp

Franchise 500 Placement #424 last year; #212 this year

hrough a message that pairs fitness with self-love, husband and wife Devan and Morgan Kline have built a fan following of neighborhood moms. And five years ago, when the superfit couple decided to franchise their company, Burn Boot Camp, those self-loving customers raised their hands to carry the torch of Burn. Turns out, empowerment is contagious. “There’s a lot of passion here,” says Jolene Purchia, VP of business development. “Our culture was built on community from a very early start.” The studio grew fast. Already it has 234 locations, with 180 more in development. And roughly 85 percent of Burn’s franchisees started as customers. Its membership is 94 percent women, and they appreciate perks like complimentary childcare and universal access to any location. But it’s the emotional support that steals them away from other workouts. That’s been true since the Klines held their first-ever

T

Burn Boot Camp workout in the parking lot of a gymnastics studio in Cornelius, N.C. They focused on weight loss, sure, but also on motivation, community, and a sense of belonging. “I think a lot of companies in our space want to be the best workout,” says Devan. “And we’re just a relationship company that recognizes people need to be empowered; we recognize how impactful trainers can be in people’s lives.” To give customers hits of Burn between sweat sessions, Morgan hosts a women-focused podcast and cooking show. “We envision a world where women can love themselves today and be inspired by who they are tomorrow,” she says. “And that’s not an exercise plan with some macronutrient ratios that you follow for 90 days. That is a promise. It’s a brand promise.” Recently, the Klines went on a national tour, visiting 120 franchise locations in 18 months. “We are down in the weeds with the clients, training them, hanging out, letting them tell us their stories,” says Devan. “As a by-product of that, we’re showing support to our franchisees.” They’re letting them know: You belong. You’re doing great. We still believe in you. As explanation for the company’s giant leap of 212 spots on this year’s Franchise 500, Devan points to the power of exponential growth. “This the first opportunity we’ve had for a large number of franchise partners to expand their businesses simultaneously,” he says.

Strategy #4 Build a family-oriented culture

Company Bloomin’ Blinds

Franchise 500 Placement Unranked last year; #160 this year

linds aren’t a very sexy topic,” says Kelsey Stuart, CEO of Bloomin’ Blinds. “Nobody goes to career day and says, ‘I want to be a blinds guy.’ ” So how did this family-owned business—which, to be clear, sells and repairs blinds—skip 340 spots on the list this year? It began focusing on the culture that differentiates it from other franchise companies. Stuart’s mom launched Bloomin’ Blinds after moving to Texas in 2001 and 13 years later awarded its first franchise. Stuart and his two brothers, Kevin and Kris, took over in 2017 to continue the growth into a national franchise. Their slow-growth strategy allowed them to put their family before business, and recently, the brothers decided to lean hard into that aspect of their company. In its recruitment material, for instance, the company now boasts that it’s designed to operate during regular business hours, so franchisees

B

can be home with their children and spouses in the evening. “Our franchisees feel like they’re part of our family, and they have their own families, too,” says Stuart. “We convey that connection.” The schtick works because—well, it’s not schtick. The Stuart brothers work side by side in a 15-by-15 office, and during business meetings, it’s typical to see their kids running around. And while most companies provide assistance for business-related inquiries, Bloomin’ Blinds franchisees have the brothers’ cell numbers on speed dial. Sometimes the kids join the conversation. “I’m sitting on the couch with my family, and one of my guys in California calls,” says Stuart. “I’m talking, and my girl looks at the phone and goes, ‘Hi, Mr. Steve!’ ” To protect the personal, family-first culture, Bloomin’ Blinds still keeps its growth in check. “If we doubled or tripled our growth rate, it would just be too many people,” says Stuart, who likes to say his daughters make the company’s business decisions. “We couldn’t possibly provide the kind of service we’re trying to.” Still, Bloomin’ Blinds added 10 new franchise locations in 2019—and the company’s strength was enough to not only crack the Franchise 500 but make one of the biggest jumps of any company. Over the years, the brothers have learned a lot about mixing family with business. Specifically, they discovered that you can’t micromanage. “We give each other a lot of freedom,” says Stuart. “Because that’s the only way it works when you work so closely with family.”

THE

FRANCHISE

Strategy #5 Strengthen your core before expanding your units

Company Snapology

Franchise 500 Placement Unranked last year; #230 this year

I

know exactly what it’s like to be a franchisee,” says Laura Coe, co-owner of Snapology. Before she launched the company, which offers STEAM and robotics courses, Coe ran both a residential cleaning franchise and a senior-care franchise. The experiences left her burned out. “With one, if I had a question, there was no one to call,” she says. “There was no support with marketing and sales, and no real guidance on hiring people. Essentially, I had a few days of training, and then I was on my own.” So when Coe launched Snapology with her sister in 2010, she vowed to always support her franchisees. Before franchising, the company spent five years building its core product: a robust curriculum. And when it finally did franchise, it moved at a careful pace of 10 to 12 units per year. “We grew slowly the first few years to make sure we had the infrastructure in place to support our franchisees fully,” says Coe.

But while the company’s progress appeared modest from the outside, under the hood Snapology was building a massive engine. Coe hired a team of writers, robotics experts, engineers, architects, and a “master builder” to design LEGO builds. Over time, they created a curriculum of more than 40 birthday party guides and 70 educational programs, each with a unique lesson plan, ranging from six to 15 hours. “Whoever has the best curriculum at the end of the day wins in this industry,” says Coe. By 2017, the pieces had come together, and Coe decided that Snapology’s infrastructure was finally sound enough to support faster growth. So she stomped on the accelerator. She sold a master unit in China (and later one in Australia), while domestically, she hired a new franchise developer to onboard more franchisees. At the same time, Snapology began boosting its profile with heavy SEO investments, which ultimately led to a boost in organic leads. In 2018, Snapology opened a record 19 franchise units, and in addition to a handful of international units, it opened 26 more in 2019. To make sure new franchisees are properly supported, Coe assigns them a digital marketing director and a marketing analyst, who spend six months helping build out a tailored social media campaign with videos, blogs, and optimized SEO. “We’re proud of the support we give our franchisees,” says Coe. “I believe it shows our dedication to their success.” And when they win, so does Snapology.

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THE HOTTEST CHILL IN FRANCHISING Cryotherapy is the new wellness trend in franchising, and more than a dozen brands have already cropped up. Will it stick around like yoga or dissipate like oxygen bars? The truth is, it might not matter.

by JESSE WILL 98 / E N T R E P R E N E U R . C O M / January-February 2020

Illustration / N I C O L Ă S O R T E G A

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Interested in becoming a franchisee? Visit Hilton.com/development for more information. ©2020 Hilton. All trademarks are owned by Hilton or its subsidiaries. This is not an offer to sell or solicitation to buy a franchise. Offers will only be made in compliance with applicable law, including the provision of a Franchise Disclosure Document. Hilton Franchise Holding LLC, 7930 Jones Branch Drive, McLean, VA 22102. MN registration numbers F-7605, F-7599 and F-7829.

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t’s late summer in Austin, Texas, and it’s infernally hot inside the city’s newest cryotherapy center. The 3,500-square-foot facility is still weeks from opening, so sawdust is flying and workers are dripping sweat as they put the finishing touches on the drywall. Walking the site, owner Jeff Mobley describes a vision that’s still taking shape. That empty patch of floor there? That’s where two cryotherapy chambers will sit. This is the latest outpost for iCryo, a Texas-based franchise with 42 units open or under construction. If you don’t know what cryotherapy is, then you’re probably just not paying close enough attention to wellness trends. There are roughly 20 cryo centers in Austin alone, and one of those is just half a mile from Mobley’s. For $9.95, first-time customers can be blasted with nitrogen-cooled air to -166°F for three minutes. This chill, cryo advocates say, will trigger the body’s flight-or-fight response and flood the body with feel-good hormones. It can (allegedly) cure any number of ailments. What sets iCryo apart from its competitors is the ease of access. In some cryo facilities, people lie down in a clamshell chamber. “With these, though, you’ll be able to walk right into them,” says Mobley’s son, Ty, who will manage the shop. “It’s gonna be pretty cool.” Cryotherapy took a long time to become this cool, though. In the 1970s, the technology was developed in Japan as a treatment for rheumatoid arthritis and fibromyalgia. By the late 1990s, physical therapists in Poland and the U.K. began using it for rehab, and by 2010, Nike coach Alberto Salazar adopted whole-body cryo as a recovery aid for his pro athletes.

With their heavy and expensive equipment, cryo seemed like a performance edge available only to the kind of athletes that train under coaches like Salazar. This led the average athlete—and then the average wellness consumer—to want what the pros had. So when the therapy was made available to the masses, people jumped. Across the U.S. today, you’ll find more than 700 cryo facilities battling to freeze the most customers and grab the biggest share of the $4.5 trillion wellness market. Cryo is, of course, competing with other franchised wellness movements, like float tanks and salt rooms. But with more than a dozen cryo brands now offering franchising, the trend is uniquely poised to represent the uncertain arc of a wellness boomlet. Which is to say: The business is moving a lot faster than the science is. While fitness franchises like Planet Fitness and Gold’s Gym can cite long-standing physiological science on the benefits of exercise, newer wellness movements like cryo aren’t so fortunate. In 2016, the FDA released a consumer update calling cryotherapy a “ ‘cool’ trend that lacks evidence.” While some cryo research has shown modest benefits, a 2018 study from the London Sports Institute found that it was no more effective than a placebo for improving functional recovery among 31 marathon runners. (And its famous advocate just fell from grace: Nike coach Salazar was recently suspended by the U.S. Anti-Doping Agency for multiple violations, though none were related to cryo.) “Whole-body cryo can probably help some athletes recover faster,” says Dhaval Bhanusali, M.D., a Manhattan dermatologist who has treated

patients with blisters and burns from cryotherapy. “But I wish [cryotherapy practitioners] would walk back some of these outrageous claims. Cryo bars have grown quickly—and so has the misinformation.” To entice customers without attracting regulators, iCryo and its competitors are often forced to rely on vague claims. “It gives your body that natural reboot it needs from time to time, like shutting down and restarting a computer or cellphone,” says Kyle Jones, cofounder and COO of iCryo. “We’re shocking the central nervous system.” On its website, US Cryotherapy, a competing franchise, claims it can “systematically reduce pain, inflammation, and muscle soreness,” while Orange Cryo, another franchisor, offers “rejuvenation of the body at the cellular level.” Oftentimes, it may not matter how much of this is scientifically verifiable. Wellness fads tend to run on belief. For as little as $10 or as much as $50, people can book cryo sessions at salons and strip malls around the country—and if they walk out feeling healthier, they’re happy. Meanwhile, business owners expect science to eventually catch up. “It took eight to 12 years before massage became mainstream and people started to understand its benefits,” says Jones. But will these kinds of businesses last eight to 12 years? That’s really the multimillion-dollar question. And there’s no way to know the answer. “It’s tough to tell,” says John Hayes, Ph.D., a professor of franchise leadership at Palm Beach Atlantic University. “You’re taking a risk when you buy into a franchise that doesn’t serve an established behavior or deliver a service that people require on a regular basis.”

But, he says, there’s another way to look at it, too. “iCryo franchises are appealing because they’re affordable and easy to operate,” says Hayes. “Get in at the right time and you can make your investment back in a matter of a couple of years.” In five years, you might be able to roll your money right into the next boomlet. Wellness and fitness trends are, of course, notoriously fickle. In recent years, health-seeking consumers have fallen for and then promptly forgotten both oxygen bars and colonics studios. In 2009, the year the first cryotherapy machine landed in the U.S., the country boasted more than 18,000 tanning salons. A decade later, that number had fallen below 8,000. Before CrossFit, we had Buns of Steel. Before SoulCycle, we had Jazzercise. We had Zumba. We had Sweatin’ to the Oldies. And now we have cryotherapy. To open his iCryo, Mobley is spending more than half a million dollars. It’s money he earned by selling his industrial-painting company. And if his projections pan out, he’ll have that money back in 18 months to two years. But he says he’s not doing this just for the quick buck. Until recently, his wife, Paula, suffered from rheumatoid arthritis. “She was doing cryo for almost a year, and then she went into complete remission,” he says. “She was able to stop all medication, everything.” Paula’s doctors were astonished. “This is incredible!” said one. “Whatever you did, keep doing it.” And that’s when Mobley started shopping for an iCryo franchise. So, no, he doesn’t believe he’s found a fad. The way he sees it, he’s investing in an important new treatment technology that’s in the early stages of awareness. “I think it’s going to be a game changer,” he says.

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RESTAURANT RESCUE? Jon Taffer, host and executive producer of the TV show Bar Rescue, sees problems lurking in the franchise food space. To fix them, he’s opening his own restaurant concept, called Taffer’s Tavern. Will it work?

by JASON FEIFER 102 / E N T R E P R E N E U R . C O M / January-February 2020

Photographs / D AV I D Y E L L E N

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s host of the television show Bar Rescue, Jon Taffer shows up to fix other people’s restaurants. Now he’s also looking at the casual-dining sector more broadly, and he sees signs of trouble: “They’re dinosaurs,” he says of many brands that have been around for decades, “and I think they’re facing extinction. All the Uber Eats in the world can’t bail them out.” His diagnosis: rising labor costs, plummeting meal prices, and an economy in flux. That’s why starting this year, Taffer plans to spend a lot of time in restaurants of his own. He’s launching a new franchise restaurant concept called Taffer’s Tavern, which is designed for efficiency—with minimally staffed, robotic kitchens cooking vacuum-sealed food, and data-driven decisions everywhere. The first unit is expected to open in Atlanta in April this year. There are agreements to sell another 50 by then as well, and a television tie-in is in the works. “This is my baby,” he says. “Not only can I build immense value with this, but it could be a heck of a business model.” This past fall, as he was negotiating the TV deal and developing

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his first test kitchen, Taffer spoke to Entrepreneur about the franchise industry, how he developed his concept, and why he believes all restaurateurs need to become more efficient. You’re experienced in the hospitality space, but this is your first step into franchising. Why do it? I found the casual-dining sector to be incredibly frustrating. I look at these companies doing all-you-can-eat appetizers, two-for-one entrées, $10 all-you-can-eat meals. They’re fighting for customers while, at the same time, labor pools are shrinking. We’re approaching $15 minimum wages—so labor costs are through the roof, and we’re discounting food. The numbers don’t work. It’s going to implode. I said to myself, Somebody’s gotta create a franchise model that works. How do I solve that with robotic cooking, and what kind of approach to cuisine production can I take that assures quality and consistency, and attacks the labor issue? So I’ve been working on test kitchens with sous vide cooking. f

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for us. Think about this. Food lasts three times longer. No open Sous vide—that’s vacuum-sealing food in a bag proteins. Rather than weeks of training in the kitchen, I have and cooking it in water, right? hours. I don’t have the prep. I don’t have the cleanup. Don’t have I can take a beautiful steak, or any protein. I can season it. I can the grease. I realized, wow, I found an incredible franchise model. wrap it in a sealed, airtight, sous vide plastic package. I then ship it. It’s still fresh, with unbelievable quality and consistency. The seasoning is done by me, not the franchisee. Now that Now you need franchisees to buy into a new package of steak lasts three times longer on idea. What’s that been like? the shelf. There’s no exposed protein. There’s We’re not open yet, and we’re close to selling more “You’re still going to no blood dripping anywhere. There’s none of than 50 locations! I partnered with Fransmart. have a human being the cleaning or sanitation risks associated with They took Five Guys from four restaurants to come up to you protein. And then the food is prepared in water 2,000. They took Halal Guys from three stands to and tell you what ovens. It can’t be overcooked. It’s simply put on 400. They took the concept to market for me, and ingredients are in a grill to sear when it’s done. We’ve taken backevery person we’ve sold it to has millions of dolthe food. We’re just of-house labor costs down almost 60 percent. lars of liquidity, has food-and-beverage-operation putting a lot of tech Our kitchen will never run with more than two experience, and is a franchisee for another brand. around that human.” people, two and a half people. That way, we’re with people who know how to respect franchise standards, know how to operate within a franchise envelope, how to respect food But now aren’t you running lots of off-site standards and recipes, and have the financial wherewithal. locations to prep the food, which you’ll have to staff? There are three massive sous vide companies in the country. One of them creates the sandwiches you see at Starbucks and produces As experienced franchise operators looked at your concept, what questions did they have that surprised you? a million a day. So we spec the product, we spec the seasoning, and they produce the product and then handle the supply-side logistics The premise of robotic cooking—of sous vide—raised their eyebrows. f

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we’re talking with him about it. So yeah, what we’re ďŹ nding is They needed to understand that the quality is better with sous vide than two things: People are interested in building new Taffer’s Taverns, not. Because if I send you a frozen hamburger, or a hamburger that’s but existing franchisees are really interested in converting fresh, some kid who’s 18 or 20 years old is going to season that thing underperforming units. And that’s exciting because these are on the line. You get too much salt, not enough salt. There is a certain people who know the business. inconsistency that happens when things are done at the unit level. But we preseason it when we package for sous vide. So we have more conLet’s go beyond food. What else is new at trol over products, consistency, and quality than a Taffer’s Tavern? anybody else does. Once they understood the If you went to a Taffer’s concept, wouldn’t you science of sous vide and where we’re going, that’s “I’ve been able to do be more inclined to try a beverage? I’m putting when everybody lined up to come on board. my brand through together what I believe is the world’s best bevmedia. This is me erage program. I mean, everything from cotton Your message seems to go against a lot of bringing my brand candy to ice pops is in these cocktails. conventional wisdom. I mean, food brands to the street.â€? are always big winners in our Franchise 500 list. But here you’re saying: This industry That sounds time-consuming to make! is facing trouble, so let’s rethink it. Do you Will you have to staff up more there? get pushback on that? When you look at a drink that takes four minutes to make, I’ve got to sell four times the amount of the drink that takes a minute to make. The answer is, I’m shocked. Because we’ve heard from mostly And that’s where mixology economics start to fall apart. And I can’t multi-unit franchisees. Every one of them has some tired charge four times higher for a drink. So we will do some premixes; buildings, some tired concepts. I can’t mention names, but a comwe’ll prebatch certain things. Our concept is one-minute mixology. pany is looking at converting a number of units. We’ve heard from The best drinks you’ve ever had in your life, with the ďŹ nest ingreditwo airport space operators; we’re in discussion at 12 locations on ents, but we’re getting it out in a minute. f that. There’s another individual with hundreds of franchise units;

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came out of the POS system, and I’ll know when it gets into This sounds like a restaurant driven by efficiency. the Uber car. Where else are you focusing? Yes. For example, we’ll provide music programs targeted to each restaurant. If Elton John is coming to a city, that city will What about at the tables themselves? get a propensity of Elton John music. In a bar environment, music The servers have full-service tablets they’re using at the table. But and entertainment drive length of stay. Length of stay drives sales. unlike restaurant chains where you sit down at the table and order The longer you stay, the more you drink. We on a tablet, we’re not going there. You’re can connect hourly revenue reports to what still going to have a human being come up music is playing each hour. We can track to you and tell you what ingredients are in “Once they understood beats per minute to sales. the food. We’re just putting a lot of technology the science of sous around that human. The other thing we’re doing is using vide, that’s when a smart POS program we put together everybody lined up to with Shift4, which does all sorts of market You’ve released products like cocktail come on board.” analysis. So I know when tickets come in, mixers before, but this is something entirely new for you. How are you feeling? I know when tickets go out, I know how long it took to produce, I know how it was I’ve been able to do my brand through media. produced, and I know what music was being played. Then, This is me bringing my brand to the street. Everything that hapwe have infused all the to-go platforms into the POS system. pens there is so important, because it could tarnish the brand. If you go into a restaurant today, there’s a tablet for Uber Eats. I’m worried about doing it right, and I’m also so passionate about There’s a tablet for DoorDash. There’s a tablet for every one of doing it right. Make no mistake: This is my baby. So, for example, those. We put it all into our POS system. So when you’re ringing it we’re opening in Atlanta. I’ll be in that market for three weeks. I’ll in, you just hit Uber. I’ll know when the Uber order came in, be at as many restaurant openings as I can. I’ll be very involved I’ll know when it went into the POS system, I’ll know when it in it. I can’t wait to get there.

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THE FUTURE WILL BE TABLELESS

Franchises are building beautiful restaurant spaces for dining in, but consumers are increasingly ordering delivery. Now an industry of rent-a-kitchens is coming to help—and it just might change the way a food franchise grows.

by BRYAN SMITH

112 / E N T R E P R E N E U R . C O M / January-February 2020

Illustration / N I C O L Ă S O R T E G A

January-February 2020 / E N T R E P R E N E U R . C O M / 113

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→ ROOM TO SHRINK

og Haus is the kind of place designed to spend time in. It serves dogs, burgers, beers, and the like, and its wide-open space captures the vibe of a beer hall—industrial but clean, with high ceilings, wall-size graphics, reclaimed-wood-and-steel tables, and music trendy enough to draw in young customers. The first time Jesse Koontz checked it out, he wanted to spend more time there, too. “I just immediately fell in love with the concept,” he says. “I walked in and was like, ‘This place is cool.’ ” Koontz set out to become a franchisee, and in 2018, he opened his own Dog Haus, now one of 34 spread across 10 states, in Chicago’s Lincoln Park. Shortly after he opened it, Koontz started thinking about a second location. He wanted one closer to downtown Chicago, where foot traffic is especially high. But the cost gave him pause. A full Dog Haus launch can cost more than half a million dollars. Did he really want to take another gamble that big? What he really wanted was a way to test the market first. Then

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he realized he could—but it would require ditching almost everything Dog Haus is known for. No high ceilings. No art on the wall. No tables where customers could sit and snap Instagram photos of their pastrami- and arugula-piled dogs. In fact, no way for a customer to spend any time there at all, because there wouldn’t even be a front door for them to walk through. Instead, Koontz would open in what’s come to be called a “ghost kitchen.” Most consumers never see it, or care about it, or even know about it, but it’s there—a place that produces food and, just maybe, will also produce the future of the franchise food industry. restaurant business knows the trends: People are as hungry as they’ve ever been, and they’re willing to spend money on food. But they’re also focused on convenience. Workers are happy to eat lunch at desks, and when they return home at the end of the day, they have endless streaming to entertain them during dinner. f ANYONE IN THE

PHOTOGRAPH COURTESY OF DOG HAUS

A restaurant build-out can cost hundreds of thousands of dollars. But what if all you really need is the kitchen?

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with QSRs and franchise operators, who are using them to expand Dining out just doesn’t hold the appeal that it once did. their restaurants’ delivery capacity without the overhead that comes “Customers expect options that align with their lifestyles,” says with parking lots, tables, and neon signs. Christopher Sebes, partner in Results Thru Strategy, a hospitality So, for example, a Chick-fil-A could pay for space inside a consulting firm. “So if I’m going to watch Netflix at home, maybe I ghost kitchen—and then, when an order comes in via Seamless, don’t want to cook. Maybe I want Chipotle or Outback delivered to DoorDash, Uber Eats, or some other platform, the food is made my home.” there instead of at an actual Chick-fil-A. The That demand for on-demand food has crecustomer receives the same chicken strips, nugated a major shift in spending. In 2017, U.S. gets, and sandwiches, but after eliminating the food delivery was a $43 billion market. By “With all these apps costs associated with a physical location, the 2022, analysts expect it to hit $76 billion. going at once, it’s company pays less to make them. That’s a projected 77 percent growth in just like bing, bing, bing: Part of the allure for restaurants is that ghost five years—and to fill that demand, restauDoorDash, Postmates, kitchens are built to maximize efficiency, with rants will have to rethink the ratio of griddles Grubhub. You can get infrastructure and technology that helps food to tables. That’s why many of them, Koontz stressed-out easily.” move from the kitchen to the customer with a included, are turning to ghost kitchens. speed that makes the teenage-pizza-boy model They’re a logical answer to the question: How look like the U.S. Postal Service. can we best serve customers who aren’t even Ghost kitchens are still a relatively new concept, but the induswalking into our restaurant? try already features a number of fast-growing companies. One is Think of a ghost kitchen as a shared workspace. Each brand called CloudKitchens, and it’s backed by former Uber CEO Travis claims a small stake of a big building and receives equal access to Kalanick and recently landed $400 million in funding from Saudi common services such as dishwashing, cleaning and maintenance, Arabia. Reef Technologies, a parking lot management platform, and delivery. These operations sometimes go by other names, such secured a $1 billion valuation thanks to a SoftBank investment. as virtual or smart kitchens. But they’ve become especially popular

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The funds will let Reef Technologies enter the ghost kitchen busiIN JUNE , Koontz officially moved into Eats on Sedgewick, on the ness by housing kitchens in its parking lots. In 2019, Zuul Kitchens second floor of a squat block of redbrick and baker’s glass located (named after the refrigerator ghost from Ghostbusters) became the strategically close to boutiques, business, and tech, and just half first to open a space in New York City. Meanwhile, Kitchen United a mile from Groupon’s headquarters. It’s close enough to fill launched in 2017 and quickly closed a $10 million Series A round lunchtime orders quickly but far enough away to avoid the high backed by Google Ventures. It brought in an additional $40 milrents paid by its tonier neighbors. With no build-out or liquor lion and has plans to open 400 locations over license to secure, the deal came together fast. the next few years, with the capacity to serve And Koontz was able to escape many of the 5,000 restaurants. typical franchise costs: He skipped the If the plan succeeds, Right now, however, Kitchen United has $12,000 needed for street-front signage, Dog Haus will soon be only three locations—and one of them is in $75,000 for kitchen equipment, and $125,000 leveraging each lowChicago, operating under the name Eats on for lease and construction fees. Instead, he cost ghost kitchen to Sedgwick. It contains a handful of brands, just has to pay rent on a 350-square-foot sell a big, multi-unit including B.Good, Moonbowls, Chick-fil-A, kitchen, which exactly mirrors the one in his franchise territory. and Naf Naf Middle Eastern Grill. And it isn’t full-size Dog Haus. totally hidden from consumers; there’s a store“They build it to suit your needs,” Koontz says. front where people can pick up their food to “You just tell them what you want, and they give go, and a website to explain what the place is all about. (The site’s you a list of equipment to choose from.” FAQs include “Is there sit-down dining?” The answer is, of course, On a recent weekday, the ghost version of Dog Haus bustles like no.) One day, Dog Haus franchisee Jesse Koontz showed up at Eats any back-of-house kitchen, but it carries the edge of a Silicon Valley on Sedgwick to check the place out. He thought it might make a thought experiment. A few people scroll on their phones in the comperfect second Dog Haus location—and after touring around, he mon area—it’s available to all restaurants—while two staffers in ball decided to give it a shot. caps and Dog Haus T-shirts man the grill, dice veggies, and check a

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tablet for incoming orders. That tablet is actually a big selling point for Kitchen United. “One of the problems with delivery, and any restaurant owner knows this, is that with all these apps going at once, it’s like bing, bing, bing: DoorDash, Postmates, Grubhub,” says Koontz. “You can get stressed-out very easily.” But Kitchen United solves the problem with software that aggregates delivery services. Everything is in one place. When an order comes through, Dog Haus staffers prepare and bag it just like they would at a real restaurant. But then things get different. They place the order onto a stainless steel platform the size of a record album. A hydraulic lift carries it upward toward a conveyor belt, and off it goes on the labyrinthine journey through the building until it ultimately ends at a tent outside the building. There, deliverymen congregate like cabdrivers outside an airport. As food shows up on the conveyor belt, a dispatcher calls out the next driver, and the food quickly goes into a passenger seat and then off to a home or office building. If there are any hiccups in this process, Koontz knows immediately. In the kitchen, for instance, cameras powered by facial recognition software trigger an email alert if someone unauthorized so much as steps on Dog Haus turf. “The cameras can even pick up on body motions,” he says. “So if someone starts acting erratically, like if they’re upset and waving their arms, you’ll be notified. Or if someone is lying on the floor, it’s like, ‘Hey, this person is passed out and unresponsive.’ ” The delivery software even draws on traffic data to dictate the delivery radius. Dog Haus will ferry food as far as four miles away during slow times, but that drops to two miles during the peak hours. That way, nobody ever receives a sack of cold dogs. Almost seven months in, with zero seats, the virtual Dog Haus is feeding 200 people per day. Koontz is happy with his new franchise—and at the corporate level, Dog Haus is now thinking even bigger about ghost kitchens. It has agreed to a 25-unit partnership with Kitchen United and is making ghost kitchens a part of its

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broader strategy for testing markets and recruiting more franchisees. “We’d open a [virtual Dog Haus] in, let’s say, San Francisco,” says Dog Haus partner André Vener. “Once that’s up and running and doing great, we would hand it over to our franchise sales team.” If the plan succeeds, the company will soon be leveraging each low-cost ghost kitchen to sell a big, multi-unit franchise territory. It’s a strategy that could alleviate fear for franchisees who might be skittish about entering or expanding in an industry where six out of 10 brickand-mortar restaurants fail. A successful Dog Haus ghost kitchen can prove that, at the very least, the market has an appetite for gourmet dogs. aren’t the only strategy aimed at meeting the demand for home and office eating. If anything, they’re the pinnacle of a long-standing trend toward lean, efficient restaurants. In recent years, titans like Wendy’s, McDonald’s, and Dunkin’ have all opened smaller stores, and plenty of QSR owners have found that fewer tables can lead to bigger profits. In 2002, Pete Mora, founder and CEO of Fajita Pete’s, opened a mammoth 6,500-square-foot eatery with a full bar, a dance floor, and 60 tables. “My thinking at the time was that you needed a big restaurant to make big money,” he says. “And then through the years, I started asking myself, What am I doing with all these tables? This isn’t the most efficient way to make money.” When Mora’s catering business exploded in his second year, he says, “my eyes opened to the possibilities.” At the end of his five-year lease, he closed his original location and moved into a 1,200-square-foot location with delivery and catering as his primary focus. To help the kitchen run faster, Mora also shrank the size of his menu—dropping from 65 items to three types of fajitas—beef, chicken, and shrimp. “That’s how Fajita Pete’s started,” he says. “As soon as I transitioned to a smaller restaurant—which was really just a counter with a couple of tables— GHOST KITCHENS

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Aaron Goldberg, Director of Development aaron.goldberg@californiatortilla.com 301.545.0035 Ext. 105 franchise.californiatortilla.com *These figures represent the financial performance of the 27 franchised California Tortilla restaurants in operation for at least 12 months, as of December 31, 2018, as published in Item 19 of our 2019 Franchise Disclosure Document (“FDD”). [These franchised restaurants had an average annual gross revenue of $1,023,268 with 10 restaurants (or 37%) exceeding the average.] The median annual gross revenue of these restaurants was $826,025, and the lowest annual gross revenue was $534,384. You should review Item 19 of our FDD for additional information and details about these figures. Some outlets have sold this amount. Your individual results may differ. There is no assurance you will sell as much. This advertisement does not constitute a franchise offering or an offer to sell a franchise. It is for information purposes only. A franchise offering can be made by us only in a state if we are first registered, excluded, exempted or otherwise qualified to offer franchises in that state, and only if we provide you with an appropriate franchise disclosure document. Please contact the California Tortilla Group, Inc., located at 7825 Tuckerman Ln., Ste. 214, Potomac, MD 20854, to request a copy of our FDD.

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something went off in people’s brains where they said, ‘Hey, this isn’t a restaurant; this is a delivery concept. It’s a catering company.’ ” Mora’s sales actually increased, while his monthly costs dropped about 20 percent. “My customers just stopped coming in and instead began ordering for their offices.” Fazoli’s, a 220-unit fast-casual Italian food chain based out of Lexington, Ky., counts itself among the restaurants shrinking its footprint. “When I started 11 years ago, we were 60 percent dine-in and 40 percent drive-through,” says Fazoli’s president and CEO, Carl Howard. “Now it’s 57 percent off-premise and 43 percent dine-in.” The numbers have essentially flipped, and the trend suggests they’re going to continue moving in that direction. The restaurant’s new test model, which has yet to officially roll out, shrinks the store from today’s high end of 4,400 square feet to 2,500 or less. But fewer tables doesn’t necessarily mean fewer diners: Fazoli’s is also planning to add a second drive-through lane, so more customers can grab and go. Ghost kitchens take the shrinking trend to its extreme, and as such, some pundits worry that they’re bad for the restaurant industry. Their proliferation in metropolitan areas could steal customers who would otherwise dine in. They could even run nondelivery spots out of business. But an industry in upheaval also presents opportunity for entrepreneurs who are nimble enough to adapt, and Sebes, the hospitality consultant, sees a future where dine-in restaurants could justify the costs of signage, high ceilings, and painted wall graphics by serving as advertising vehicles for the delivery operation. “The food may be replicable, but the experience, atmosphere, and ambiance are not,” he says. People who walk into a full-size Dog Haus, for instance, are able to experience it the way Koontz did his first time. His restaurant plays music videos on the wallmounted TVs and has a deep selection of local craft beer on tap. It’s only natural that customers fall in love the same way he did—and they’ll remember that the next time they pull up Grubhub.

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FRANCHISING’S FOUNTAIN OF YOUTH Young franchisees often prove to be a franchisor’s biggest asset. The challenge is finding them, funding them, and letting them take control.

by BLAIRE BRIODY 124 / E N T R E P R E N E U R . C O M / January-February 2020

Illustration / N I C O L Á S O R T E G A

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assidi Brown wanted her Coolgreens to stand out among the nearby restaurant chains in her Dallas suburb. So she began building a selfie wall, covered with succulents and vines, that would live at the store’s entrance. She promoted the store’s opening with social media posts featuring the staff playing Jenga. And two days before the official launch, she opened the doors for a fundraising event for low-income residents in the area. As a franchisee, Brown is ambitious and innovative. She also believes she knows how to draw in young customers because, well, she’s their age. At 28, she represents a generation the franchise industry has struggled to recruit. “Franchise systems are aging,” says Mark Siebert, the founder of iFranchise Group and author of The Franchisee Handbook. “As they do, there’s a need to replace the older franchisees.” The numbers are stark: The majority of franchisees across the U.S. are between 46 and 65 years old, according to FRANdata, a franchise analytics company. But as the industry ages, it also grows. Roughly 300 companies begin franchising each year. In 2017 alone, 43,500 new franchise units opened up—meaning demand for new franchisees will only increase. And who is frequenting all these new franchises? Increasingly, it’s young people. Food is, of course, franchising’s largest category, and millennials spend 23.8 percent of their discretionary budget eating out, according to data by Bank of America. That’s nearly double what baby boomers spend, making it increasingly important that franchise brands know how to appeal to the next generation of customers.

This is why, for many franchise brands, youth recruitment is becoming a priority—though it isn’t always easy. To start, young entrepreneurs have different motivations than their predecessors. In a poll conducted by the Center for Women and Business at Bentley University, 84 percent of millennials said that making a positive difference in the world was more important than professional recognition. They want to make money, sure, but they also want to have an impact—which means franchise brands need to think differently about their recruitment and what elements of the business will appeal to younger potential owners. There’s also the question of how to reach them, given their diverse media habits and perceptions of the franchise industry. Rick Grossmann, author of Franchise Bible, has found that many young people think franchising is limited to restaurants. That’s certainly not the case; Grossmann’s own franchise, Friend of the Family, for example, helps seniors move and downsize. Still, it’s a perception he’s had to fight against as he introduces his company to potential younger owners. But even if franchises do a good job appealing to the next generation, they should be prepared for some built-in challenges. Younger franchisees often lack experience, struggle to come up with money, or simply don’t understand the industry, says Siebert. So companies committed to recruiting younger franchisees are often compelled to offer programs that support professional development, along with robust financing options. (Grossmann, for instance, has begun offering zero-percent-down busi-

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ness loans to lure in franchisees. The incentive made it possible for his first franchisee, a single mother in her early 40s, to launch her business.) At Coolgreens, the franchise Cassidi Brown bought into, all this is top of mind. Coolgreens’ average franchisee age is 34. Its franchising website stresses that it offers “more than our healthy menu”—including in-store yoga nights, fitness classes, and an attitude of being “unabashedly passionate about making our communities a better place to live for everyone.” It also features photos of young franchisees, including Brown. But it didn’t start that way. The company is based in Oklahoma City, and it serves down-theline salads, sandwiches, and wraps. It launched as a corporate chain in 2009 and operated that way for six years—until 2015, when a new CEO named Robert Lee took over. He was only 29 at the time, and had spent most of his 20s opening and operating 12 leased salonspace franchises. His task was to turn Coolgreens into a franchise, and, given his own age, he says he just hadn’t thought about youth as a liability. So when he began searching for franchisees, he cast what he says was perhaps a wider net than an older CEO might have. That’s what created an opening for Brown. Brown’s road to Coolgreens is typical of young franchisees. She graduated with a degree she wasn’t using and wasn’t passionate about— graphic design. Brown was working as a server at The Melting Pot in 2013, the year she first stepped inside a Coolgreens as a customer. The place drew her in with its bright colors, sustainable packaging, and

healthy food options. Prices were approachable: Most items were less than $10. It didn’t hurt that she was on a first date with her now husband. The pollen of love was already in the air. A year later, Brown and her husband moved to Dallas and were disappointed that Coolgreens hadn’t made it to Texas. When the company launched its franchise program, Brown learned about it, secured a loan from the Small Business Administration, cobbled together a 20 percent down payment using inheritance money and her husband’s savings, and became the first franchisee in the area. Her store opened in September 2019, and three more stores have opened since. The company plans to open 10 locations in 2020. So far, Coolgreens’ millennial franchisees have demonstrated huge potential, says CEO Lee. They’re adaptable, tech-savvy, and interested in learning. They show a knack for bringing in young customers—and, if all goes well, both franchisee and customer could stick around for decades to come. Brown, too, is happy with her decision…and her selfie wall, which Coolgreens happily endorsed. She feels that the brand accepts her and the people she hopes to serve. “What I love about Coolgreens is we’re inclusive and free to be ourselves,” she says. She recalls meeting a transgender employee behind the counter at another location, and one of her first hires showed up for the interview with orange-and-red hair. Brown herself has a lip piercing. “Accepting all lifestyles is important to my generation and the generations below me,” she says. “That might be a big reason why people are flocking here.”

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*Figure reflects the actual annual EBITDA for one affiliate-owned and operated BIG BLUE Swim School (operational for at least 5 full years as of December 31, 2018) during its 5th full 12 months of operation. This figure is published in Item 19 of our April 30, 2019, Franchise Disclosure Document (FDD). Item 19 of our FDD includes actual average and median annual gross revenue, annual expense, annual EBITDA, and other annual financial performance information for 4 affiliate-owned and operated BIG BLUE Swim Schools (operational for at least 1 full year as of December 31, 2018) during their 1st full 12 months of operation, for 3 of those 4 Swim Schools during their 2nd full 12 months of operation, for 2 of those 4 Swim Schools during their 3rd and 4th full 12 months of operation, and for 1 of those 4 Swim Schools during its 5th full 12 months of operation. A new franchisee’s results may differ from the represented performance. There is no assurance that you will do as well, and you must accept that risk.

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THE MOST IMPORTANT RELATIONSHIP IN FRANCHISING Franchisees and franchisors are in business together, but that doesn’t mean they’ll always see eye to eye. Here’s how both sides can create a great, lasting, profitable partnership.

by MARK SIEBERT, CEO of iFranchise Group

128 / E N T R E P R E N E U R . C O M / January-February 2020

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will need from franchisors in terms of support (which reduces corn the world of business, the relationship between a franchiporate costs), and the more they will pay in royalties. They will sor and a franchisee is indisputably unique. interact with the brand and contribute ideas. Happy franchisees Some liken it to a partnership, but in fact, it’s nothing of rarely sue. the sort. In a partnership, interests of both parties are directly And, of course, they buy additional franchises. aligned. And while the best franchise systems work to actively So, how does this relationship get off on the right foot? The align franchisor and franchisee goals, at the end of the day, the answer begins at the very beginning—by defining the relationfranchisor’s financial interests are met by increasing franchiship on both sides. Think of it, again, like a parent-child relationsee revenues, while a franchisee’s interests are met by increasing ship: Sometimes being a great parent means you cannot be a good profits. friend. And the franchisor needs to be a good parent first. Others liken the relationship to a marriage. But still, it is unlike One of the most important things a new franchisor can do is (most) marriages in that the franchisor has almost all the power— establish the boundaries of the relationship. The franchisee needs at least when it comes to brand standards. to understand that a franchisor’s role is to guard the system and the It’s also nothing like a traditional employer-employee relationbrand so all franchisees can continue to thrive. As such, the parent ship. Franchisors govern by contract; they cannot hire, fire, or discompany needs to communicate and enforce brand standards, and cipline franchisees the way they would with an employee. be willing to discipline those who do not follow them. Franchisees So perhaps the closest analogy is in fact that of a parent-child also need to realize that not every decision a brand makes will relationship: A franchisee starts out dependent on the franchisor benefit all franchisees equally. Sometimes the greater good of the for everything, then gradually becomes more independent (and system needs to supersede the desires of a few. It’s not possible to perhaps even grows rebellious), but is ultimately required to follow please everyone all the time. the rules that the franchisor sets. At the same time, discipline cannot be meted Franchisors have both the right and the obliout to franchisees as if they’re employees in a gation to enforce system standards, but their corporation. They’re not. If a franchisor tries to franchisees are independent business owners give a franchisee the “it’s my way or the highwho can call their own shots on day-to-day operThe closest analogy way” speech, only trouble will follow. If they try ational decisions that do not impact brand stanis that of a parentto dictate certain employment practices, it may dards. Franchisors have to remember that. child relationship: create legal complications. This is why both sides need to come together, A franchisee starts Franchisees are proud business owners, and at the very start, to make sure their relationship out dependent as such, all communication with them should gets off on the right foot and stays strong. In the on the franchisor happen in a professional manner. While franend, the franchisor is creating a community in for everything. chisors will want to be firm on issues involving which franchisees and the franchisor team have brand standards, they will also need to be sure many shared interests and needs. The commufranchisees understand the nature of the stannity thrives if the franchisor can maintain trust, dards and have an opportunity to give feedback. No major decisions sound leadership, and transparency—and if franchisees actively should happen in a vacuum. engage with the franchisor and one another to make the system If a franchisee isn’t complying with the brand’s requirements, stronger over time. In many of the highest-performing franchise franchisors should explain why their actions are to the detriment of systems, the franchisor’s principal role is as much about accumuthe business and perhaps other franchisees as well. They can show lating and sharing best practices from franchisees as it is about the franchisee how following standards can increase revenues, anything else. reduce operating costs, maximize profits, and enhance the resale Sound simple? It’s not. But with the right work and attention to value of the business. And rather than having all the information detail, this relationship can truly thrive. come from corporate headquarters, a franchisor should point to examples of best practices that have been put in place by other LET’S START WITH this basic fact: Everybody loses when the relafranchisees within the system. tionship goes sour. The point is, even when tensions run high, both sides should A failing franchisee will cost more to support, and they’ll profocus on their shared goal: They want to be successful. And that vide less (sometimes nothing) in royalties. They’ll often stray from means they need each other to succeed. the franchise’s system in an attempt to save money—by, say, buying substandard products to cut corners. As a result, their customers will be unhappy and they’ll degrade the overall brand. ESTABLISHING BOUNDARIES between franchisors and franchisees— Happy and successful franchisees will do the opposite. They while a necessary first step—will only carry you so far. Clear will tell their friends and family about their success, generating communication is the keystone of a productive franchisor and more franchise leads. They will spread the word on social media franchisee relationship. And it can be the toughest, most nuanced and elsewhere, increasing lead flow. They will usually follow the aspect to get right. system—and presumably, that will make them more successful. The ancient Greek philosopher Zeno said that we are given two And generally speaking, the more successful they are, the less they ears and one mouth for a reason. The best communicators (and the January-February 2020 / E N T R E P R E N E U R . C O M / 129

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munication. Every day, try to think of a franchisee you haven’t spobest franchisors) use them in roughly that proportion. And they ken to in a while—and give them a call. Check in. Ask how you can know communication must flow up as well as down. help. Ask what they’re struggling with. The most successful franchisors diligently provide their franOf course, as a franchisor’s system grows, eventually they will chisees with frequent, useful communication—which means more lose the capacity to answer every call or personally respond to every than the occasional email, newsletter, or perfunctory visit from concern. But person-to-person communication can still happen. their field representative. Today, it is all too tempting to rely on the Consider launching a dedicated franinternet for communications, but deperchisee support line, one where a human sonalizing the relationship is a big misbeing answers—never an automated take. Time and again, well-intentioned attendant. Set up a technology platemails or texts can be misinterpreted Well-intentioned emails or form to track all communications with and create a firestorm. Do not make the texts can be misinterpreted. franchisees. (Those records of calls and mistake of believing an email can subDo not make the mistake summaries of emails can be vital if a stitute for human contact. of believing an email can dispute ever arises!) Companies can Relationships are built with dialogue, substitute for human contact. also appoint one person as the commuand good franchisors are careful to crenications manager—someone who can ate multiple venues for constructive ensure all system-wide messages and two-way conversations, from annual alerts use consistent tone, and contain accurate information. conventions and regional meetings to advisory and advertising counFormalizing these systems is also a step toward conducting valucils. But in addition to this kind of institutionalized communication, able research. Having spoken with hundreds of franchisors, I can simple, day-to-day accessibility should never be overlooked. say with some certainty that very few of them conduct any meanIf you’re a franchisor, and a franchisee calls you? Pick up the ingful research on franchisee attitudes and opinions. Instead, they phone! If you missed the call and receive a message or a voicemail, rely on their gut instinct. But gut instinct is often biased by our respond the same day. On the flip side, be proactive in your com-

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won’t do in return. perceptions of the job we are doing and how people feel about us. In reality, franchisees may be guarded when talking with franchisors To truly build that kind of loyalty, two-way communication can’t or their representatives; perhaps they believe candid comments just be frequent. It needs to be honest. Trust starts with transwill not yield positive results. They may prefer to avoid confrontaparency. Get caught in a single half-truth, and trust is destroyed tion. Whatever the reason, franchisors may sometimes be surprised forever. at how their franchisees truly view them. Just as technological advances and the conThat’s why communication has to be consisveniences of the internet have made it easier, tent. Franchisors need to hear what franchifaster, and more affordable to communicate When franchisees sees really think! So in order to get that real, within a franchise system, they’ve also made it see franchisors valuable insight, franchisors should be actively easier to embrace transparency. Intranet sites, breaking their soliciting feedback on a regular basis. Conduct blogs, chat rooms, emails, e-newsletters, realback to help them formal surveys. Mystery shop to hear what your time reporting, and online training have all succeed, there is franchisees are saying. Listen for the stuff franunquestionably improved a franchisor’s ability almost nothing they chisees won’t say to a franchisor’s face! And if to reach, train, and coach franchisees. won’t do in return. there’s a genuine problem or a consistent comBut the ubiquitous (and sometimes intrusive) plaint, both sides need to pause and fix it. nature of the internet can all too easily transform a franchisor from the friendly beat cop into a menacing Big Brother in the eyes of a franchisee. Real-time SO, WE’VE ESTABLISHED the importance of the relationship. We see access to the franchisee’s POS system, remote video, and formthat communication is the key to maintaining that relationship. letter emails can substitute for dialogue—and in the process create And now it’s time to back up all that talk—because a franchisor’s an us-versus-them environment. commitment to their franchisees should be obvious at every level Franchisors need to display trust—trust that their franchisees of the organization. When franchisees see franchisors breaking are paying all required royalties, that they’re properly reporting their back to help them succeed, there is almost nothing they

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are paid for and supported by the franchisor, and operate under revenues, and that they’ll adhere to brand standards and follow by-laws that address issues like communication, confidentiality, structured systems. But, of course, that’s not all. As Ronald Reagan and purpose. often said, “Trust but verify.” Some franchisors may balk at the idea of launching a FAC—it can Verification doesn’t imply selfish intent—it’s in the best interest sound like a frightening way to open commuof franchisees, as well, who suffer when brand nication lines that could encourage franchisee standards are not met. They suffer when other unrest. But this thinking is flawed, and a litfranchisees cheat, leaving less advertising tle naive: It assumes franchisees will not find a funds and royalties to support the franchisee The last thing a way to communicate about any possible dissent community. franchisor wants without these tools. It is far better for the franSo where is the middle ground? That’s the is their franchisees chisor to hear about potential problems before real power of transparency. to have formed they become major issues, and FACs provide that If, for example, a franchisor uses a mystery an association opportunity. The last thing a franchisor wants is shopper to uncover violations of standards and without them—a their franchisees to have formed an association underreporting of revenues, the franchisees sign that something without them—almost always a sign that someshould know about this practice. Hide it and is wrong. thing is wrong. When an independent associafranchisees will forever distrust the brand. tion is built, it’s often done to share grievances, Invest in ways to keep transparent commuand those grievances are almost never pretty. nication channels open. A good franchise adviLegal counsel may follow. sory council (FAC), for example, can play a big role here. A FAC is That’s why it’s so important to keep the conversation open, honest, generally established by the franchisor and is designed to facilitate and transparent. When franchisors demonstrate that they’re open communication between the franchisor and franchisees, as well to sharing information with franchisees and to hearing criticisms, as among franchisees themselves—it’s a way to foster involvement there’s only one direction the relationship will move: forward. and leadership, plus build a valuable community of resources. FACs

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Those top-performing franchisees can also hold the key to of his McDonald’s franchisees, “My best ideas expanding a system’s footprint—and to do that, they need to came from my franchisees. Why? Because my franchisees were feel particularly supported. For many business owners, the bigtalking to my customers every day, and some of them were listengest step they ever take is not when they first open for business. ing to what they have to say.” Instead, it’s when they grow from their first Kroc knew that the way to succeed in franunit (where they can oversee the business chising was to make his franchisees successdirectly) and open their second. ful. Top franchisees, on paper, require less This leap will require franchisees to undersupport than other franchise owners in their For many business stand that they are going to take a step backsystem. That may lead a franchisor to visit owners, the biggest ward—hiring and training a manager to their locations less frequently and shift supstep they ever take replace them in the first location, incurring port resources toward franchisees who are is not when they additional cost—so that they can eventually struggling. first open. It’s when take two steps forward when they open their It might sound like a sensible instinct, they grow from second location. Franchisors can help them but it’s a mistake to neglect top franchisees. their first unit and recognize the trade-off. Yes, they may sacriThe highest-performing franchisees are also open their second. paying more royalties and advertising fund fice short-term profitability, and perhaps will contributions, and because they’re strong need to put off buying that new house, car, or operators, it’s likely they have the potential to boat. But in the long run, the franchisee will be continue growing their business. If their franchise generated building something more substantial that can run without their day-to-day involvement. $1.5 million last year, the franchisor should help them grow the But for now, they’ll need to make a commitment to training. business to $1.6 million and beyond next year. They may need a They’ll need to secure additional financing. And they’ll need to different kind of support than other franchisees, but they don’t understand that their own skill set will need to grow and evolve need less of it. RAY KROC ONCE SAID

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as they transition from running a single location to multiple-unit management. The best franchisors will institutionalize the hockey stick effect by working with franchisees from day one to begin growing their businesses. A brand’s field support team should not just be policemen, looking out for errors or missteps made by underperforming locations. They should also be focused on identifying and helping their best franchisees expand, working directly with owners to develop annual business plans, developing their management team, building their balance sheet for access to further credit, and adding the resources necessary to grow. Without thriving franchisees, no franchise system can last. When a brand puts the franchisees’ interests first, it will attract the kind of raving fans that build successful companies. There is a significant correlation between successful franchise systems and good franchisee relations. And while it is certainly easier to keep successful franchisees happy, it takes more than that. It takes trust. It takes leadership. It takes transparency. And most of all, it takes communication. Good franchisee relations start and end with good communication. In our digital age, that’s easier to do than ever—and it comes with benefits, for sure—but in the end, people have relationships with other people, not their computers. So focus on building relationships in person, the same way you build relationships in your own life. And remember, while the franchise relationship is contractual in nature, if either side is ever forced to bring out the contract and cite chapter and verse, they have already lost. The best franchise contracts are the ones you put in a drawer and never look at again. Let that be your starting point—and go build your success together. THE LESSON IS SIMPLE:

Excerpted from Franchise Your Business: The Guide to Employing the Greatest Growth Strategy Ever (Entrepreneur Press, 2016).

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WHAT’S UP WITH JOINT EMPLOYER?

Since 2014, a regulation known as “joint employer” has loomed over the franchise world, threatening to upend the model as we know it. This past year brought some news. Here’s the latest.

by JASON DALEY

he franchise world was on alert. In a series of actions between 2014 and 2016, the Department of Labor (DOL) and the National Labor Relations Board (NLRB) issued guidelines suggesting that every employee within a franchise system could have two bosses: the franchisee and the franchisor. This was joint employer—the idea that a local franchisee and a parent company were jointly employing their workers. To franchisors, this news held potentially devastating legal repercussions. They’d long operated under the assumption that each franchisee was solely responsible for its employees. If Jane Frycook was unhappy with her work conditions, she could sue the SuperBurger franchisee that hired her. What she couldn’t do was sue the corporate office. But these new interpretations appeared to change all that. Well, not so fast. The Trump administration declined to enforce the guidelines—in fact, it recently walked them back. Confused? So is everybody else—and this past year, the state and federal governments added a few new regulations. “In these times, franchisors must keep up on the legal landscape,” says Steven Suflas, a labor and employment attorney at the law firm Ballard Spahr. “Future administrations could change the rules yet again.” We can’t predict the future, but here’s how we arrived at where we are today.

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—

Regulators propose new rulemaking.

The DOL proposed new rules on joint employment. (The NLRB did the same in 2018.) Both efforts aimed to clear up ambiguity by drawing a hard line: Franchisors will not be considered joint employers, the rules say, unless they control local franchisee operations like hiring, firing, and employee scheduling. The new rules will likely be published before the next election, but even if that happens, experts say they may not be permanent. “Depending on what happens in the next couple of years,” says Steven Porzio, senior counsel with law firm Proskauer, “there may be a push by what could be a Democratically led [NLRB] board to unwind and reverse this rulemaking attempt.”

JUNE 2019

—

States join the battle.

Attorneys general from 18 states submitted comments to support stricter joint-employment standards. At the same time, Washington State also went after “no-poaching” clauses that some franchisees have employees agree to. (The clauses prevent employees from moving locations within the same chain unless they get permission from their employer.) Seven fast-food chains agreed to stop using them.

AUGUST 2019

—

Franchises fire back.

The International Franchise Association launched a campaign in support of a law called the Trademark Licensing Protection Act. It was first introduced in 2018 but has yet to make its way out of committee. The law would allow franchisors to enforce workplace standards that protect their brand, without being considered joint employers.

DECEMBER 2019

—

McDonald’s gets a big win.

In a victory for franchising, the NLRB resolved a four-year trial in favor of McDonald’s, claiming that the company’s corporate office was not a joint employer. “This settlement is significant,” says Suflas. But it’s also unlikely to be the last word, since the proposed DOJ and NLRB rules have yet to be published. “It’s likely those new rules will be challenged and the uncertainty will continue,” he says.

136 / E N T R E P R E N E U R . C O M / January-February 2020

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FRANCHISE

TOP INDUSTRY SUPPLIERS From banks to real estate to consultants, here are the year’s top franchise industry suppliers geared to help franchisees and franchisors succeed.

compiled by TRACY STAPP HEROLD hen we refer to the franchise industry, we usually mean franchisors, and maybe franchisees. But the truth is, there are many other businesses that play a part in making franchising such a successful business model. That’s why we’re proud to present this ranking of the top franchise suppliers—companies that provide services to franchisors and franchisees. To create this ranking, we surveyed more than 500 franchisors and asked them to tell us which service providers they and their franchisees use, and to rate their satisfaction with the quality, cost, and value of each supplier’s services. We scored each supplier based on the results of this survey, and the top-scoring suppliers in each of 10 categories are listed on the following pages. Please note that this list is not intended as a recommendation of any company. There are a multitude of suppliers in each category to choose from, and this list serves as a helpful start to your own search for the supplier that best fits your needs. For more options, be sure to check out our directory of franchise suppliers at Entrepreneur.com/franchises/franchise-suppliers.

W

140 / E N T R E P R E N E U R . C O M / January-February 2020

BDO USA,LLP

ACCOUNTING

5

Accounting services are vital to every business—especially franchises, which must include audited financial statements in their franchise disclosure documents (FDDs) every year. Franchisors have a host of options in this category, from the “Big Four” firms to smaller ones that specialize in serving franchises.

1

BDO USA, LLP

2

Grant Thornton

7

RSM US LLP

Audit, tax, and business consulting 8

EY

Advisory, assurance, tax, and transaction services

Kezos & Dunlavy

Full-service CPA firm specializing in real estate tax and accounting, franchise audits, and related issues 10

The Franchise CPA

Financial statement audits, royalty audits, and part-time CFO services 11

Professional services firm offering audit, tax, and advisory services 4

Citrin Cooperman

Accounting, tax, and advisory services

Deloitte

Audit and assurance, tax, legal, risk and financial advisory, and consulting services 3

6

9

Professional services firm serving franchises worldwide

PwC

Audit, assurance, consulting, and tax services

Plante Moran

Audit, tax, wealth management, and business consulting services

KPMG LLP

Professional services firm

12

A&G

Full-service accounting

Service descriptions come from respective suppliers.

PHOTOGRAPH COURTESY OF BDO

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FRANCHISE

BANKING / FINANCING

New franchisees often need thousands or even millions of dollars to get their businesses up and running, so a reliable financing source is indispensable. Banks remain a popular choice, but in this year’s ranking, a funding company specializing in serving franchisees climbed to the top.

1

2 Guidant Financial

401(k) business financing, SBA loans, unsecured business loans, business valuations and appraisals, and other business services

Benetrends Financial 3

401(k) rollover funding, SBA loans, and equipment leasing

Bank of America

Small-business banking, credit, digital investing tools 5

ApplePie Capital

Franchise financing 6

U.S. Bank

Business banking, conventional and SBA financing, credit card and payment solutions, wealth management services 7

Chase for Business

Deposit accounts, loans, credit cards, cash management, and payment processing 8

BMO Financial Group

Banking solutions for franchisees, including financing for acquisitions, development, and remodeling 9

First Financial

SBA financing for franchise startups, working capital, construction, and acquisitions; equipment leasing 11

12

FRANCHISE BROKER/ REFERRAL NETWORKS

These are organizations of franchise brokers or consultants who help franchisees find the right franchise to buy. Their services are typically free to the person seeking to purchase a franchise, and they are instead paid by the franchisor when a sale is successfully made.

IFPG

Membership-based franchise broker organization 2

3

FranWise

Operations and compliance consulting

Brokerage services for franchise companies and prospective franchise buyers 7

FranServe

4

Franchise FastLane

Franchise sales organization 5

Consulting services to prospective franchise buyers

KeyBank

SBA and conventional financing, merchant and treasury solutions, deposits

1

BAI Business Alliance Inc. 6

BB&T

Retail, commercial, and corporate banking, investments, insurance, and wealth management

FranFund

Funding solutions including 401(k) business financing, SBA loans, unsecured business loans, and equipment leasing

4

10

Franchise Creator

Franchise development, marketing, and sales

Helgerson Franchise Group 6

FRANCHISE CONSULTING/ DEVELOPMENT

These are companies that work with business owners who want to turn their brand into a franchise, or that offer other consulting or development services to established franchisors to make their operations more successful.

Development, management, and consulting services for emerging and established franchisors and suppliers

Pinnacle Franchise Development 7

Franchise development services, including sales, strategy, and consulting 8

DCV Franchise Group

Franchise consulting services and financing 9 Franchise Performance Group

iFranchise Group 1

Franchise consulting firm specializing in franchise development

Franchise consulting and development for startup and existing franchisors

10

Raintree

Full-service franchise design, marketing, and sales

SMB Franchise Advisors 2

Franchise consulting services for emerging brands

FranNet

Franchise consultants that match clients to business opportunities

FCC, The Franchise Consulting Company 3

Free consulting service to prospective franchise buyers 4

iFranchise Group

FranChoice

Free consulting service to individuals considering franchise ownership

PHOTOGRAPH COURTESY OF IFRANCHISE GROUP

THE

Franchise Brokers Association 5

Franchise broker training and membership organization

Live Oak Bank

Small-business banking

142 / E N T R E P R E N E U R . C O M / January-February 2020

Service descriptions come from respective suppliers.

FRANCHISE FUNDING PROVIDER

#1

FUNDING PROVIDER

bit.ly/franfund-entrepreneur

FRANCHISE

MARKETING

Franchisors need to market to at least two groups—customers and potential franchisees. Fortunately, they have many options when it comes to marketing services and software, including traditional marketing agencies, digital and social media marketing tools, and more.

FisherZucker LLC

MERCHANT SERVICES

Every business needs secure payment processing. A top supplier should have a record of reliability and offer additional services, such as analytics, loyalty programs, and consulting.

1

1

Scorpion

Digital marketing and technology solutions 2

Hot Dish Advertising

Full-service strategic marketing agency specializing in franchising 3

Wheat Creative

Franchise marketing strategy, development websites, and creative and digital collateral

Integrated Digital Strategies 4

LEGAL SERVICES

Legal services is one of the most competitive categories in our ranking, and one of the most important. Franchisors face unique legal requirements and challenges, and there are multiple law firms specialized in working with them.

Digital marketing company specializing in franchise development and franchisee marketing 6

7

8

1

FisherZucker LLC

DLA Piper

Legal services including franchise law compliance, mergers and acquisitions, and dispute resolution 3

Lathrop GPM*

Full-service corporate law firm with a franchise practice

Drumm Law LLC

Full-service franchise law firm

7

8

Internicola Law Firm

Legal services for emerging franchise brands 11

Carter & Tani

Legal services for franchisors, master franchisees, and Illinois-based franchisees and businesses

Mullin Law, PC

Franchise compliance, IP protection, general business, and dispute resolution services

Faegre Baker Daniels LLP 5

International law firm with a full-service franchise practice

14 4 / E N T R E P R E N E U R . C O M / January-February 2020

Rallio

SOCi

Social media and reputation management for multi-location brands

Cheng Cohen LLC

2

Stripe

Payments infrastructure and business applications

Franchise Payments Network 3

Payment processing and gift and loyalty programs for franchise chains 4

PayPal

Payment technology and software solutions 5

Square

Payment processing, reporting and analytics, POS software, and business services

ClickTecs

Social media technology and local agency services for franchises

Plave Koch PLC

Full-service law firm exclusively representing franchisors

12 4

6

Franchise legal services, including dispute resolution, transactions, and trademarks

10 2

5

Websites and digital marketing for franchisors and franchisees

Spadea Lignana LLC

Full-service franchise law firm

9

Full-service law firm focusing on franchising and licensing matters

FranchiseSmith LLC

Nationwide and international practice specializing in franchise law

TSYS

Integrated payments and point-of-sale solutions

Qiigo

Digital marketing for multi-location brands

Authorize.net, a Visa Solution 6

Payment processing and management system for businesses 7

Toast

Cloud-based restaurant point-of-sale and management system

Bank of America Merchant Services 8

Multi-channel payments, e-commerce, and security solutions

Wells Fargo Merchant Services 9

9

MGH Advertising

Full-service marketing, advertising, digital, interactive, creative, and communications agency 10

Curious Jane

Full-service advertising agency offering franchise development and consumer marketing 11

WebPunch

Customer and employee experience platform 12

SeoSamba

Franchise marketing platform

Payment acceptance and processing 10

Worldpay

Payment processing, software solutions, analytics, fraud protection, card solutions, consulting 11

First Data

Payment processing and technology solutions

Global Payments Inc. 12

Payment technology and software solutions

Service descriptions come from respective suppliers. *Originally ranked as Gray Plant Mooty, which has merged with Lathrop Gage to form Lathrop GPM

PHOTOGRAPH COURTESY OF FISHERZUCKER LLC

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FRANCHISE

OTHER TECHNOLOGY SERVICES

Technology has made it easier than ever for franchisors to expand widely and rapidly while monitoring and maintaining consistency across all their locations. Companies in this category offer solutions for CRM, sales, accounting, business management, and more.

PUBL IC RE L ATIONS For a national or global brand—or one that aspires to be—a good public relations agency is essential. It can raise positive awareness with customers, potential franchisees, and investors—and help to mitigate the impact of any negative situations that may arise.

1 1

HubSpot

CRM, marketing, sales, and customer service platform 2

Salesforce

CRM, cloud computing, sales, service, marketing, commerce, and analytics apps

FranConnect

Franchise management software 4

Vonigo

Business management software for mobile service franchises 5

Naranga

Franchise management solutions 6

Zoho

Cloud software suite and SaaS applications for business 7

Microsoft

Intelligent cloud, CRM, and software solutions

Intuit Quickbooks Franchise Program 8

Cloud-based software for accounting, time tracking, payroll, and payments

Infusionsoft by Keap 9

CRM, sales, and marketing software 10

MINDBODY

Technology platform for the wellness industry 11

FranchiseSoft

SaaS-based franchise management software 12

Fishman PR

PR and content marketing for franchise lead generation and brand awareness 2 All Points Public Relations

PR, social media, content marketing, digital and lead generation strategy 3

3

Fishman PR

Fish Consulting

Full-service national communications firm specializing in franchise PR and marketing 4

Franchise Elevator PR

PR services for emerging franchise brands 5 919 Marketing Company

Brand strategy, PR, social media, and digital marketing programs for franchise brands 6

10

Ripley PR

Strategic communication services, including media relations, digital content, social media, and crisis management

Konnect Agency

Full-service PR, marketing, and digital agency 12

Champion

Sanderson & Associates 8

Media placement, media coaching, social media, communications, and consulting for franchisors and franchisees 9

TopFire Media

Full-service PR and digital marketing agency specializing in franchise lead generation

Full-service PR, local store marketing, franchise development, and social media agency

146 / E N T R E P R E N E U R . C O M / January-February 2020

Colliers International Global real estate services and investment management company

Catalyst Commercial Group 7

REAL ESTATE SERVICES

Location, location, location. It can mean the difference between success and failure for a restaurant or retail franchise. These are the companies that franchisors and franchisees rely on to help them find or develop the right site for a new business.

1

RESOLUT RE

Analytics and brokerage services for tenants 2

3

Retail and restaurant tenant representation 8

Baum Realty Group

Retail brokerage firm 9

Keller Williams

Commercial and residential real estate services and technology 10

Coldwell Banker

Full-service commercial and residential real estate brokerage services 11 Franchise Real Estate

National real estate services for franchisees and franchisors

Keyser

Commercial real estate tenant representation

FRM Solutions

Software solutions for managing relationships between franchisors and existing/prospective franchisees

Morrow Hill

Real estate technology and services for corporate and franchise organizations 6

Full-service communications firm specializing in franchise brands

PR, crisis, social media, and influencer relations, specializing in franchise and foodservice businesses

Site planning, property development, and construction management 5

11

No Limit Agency

7 Powerhouse Communications

CDS Development 4

12 Newmark Knight Frank

Commercial real estate advisory firm

RPM

Real estate and project management consulting for franchises

Service descriptions come from respective suppliers.

PHOTOGRAPH BY BUZZ ORR/FISHMAN PR

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THE

FRANCHISE

DIRECTORY 156

168

Appearance Services ...................................................................................................156

Sports Bars/Pubs ............................................................................................................. 168

Oil-Change Services ....................................................................................................... 156 Repair & Maintenance Services .........................................................................156

Steakhouses ......................................................................................................................... 169 Miscellaneous Full-Service Restaurants ..................................................170

Wheels & Tires ...................................................................................................................... 157 Windshield Repair .............................................................................................................158

171

Automotive

Miscellaneous Auto Products & Services .................................................158

Food: Full-Service Restaurants

Food: Quick-Service Restaurants Asian Food .................................................................................................................................171

158

Business Services Advertising Services .....................................................................................................158 Business Brokerages .....................................................................................................159 Business Coaching & Consulting .......................................................................159 Printing/Marketing Services ..................................................................................159 Property Management .................................................................................................159 Signs ...............................................................................................................................................160 Staffing/Recruiting .........................................................................................................160 Training Programs ..............................................................................................................161 Miscellaneous Business Services .....................................................................161

Baked Goods: Bakery Cafes .....................................................................................171 Baked Goods: Cinnamon Rolls ................................................................................171 Baked Goods: Doughnuts ...........................................................................................171 Baked Goods: Pretzels ..................................................................................................172 Baked Goods: Miscellaneous .................................................................................172 Chicken ........................................................................................................................................173

Childcare ....................................................................................................................................162 Children’s Enrichment Programs .......................................................................163 Children’s Fitness Programs ...................................................................................165 Children’s Retail ...................................................................................................................165 Swimming Lessons ..........................................................................................................166 Tutoring .......................................................................................................................................166

Coffee ...........................................................................................................................................173 Frozen Desserts: Custard .........................................................................................173 Frozen Desserts: Ice Cream .................................................................................... 174 Frozen Desserts: Miscellaneous ........................................................................ 174 Hamburgers ............................................................................................................................175 Hot Dogs .....................................................................................................................................175 Mexican Food ........................................................................................................................175 Pizza ...............................................................................................................................................176 Sandwiches: Philly Cheesesteak ....................................................................... 177 Sandwiches: Submarine ............................................................................................. 177 Sandwiches: Miscellaneous ...................................................................................178 Seafood .......................................................................................................................................178 Smoothies/Juices .............................................................................................................178 Miscellaneous Quick-Service Restaurants .............................................179

167

180

162

Children’s Businesses

Financial Services Business Financial Services ................................................................................... 167 Insurance .................................................................................................................................. 167 Tax Services ...........................................................................................................................168 Miscellaneous Financial Services ....................................................................168

148 / E N T R E P R E N E U R . C O M / January-February 2020

Food: Retail Sales Candy ........................................................................................................................................... 180 Miscellaneous Food/Beverage Businesses .......................................... 180

THE

FRANCHISE

181

195

Chiropractic Services ....................................................................................................181

Fitness Businesses ........................................................................................................ 195

Eye Care .......................................................................................................................................181 Health Products ...................................................................................................................181

Hair Care .................................................................................................................................... 198 Lash & Brow Services .................................................................................................. 199

Physical Therapy ...............................................................................................................182 Miscellaneous Health Services ...........................................................................182

Massage & Spa Services ......................................................................................... 200 Salon Suites .......................................................................................................................... 200

182

Senior Care ............................................................................................................................. 201 Waxing ........................................................................................................................................ 203

Health

Home Improvement Flooring ........................................................................................................................................182 Kitchen & Bath Remodeling .....................................................................................183

Personal Care

Miscellaneous Personal-Care Businesses ............................................ 204

204

Organization/Storage Systems ..........................................................................183

Pets

Painting .......................................................................................................................................184 Window Coverings ...........................................................................................................185

Pet Care .................................................................................................................................... 204 Pet Stores ............................................................................................................................... 205

Wood ReďŹ nishing ...............................................................................................................185 Miscellaneous Home-Improvement Businesses ...............................185

Miscellaneous Pet Businesses .......................................................................... 205

186 Lodging Campgrounds ........................................................................................................................186 Hotels & Motels ...................................................................................................................186

188

Maintenance Carpet & Upholstery Services ..............................................................................188 Commercial Cleaning .....................................................................................................188 Crime-Scene Cleaning .................................................................................................189 Garage Door Repairs/Installation ......................................................................189 Home Repairs ........................................................................................................................189 HVAC/Duct-Cleaning Services .............................................................................190 Lawn Care/Landscaping ............................................................................................190 Leather & Vinyl Repair ....................................................................................................191 Pest Control .............................................................................................................................191 Plumbing ......................................................................................................................................191 Pool Maintenance .............................................................................................................192 Residential Cleaning .......................................................................................................192 Restoration Services .....................................................................................................193 Restroom Maintenance ..............................................................................................194 Window Cleaning ...............................................................................................................194 Miscellaneous Maintenance Businesses ..................................................194

206

Recreation Adventure Parks/Entertainment Centers .............................................. 206 Paint & Sip/DIY Studios .............................................................................................. 206 Sports Equipment & Apparel .................................................................................207 Travel Agencies ..................................................................................................................207 Miscellaneous Recreation Businesses .......................................................207

208

Retail Apparel & Accessories ............................................................................................... 208 Convenience Stores ..................................................................................................... 209 Tools Distribution ............................................................................................................. 209 Miscellaneous Retail Businesses .................................................................... 209

210

Services Dry Cleaning & Laundry Services ..................................................................... 210 Embroidery & Screen Printing ............................................................................... 211 Home Inspections ............................................................................................................. 211 Locksmith Services ......................................................................................................... 211 Moving/Junk-Removal Services ......................................................................... 211 Photography & Video Services ........................................................................... 212 Postal & Business Centers ...................................................................................... 212 Real Estate .............................................................................................................................. 213 Security Services ..............................................................................................................214 Miscellaneous Services ..............................................................................................214

216

Tech Electronics Repairs & Sales ................................................................................... 216 Miscellaneous Tech Services ............................................................................... 216

150 / E N T R E P R E N E U R . C O M / January-February 2020

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FRANCHISE

UNDERSTANDING THE RANKING elcome to Entrepreneur’s 41st annual Franchise 500® ranking. For more than four decades, we’ve been studying the franchise industry and honing our proprietary formula in order to bring you the world’s first, best, and most comprehensive franchise ranking. And with each year, the ranking becomes increasingly competitive, as more and more companies see the value of expansion through franchising and throw their hats into the ring. Our list shows just how varied the franchise world has become, offering prospective franchisees a myriad of choices, from more traditional options, like restaurants, maintenance services, and gyms to the latest trends, like ax throwing, cryotherapy, and CBD. So just how do we go about evaluating and ranking such a diverse pool of opportunities? Here’s a look behind the scenes.

W

The Five Pillars of the Franchise 500

®

Some key factors that go into our evaluation.

COSTS & FEES

SUPPORT

BRAND STRENGTH

• Franchise fee • Total investment • Royalty fees

• Training times • Marketing support • Operational support • Franchisor infrastructure • Financing availability • Litigation

• Social media • System size • Years in business • Years franchising

SIZE & GROWTH • Open and operating units • Growth rate • Closures

FINANCIAL STRENGTH & STABILITY • Franchisor’s audited financial statements

Note: Pillars are not listed in order of importance or weighting.

152 / E N T R E P R E N E U R . C O M / January-February 2020

THE RANKING PROCESS begins with gathering the data. Start-

ing in July 2019, we asked franchisors to fill out our online form and submit a copy of their current franchise disclosure document (FDD) or Canadian disclosure document. We had a record-breaking year, with 1,105 companies supplying all the required information. Submissions were vetted by our editorial team before being entered for data analysis. To be eligible to rank, a franchisor must be seeking new franchisees in the U.S. or Canada and must have had a minimum of 10 units open and operating as of July 31, 2019, with at least one franchise located in North America. Each eligible franchisor was scored based on more than 150 data points, and those with the highest cumulative scores became the Franchise 500. Franchise companies are listed on the following pages by their industry categories. Ranked companies appear with their position listed to the left of their names. As an additional tool, we also list the 605 franchise companies that did not rank in the Franchise 500 but still passed our vetting process. These companies are listed in alphabetical order under “Not Ranked” in their respective categories. Check the index on page 217 to find a specific company, or go to Entrepreneur.com/franchise500 to view the entire ranking in numerical order. Note: The Franchise 500 is not intended to endorse, advertise, or recommend any particular franchise. It is solely a tool to compare franchise operations. You should always conduct your own careful research before investing in a franchise. Read the FDD and related materials, get help from a franchise attorney and an accountant to review legal and financial documents, talk to as many existing and former franchisees as possible, and visit their outlets. Protect yourself by doing your homework to find the opportunity that’s best for you. Research compiled by Tracy Stapp Herold and Michael Frazier, with assistance from Sean Strain, Ayesha Diwan, Karina Martinez, Dianna Mendoza, and Niko Ruiz; technical assistance from Angel Cool.

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FRANCHISE

LISTINGS KEY

Year began/franchising since

This shows how long a company has been in business and how long it has been franchising. Both are good to know when you’re trying to decide whether you should go with an established system or a newer concept.

Available U.S. regions and Seeking int’l.?

Contact us at 301-327-5059 x315 or visit our website at patriceandassociatesfranchising.com

Check out these columns if you want to know whether a franchise system is expanding in your area and whether a company requires franchisees to buy master licenses or multiple units.

Number of franchises/Company-owned See a franchise company’s size and how quickly it’s growing. Here we list the numbers of franchises and company-owned units open and operating worldwide as of July 31, 2017, 2018, and 2019.

Startup costs/Franchise fee Look here for the total investment to open a franchise (without financing). This figure can be impacted by real estate and construction costs, equipment, inventory, location, type of business, and other variables. Note: The startup costs include the initial franchise fee; however, for easy reference, the franchise fee is listed separately as well.

Royalty fee Many franchisors require franchisees to pay an ongoing royalty fee. Specific fees are listed in this column, typically expressed as a percentage of monthly gross sales.

Financing available? More than 85 percent of the franchisors in our listing offer in-house financing or have relationships with third-party financing sources to which they refer qualified franchisees.

Home-based/Mobile opportunity Identifies franchises that can be run from home or from a mobile unit, with no retail store, outside office, or warehouse space required.

Kiosk/Express unit available? Some franchises offer kiosk opportunities or smaller express units that typically cost less than full-size units.

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THE

FRANCHISE

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

Automotive RANK

A PP EA RA N C E S ERVIC ES

149 357

Ziebart

1959/1962

ALL

C,I**

379/12

379/13

376/12

$291.8K-$463.1K/$30K

5%/8%

YES

NO

NO

1972/1972

ALL

C

496/0

510/0

475/0

$362.3K-$567.3K/$40K

9%

YES

NO

NO

2002/2008

ALL

C,I**

62/12

60/12

70/12

$88.5K-$195.1K/$35K

6%

YES

YES

YES

1986/1988

ALL

C,I

734/ 384

703/ 451

750/ 502

$174.5K-$2.5M/$30K

4-6%

YES

NO

NO

1979/1979

ALL

C,I

2,089/0

2,078/0

2,094/0

$207K-$500K/ $17.5K-$35K

3-4%

YES

NO

NO

1978/1979

ALL

NO

230/90

239/ 104

241/94

$156.7K-$342.9K/$30K

5%

YES

NO

NO

1980/1982

ALL

NO

85/0

85/3

99/9

$197.3K-$522.97K/ $30K

6%

YES

NO

NO

1984/2016

ALL

NO

4/206

7/294

15/329

$637K-$850.5K/$35K

7%

YES

NO

NO

1989/1989

ALL

C

533/1

603/1

675/2

$298.2K-$804.3K/ $14.99K-$20K

1.5%+

YES

NO

NO

1954/1956

ALL

C,I

2,027/0

2,020/0

2,011/0

$191.7K-$460.5K/$30K

10%

YES

NO

NO

1970/1971

ALL

NO

161/17

153/22

151/20

$224K-$413.5K/$30K

2.5-5%

YES

NO

NO

Auto appearance and protection services Troy, Mich.

Maaco Franchising Auto painting and collision repair Charlotte, N.C.

NOT RANKED DetailXPerts Environmentally friendly mobile vehicle wash and detailing Chattanooga, Tenn.

OI L-CHAN GE S E RVIC ES

57 70

Valvoline Instant Oil Change Oil changes and preventive maintenance Lexington, Ky.

Jiffy Lube International Oil changes, preventive maintenance Houston

Grease Monkey Franchising

161 415 426

Oil changes, preventive maintenance, brakes, light repairs Greenwood Village, Colo.

SpeeDee Oil Change & Auto Service Center Oil changes, tune-ups, brakes, and repair services Greenwood Village, Colo.

Take 5 Oil Change Oil changes Charlotte, N.C.

R EPAIR & MA INTEN ANCE SERV ICES

120 199 222

Carstar Franchise Systems Auto collision repair Charlotte, N.C.

Midas International Auto repair and maintenance Palm Beach Gardens, Fla.

Tuffy Tire and Auto Service Auto repair Toledo, Ohio

Top-Rated Franchise for Franchisee Satisfaction Franchise Business Review 2011 – 2019

Top Franchise and Top Veterans Franchise Inc., Franchise Times, Entrepreneur, Franchise Business Review

Prime, exclusive territories available!

From exceptional training and support to an extraordinary culture of care this is an investment worth making. At FirstLight® our propriety culture of care and step-by-step FirstPath™ operational model is unmatched in the industry and has earned us many awards. In addition, our system allows franchise owners to take advantage of the nearly $80 billion home care industry even without any prior home care experience. If you’d like to own a rewarding business while improving the lives of others, connect with us today to learn more.

877-570-0002 Email: Info@FirstLightHomeCare.com Online: FirstLightFranchise.com

See our listing on page 156

156 / E N T R E P R E N E U R . C O M / January-February 2020

See our listing on page 201

KEY K Thousands ($), M Millions ($), $ U.S. dollars, * Selling multiple units/master licenses only, ** Selling int’l. master licenses only

REGIONS

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

RANK

MW Midwest, NE Northeast, S South, SE Southeast, SW Southwest, W West, C Canada, I Other International

224 261 277 481 496

AAMCO Transmissions and Total Car Care

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

1963/1963

ALL*

C

630/0

624/4

598/13

$223.6K-$330.5K/ $39.5K

7.5%

YES

NO

NO

1982/1996

ALL

NO

163/1

185/1

203/1

$461.3K-$566.4K/ $135K

VARIES

YES

NO

NO

1975/1978

ALL

C,I**

281/45

263/53

273/53

$127K-$253.6K/$25K

7.5-6%

YES

NO

NO

1956/1976

ALL

C,I**

88/0

86/1

89/1

$204.4K-$288.1K/$45K

7%

YES

NO

NO

1972/1972

ALL

C,I

915/11

879/1

809/1

$122.8K-$572.5K/$35K

$20.8K+/YR.

YES

NO

NO

2000/2006

ALL

C,I**

12/2

16/2

21/2

$132.4K-$185.1K/$35K

6%

YES

NO

NO

1983/1990

ALL

NO

25/0

25/0

25/0

$229K-$492.5K/$31.5K

6%

YES

NO

NO

2003/2003

ALL

NO

64/0

71/0

71/2

$223.2K-$867.7K/$45K

6%

YES

NO

NO

1963/1969

NO

C

59/3

55/3

53/5

$127.7K/$35K

7%

YES

NO

NO

1962/1982

ALL

NO

395/2

449/0

457/1

$311K-$1.1M/$30K

2-5%

YES

NO

NO

1999/2003

ALL

C,I**

83/14

98/15

109/15

$500K-$1M/$35K

5%

YES

NO

NO

2005/2007

ALL

NO

38/0

35/0

36/0

$321.2K-$684.3K/ $25K

4%

YES

NO

NO

Transmission and general auto repairs, diagnostic services Horsham, Pa.

Christian Brothers Automotive Auto repair Houston

Precision Tune Auto Care Auto repair and maintenance Leesburg, Va.

Milex Complete Auto Care/ Mr. Transmission Auto repair and maintenance Midlothian, Ill.

Meineke Car Care Centers Auto repair and maintenance Charlotte, N.C.

N OT RANKED Advanced Maintenance Commercial-fleet maintenance, repair, and management services Wilmington, N.C.

Eagle Transmission Transmission repair and replacement Rockwall, Texas

Honest-1 Auto Care Auto repair and maintenance St. Petersburg, Fla.

Mister Transmission International Transmission repair and services Richmond Hill, Ontario

W HE E LS & TI RES

91 265

Big O Tires Tires, tire services, auto products Palm Beach Gardens, Fla.

RNR Tire Express Tire and custom wheel sales and rentals Tampa, Fla.

N OT RANKED RimTyme Custom Wheels and Tires Rent-to-own custom wheels and tires Plano, Texas

See our listing on page 157

January-February 2020 / E N T R E P R E N E U R . C O M / 157

THE

FRANCHISE

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

RANK

W IND SH IE LD RE PAI R

116

Novus Glass

SuperGlass Windshield Repair

422

1972/1985

ALL

C,I

1,967/ 32

1,991/ 32

2,014/ 30

$54.5K-$258.2K/$10.5K

6%

YES

YES

NO

1992/1993

ALL

C,I

332/0

341/0

332/0

$18.7K-$84.2K/ $5K-$17.5K

4%

YES

YES

YES

1993/1999

ALL

C,I

553/4

576/6

571/3

$126.4K-$366.3K/ $15K-$30K

0

YES

NO

NO

1982/2007

ALL

C,I

55/0

66/0

75/0

$179.5K-$259.5K/ $25K-$40K

6%

YES

NO

YES

1963/1970

ALL

C,I

102/4

96/4

96/3

$154.3K-$390.6K/ $15.5K-$40K

5%

YES

NO

NO

1986/1993

ALL

C,I**

13/0

14/0

14/0

$151.9K-$214.9K/$45K

7%

YES

YES

NO

1979/1989

ALL

NO

135/27

120/29

120/30

$825.5K-$3.7M/$50K

2.5%

YES

NO

NO

2013/2016

ALL

C,I

10/1

12/0

20/2

$60K-$141.5K/$25K

$750/MO.

YES

NO

NO

2009/2013

ALL

NO

22/6

21/9

27/8

$158.4K-$321.4K/ $30K-$75K

8.5%

YES

YES

NO

2005/2011

ALL

C,I**

8/3

12/3

13/4

$47.9K-$160.6K/ $19.9K

5%

NO

YES

NO

2003/2015

ALL

C,I

1/17

3/17

3/16

$282.5K-$745.2K/ $18K-$75K

$34/CAR/ MO.

YES

NO

NO

1997/1997

ALL

C,I

21/0

23/0

24/0

$282.5K-$745.2K/ $18K-$75K

$34/CAR/ MO.

YES

NO

NO

1969/2016

ALL

C,I

0/1

5/1

14/2

$4.2M-$5.3M/$50K

4%

YES

NO

NO

2009/2014

ALL

NO

17/0

25/0

27/2

$29.5K-$144.7K/ $24K-$49K

0

YES

YES

NO

1985/1998

ALL

NO

62/0

64/0

67/0

$96.4K-$265.1K/$15K

7%

YES

YES

NO

1974/1993

ALL

C,I

130/2

129/1

131/4

$35.95K-$45.95K/$25K

10%

YES

YES

NO

1988/1994

ALL

C,I

801/5

710/8

685/8

$10.8K-$11.8K/$9.5K

$25-$80/WK.

YES

YES

NO

2013/2018

NO

C

0/1

0/1

41/1

$25K-$45K/$15K-$35K

27%

YES

YES

NO

1973/1984

ALL

C

182/17

168/25

149/28

$45.5K-$114K/$27K

10.5%

YES

YES

NO

1979/1980

ALL

NO

186/52

168/65

149/80

$65.2K-$77K/ $49.9K-$59.9K

$75-$300/ AREA

YES

YES

NO

2016/2019

ALL

C,I

0/0

0/0

127/0

$26.6K-$142.2K/ $15K-$100K

5%

YES

NO

NO

2004/2016

ALL

NO

757/6

998/4

934/1

$975-$5.7K/TO $570

15%

NO

YES

NO

Auto glass repair and replacement St. Paul, Minn. Windshield repair, glass scratch removal, headlight lens repair Orlando, Fla.

MISCELL ANEOUS AUTO PRODUCTS & SERVICES Line-X

327

Spray-on truck-bed liners, truck accessories, protective coatings Huntsville, Ala.

Tint World

370 378

Auto accessories, mobile electronics, security, window tinting, appearance services Boca Raton, Fla.

Mighty Auto Parts Wholesale distribution of auto parts Norcross, Ga.

NOT RA NKED Alta Mere/SmartView Auto, residential, and commercial window tinting, electronic auto accessories, auto imaging Midlothian, Ill.

Byrider Used-auto sales and financing Carmel, Ind.

DPF Alternatives Diesel filter cleaning and restoration Morrison, Colo.

Fleet Clean USA Mobile commercial-fleet washing Melbourne, Fla.

Green Shine Environmentally friendly car cleaning and detailing Hialeah, Fla.

Nextcar Auto rentals Laurel, Md.

Priceless Rent-A-Car Auto rentals Laurel, Md.

Tommy’s Express Car washes Holland, Mich.

Business Services ADVERTIS IN G SE RV ICES

313 328 386

BirthdayPak Direct-mail advertising Springfield, Pa.

RSVP Advertising Plymouth, Mich.

Discovery Map International Visitor-information maps and guides Waitsfield, Vt.

NOT RA NKED Coffee News Weekly publication distributed at restaurants and waiting areas Bangor, Maine

GetintheLoop Local shopping apps Kelowna, British Columbia

Homes & Land Real-estate marketing magazines Bee Cave, Texas

Money Mailer Franchise Direct-mail, online, and mobile marketing services Cypress, Calif.

NeoTripper Advertising and marketing services Birmingham, UK

N2 Publishing Monthly community publications Wilmington, N.C.

158 / E N T R E P R E N E U R . C O M / January-February 2020

KEY K Thousands ($), M Millions ($), $ U.S. dollars, * Selling multiple units/master licenses only, ** Selling int’l. master licenses only

REGIONS

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

MW Midwest, NE Northeast, S South, SE Southeast, SW Southwest, W West, C Canada, I Other International

Our Town America

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

1972/2004

ALL

NO

63/0

65/0

60/0

$63.8K-$86.3K/$47.5K

5%

YES

YES

NO

2018/2019

ALL

NO

0/0

0/1

0/2

$71.5K-$254.9K/$50K

6%

YES

YES

NO

2011/2013

ALL

NO

55/4

56/4

59/3

$63.5K-$70K/$50K

10%

NO

YES

NO

2008/2013

MW,NE, SE,SW

NO

61/5

67/2

77/0

$10.3K-$16.5K/ $4.3K-$6.8K

5-40%

NO

NO

NO

1992/2005

MW,NE, SE

NO

49/0

52/0

49/1

$5.7K-$17K/$0

0

NO

YES

NO

2007/2007

ALL

C,I**

210/1

274/1

294/1

$74.9K-$97.2K/$49.5K

8%

NO

YES

NO

1979/1993

ALL

C,I**

159/0

155/0

167/0

$43.5K-$104K/ $20K-$35K

0

NO

NO

NO

1994/2005

ALL

C,I**

14/2

19/6

20/6

$54.3K-$81.8K/$39.5K

10-7%

YES

YES

YES

2004/2011

ALL

NO

10/2

12/2

16/3

$59.9K-$95.7K/$40K

15%

NO

YES

NO

1993/1997

ALL

C,I

758/3

853/3

788/2

$47.9K-$189.8K/ $15K-$124.5K

$1.95K+/MO.

NO

YES

NO

1990/1996

ALL

C,I

226/28

252/27

290/25

$48.6K-$97.8K/ $9.5K-$44K

10-50%

NO

YES

NO

2011/2013

ALL

C,I

2/1

2/1

2/1

$30.7K-$34.2K/$24.9K

0

YES

YES

NO

2002/2003

ALL

C,I

79/0

79/0

84/0

$57K-$78.9K/$42.9K

10%

YES

YES

NO

1973/1975

ALL

C,I

965/0

966/0

967/0

$74.9K-$180.1K/ $32.5K-$47.5K

TO 6%

YES

NO

NO

1970/1980

ALL

I**

281/0

280/0

270/0

$102.3K-$380.6K/$48K

7-3%

YES

NO

NO

1968/1968

ALL

C,I**

239/0

231/0

220/0

$227.98K-$277.98K/ $25K

4-6%

YES

NO

NO

1976/1977

ALL

C

302/4

290/3

287/2

$30.9K-$373.9K/ $10K-$45K

1.5-6%

YES

NO

NO

1978/1985

ALL

C,I

654/0

636/0

637/0

$5K-$59.7K/TO $34.5K

5-8%

YES

YES

NO

1965/1968

ALL

C,I**

68/0

68/0

66/0

$227.98K-$277.98K/ $25K

0.25-6.5%

YES

NO

NO

2011/2019

ALL

C,I

0/1

0/1

0/1

$35.95K-$44.2K/ $14.95K

5-8%

NO

YES

NO

2008/2008

ALL

C,I

199/1

209/1

247/1

$22.8K-$175.1K/ $15K-$50K

4-6%

YES

YES

NO

1986/2004

ALL

C

274/8

310/0

325/0

$86.8K-$117.8K/$45K

7%

YES

NO

NO

Direct-mail advertising to new movers Clearwater, Fla.

Runningboards Marketing Advertising Watertown, N.Y.

The Scout Guide City guides Charlottesville, Va.

Tapinto.net Local online news sites New Providence, N.J.

Town Money Saver Direct-mail and digital advertising Lucas, Ohio

RANK

BUSINESS BROKERAGES

119 331

Transworld Business Advisors Business brokerages; franchise consulting West Palm Beach, Fla.

Sunbelt Business Brokers Business brokerages Independence, Ohio

NOT RA NKE D First Choice Business Brokers Business brokerages Las Vegas

We Sell Restaurants Restaurant and business brokerages, business services Flagler Beach, Fla.

B USIN ESS COACHING & C ON SU LTI NG

346 383

ActionCoach Business coaching Las Vegas

The Alternative Board (TAB) Peer advisory boards, business coaching Westminster, Colo.

NOT RA NKE D Franchise Creator Franchise consulting Miami

The Growth Coach Business and sales coaching for SMBs Cincinnati

P R I NTI NG/ MARKETI N G SE RVICES

114

Minuteman Press International Printing, graphics, and marketing services Farmingdale, N.Y.

AlphaGraphics

226 292

Printing, marketing communications, signs and graphics. Lakewood, Colo.

Sir Speedy Print Signs Marketing Printing, signs, marketing services Mission Viejo, Calif.

Allegra Marketing-Print-Mail

339 373 389

Printing, marketing, mail, signs, promotional products Plymouth, Mich.

Proforma Printing and promotional products Cleveland

PIP Marketing, Signs, Print Printing, signs, marketing services Mission Viejo, Calif.

NOT RA NKE D Optamark Printing and promotional products New York

PROPERTY MANAGEMENT Property Management Inc.

281 301

Commercial, residential, association, and vacation property management Lehi, Utah

Real Property Management Property management Salt Lake City

January-February 2020 / E N T R E P R E N E U R . C O M / 159

RANK

THE

447

FRANCHISE

All County Property Management Franchise

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

1990/2008

ALL

NO

43/1

48/1

51/1

$66.95K-$98.9K/ $39.5K

7%

YES

YES

NO

2007/2014

ALL

NO

17/3

28/4

34/3

$70.1K-$122.4K/$35K

7%

YES

YES

NO

1985/1986

ALL

C,I

653/0

683/0

710/0

$197.2K-$313.1K/ $49.8K

6%

YES

NO

NO

1986/1987

ALL

C,I**

683/0

702/0

709/0

$116K-$315K/$49.5K

6-2%

YES

NO

NO

1986/1987

ALL

C,I

312/2

313/2

309/2

$192.6K-$365.3K/$40K

6-1.5%

YES

NO

NO

2004/2005

ALL

C,I

175/0

181/0

185/0

$53.6K-$297.8K/ $37.4K-$49.9K

6%/4%

YES

NO

NO

1983/1985

ALL

C,I

761/0

775/4

800/0

$140K-$211K/$35K

8.6%

YES

NO

NO

1946/1956

ALL

NO

182/0

181/0

193/0

$148K-$347.5K/ $26.3K-$35K

0

YES

NO

NO

1989/2008

ALL

C

107/0

141/0

157/0

$90.6K-$108K/$58K

10%

YES

YES

NO

1975/1975

ALL

NO

193/0

194/0

195/0

$128.5K-$217.96K/ $20K

3.5%

YES

NO

NO

1978/1995

ALL

NO

72/3

78/2

77/2

$167K-$262.5K/$40K

VARIES

YES

NO

NO

1965/1987

ALL

NO

121/0

123/0

130/0

$152K-$258.5K/ $39.95K

VARIES

NO

NO

NO

1959/1970

ALL

C,I

80/0

90/0

102/0

$108.3K-$143.6K/$88K

7-6%

YES

YES

NO

Property management St. Petersburg, Fla.

NOT R ANKED Keyrenter Property Management Residential property management Midvale, Utah

S IG NS

55 117 187

FastSigns International Signs, graphics Carrollton, Texas

Signarama Signs West Palm Beach, Fla.

Image360 Signs, graphics, displays, digital imaging Middle River, Md.

NOT R ANKED SpeedPro Large-format graphics Centennial, Colo.

STA F FING/ RECR U ITING

51 89 135 155 177 182 321

Express Employment Professionals Staffing, HR solutions Oklahoma City

Spherion Staffing Staffing, recruiting Atlanta

Patrice & Associates Hospitality, retail, and sales recruiting Dunkirk, Md.

Labor Finders Industrial staffing Palm Beach Gardens, Fla.

PrideStaff Staffing Fresno, Calif.

Remedy Intelligent Staffing Staffing Atlanta

Sanford Rose Associates International Executive search and recruiting Plano, Texas

160 / E N T R E P R E N E U R . C O M / January-February 2020

KEY K Thousands ($), M Millions ($), $ U.S. dollars, * Selling multiple units/master licenses only, ** Selling int’l. master licenses only

REGIONS

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

RANK

MW Midwest, NE Northeast, S South, SE Southeast, SW Southwest, W West, C Canada, I Other International

443

Link Staffing Services

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

1980/1994

ALL

NO

32/8

35/7

37/7

$112.5K-$199K/$35K

VARIES

YES

NO

NO

1982/1999

ALL

NO

5/1

5/1

5/1

$75.8K-$123.3K/$45K

9-3%

YES

NO

NO

1986/1992

ALL

NO

92/1

92/1

78/1

$154K-$231K/$35K

7-2.6%

YES

NO

NO

1959/1973

ALL

C

65/1

61/1

61/0

$86.3K-$135.1K/ $20K-$25K

8%

YES

NO

NO

1998/2004

ALL

NO

11/29

10/50

18/61

$98.8K-$148.8K/$40K

8-6%

YES

NO

NO

2010/2012

ALL

C,I

7/1

7/1

7/4

$102.9K-$238.7K/ $39.7K

3-7%

NO

NO

NO

1966/1966

ALL

C,I**

461/0

462/0

458/0

$20K-$27.5K/$15K

6%

YES

YES

NO

1912/2000

ALL

C,I

240/2

240/2

238/1

$108.4K-$255.8K/ $20K-$50K

12-4.5%

NO

YES

NO

1967/1983

ALL

C,I**

263/0

258/0

263/0

$97.5K-$114.5K/$79K

$1.2K/MO.

NO

NO

NO

1987/1991

ALL

C,I

193/0

188/0

180/0

$85.2K-$99.3K/$69.5K

1.5%

YES

YES

NO

1920/2011

MW,NE, S,SE

C

57/39

57/39

61/37

$65K-$352.2K/$50K

6%

YES

YES

NO

2003/2012

ALL

NO

24/7

44/8

55/8

$286.8K-$1.5M/$45K

7.5%

YES

NO

NO

Staffing, HR solutions Houston

N OT RANKED American Recruiters Recruiting Coconut Creek, Fla.

AtWork Group Temporary, temp-to-hire, and direct-hire staffing Knoxville, Tenn.

Fortune Personnel Consultants (FPC) Executive recruiting New York

Nextaff Staffing Louisville, Ky.

Recruiting in Motion Franchise Permanent and contract/temporary personnel placement and recruiting Toronto

TRAINING PROGRAMS Leadership Management International

189 303 348

Leadership and organization training and development Waco, Texas

Dale Carnegie Workplace training and development Melville, N.Y.

Sandler Training Sales and sales-management training Owings Mills, Md.

N OT RANKED Crestcom International Leadership development Greenwood Village, Colo.

M IS CE L L ANEOU S BUSI NES S SERVIC ES

169

YESCO Sign & Lighting Service Sign and lighting service and maintenance Salt Lake City

Office Evolution

267

Virtual office services, coworking spaces, executive-suite and conference-room rentals Louisville, Colo.

See our listing on page 160

See our listing on page 160

January-February 2020 / E N T R E P R E N E U R . C O M / 161

RANK

THE

384

FRANCHISE

InXpress

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

Royalty Fee

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

1999/2000

ALL

C,I

318/0

325/0

355/0

$85.6K-$169.99K/$50K

30%

YES

YES

NO

2004/2006

ALL*

NO

14/1

15/1

15/1

$13.9K-$51.8K/$10K

30%

YES

YES

NO

1997/1997

ALL

C,I

901/0

671/0

558/0

$36.9K-$136.3K/$18.5K

6%

NO

YES

NO

1946/2018

ALL

NO

0/1

0/1

1/1

$117.8K-$154.3K/ $75K-$90K

15%

YES

YES

NO

1989/2012

ALL*

C,I**

17/ 2,990

26/ 3,171

28/ 3,079

$650.3K-$1.7M/$50K

6%

NO

NO

NO

2002/2017

ALL

NO

0/2

2/2

8/3

$79K-$141.5K/$49.5K

TO $2K/MO.

YES

YES

NO

2012/2016

ALL

C,I**

2/1

11/1

23/0

$612.2K-$1.2M/$79.5K

6%

YES

NO

NO

1982/1988

ALL

NO

353/0

382/0

405/0

$637.9K-$6.4M/$80K

7%

YES

NO

NO

1979/2003

ALL

C,I**

159/20

192/20

212/23

$494.4K-$3.6M/$60K

7%

YES

NO

NO

1986/1988

ALL

NO

464/0

482/0

509/0

$653.8K-$814.5K/ $135K

7%

YES

NO

NO

1981/1992

ALL

NO

187/1

205/1

233/1

$425K-$4.2M/$135K

7%

YES

NO

NO

1985/1988

ALL

C,I**

160/0

168/0

173/0

$4.4M-$5.7M/$115K

6%

YES

NO

NO

1997/2011

MW,NE, S,SE

NO

15/13

23/13

27/13

$549.2K-$5.1M/$40K

7%

YES

NO

NO

2001/2005

ALL

NO

147/0

188/0

191/0

$105K-$173K/$45K

5%

YES

NO

NO

2004/2006

ALL

NO

9/4

11/4

11/4

$344.3K-$589K/$29.5K

5%

YES

NO

NO

2002/2015

ALL

C,I**

6/2

9/9

17/8

$215K-$656K/$50K

7%

YES

NO

NO

1996/1999

ALL

NO

44/0

49/0

49/0

$722.5K-$5M/$70K

7%

YES

NO

NO

1970/2000

MW,NE, S,SE

NO

16/7

18/7

16/7

$2.4M-$5.2M/$60K

5-7%

YES

NO

NO

1988/1990

ALL

C,I

44/3

44/3

44/3

$405.6K-$3.4M/$75K

$4.7K-$6.5K/ MO.

NO

NO

NO

2001/2011

ALL

C,I

25/7

29/7

30/6

$239.9K-$619.5K/$50K

6%

YES

NO

NO

2008/2013

ALL

C**

2/1

5/1

6/1

$334K-$762.6K/$35K

7%

YES

NO

NO

2007/2016

ALL

C,I**

1/2

2/2

5/11

$310.7K-$440.2K/$50K

6%

YES

NO

NO

2002/2016

SE,SW

NO

0/5

5/5

7/5

$2.6M-$5.6M/$60K

7%

YES

NO

NO

1988/2003

ALL

NO

15/2

15/2

17/2

$258.8K-$472.95K/ $25.5K

5%

YES

NO

NO

Shipping services South Jordan, Utah

NOT RA NKED AmSpirit Business Connections Professional networking referral groups Columbus, Ohio

Cartridge World Printers, cartridges, and printer services McHenry, Ill.

Nexterus Franchising Consulting, supply chain management, logistics New Freedom, Pa.

Regus Flexible/virtual offices, coworking spaces, meeting and training facilities Addison, Texas

Supply Pointe Transportation, packaging, waste removal, pallet supply Charlotte, N.C.

Venture X Coworking spaces West Palm Beach, Fla.

Children’s Businesses C HILD CAR E

54 62 88 108 109 234 260

Primrose School Franchising Educational childcare Atlanta

The Learning Experience Academy of Early Education Preschool/educational childcare Deerfield Beach, Fla.

Goddard Systems Preschool/educational childcare King of Prussia, Pa.

Kiddie Academy Educational childcare Abingdon, Md.

Kids ‘R’ Kids Learning Academies Childcare centers Duluth, Ga.

Lightbridge Academy Childcare/early learning Iselin, N.J.

College Nannies, Sitters and Tutors Nanny-placement, babysitting, tutoring Minneapolis

NOT RA NKED Adventure Kids Playcare Childcare/entertainment centers Lewisville, Texas

Building Kidz School Preschool/educational childcare Foster City, Calif.

Children’s Lighthouse Childcare Fort Worth, Texas

Creative World School Franchising Early childhood education centers Bonita Springs, Fla.

Discovery Point Franchising Childcare Duluth, Ga.

Genius Kids Preschool, daycare, public-speaking enrichment programs Fremont, Calif.

Giggles Drop-In Childcare Drop-in childcare, afterschool programs, summer camps Wilmington, N.C.

Ivybrook Academy Preschool Weddington, N.C.

Ivy Kids Systems Childcare and early learning Katy, Texas

KidsPark Hourly childcare and preschool San Jose, Calif.

1

Ivybrook Academy has 110 additional nonfranchise units

162 / E N T R E P R E N E U R . C O M / January-February 2020

KEY K Thousands ($), M Millions ($), $ U.S. dollars, * Selling multiple units/master licenses only, ** Selling int’l. master licenses only

REGIONS

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

MW Midwest, NE Northeast, S South, SE Southeast, SW Southwest, W West, C Canada, I Other International

KLA Schools

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

2007/2009

ALL*

NO

10/6

11/7

15/7

$475K-$2.1M/$78.5K

6%

YES

NO

NO

1988/1999

ALL

C,I

17/3

19/5

19/5

$3.7M-$6.8M/$87.5K

6%

YES

NO

NO

1988/2013

C,I**

5/0

9/0

11/0

$431.3K-$933.7K/$61K

6%

YES

NO

NO

2013/2019

MW,NE, S,SE, SW* ALL

NO

0/2

0/3

0/4

$591.3K-$1.1M/$50K

7%

YES

NO

NO

1998/2005

ALL

C,I**

180/20

179/35

197/41

$192.2K-$422.1K/ $49.9K

8%

YES

NO

NO

2010/2015

ALL

C,I

25/1

52/1

98/21

$40.4K-$214.9K/ $24.9K-$58.9K

6%

YES

YES

NO

2007/2011

ALL

NO

17/6

25/7

31/8

$281.7K-$519.7K/$40K

7%

YES

NO

NO

2011/2014

ALL

C,I**

7/5

75/5

97/5

$19.9K-$48.7K/$12.5K

7%+

YES

YES

NO

1979/1989

ALL

C,I

233/0

237/0

238/0

$33.8K-$68K/$27.5K

8%

YES

YES

NO

2003/2012

ALL

C,I

42/3

77/3

101/3

$48.3K-$62.95K/ $39.9K

7%

YES

YES

NO

2005/2014

ALL

NO

9/1

14/1

18/12

$15.98K-$81.1K/$0

8%

YES

YES

NO

2002/2004

ALL

C,I**

353/2

481/2

487/2

$38K-$81.9K/ $25.4K-$56.9K

8%

YES

YES

NO

2012/2014

ALL

C,I

14/2

17/2

19/2

$29.6K-$37.5K/$23.5K

7%

YES

YES

NO

2003/2005

ALL

NO

12/2

12/2

15/2

$36.1K-$95.7K/ $22.5K-$25K

6%

YES

YES

NO

Preschool/childcare Miami

LeafSpring Schools Educational childcare/preschool Glen Allen, Va.

Montessori Kids Universe Educational childcare Palm Beach Gardens, Fla.

Tierra Encantada Spanish immersion daycare and preschool Minneapolis

RANK

CHILDREN’S ENRICHMENT PROGRAMS

219 230 239

School of Rock Music education Canton, Mass.

Snapology STEAM education programs Bridgeville, Pa.

Bach to Rock Music schools Bethesda, Md.

STEM For Kids

280

Biomed, coding, business, and engineering programs for ages 4 to 14 Morrisville, N.C.

Drama Kids International

287 345 403 459

After-school drama classes and summer camps Fort Myers, Fla.

Challenge Island Educational enrichment programs Marietta, Ga.

Parker-Anderson Enrichment Enrichment programs Van Nuys, Calif.

Abrakadoodle Art-education programs for children Sterling, Va.

NOT RANKED Bricks Bots & Beakers STEM camps, classes, parties Blacksburg, Va.

Chef It Up!/Chef It Up 2 Go! Allergy-friendly cooking parties, classes, and events Blairstown, N.J.

2

See our listing on page 165

1 Snapology has 7 additional nonfranchise units. Parker-Anderson Enrichment has 2 additional nonfranchise units

See our listing on page 163

January-February 2020 / E N T R E P R E N E U R . C O M / 163

THE

FRANCHISE

Club SciKidz

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

1997/2007

ALL

NO

6/1

6/1

5/1

$43K-$63.4K/ $30K-$45K

6%

YES

YES

NO

2015/2018

ALL

C,I

0/5

4/7

6/9

$21.7K-$33.6K/$20K

10%

YES

YES

NO

2016/2016

ALL

C

0/1

46/1

162/3

$118.6K-$387.3K/$29K

6%

YES

NO

NO

2014/2015

ALL

C

10/3

20/3

26/3

$65.3K-$150.7K/ $29.95K

5%

NO

NO

NO

2017/2018

MW,NE, SE

NO

0/0

0/1

2/1

$93.8K-$168.2K/$40K

6%

YES

NO

NO

1994/2001

ALL

C

29/1

26/1

22/1

$18.3K-$33K/ $12.5K-$17.5K

$150+/MO.

NO

YES

NO

2009/2011

ALL

C,I**

141/1

168/1

156/1

$28.1K-$94.3K/ $11.3K-$22.5K

7-5%

YES

YES

NO

1990/1993

ALL

C,I

29/4

30/4

31/4

$62.8K-$69K/$52.5K

7%

YES

YES

NO

1995/2004

ALL

C,I

13/1

12/1

9/1

$5K/$2.5K

0

YES

YES

NO

2015/2016

ALL

C,I**

1/1

4/1

7/1

$293K-$347K/$35K

8%

YES

NO

NO

2007/2016

ALL

C,I

1/1

1/1

4/1

$102.2K-$123K/$40.5K

8%

NO

YES

NO

2007/2016

ALL

NO

0/2

3/2

13/2

$108.8K-$231.8K/$45K

8%

YES

NO

NO

1997/2002

ALL

C,I

64/0

52/0

51/0

$21.5K-$34.1K/ $14.9K-$19.9K

8%

YES

YES

NO

1986/2003

ALL

NO

70/1

67/1

64/1

$90K-$149K/ $17K-$25K

8-7%

YES

NO

NO

2010/2014

ALL

C,I

36/3

41/4

49/4

$36.8K-$53.2K/$19.5K

8%+

YES

YES

NO

1985/1995

ALL

C,I

141/1

143/1

138/1

$74.1K-$110.5K/$25K

8%

NO

NO

NO

2009/2018

ALL

NO

0/1

0/1

2/1

$31.1K-$48.5K/$22.5K

8%

YES

YES

NO

2004/2006

ALL

C,I**

158/3

200/2

355/2

$198.7K-$399.2K/$45K

6%

YES

NO

NO

2009/2012

ALL

NO

21/0

20/0

19/0

$92.3K-$122.7K/$45K

7%

YES

YES

YES

2014/2016

ALL

C,I

0/1

2/1

5/1

$65.2K-$130.8K/$30K

8%

YES

NO

NO

2007/2013

ALL

C,I

6/1

9/1

11/1

$260.1K-$405.2K/$45K

9%

YES

NO

NO

2007/2019

ALL

C,I

0/2

0/2

0/2

$115.4K-$160.4K/ $24.9K

8.5%

YES

NO

NO

2015/2018

ALL

C

0/1

0/1

4/1

$34.8K-$66.8K/ $19.5K-$29.5K

8-6%

YES

YES

NO

2004/2005

ALL

C,I

18/1

20/2

24/2

$95.3K-$183.9K/$39.9K

5%

YES

NO

NO

1988/1997

ALL

C,I

105/0

99/0

97/0

$41.3K-$48.7K/ $34.5K

10-8%

YES

YES

NO

Science and technology enrichment programs Canton, Ga.

CodeFu

Royalty Fee

Coding classes for children Oakland, Calif.

Code Ninjas Computer-coding learning centers for ages 4 and up Pearland, Texas

the Coder School Coding education for ages 7 to 18 Palo Alto, Calif.

Code Wiz Coding, robotics, and STEM enrichment classes and camps for ages 7 to 17 Westford, Mass.

CompuChild STEAM classes Dublin, Calif.

Engineering for Kids STEM activities Fredericksburg, Va.

High Touch-High Tech Science enrichment activities for schools/parties Asheville, N.C.

Ho Math Chess Tutoring Centre After-school math, chess, and puzzle learning programs Vancouver, British Columbia

iCode Computer science education for children in grades K-12 Addison, Texas

iKids U Educational after-school programs Houston

Kidcreate Studio Children’s art education Denver

KidzArt Art-education programs, products, and services Jackson, Mich.

LearningRx Learning enhancement, cognitive training, reading training Colorado Springs, Colo.

Little Medical School Healthcare-themed after-school and summer-camp programs St. Louis

Mad Science Group Science education and entertainment programs Montreal

My Music Workshop Music classes for ages 2 to 6 Escondido, Calif.

Romp n’ Roll Recreational and enrichment classes, camps, parties Glen Allen, Va.

Songs for Seeds Children’s music classes New York

Stemtree Science, coding, robotics, and electronics programs Vienna, Va.

Taste Buds Kitchen Cooking events for children and adults Chester, Md.

Village East Gifted Learning centers for gifted students Huntington, N.Y.

Wize Computing Academy Coding and robotics programs for ages 4 to 16 Coppell, Texas

Young Chefs Academy Cooking schools for children and adults Waco, Texas

Young Rembrandts Franchise Drawing classes for ages 3 to 12 Elgin, Ill.

164 / E N T R E P R E N E U R . C O M / January-February 2020

KEY K Thousands ($), M Millions ($), $ U.S. dollars, * Selling multiple units/master licenses only, ** Selling int’l. master licenses only

REGIONS

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

MW Midwest, NE Northeast, S South, SE Southeast, SW Southwest, W West, C Canada, I Other International

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

RANK

CHILDREN’S FITNESS PROGRAMS

179 202 217 253

The Little Gym International

My Gym Children’s Fitness Center

Skyhawks Sports & Supertots Sports Academy

424 457 460 464 466

C,I**

361/0

403/0

430/0

$181.5K-$431.5K/ $49.5K

8%

YES

NO

NO

1983/1995

ALL*

C,I

503/0

604/0

694/0

$36.8K-$277.2K/ $25K-$55K

7-8%

YES

YES

NO

1979/2007

ALL

C,I

62/63

91/63

102/65

$30K-$71.8K/ $15.5K-$32.5K

9-6%

YES

YES

NO

1999/2005

ALL

C

183/8

200/9

223/9

$41K-$53.95K/$34.5K

7%

YES

YES

NO

1998/2007

ALL

C,I

38/0

59/0

80/0

$398K-$699.97K/$40K

40% OF MEMBERSHIP FEES

YES

NO

NO

1979/1985

ALL

C,I

134/2

148/2

161/2

$18.1K-$46.8K/ $15K-$40K

6-12%

YES

YES

NO

1992/2005

ALL

C,I

83/0

87/0

95/0

$13.3K-$155.5K/ $3.5K-$6K

$400-$600/ MO.

YES

NO

NO

2002/2003

ALL

NO

128/1

136/1

146/1

$59.9K-$69.9K/$24.9K

7.5%

YES

YES

NO

2002/2006

ALL

C,I

110/4

116/4

121/4

$18.8K-$68.3K/ $7.5K-$45K

8%

YES

YES

NO

1990/2015

ALL

NO

9/4

8/4

15/3

$17.9K-$388.2K/ $9.9K-$25K

8.5%

YES

YES

NO

2002/2006

ALL

C,I**

96/0

100/0

119/11

$30.7K-$61.7K/ $25K-$35K

8%

YES

YES

NO

2011/2012

ALL

NO

83/0

88/8

97/8

$81.5K-$104.2K/$49.5K

8%

YES

YES

NO

2000/2003

ALL

NO

25/1

24/0

23/0

$95.7K-$117.9K/$39.5K

7%

YES

YES

NO

2000/2006

ALL*

C,I**

5/10

5/10

5/10

$42.9K-$57K/$30K

7%

NO

YES

NO

1993/2007

ALL

C,I

2/2

2/2

2/2

$100K-$125K/$25K

7%

NO

YES

NO

2002/2004

NO

C,I

278/2

300/2

318/2

$25.2K-$37.1K/$16K

10%

NO

YES

NO

2010/2011

ALL

C

37/0

49/1

47/0

$41.1K-$58.5K/ $28.8K-$39.8K

8%

YES

YES

NO

2012/2012

ALL

NO

20/1

24/1

27/0

$16.4K-$94.5K/ $9.9K-$19.9K

8%

NO

YES

NO

2003/2016

ALL

NO

7/6

12/2

17/3

$32.7K-$56.3K/$20K

5%

NO

YES

NO

2013/2013

ALL

NO

9/2

17/1

21/1

$4.3K-$422.2K/ $1.99K-$39K

VARIES

YES

YES

YES

1995/2007

ALL

C,I**

21/4

23/4

26/4

$50.2K-$68.3K/$38K

8%

NO

YES

NO

2008/2012

ALL

NO

22/3

27/3

31/3

$73.7K-$135.2K/$36K

5%

NO

NO

NO

2012/2016

ALL

NO

1/1

2/1

2/1

$88.4K-$282.3K/ $32.5K

5%

YES

NO

NO

1984/1992

ALL

C

357/0

369/0

385/0

$246.7K-$391.7K/$25K

5%

YES

NO

NO

Sports camps and programs Spokane, Wash.

Soccer Shots Franchising Soccer programs for ages 2 to 8 Middletown, Pa. Indoor baseball and softball training, batting cages, merchandise Carrollton, Texas

Kinderdance International

367

ALL

Early-learning/fitness programs Sherman Oaks, Calif.

D-BAT Academies

344

1976/1992

Child-development/fitness programs Scottsdale, Ariz.

Children’s dance, gymnastics, fitness, and yoga programs Roanoke, Va.

Parisi Speed School Youth sports performance training Franklin Lakes, N.J.

i9 Sports Youth sports leagues, camps, and clinics Riverview, Fla.

TGA Premier Sports Youth sports programs El Segundo, Calif.

Hi-Five Sports Franchising Youth sports programs Santa Clara, Calif.

Amazing Athletes Educational sports programs New York

NOT RANKE D Apex Leadership Co. Elementary-school fundraising and fitness programs Phoenix

Fun Bus Fitness Fun on Wheels Mobile children’s fitness and entertainment Middlesex, N.J.

Kidokinetics Mobile children’s physical education programs Weston, Fla.

Kidz On The Go Mobile children’s fitness programs New Paltz, N.Y.

Little Kickers Preschool soccer programs Toronto

NZone Sports of America Sports leagues and programs for ages 2 to 15 Tampa, Fla.

One Sports Nation/Fun Size Sports Youth sports leagues/children’s sports enrichment programs Phoenix

Overtime Franchise Youth sports programs Reston, Va.

RedLine Athletics Franchising Youth athletic training centers; fitness and fundraising services Scottsdale, Ariz.

Sportball Sports enrichment programs for ages 16 months to 12 years Thornhill, Ontario

Tutu School Children’s ballet schools Chicago

Zooga Yoga Enterprises Yoga classes for children and families Culver City, Calif.

C HIL DR EN’S RETAIL Once Upon A Child

110

New and used children’s clothing, equipment, furniture, toys Minneapolis

January-February 2020 / E N T R E P R E N E U R . C O M / 165

RANK

THE

452

FRANCHISE

Learning Express Toys

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

1987/1990

ALL

NO

120/0

111/0

107/0

$189.9K-$364.2K/$35K

5%

YES

NO

NO

2010/2011

ALL

C,I

26/1

38/2

36/2

$108.5K-$276.4K/$25K

6%

YES

NO

NO

1980/1985

ALL

NO

27/1

26/0

25/0

$174.7K-$326K/$25K

4%

YES

NO

NO

1997/2004

ALL

C

153/5

151/8

150/7

$38.5K-$54.5K/$17.9K

3%

NO

YES

NO

1992/1994

ALL

C,I**

120/1

118/2

110/4

$301.8K-$484.8K/$25K

5%

YES

NO

NO

1997/2008

ALL

NO

78/3

82/3

93/3

$20.6K-$39.95K/ $11.5K-$14.5K

3-1%

NO

NO

NO

2006/2008

ALL

C

45/1

69/1

89/1

$1.4M-$3.2M/ $50K-$60K

6%

YES

NO

NO

1981/2011

ALL

C,I

60/1

63/0

69/0

$91.3K-$150.9K/ $39.5K-$59.5K

10%

YES

YES

NO

1991/2007

ALL

C,I

79/1

90/1

102/1

$502.1K-$1.2M/$40K

6%

NO

NO

NO

2005/2014

ALL

C,I**

126/18

142/11

154/91

$44.5K-$1.8M/ $25K-$60K

6%

YES

NO

NO

2009/2018

ALL

NO

0/3

0/4

0/5

$1.8M-$3.7M/$75K

6%

YES

NO

NO

1954/1958

ALL

C,I

25,827/ 32

25,854/ 27

26,256/ 22

$73.4K-$154.8K/$1K

$34-$38/ STUDENT/ MO.

NO

NO

NO

2002/2003

ALL

C,I

839/13

924/13

1,030/ 17

$112.8K-$149.1K/$49K

10%+

YES

NO

NO

1977/1985

ALL

NO

245/35

255/34

274/24

$127.1K-$292.9K/$28K

9.5%

YES

NO

NO

2000/2003

ALL

C,I

531/1

554/1

662/0

$73.3K-$100.99K/ $44.7K-$49.7K

8%

YES

YES

NO

1976/1976

ALL

C,I

616/ 797

818/ 814

813/ 808

$59.3K-$126.8K/$5K

$29-$36/ SUBJECT/ MO.

YES

NO

NO

1979/1980

ALL

C,I

601/14

574/11

575/8

$68.7K-$159.1K/$24K

16%

YES

NO

NO

1994/2005

ALL

C,I

90/0

95/0

100/0

$99.5K-$148.2K/$32K

$1K/MO.

YES

NO

NO

1977/1992

ALL

C,I**

301/ 246

292/ 232

269/ 276

$69.5K-$115K/$22.5K

$23-$33/ SUBJECT/ MO.

NO

NO

NO

1984/1991

ALL

C,I

156/0

150/3

154/3

$99.8K-$270.5K/$40K

10%

NO

NO

NO

1995/1998

ALL

C,I

384/0

386/0

388/0

$33.9K-$52.9K/ $19.8K-$34.8K

6-8%

YES

YES

NO

1988/2011

ALL*

C,I**

48/0

55/0

65/0

$67.4K-$127.7K/$35K

12%

YES

NO

NO

2008/2008

ALL

NO

107/3

110/3

111/1

$256.9K-$478.9K/$45K

8%

YES

NO

NO

Specialty toy stores Devens, Mass.

NOT RA NKED Bricks & Minifigs Lego resale stores Orem, Utah

Children’s Orchard Children’s clothing and toys resale stores Minnetonka, Minn.

Just Between Friends Franchise Systems Children’s and maternity consignment events Broken Arrow, Okla.

Kid to Kid New and used children’s and maternity clothing and products North Salt Lake, Utah

Rhea Lana’s Franchise Systems Children’s consignment events Conway, Ark.

SWIMMING LESSONS

28 203 232

Goldfish Swim School Franchising Infant and child swimming lessons Troy, Mich.

British Swim School USA Swimming lessons for ages 3 months and older Virginia Beach, Va.

Aqua-Tots Swim Schools Swimming lessons Mesa, Ariz.

SafeSplash/SwimLabs/Swimtastic

278

Child and adult swimming lessons, parties, summer camps Englewood, Colo.

NOT RA NKED Big Blue Swim School Swimming lessons for ages newborn to 10 Chicago

TU TO R ING

12 29 39 164 184 252 283 372 404 491

Kumon Math & Reading Centers Supplemental education Ridgefield Park, N.J.

Mathnasium Learning Centers Math tutoring Los Angeles

Huntington Learning Centers Tutoring and test prep Oradell, N.J.

Tutor Doctor Tutoring Toronto

Eye Level Learning Centers Supplemental education Ridgefield Park, N.J.

Sylvan Learning Individualized supplemental education Hunt Valley, Md.

The Tutoring Center Franchise Tutoring Long Beach, Calif.

JEI Learning Center Individualized supplemental education Los Angeles

GradePower Learning Supplemental education London, Ontario

Club Z! In-Home Tutoring Services In-home tutoring Tampa, Fla.

NOT RA NKED Best in Class Education Center Afterschool supplemental education Seattle

Brain Balance Achievement Centers Supplemental education South San Francisco

1

SafeSplash/SwimLabs/Swimtastic has 4 additional nonfranchise units.

166 / E N T R E P R E N E U R . C O M / January-February 2020

KEY K Thousands ($), M Millions ($), $ U.S. dollars, * Selling multiple units/master licenses only, ** Selling int’l. master licenses only

REGIONS

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

MW Midwest, NE Northeast, S South, SE Southeast, SW Southwest, W West, C Canada, I Other International

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

Financial Services RANK

B US IN ESS F INANCIA L SERV I CES

272 435 449

Lendio Franchising

2011/2016

ALL

NO

21/0

42/0

69/0

$30.2K-$117.1K/ $28K-$46K

TO $4K/MO.

YES

YES

NO

1965/1975

ALL

C

356/0

343/0

331/0

$20.2K-$99.97K/ $15K-$56K

9%+

NO

NO

NO

2007/2012

ALL

NO

35/1

38/1

43/1

$49.1K-$74.3K/$40K

6%

YES

NO

NO

1984/1993

ALL

C,I

708/6

690/6

697/0

$66K-$85.9K/$59.9K

15%

YES

YES

NO

1972/2014

ALL

C,I

66/0

56/0

48/0

$86.8K-$137.8K/$34.5K

8%

YES

YES

NO

2014/2015

ALL

NO

19/1

30/1

29/1

$37.1K-$48.7K/$21.9K

7%

YES

YES

NO

2004/2013

ALL

NO

63/0

85/0

98/0

$76.9K-$102.2K/$60K

10%

YES

YES

NO

2003/2011

ALL

NO

220/0

341/0

535/0

$41.5K-$116.5K/ $25K-$60K

20-50%

YES

NO

NO

1980/2008

S,SE, SW

NO

126/0

120/0

152/0

$12.3K-$84K/ $10K-$25K

10-14%

YES

YES

YES

2003/2007

ALL

NO

141/1

165/1

190/1

$42.3K-$178.9K/ $30K-$60K

TO 45%

YES

NO

NO

1998/2006

ALL

NO

175/0

196/0

207/0

$67.1K-$120.6K/$10K

15-25%

YES

NO

NO

1997/2009

SE,SW, W

NO

46/126

54/207

60/217

$52.9K-$120.95K/ $20K-$40K

0

NO

NO

YES

Small business financing Lehi, Utah

Padgett Business Services Financial, payroll, consulting, and tax services Athens, Ga.

Payroll Vault Franchising Payroll and workforce management services Greenwood Village, Colo.

NOT RANKE D Expense Reduction Analysts Business financial consulting Addison, Texas

The Interface Financial Group - IFG 50/50 Invoice discounting Bethesda, Md.

Succentrix Business Advisors Accounting, payroll, tax, and advisory services Athens, Ga.

Supporting Strategies Bookkeeping and operational support for small businesses Beverly, Mass.

INS URA NCE

129 153 254 336 419

Goosehead Insurance Agency Property and casualty insurance Westlake, Texas

Estrella Insurance Auto, home, and business insurance Miami

Brightway Insurance Property and casualty insurance Jacksonville, Fla.

Fiesta Auto Insurance and Tax Insurance and tax-preparation services Las Vegas

Pronto Insurance Insurance Brownsville, Texas

See our listing on page 167

See our listing on page 166

January-February 2020 / E N T R E P R E N E U R . C O M / 167

THE

FRANCHISE

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

RANK

TA X S ERVI CES

197 306 355 439

Jackson Hewitt Tax Service

1985/1986

ALL

NO

4,065/ 1,772

3,903/ 1,843

3,922/ 1,857

$45.1K-$110.3K/ $15K-$25K

5-15%

YES

NO

YES

1955/1956

ALL

C,I

4,027/ 6,655

4,068/ 6,761

3,877/ 6,388

$31.6K-$149.4K/$2.5K

30%

YES

NO

YES

1972/1973

ALL

C

3,479/ 289

3,079/ 261

2,922/ 84

$58.7K-$71.9K/$40K

14%

YES

NO

YES

1986/2007

ALL

NO

31/1

31/1

43/1

$17.5K-$76.7K/ $10K-$25K

10%

YES

NO

NO

2012/2019

ALL

NO

0/2

0/2

0/2

$127.5K-$188K/$40K

12.5%

YES

NO

NO

2014/2019

ALL

C,I

0/2

0/2

0/2

$77.7K-$123.2K/$35K

12%

YES

NO

NO

2016/2016

ALL

NO

18/0

61/0

100/0

$47.8K-$68.1K/ $25K-$26.5K

TO $4.5K/ MO.

YES

NO

NO

1996/2003

ALL

C

239/0

256/0

277/0

$39.1K-$64K/$25K

0

YES

YES

NO

2004/2004

ALL

NO

44/0

47/0

50/0

$153.7K-$307K/ $40.5K

VARIES

YES

NO

YES

2003/2015

ALL

NO

9/4

18/3

25/3

$1.2M-$4M/$60K

5%

YES

NO

NO

1982/1991

ALL*

C,I**

620/ 628

638/ 638

639/ 635

$1.9M-$3.8M/$40K

5%

YES

NO

NO

1976/2000

ALL

NO

34/72

35/73

37/72

$1.4M-$2.2M/$40K

4%

YES

NO

NO

Tax preparation Jersey City, N.J.

H&R Block Tax preparation, electronic filing Kansas City, Mo.

Liberty Tax Service Tax preparation, electronic filing Virginia Beach, Va.

Atax Franchise Tax preparation, business services Yonkers, N.Y.

NOT RANKED G.I. Tax Tax preparation, financial services Melbourne, Fla.

The Tax Team Tax preparation Miami

M I SC EL L A NEOU S F INANCI AL SERVIC ES

395 482

Motto Mortgage Mortgage brokerages Denver

ACFN Automated teller machines San Jose, Calif.

NOT RANKED Family Financial Centers Financial services Doylestown, Pa.

Food: Full-Service Restaurants SP O RTS BA RS/ PUBS

122 159 299

Walk-On’s Bistreaux & Bar Louisiana-themed sports grills Baton Rouge, La.

Buffalo Wild Wings Wings, bar food, alcohol Atlanta

Old Chicago Pizza & Taproom Pizza, pasta, burgers, salads, craft beer Broomfield, Colo.

See our listing on page 158

168 / E N T R E P R E N E U R . C O M / January-February 2020

See our listing on page 207

KEY K Thousands ($), M Millions ($), $ U.S. dollars, * Selling multiple units/master licenses only, ** Selling int’l. master licenses only

REGIONS

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

RANK

MW Midwest, NE Northeast, S South, SE Southeast, SW Southwest, W West, C Canada, I Other International

423 498

Arooga’s Grille House & Sports Bar

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

2007/2010

ALL

C,I**

4/10

9/10

10/10

$1.3M-$3.6M/$49.5K

5%

YES

NO

NO

2008/2010

ALL

NO

46/1

47/1

44/1

$780.9K-$1.3M/$37.5K

4%

YES

NO

NO

1985/1998

ALL

NO

159/13

155/16

127/24

$806.8K-$1.3M/$37.5K

4%

YES

NO

NO

2011/2014

ALL

C,I**

3/2

3/2

4/2

$337.3K-$548K/$40K

5%

YES

NO

NO

1976/2003

ALL

C,I**

33/11

35/12

31/13

$1.5M-$2.7M/$45K

4%

YES

NO

YES

1983/1986

ALL*

C,I**

229/ 197

225/ 207

210/ 202

$956.5K-$4.3M/$75K

5%

YES

NO

NO

1979/1993

SW

NO

34/2

30/2

29/0

$998K-$2.6M/$35K

6%

YES

NO

NO

2010/2012

ALL*

C,I**

16/2

14/2

13/31

$1.5M-$4.4M/ $50K-$250K

5%

YES

NO

NO

2012/2015

ALL

C,I

0/2

0/2

0/2

$143.9K-$1.5M/$34.9K

7%

YES

NO

NO

2010/2017

ALL

C,I

0/9

0/9

0/10

$425.6K-$939.9K/$40K

5%

NO

NO

NO

2016/2019

ALL

C,I

0/1

0/1

0/2

$462.3K-$721.5K/ $34.5K

5%

YES

NO

NO

2005/2007

ALL*

C,I

50/30

52/30

55/28

$1.4M-$3.6M/$50K

5%

NO

NO

NO

1973/1987

ALL

NO

418/69

448/43

456/36

$2.3M-$6.7M/$50K

4%

YES

NO

NO

2010/2014

ALL

C

8/2

11/2

14/1

$1.5M-$2.99M/$50K

4%

NO

NO

NO

Sports-themed restaurants and bars Harrisburg, Pa.

Brass Tap Craft-beer bars Tampa, Fla.

NOT RANKE D Beef O’Brady’s Family Sports Pub Family sports restaurants Tampa, Fla.

Global Brew Tap House Craft-beer bars O’Fallon, Ill.

The Greene Turtle Sports Bar & Grille Restaurants and sports bars Columbia, Md.

Hooters Casual restaurants Atlanta

Native Grill & Wings Franchising Family sports grills Chandler, Ariz.

Rock & Brews Franchising Restaurants and bars Manhattan Beach, Calif.

Shots Bars Miami

Stacked Pickle Restaurants and sports bars Indianapolis

Tapville Station Self-service beer taprooms and restaurants Naperville, Ill.

Twin Peaks Restaurant Restaurants and bars Dallas

STE A KH OUSES

90

Golden Corral Restaurants Family steakhouses, buffets, and bakeries Raleigh, N.C.

NOT RANKE D Black Rock Bar & Grill Hot-rock-cooking restaurants Wixom, Mich. 1

Rock & Brews Franchising has 5 additional nonfranchise units

See our listing on page 173

See our listing on page 159

January-February 2020 / E N T R E P R E N E U R . C O M / 169

THE

FRANCHISE

Ponderosa Steakhouse

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

1965/1965

ALL

C,I

94/1

86/0

83/0

$657.2K-$1.2M/$50K

5%

YES

NO

NO

1972/1979

ALL

C,I**

113/4

133/2

131/2

$2.1M-$3.5M/$40K

4%

NO

NO

NO

1996/1997

ALL

C,I

702/20

706/21

751/26

$1.2M-$2.5M/$50K

4-5%

NO

NO

NO

1975/1984

ALL

C,I**

119/3

114/3

105/3

$1.4M-$1.8M/ $20K-$45K

5%

YES

NO

NO

1995/2002

ALL

NO

64/33

74/42

83/48

$1.1M-$2.1M/$55K

4.5%

NO

NO

NO

2006/2006

ALL

NO

28/21

28/23

30/25

$129.7K-$893.2K/ TO $25K

3%

NO

NO

NO

1985/1990

ALL

C,I

19/1

18/1

18/0

$407.4K-$1M/$50K

5%

YES

NO

YES

2015/2019

MW

NO

0/0

0/1

0/1

$185.5K-$400.9K/$40K

5%

YES

NO

NO

2003/2005

ALL

C,I**

37/3

36/3

33/3

$746K-$2.3M/$35K

6%

YES

NO

NO

1984/1995

S,SE, SW*

NO

28/2

32/3

32/4

$132.5K-$565.5K/ $15K-$25K

5%

YES

NO

YES

1995/2004

ALL

C,I**

34/2

34/2

34/2

$434.6K-$927.9K/$40K

5%

YES

NO

NO

1986/2005

ALL

NO

24/0

26/0

34/1

$462.3K-$653.7K/$39K

5%

YES

NO

NO

1960/1982

ALL

NO

18/10

18/11

18/11

$712K-$3.2M/$40K

4%

NO

NO

NO

1993/2006

ALL

NO

13/1

16/1

18/0

$442.5K-$737K/$45K

5%

YES

NO

NO

2001/2019

ALL

NO

0/1

0/1

0/1

$375.9K-$675.9K/ $34.9K

4-5%

YES

NO

NO

1964/1966

MW,SE

NO

325/30

315/36

301/43

$511.9K-$1.3M/$35K

4.75%

YES

NO

NO

1999/2002

ALL

NO

49/12

46/21

42/22

$984K-$1.2M/$40K

5%

YES

NO

NO

1991/1993

SE

NO

117/17

121/17

116/20

$153.9K-$249.9K/$25K

5%

YES

NO

NO

1996/2017

ALL

C,I

0/1

0/1

0/1

$185.95K-$428.9K/ $24.9K

5%

YES

NO

NO

2007/2017

MW,SW

NO

0/2

0/2

0/2

$221K-$425K/$25K

5%

YES

NO

NO

2010/2013

SE,W

NO

10/2

17/2

22/2

$250.2K-$667.5K/$40K

6%

YES

NO

NO

2004/2011

ALL*

NO

5/5

7/3

6/3

$432.8K-$1.3M/$40K

4%

NO

NO

NO

1994/1998

ALL

C,I**

37/6

39/7

37/5

$451.4K-$1.5M/$39.5K

6%

YES

NO

YES

2007/2014

MW,NE, S,SE

NO

8/2

10/2

13/2

$234.2K-$541.4K/ $37.5K

3-5%

YES

NO

NO

2010/2016

ALL

NO

0/1

0/1

1/1

$222.3K-$665.6K/$30K

6%

NO

NO

NO

Family steakhouses and buffets Beverly Hills, Calif.

Tony Roma’s Ribs, steak, seafood Orlando, Fla.

RANK

M ISC ELL A NEO U S FULL- SE RV ICE R ESTAU RA NTS

240 360 468

Gyu-Kaku Japanese BBQ Restaurant Japanese barbecue restaurants Torrance, Calif.

The Melting Pot Restaurants Fondue restaurants Tampa, Fla.

Black Bear Diner Family restaurants Redding, Calif.

NOT RA NKED Boomarang Diner Franchising ’50s-and-’60s-themed restaurants Shawnee, Okla.

Buffalo’s Cafe Buffalo wings Beverly Hills, Calif.

Captain’s House Franchise Seafood restaurants Gary, Ind.

The Counter Build-your-own-burger restaurants Scottsdale, Ariz.

DoubleDave’s Pizzaworks Pizza, sandwiches, wings, salads, craft beer Austin, Texas

East Coast Wings + Grill Buffalo wings and craft beer Winston-Salem, N.C.

Eggs Up Grill Breakfast, brunch, and lunch restaurants Spartanburg, S.C.

Elmer’s Breakfast Lunch Dinner/Egg N’ Joe Family restaurants Portland, Ore.

The Flying Biscuit Café Southern food and breakfast Atlanta

Grumpy’s Restaurant Breakfast, lunch, and brunch restaurants Orange Park, Fla.

Huddle House Family restaurants Atlanta

HuHot Mongolian Grills Mongolian grill restaurants Missoula, Mont.

Hwy 55 Burgers, Shakes & Fries ’50s-style diners Mount Olive, N.C.

John The Baker Italian restaurants Cooper City, Fla.

Keo Asian Cuisine Asian restaurants Tulsa, Okla.

The Lost Cajun Cajun restaurants Covington, La.

Lumberjacks Restaurant Family restaurants Redding, Calif.

Russo’s New York Pizzeria Pizza, pasta, soups, salads, sandwiches, desserts Houston

Shuckin’ Shack Oyster Bar Oyster bar/seafood restaurants Wilmington, N.C.

The Vine Wine Bar Wine bars Merrick, N.Y.

170 / E N T R E P R E N E U R . C O M / January-February 2020

KEY K Thousands ($), M Millions ($), $ U.S. dollars, * Selling multiple units/master licenses only, ** Selling int’l. master licenses only

REGIONS

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

MW Midwest, NE Northeast, S South, SE Southeast, SW Southwest, W West, C Canada, I Other International

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

Royalty Fee

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

Food: Quick-Service Restaurants RANK

AS IA N FOOD

165 461

L&L Hawaiian Barbecue

1976/1991

ALL

C,I**

184/0

185/0

195/0

$133.7K-$535K/$30K

3-4%

YES

NO

NO

2003/2005

ALL

C,I**

45/2

44/1

55/3

$313.5K-$653.9K/$45K

6%

YES

NO

NO

2006/2018

ALL

NO

0/7

0/7

1/7

$262.4K-$777.3K/$25K

6%

YES

NO

NO

2016/2017

ALL

C,I**

2/2

5/3

16/2

$341.95K-$866.4K/ $40K

3-6%

YES

NO

YES

1983/1992

ALL

C,I

65/10

53/10

53/10

$267.6K-$523.4K/$30K

4%

YES

NO

YES

2016/2018

ALL

C,I

0/1

0/1

0/1

$199.95K-$392.9K/ $29.9K

5%

YES

NO

NO

2015/2016

ALL*

C,I**

3/8

8/12

35/11

$273K-$711K/$35K

6%

YES

NO

NO

2015/2017

ALL

C,I

0/5

0/5

1/4

$177.8K-$326.5K/$35K

5.5%

YES

NO

NO

2011/2019

ALL

C,I**

0/5

0/6

0/7

$293K-$897K/$40K

5%

NO

NO

NO

2014/2018

ALL

C,I

0/1

0/1

0/1

$271.3K-$424.2K/ $30K-$40K

5%

YES

NO

NO

2019/2019

ALL

C,I

0/0

0/0

0/1

$75.95K-$215.7K/ $29.9K

5.5%

YES

NO

NO

1983/2011

ALL*

NO

20/63

53/32

53/30

$1.2M-$3.1M/$40K

5%

NO

NO

YES

1986/1988

MW,NE, SW,W

C,I

3,309/ 47

3,319/ 49

3,333/ 48

$719.3K-$1.4M/$50K

3-5%

YES

NO

NO

1976/1978

ALL*

C,I**

180/2

182/2

182/1

$144.1K-$704.2K/$35K

5%

YES

NO

NO

2000/2000

ALL

C,I

154/1

149/1

136/1

$145.4K-$499.1K/ $18.8K-$37.5K

6%

YES

NO

YES

1985/1986

ALL

C,I

1,464/2

1,512/1

1,539/1

$108.5K-$368.1K/$30K

6%

YES

NO

YES

2010/2014

ALL

C**

14/0

22/1

37/1

$178K-$308.5K/$35K

5%

YES

NO

NO

1936/1987

ALL

NO

274/13

285/13

290/12

$410K-$771.5K/ $35K-$50K

5%

YES

NO

NO

2006/2013

ALL

C,I**

47/0

69/0

82/1

$348.4K-$568K/$30K

5%

YES

NO

YES

2012/2015

ALL

NO

2/1

4/1

6/1

$274K-$323.5K/$50K

6.5%

YES

NO

NO

2012/2018

ALL

C,I

0/3

0/3

0/3

$175.4K-$321.7K/$30K

6%

NO

NO

YES

2009/2016

ALL

NO

15/3

21/4

24/41

$121.2K-$235.1K/$40K

6%

YES

NO

NO

Asian-American/Hawaiian food Honolulu

Teriyaki Madness Asian food Denver

NOT RA NKE D Go! Go! Curry Japanese curry and rice New York

LemonShark Poke Poke Santa Monica, Calif.

Pho Hoa Vietnamese food Sacramento, Calif.

Point Break Poke House Poke bowls Fort Lauderdale, Fla.

Pokeworks Poke Irvine, Calif.

Poki Bowl Build-your-own poke bowls San Jose, Calif.

Rakkan Ramen Ramen and Japanese food Redondo Beach, Calif.

Roc N Ramen Franchise Ramen noodle dishes New Rochelle, N.Y.

Uncle Sharkii Poke Concord, Calif.

BAKE D GO ODS: BAK ERY CAF ES

125 132

la Madeleine French Bakery & Cafe French bakeries and cafes Dallas

Paris Baguette Bakery cafes Moonachie, N.J.

NOT RA NKE D Great Harvest Franchising Bakery cafes Dillon, Mont.

Nestle Toll House Cafe by Chip Bakery cafes Richardson, Texas

BAKED GOODS: CINNAMON ROLLS

53 477

Cinnabon Cinnamon rolls, baked goods, coffee Atlanta

Cinnaholic Franchising Cinnamon rolls, coffee Atlanta

BAKE D GO ODS: DOU G HNU TS

157 486

Shipley Do-Nuts Doughnuts, kolaches, pastries, coffee Houston

Duck Donuts Franchising Doughnuts and coffee Mechanicsburg, Pa.

NOT RA NKE D The Donut Experiment Doughnuts, coffee, catering Cary, N.C.

Doughnuttery Mini doughnuts New York

Peace, Love & Little Donuts Doughnuts and coffee Moon Township, Pa.

1

Peace, Love & Little Donuts has 7 additional nonfranchise units

January-February 2020 / E N T R E P R E N E U R . C O M / 171

THE

FRANCHISE

Randy’s Donuts

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

1962/2019

ALL*

C,I**

0/1

0/2

0/4

$369.3K-$526K/$35K

5%

NO

NO

NO

1988/1989

ALL

C,I**

1,814/ 14

1,934/ 13

1,892/ 11

$199.5K-$385.1K/$30K

7%

YES

YES

YES

1994/1996

ALL

C,I**

310/18

323/20

319/26

$164.95K-$405.9K/ $35K

7%

YES

NO

YES

2008/2013

ALL

C,I

66/18

68/17

69/13

$89K-$339.5K/$30K

6%

YES

YES

YES

1998/2004

ALL

NO

173/10

167/7

155/7

$133.99K-$351.2K/ $35K

6%

YES

NO

YES

1991/1992

ALL

I**

277/0

264/0

255/0

$216.2K-$343K/ $15K-$25K

7%

NO

NO

YES

1977/1977

ALL

C,I**

366/0

376/0

383/0

$177.7K-$476.1K/ $15K-$35K

6%

NO

NO

YES

1981/2000

ALL

NO

29/25

31/25

32/26

$428.9K-$696.9K/ $44.9K

6%

YES

NO

NO

1993/1993

ALL

NO

29/2

31/2

32/2

$354.3K-$399.9K/$30K

7-5%

YES

NO

NO

1992/2017

NE

NO

0/0

0/0

0/0

$36.5K-$49.5K/$5K

7%

YES

NO

YES

1990/1992

NE

NO

2/3

1/3

2/3

$124.5K-$438K/ $22.5K-$25K

5-7%

YES

NO

YES

2017/2019

ALL

C,I

0/0

0/1

0/1

$103.7K-$171.9K/ $25K-$35K

6%

YES

NO

NO

2009/2012

ALL

C,I**

37/9

42/9

41/8

$84.4K-$361.5K/$45K

6%

YES

YES

YES

Doughnuts and beverages Inglewood, Calif.

RANK

BAK ED G OOD S: P RET ZELS

400 497

Auntie Anne’s Soft pretzels Lancaster, Pa.

Wetzel’s Pretzels Soft pretzels, lemonade, hot dogs Pasadena, Calif.

NOT RANKED Ben’s Soft Pretzels Soft pretzels, dipping sauces, beverages Elkhart, Ind.

Philly Pretzel Factory Soft pretzels Bensalem, Pa.

Pretzelmaker Pretzels Atlanta

BAK ED G OOD S: M ISCELL ANEOUS

136 243 333

Great American Cookies Cookies Atlanta

Kolache Factory Kolaches Katy, Texas

Breadsmith European-style breads and sweets Whitefish Bay, Wis.

NOT RANKED Between Rounds Add-On Kiosk Bagels, sandwiches, baked goods, coffee, hot and frozen drinks South Windsor, Conn.

Between Rounds Bakery Sandwich Cafe Bagels, baked goods, deli items, sandwiches South Windsor, Conn.

House of Chimney Cakes Chimney cakes Anaheim, Calif.

Le Macaron French Pastries Macarons, pastries, gelato, chocolates, specialty coffee and tea Sarasota, Fla.

•

Average annual revenue of $1.3 million*

•

$40 billion high-demand optical industry**

•

National trusted brand

•

Scalable, turnkey business model

Get started today at ownapearlevision.com This is not intended as an offer to sell or the solicitation of an offer to buy a franchise. Within the U.S.A. and Canada, we offer franchises solely by means of our Franchise Disclosure Document. Certain states in the U.S.A., provinces in Canada, and other countries have laws governing the offer and sale of franchises. If you are a resident of one of these states/provinces, we will not offer you a franchise unless and until we have complied with applicable legal requirements in your state. This information about our franchise opportunity is intended solely for residents of the United States and Canada. Source: *Pearle Vision FDD, 2019. ** The Vision Council, 2017.

See our listing on page 173

172 / E N T R E P R E N E U R . C O M / January-February 2020

See our listing on page 181

KEY K Thousands ($), M Millions ($), $ U.S. dollars, * Selling multiple units/master licenses only, ** Selling int’l. master licenses only

REGIONS

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

MW Midwest, NE Northeast, S South, SE Southeast, SW Southwest, W West, C Canada, I Other International

NYC Bagel and Sandwich Shop

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

1995/2007

NE,SE, SW

NO

10/1

11/1

8/1

$118.5K-$208.5K/ $29.5K

5%

YES

NO

YES

1930/1952

ALL

C,I

19,463/ 1,363

20,775/ 668

22,774/ 329

$1.4M-$2.8M/$45K

4-5%

YES

NO

NO

1994/1998

ALL*

I**

1,035/ 21

1,162/ 26

1,274/ 29

$374.1K-$782.4K/$20K

6%

YES

NO

NO

1977/1978

ALL*

C,I**

426/ 314

441/ 325

442/ 322

$1.6M-$2.4M/$25K

4%

YES

NO

NO

1952/2004

ALL

C,I**

1,156/ 0

1,192/ 0

1,286/ 01

$12.4K-$287.6K/ TO $3.5K

0

YES

NO

YES

1967/1972

ALL

C,I**

156/14

173/13

169/12

$443.4K-$1.3M/$30K

4%

YES

NO

NO

1998/2013

ALL

NO

397/0

393/0

369/0

$9K-$349K/$0

0

YES

YES

YES

2008/2012

ALL

NO

58/12

71/19

85/40

$515K-$683K/$50K

5%

YES

NO

NO

1952/1969

ALL*

C,I**

1,336/ 237

1,388/ 168

1,385/ 165

$964.2K-$1.6M/$15K

5%

NO

NO

NO

1982/2018

ALL

NO

0/17

1/18

3/20

$459.95K-$1.2M/$30K

5%

YES

NO

NO

1971/2001

NE,SE

NO

98/253

82/269

73/272

$432.4K-$1.97M/$40K

5%

YES

NO

YES

1950/1955

ALL

C,I

12,350/ 0

12,676/ 0

12,957/ 0

$395.5K-$1.6M/ $40K-$90K

5.9%

YES

NO

YES

1998/2002

ALL

NO

53/13

66/13

76/13

$211.6K-$738.4K/$30K

0

YES

NO

NO

1998/2001

MW,SE, SW

NO

149/18

171/16

205/20

$331K-$638K/$40K

6%

YES

NO

NO

1979/1986

ALL

C,I**

856/0

854/0

859/0

$173.2K-$473K/ $15K-$25K

6%

YES

NO

YES

1978/1989

ALL

C,I**

78/0

84/0

93/0

$188.3K-$578K/ $25K-$35K

5%

YES

NO

YES

2000/2013

NE,SE

NO

51/0

58/1

66/1

$256.5K-$702K/$15K

8%

NO

NO

NO

1994/1999

ALL

I

230/0

231/0

240/0

$186.9K-$369.1K/$20K

6%

YES

NO

YES

1976/1985

ALL

NO

67/2

59/1

56/2

$185K-$472.5K/$15K

4%

NO

NO

YES

1987/1994

MW,NE, S,SE, SW,W

NO

78/4

75/4

70/5

$385.2K-$609.6K/ $37.5K

5%

YES

NO

NO

2002/2003

ALL

NO

11/0

12/0

12/0

$275.3K-$398.5K/$20K

5%

YES

NO

NO

1995/2000

ALL

C,I

25/0

24/0

21/0

$173.2K-$473K/ $15K-$25K

6%

YES

NO

YES

1982/1997

ALL

C,I**

166/0

144/0

150/0

$63.9K-$554K/ $30K-$50K

0

YES

YES

YES

1984/1988

MW,S, SE,SW

NO

623/8

661/6

709/6

$1.97M-$4.7M/$55K

4%

YES

NO

NO

Bagels and sandwiches Hackensack, N.J.

RANK

C HI CK EN

24 42 49 180 335

KFC Chicken Louisville, Ky.

Wingstop Restaurants Chicken wings Dallas

Bojangles’ Famous Chicken ‘n Biscuits Chicken, biscuits, iced tea Charlotte, N.C.

Chester’s Chicken Birmingham, Ala.

Golden Chick Chicken Richardson, Texas

NOT RA NKE D Champs Chicken Fried chicken, fried fish, sides Holts Summit, Mo.

Chicken Salad Chick Chicken salads, soups, sides Auburn, Ala.

Church’s Chicken Chicken Atlanta

Epic Wings Chicken wings and tenders, fries, breadsticks, sauces San Diego

Pollo Campero USA Chicken Dallas

C O FF E E

1 185

Dunkin’ Coffee, doughnuts, baked goods Canton, Mass.

The Human Bean Drive Thru Specialty coffee Medford, Ore.

Scooter’s Coffee

225 392 478

Coffee, espresso, smoothies, pastries, breakfast items Omaha, Neb.

Gloria Jean’s Coffees Specialty coffee Santa Fe Springs, Calif.

PJ’s Coffee of New Orleans Coffee, tea, pastries, sandwiches, salads Covington, La.

NOT RA NKE D Aroma Joe’s Coffee Specialty coffee Portland, Maine

Biggby Coffee Specialty coffee, tea, smoothies, baked goods East Lansing, Mich.

The Coffee Beanery Coffee, tea, sandwiches, salads Flushing, Mich.

Dunn Brothers Coffee Specialty coffee, tea, baked goods, sandwiches, soups, salads Minneapolis

Ellianos Coffee Company Specialty coffee and smoothies Lake City, Fla.

It’s A Grind Coffee House Specialty coffee Santa Fe Springs, Calif.

Maui Wowi Hawaiian Coffees & Smoothies Hawaiian coffee and smoothies Scottsdale, Ariz.

FROZEN DESSERTS: CUSTARD

9

Culver’s Frozen custard, specialty burgers Prairie du Sac, Wis.

1

Chester’s has 169 additional nonfranchise units.

January-February 2020 / E N T R E P R E N E U R . C O M / 173

RANK

THE

67

FRANCHISE

Freddy’s Frozen Custard & Steakburgers

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Available U.S. Regions

Seeking Int’l?

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2002/2004

ALL*

C,I**

249/18

287/24

324/27

$590.5K-$1.99M/$25K

4.5%

NO

NO

NO

1936/2002

ALL

NO

4/0

4/0

4/0

$188.5K-$315K/$25K

6%

YES

NO

NO

1945/1948

ALL

C,I

7,892/0

8,011/0

8,072/0

$93.6K-$401.8K/ $12.5K-$25K

5.9%

YES

NO

YES

1940/1940

ALL

C,I

6,753/2

6,862/2

7,035/2

$1.1M-$1.8M/$35K

4%

YES

NO

NO

1978/1981

MW,SE, SW

C,I

557/29

556/37

577/38

$149.2K-$504.3K/ $16K-$37K

3%

YES

NO

YES

1988/1999

ALL

C,I**

212/1

219/1

223/0

$112.2K-$366.95K/ $15K

VARIES

YES

YES

YES

1983/1984

ALL

I**

335/0

330/0

348/0

$316.1K-$409.1K/ $15K-$25K

6%

NO

NO

NO

1934/1947

NE,SW

C,I**

398/0

373/0

356/0

$250.6K-$415.5K/$30K

$2.44/ GALLON

YES

NO

YES

1945/1989

ALL

NO

28/11

33/11

36/11

$224.5K-$666.5K/$50K

6%

NO

NO

NO

1961/1977

ALL

NO

202/0

207/0

217/0

$164.2K-$542.8K/$30K

4%

NO

NO

YES

2013/2014

ALL

C,I

44/2

61/1

62/1

$224.5K-$576.5K/$40K

6%

YES

NO

YES

1989/1993

NE,S, SE,SW, W

NO

195/2

196/2

192/2

$229.2K-$1.3M/$35K

5%

YES

NO

NO

2016/2019

ALL

C,I**

0/0

0/0

1/1

$180.96K-$562.3K/ $30K

6%

YES

NO

NO

1988/1994

ALL

C,I

1,238/ 10

1,233/3

1,204/4

$53.2K-$468.8K/ $10K-$27K

6%

YES

NO

YES

1946/1946

ALL

NO

72/0

70/0

70/0

$64K-$587.5K/ $5K-$25K

4%/8%

NO

NO

NO

2018/2018

ALL

NO

0/0

0/1

0/1

$85.6K-$153.9K/ $9K-$20K

5%

NO

NO

NO

2004/2005

ALL

C,I**

49/3

56/3

59/1

$223.95K-$480K/$35K

6%

YES

NO

YES

2015/2016

ALL

C,I

3/4

12/4

15/3

$124.8K-$236.1K/$30K

6%

YES

NO

NO

2007/2008

ALL

C,I

894/14

1,048/ 18

1,180/ 19

$127.8K-$151.6K/$15K

$3K-$4K/YR.

YES

YES

NO

1989/1993

MW,S, SE,SW, W

NO

103/3

109/4

106/4

$303.7K-$956.3K/ $29.5K

6%

YES

NO

YES

2016/2019

ALL

C,I**

0/0

0/0

2/1

$105.7K-$142.3K/$15K

8%

YES

YES

NO

2014/2018

ALL

NO

0/3

7/1

33/2

$27.2K-$186.95K/ $12.5K-$25K

0

NO

YES

YES

2000/2004

ALL

C,I**

32/4

33/1

31/1

$124.7K-$489.3K/$20K

6%

YES

NO

YES

2005/2006

ALL

NO

96/16

94/9

91/2

$316.3K-$597.1K/$35K

6%

YES

NO

YES

2010/2010

ALL

C,I**

25/1

31/1

26/1

$217K-$458.4K/$35K

6%

YES

NO

YES

Year Began/ Franchising Since

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

Frozen custard, steakburgers, hot dogs Wichita, Kan.

NOT RA NKED Stricklands Frozen Custard Frozen custard, ice cream, yogurt, sorbet Cuyahoga Falls, Ohio

FROZEN DESSERTS: ICE CREAM

13 16 63 207 311 361 385 397 432

Baskin-Robbins Ice cream, frozen yogurt, frozen beverages Canton, Mass.

Dairy Queen Ice cream, burgers, chicken Bloomington, Minn.

Ben & Jerry’s Ice cream, frozen yogurt, sorbet, smoothies South Burlington, Vt.

Dippin’ Dots Franchising Specialty ice cream, frozen yogurt, ices, sorbet Paducah, Ky.

Marble Slab Creamery Ice cream, frozen yogurt, baked goods Atlanta

Carvel Ice cream, ice cream cakes Atlanta

Handel’s Homemade Ice Cream Ice cream Canfield, Ohio

The Haagen-Dazs Shoppe Ice cream Minneapolis

Creamistry Franchise Made-to-order ice cream and frozen desserts Yorba Linda, Calif.

NOT RA NKED Bruster’s Real Ice Cream Ice cream, frozen yogurt, ices, sherbets Bridgewater, Pa.

Buzzed Bull Creamery Alcohol-infused ice cream Cincinnati

Cold Stone Creamery Ice cream, sorbet Scottsdale, Ariz.

Fosters Freeze Soft-serve ice cream, burgers, sandwiches, hot dogs, fries Chino Hills, Calif.

Ice Cream Rollery Rolled ice cream Reynoldsburg, Ohio

Sub Zero Franchise Ice cream, Italian ice, frozen yogurt, custard Provo, Utah

Sweet Charlie’s Rolled ice cream and specialty desserts Philadelphia

FROZEN DESSERTS: MISCELL ANEOUS

60

Kona Ice Shaved-ice trucks Florence, Ky.

NOT RA NKED Bahama Buck’s Shaved ice, fruit smoothies Lubbock, Texas

BPC Franchising Alcoholic sorbets and gelatos Holiday, Fla.

Frios Gourmet Pops Popsicles Mobile, Ala.

Paciugo Gelato Caffe Gelato, pastries, beverages Dallas

Pinkberry Frozen yogurt, frozen-yogurt shakes, Greek-yogurt smoothies Scottsdale, Ariz.

Popbar Gelato, sorbetto, and frozen yogurt on a stick New York

174 / E N T R E P R E N E U R . C O M / January-February 2020

KEY K Thousands ($), M Millions ($), $ U.S. dollars, * Selling multiple units/master licenses only, ** Selling int’l. master licenses only

REGIONS

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

MW Midwest, NE Northeast, S South, SE Southeast, SW Southwest, W West, C Canada, I Other International

Rita’s Italian Ice

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

1984/1989

ALL

C,I**

605/0

598/0

572/0

$175.5K-$435K/$30K

6.5%

YES

NO

YES

2017/2019

ALL

C,I

0/1

0/1

0/1

$149.8K-$288.5K/ $29.5K

6%

YES

NO

NO

2013/2018

ALL

C,I

0/1

0/1

0/1

$37.97K-$123.2K/ $19.9K

6%

YES

YES

NO

2006/2007

ALL

C,I**

316/12

305/12

304/13

$278.2K-$588.2K/$35K

6%

YES

NO

YES

1955/1955

ALL

C,I

31,936/ 5,075

34,521/ 2,885

35,461/ 2,647

$1.3M-$2.2M/$45K

4%

YES

NO

NO

1953/1959

ALL

C,I

3,291/ 267

3,360/ 228

3,424/ 176

$1.2M-$3.5M/$45K

2.45-5%

YES

NO

YES

1960/1962

ALL*

I**

2,111/ 115

2,124/ 118

2,112/ 117

$1.5M-$2M/$25K-$35K

4%

YES

NO

NO

1945/1984

ALL*

C,I**

1,536/ 80

1,589/ 52

1,608/ 48

$1.6M-$2.1M/ $25K-$35K

4%

YES

NO

NO

1986/1989

ALL

NO

567/284

623/ 256

602/ 260

$203.6K-$945K/$30K

4%

YES

NO

NO

1919/1925

ALL

I

973/4

984/4

953/4

$269K-$1.2M/ $15K-$30K

5%

YES

NO

NO

2011/2011

ALL

C,I**

84/15

85/18

87/21

$613.6K-$987.3K/ $37.5K

5.5%

YES

NO

NO

1952/1990

ALL

C,I**

159/0

151/0

162/0

$463.2K-$988K/$50K

6%

YES

NO

YES

2007/2007

ALL

C,I

92/3

87/2

80/2

$402.8K-$564.4K/$40K

6%

YES

NO

NO

1991/2006

ALL

C,I**

122/3

136/6

138/7

$209K-$524.5K/$35K

5%

YES

NO

NO

1961/1965

S,SW, W

C,I**

320/0

323/0

325/0

$303.6K-$1.4M/ $5K-$32K

5%

YES

NO

YES

1916/1988

ALL*

C,I**

295/5

289/4

258/4

$276.4K-$1M/$30K

5.5%

YES

NO

YES

2018/2018

ALL

C,I**

0/0

0/0

4/0

$217.4K-$591.5K/$35K

6%

YES

NO

YES

2010/2013

ALL*

NO

24/1

31/0

31/2

$378K-$949.1K/$35K

6%

YES

NO

NO

1946/1997

ALL

C,I**

26/63

29/45

18/44

$349.2K-$582K/ $15K-$25K

6%

NO

YES

NO

1962/1964

ALL

C,I**

5,889/ 797

6,299/ 606

6,662/ 474

$525.5K-$2.96M/ $25K-$45K

5.5%

YES

NO

YES

1969/1969

MW

NO

381/10

383/10

382/10

$1.1M-$1.6M/$25K

5%

YES

NO

NO

1964/1967

MW,S, SE,SW, W*

NO

252/ 303

252/ 314

274/ 312

$859.7K-$2.1M/$35K

5%

YES

NO

NO

1995/1997

ALL*

C**

348/ 381

356/ 385

371/ 362

$754K-$1.6M/$30K

5%

YES

NO

NO

2003/2009

ALL

NO

117/7

136/10

135/11

$858.5K-$1.3M/$35K

3.5-5%

YES

NO

NO

Italian ice, frozen custard Trevose, Pa.

Sumo Snow Shaved snow, boba teas, Asian desserts Surprise, Ariz.

Waikomo Shave Ice Shaved ice Koloa, Hawaii

Yogurtland Franchising Self-serve frozen yogurt and ice cream Irvine, Calif.

RANK

HAMBURGERS

3

McDonald’s Burgers, chicken, salads, beverages Chicago

Sonic Drive-In

4 79 100 198

Burgers, hot dogs, chicken sandwiches, breakfast, ice cream, beverages Oklahoma City

Hardee’s Restaurants Burgers Franklin, Tenn.

Carl’s Jr. Restaurants Burgers Franklin, Tenn.

Checkers Drive-In Restaurants Burgers, fries Tampa, Fla.

A&W Restaurants

290

Root beer, burgers, hot dogs, chicken, sides, ice cream Lexington, Ky.

NOT RA NKE D BurgerFi Burgers, hot dogs, fries, onion rings, custard, craft beer, wine North Palm Beach, Fla.

Fatburger North America Burgers Beverly Hills, Calif.

Mooyah Burgers, Fries, & Shakes Burgers, fries, shakes Plano, Texas

Wayback Burgers Burgers, fries, onion rings, shakes Cheshire, Conn.

HOT DO GS

87

Wienerschnitzel Hot dogs, ice cream Irvine, Calif.

Nathan’s Famous

286

Hot dogs, hamburgers, seafood, chicken, cheesesteaks Jericho, N.Y.

NOT RA NKE D Crave Hot Dogs and BBQ Hot dogs, barbecue, beer St. James, N.Y.

Dog Haus Worldwide Hot dogs, sausages, burgers, sides Pasadena, Calif.

Hot Dog on a Stick Corn dogs, lemonade, fries, funnel cakes Atlanta

M E X ICAN FOOD

2 115 127 152 262

Taco Bell Mexican food Irvine, Calif.

Taco John’s International Mexican food Cheyenne, Wyo.

Del Taco Fresh Mexican Grill Mexican/American food Lake Forest, Calif.

Qdoba Mexican Eats Mexican food San Diego

Fuzzy’s Taco Shop Baja-style Mexican food Fort Worth, Texas

January-February 2020 / E N T R E P R E N E U R . C O M / 175

RANK

THE

362 492

FRANCHISE

Moe’s Southwest Grill

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

2000/2001

ALL

NO

677/5

716/5

713/5

$443.5K-$1M/$30K

5%

YES

NO

NO

2008/2015

ALL

NO

5/11

9/10

21/9

$131.5K-$398K/$35K

6%

YES

NO

NO

1990/1995

ALL

C,I**

130/5

127/5

131/6

$229.2K-$994.3K/ $35K-$50K

5%

YES

NO

NO

1995/2003

ALL

NO

43/4

42/4

36/5

$402.4K-$697K/$40K

5%

YES

NO

NO

2002/2006

ALL

C,I

42/5

45/6

48/6

$294K-$799K/$40K

6%

YES

NO

NO

2015/2019

ALL

C,I

0/0

0/0

4/4

$400K-$850K/$30K

5%

YES

NO

YES

2007/2017

ALL

C,I

0/1

0/1

0/1

$143.9K-$197.2K/ $29.9K

5%

YES

NO

NO

1992/1995

ALL

NO

43/27

39/28

43/28

$404.3K-$931K/$30K

5%

NO

NO

NO

2003/2010

NO

C,I

85/3

102/3

121/3

$239K-$320.5K/$25K

6%

YES

NO

YES

2010/2010

ALL*

NO

13/9

18/9

22/9

$529.8K-$796.3K/$25K

5%

NO

NO

NO

1991/2014

ALL

C,I

2/5

1/5

1/5

$129.8K-$285.8K/ $24.9K

5%

YES

NO

NO

1958/1959

ALL*

C,I**

14,645/ 352

15,325/ 93

17,120/ 56

$357K-$2.2M/$25K

6%

NO

NO

NO

1978/1979

ALL

C,I**

840/0

905/0

933/0

$293.5K-$788.6K/$25K

5.5%

YES

NO

YES

2012/2012

ALL*

I**

198/5

277/6

330/7

$545.5K-$1.1M/$30K

5%

NO

NO

NO

1978/1981

MW, SW,W

NO

185/0

199/0

211/0

$208K-$593.5K/$30K

5%

YES

NO

NO

1964/2006

ALL

C

128/14

131/13

137/11

$136.2K-$1.2M/$30K

5%

YES

NO

NO

1985/1986

ALL

C,I**

4,383/ 705

4,569/ 678

4,702/ 643

$130.1K-$844.4K/ TO $25K

5%

YES

NO

NO

1981/1984

MW

NO

193/8

194/8

200/8

$1.1M-$2.5M/$30K

4%

NO

NO

NO

1959/1962

ALL

C,I**

371/71

359/74

359/70

$327.3K-$1.1M/$25K

4%

NO

NO

NO

1963/1991

MW,S, SE*

NO

104/55

103/57

103/55

$386.5K-$698.9K/$30K

5%

YES

NO

NO

1978/1990

ALL

NO

360/38

351/37

345/38

$437.5K-$631K/$25K

8-10%

YES

NO

NO

1973/1982

ALL

NO

518/30

521/30

514/32

$290.6K-$538.4K/$25K

5.5%

YES

NO

NO

1979/1985

SW,W

NO

107/1

103/1

102/1

$372K-$562K/$30K

5%

YES

NO

YES

1972/1985

ALL

C,I

8/1

8/1

8/0

$197.6K-$389.8K/ $10K-$20K

TO 4.5%

YES

NO

YES

2014/2019

NE,SE

NO

0/1

0/1

0/1

$202.7K-$486.8K/$30K

5%

YES

NO

YES

1981/1986

ALL

C,I**

49/0

37/0

34/0

$86.5K-$549K/$39K

5%

YES

NO

NO

1971/1974

ALL

NO

230/0

218/0

212/0

$110.8K-$210.8K/$10K

$300/MO.

YES

NO

NO

Mexican food Atlanta

Bubbakoo’s Burritos Mexican food Wall Township, N.J.

NOT RA NKED Baja Fresh Mexican food Scottsdale, Ariz.

California Tortilla Mexican food Potomac, Md.

Chronic Tacos Enterprises Mexican food Aliso Viejo, Calif.

Dos Bros Fresh Mexican Grill Tex-Mex food Cleveland, Tenn.

Drunken Taco Franchising Mexican food Fort Lauderdale, Fla.

Pancheros Mexican Grill Mexican food Coralville, Iowa

Quesada Burritos & Tacos Mexican food Toronto

Rusty Taco Tacos Atlanta

Taco Rico Tex-Mex Cafe Mexican food Doral, Fla.

P IZZA

10 83 99 142 145 146 170 172 181 220 233 268

Pizza Hut Pizza, pasta, wings Plano, Texas

Marco’s Pizza Pizza, subs, wings, cheese bread Toledo, Ohio

Blaze Fast-Fire’d Pizza Assembly-line pizza Pasadena, Calif.

Mountain Mike’s Pizza Pizza, wings, salad bar, appetizers Newport Beach, Calif.

Rosati’s Pizza Pizza, Italian food Elgin, Ill.

Papa John’s International Pizza Louisville, Ky.

Pizza Ranch Pizza, chicken, salad bar, buffet Orange City, Iowa

Round Table Pizza Pizza, wings, salads Atlanta

Donatos Pizza, subs, salads Columbus, Ohio

Jet’s Pizza Pizza, subs, salads, breads, wings, dessert Sterling Heights, Mich.

Hungry Howie’s Pizza & Subs Pizza, subs, bread, wings, salads, desserts Madison Heights, Mich.

Pizza Factory Pizza, pasta, sandwiches Oakhurst, Calif.

NOT RA NKED Captain Tony’s Pizza & Pasta Emporium Pizza, pasta, subs, wings Deland, Fla.

DC Pizza Pizza Washington, D.C.

Figaro’s Pizza Pizza, take-and-bake pizza Salem, Ore.

Fox’s Pizza Den Pizza, sandwiches, wings, salads Murrysville, Pa.

176 / E N T R E P R E N E U R . C O M / January-February 2020

KEY K Thousands ($), M Millions ($), $ U.S. dollars, * Selling multiple units/master licenses only, ** Selling int’l. master licenses only

REGIONS

Freshzza

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

2018/2019

ALL

C,I**

0/0

0/1

0/1

$193.3K-$677.3K/ $19.8K

4.25%

YES

NO

NO

1986/1989

ALL

C,I**

102/0

103/0

102/0

$126.3K-$442K/$30K

5%

NO

NO

NO

2014/2014

ALL

C,I

28/1

37/1

39/0

$220.7K-$784.3K/ $29.5K

5-6%

YES

NO

NO

1981/1982

MW,SE, SW

C,I**

1,397/ 148

1,347/ 122

1,290/ 90

$280.3K-$517K/$25K

5%

YES

NO

NO

2011/2011

ALL

C,I

71/13

72/1

57/1

$398.5K-$901K/ $30K-$40K

6%

YES

NO

NO

2008/2009

SW

C,I**

18/2

18/3

13/3

$74.1K-$398.98K/ $18.5K

5.5%

YES

NO

YES

1993/2002

ALL

C,I**

22/2

20/2

21/2

$125.5K-$549K/$39K

5%

YES

NO

NO

2001/2001

MW,S, SE*

C,I**

30/1

31/1

31/6

$128K-$403K/$25K

5%

YES

NO

NO

2015/2016

ALL

NO

1/0

1/0

1/0

$308K-$675.5K/ $15K-$49.5K

5%

YES

NO

NO

1959/1969

W

NO

25/0

23/0

23/0

$346.5K-$825K/$30K

4%

YES

NO

NO

2015/2015

ALL

C,I**

11/1

17/1

13/2

$281K-$757.8K/$38.5K

6%

YES

NO

YES

2008/2008

ALL

NO

43/2

55/2

65/1

$364.8K-$710K/$35K

5%

NO

NO

NO

1986/1991

ALL

C,I**

519/56

539/56

562/59

$253.2K-$582.3K/ $24.5K

6%

YES

NO

NO

1985/1987

MW,NE, S,SE

NO

309/1

314/1

312/1

$347.95K-$556.8K/ $25K

TO 8%

NO

NO

NO

1956/1987

ALL

C,I

1,219/ 58

1,347/ 84

1,520/ 72

$237.4K-$766.97K/ $18.5K

6.5%

YES

NO

NO

1994/1995

ALL

C

1,049/ 37

1,098/ 37

1,136/ 38

$160.6K-$995.99K/ $20K

6%

YES

NO

NO

1965/1974

ALL

C,I

44,608/ 0

42,431/ 0

41,600/ 0

$140.1K-$342.4K/$15K

8%

YES

NO

YES

1972/1985

W

NO

104/27

104/27

108/28

$214.5K-$397.1K/ $18.5K

5.5%

YES

NO

YES

1976/1991

ALL

C,I**

87/14

88/10

90/10

$375K-$645.4K/ $30K-$40K

6-7%

YES

NO

NO

1998/2002

MW,S, SE,SW, W*

NO

12/6

13/8

12/13

$404.5K-$687.5K/$40K

6%

YES

NO

NO

1972/1985

MW*

NO

79/22

78/18

71/24

$197.2K-$648K/$25K

6%

NO

NO

YES

1987/1992

MW*

NO

93/4

92/5

89/2

$194.8K-$393.3K/$30K

6%

YES

NO

YES

1941/2001

S,SE

NO

32/1

33/1

33/1

$103.9K-$592K/ $18K-$28K

6%

NO

NO

YES

1988/2007

ALL

C,I**

3/4

11/0

17/0

$332.5K-$637.98K/ $39.5K

6%

YES

NO

NO

1998/2001

ALL

NO

81/8

81/11

80/1

$192.8K-$431.3K/ $20K-$25K

6%

YES

NO

YES

2002/2002

NE,S, SE

NO

89/0

85/1

85/1

$235.5K-$574.5K/$35K

6%

YES

NO

NO

Pizza Ruskin, Fla.

Ledo Pizza

Royalty Fee

Seeking Int’l?

MW Midwest, NE Northeast, S South, SE Southeast, SW Southwest, W West, C Canada, I Other International

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

Available U.S. Regions

Year Began/ Franchising Since

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

Pizza, subs, pasta Annapolis, Md.

1000 Degrees Pizza Assembly-line pizza, salads, wings Galloway, N.J.

Papa Murphy’s Take ‘N’ Bake Pizza Take-and-bake pizza Vancouver, Wash.

Pie Five Pizza Pizza, salads, calzones, breadsticks, dessert The Colony, Texas

Pizza 9 Pizza Albuquerque, N.M.

Pizza Schmizza Pizza Salem, Ore.

Romeo’s Pizza Pizza, subs, wings, salads, appetizers Medina, Ohio

Smokin’ Oak Wood-Fired Pizza Pizza St. Petersburg, Fla.

Straw Hat Pizza Pizza San Ramon, Calif.

Urban Bricks Kitchen Assembly-line pizza and salads San Antonio

Your Pie Assembly-line pizza Athens, Ga.

RANK

SA N DWICHES: PHI LLY C HEES ESTE AK

126 271

Charleys Philly Steaks Philly cheesesteaks, fries, lemonade Columbus, Ohio

Penn Station East Coast Subs Grilled subs Milford, Ohio

SA N DWICHES: SUBMAR INE

8 59 107 235 329

Jersey Mike’s Subs Subs Manasquan, N.J.

Firehouse Subs Subs Jacksonville, Fla.

Subway Subs, salads Milford, Conn.

Port Of Subs Subs, wraps, catering Reno, Nev.

Capriotti’s Sandwich Shop Subs Las Vegas

NOT RA NKE D Cheba Hut Toasted Subs Toasted sandwiches, salads, snacks Fort Collins, Colo.

Cousins Subs Hot/cold subs, salads, soups, desserts Menomonee Falls, Wis.

Erbert & Gerbert’s Sandwich Shop Subs, soups, salads Eau Claire, Wis.

Groucho’s Deli Subs, salads, sauces Columbia, S.C.

Jon Smith Subs Grilled subs West Palm Beach, Fla.

Lennys Grill & Subs Subs, Philly cheesesteaks, salads Memphis, Tenn.

PrimoHoagies Franchising Italian subs Westville, N.J.

January-February 2020 / E N T R E P R E N E U R . C O M / 17 7

THE

FRANCHISE

Tubby’s Sub Shop

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

2017 Number of Franchises/ CompanyOwned

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

1968/1978

MW

NO

59/0

62/0

61/0

$112.9K-$293.5K/ $17.5K-$20K

4-6%

YES

NO

NO

1983/1993

ALL

NO

2,657/ 63

2,737/ 56

2,763/ 55

$313.6K-$556.1K/$35K

6%

YES

NO

NO

1964/1965

ALL*

C,I**

2,313/ 1,032

2,312/ 1,117

2,355/ 1,137

$320.6K-$2M/ $12.5K-$37.5K

4%

YES

NO

NO

1989/1994

ALL*

NO

355/32

400/28

423/29

$772K-$2.1M/$35K

5%

YES

NO

YES

1977/2009

ALL*

C,I**

55/424

56/435

59/429

$534.95K-$874K/$40K

6%

YES

NO

NO

1968/1980

NE

NO

30/24

31/24

28/24

$767.3K-$1.6M/$30K

5%

YES

NO

NO

1971/1977

W

NO

225/12

204/6

194/5

$240.5K-$545.7K/$30K

5%

YES

NO

NO

1971/1976

ALL

NO

339/25

347/25

328/25

$503.8K-$800.5K/$30K

6%

YES

NO

NO

2010/2017

ALL

C,I

0/2

0/2

1/2

$275K-$650K/$35K

6%

YES

NO

NO

1996/2008

W

NO

50/0

51/0

53/0

$122.3K-$467.9K/ $25K-$30K

6%

YES

NO

YES

2003/2005

ALL

C,I

20/11

19/12

22/14

$317K-$603K/$25K

6%

YES

NO

YES

1974/1983

ALL

NO

63/0

50/1

43/1

$159.5K-$485.5K/ $22.5K

5.5%

YES

NO

NO

2009/2016

ALL*

NO

2/4

5/4

6/4

$162.5K-$509K/$25K

6%

NO

NO

NO

2010/2017

ALL*

C,I**

0/8

3/8

4/12

$426.9K-$767.4K/$35K

6%

YES

NO

NO

1972/2018

ALL

NO

0/2

0/2

0/2

$345.6K-$690.5K/$40K

6%

YES

NO

NO

1995/1997

ALL

C,I

612/16

592/13

564/6

$179.8K-$428.8K/$30K

5%

YES

NO

NO

2016/2018

ALL

NO

0/1

1/0

1/1

$120K-$395K/$30K

6%

NO

NO

NO

1980/2009

ALL

NO

14/1

13/1

14/1

$577.2K-$1.2M/$25K

3%

NO

NO

NO

2003/2004

ALL

C,I**

435/3

465/2

428/2

$175.5K-$480.3K/$30K

6%

YES

NO

NO

1969/1969

ALL

C,I**

221/299

227/ 306

244/ 291

$1M-$1.2M/$35K

4.5%

YES

NO

NO

2011/2014

ALL

C,I

11/2

20/3

32/4

$175.9K-$828.7K/ $38.5K

6-8%

YES

YES

YES

1989/2019

ALL

C,I

0/1

0/1

0/1

$226.3K-$381.5K/ $34.5K

5%

YES

NO

NO

1973/1988

ALL

C,I**

876/26

944/28

1,037/ 36

$263.6K-$844.5K/$30K

6%

YES

NO

YES

1997/1997

ALL

NO

597/1

676/1

783/1

$246.5K-$580.5K/$30K

6%

YES

NO

NO

2010/2012

ALL

C,I**

38/46

69/47

103/42

$254.5K-$466.6K/$35K

6%

YES

NO

NO

Subs Roseville, Mich.

RANK

SAN DW ICHES : MI SC ELL A NEOU S

23 25 72 131 330 342 349

Jimmy John’s Gourmet Sandwiches Sandwiches Champaign, Ill.

Arby’s Sandwiches, fries, shakes Atlanta

McAlister’s Deli Sandwiches, salads, baked potatoes Atlanta

Potbelly Sandwich Shop Toasted sandwiches Chicago

Roy Rogers Restaurants Roast beef sandwiches, fried chicken, burgers Frederick, Md.

Togo’s Specialty sandwiches, salads, soups, wraps San Jose, Calif.

Schlotzsky’s Austin Eatery Sandwiches, pizza, soups, salads Atlanta

NOT RA NKED The American Grilled Cheese Kitchen Grilled cheese sandwiches, salads, soups, sides San Francisco

Deli Delicious Sandwiches, salads, soups, catering Fresno, Calif.

Earl of Sandwich Sandwiches, wraps, salads, desserts Orlando, Fla.

Great Wraps Wraps, cheesesteaks, bowls Atlanta

The Gyro Shack Gyros and Mediterranean food Boise, Idaho

Melt Shop Melted sandwiches, chicken, tater tots, salads, shakes New York

Miller’s Roast Beef Roast beef sandwiches, fries East Providence, R.I.

Pita Pit Pita sandwiches and salads Coeur d’Alene, Idaho

Planet Grilled Cheese Grilled cheese sandwiches Temple Terrace, Fla.

Pop’s Italian Beef and Sausage Italian beef and sausage sandwiches, gyros, burgers, hot dogs, chicken Palos Heights, Ill.

Which Wich Superior Sandwiches Sandwiches Dallas

S EAFO O D

140 421

Captain D’s Seafood Nashville, Tenn.

Cousins Maine Lobster Lobster food trucks and restaurants Hollywood, Calif.

NOT RA NKED Bailey Seafood Seafood East Amherst, N.Y.

S MO OTHIES/J U IC ES

14

Smoothie King Smoothies, healthful snacks, health products Dallas

Tropical Smoothie Cafe

18

Smoothies, salads, wraps, sandwiches, flatbreads Atlanta

Nekter Juice Bar

128

Juices, smoothies, acai bowls, non-dairy ice cream Santa Ana, Calif.

178 / E N T R E P R E N E U R . C O M / January-February 2020

KEY K Thousands ($), M Millions ($), $ U.S. dollars, * Selling multiple units/master licenses only, ** Selling int’l. master licenses only

REGIONS

Year Began/ Franchising Since

Available U.S. Regions

Seeking Int’l?

RANK

MW Midwest, NE Northeast, S South, SE Southeast, SW Southwest, W West, C Canada, I Other International

314

Jamba

2018 Number of Franchises/ CompanyOwned

2019 Startup Costs/ Number of Franchise Fee Franchises/ CompanyOwned

Royalty Fee

Financing Available?

HomeBased/ Mobile Opportunity

Kiosk/ Express Unit Available?

1991/1993

ALL

C,I

863/53

849/51

853/7

$273.6K-$504.3K/$35K

6%

YES

NO

YES

1995/1998

ALL

NO

88/2

85/0

84/0

$214.4K-$377.5K/$25K

6%

YES

NO

YES

2015/2016

ALL

NO

6/4

36/5

70/7

$259K-$502.5K/ $42.5K

6%

YES

NO

YES

2016/2018

ALL

NO

0/1

0/1

0/1

$99.9K-$135.9K/ $24.9K

5%

YES

NO

YES

2016/2017

SE

NO

0/1

0/2

9/2

$300K-$595K/ $35K-$36K

6%

YES

NO

NO

1995/1998

ALL

C,I**

127/0

125/0

136/0

$77.7K-$327.6K/ $20K-$25K

5%

YES

NO

NO

2014/2019

ALL

NO

0/4

0/5

0/51

$122.95K-$379.9K/ $30K

7%

NO

NO

NO

1996/2001

ALL

NO

84/0

82/0

84/0

$236.5K-$345.5K/$30K

6-7%

YES

NO

YES

1982/1993

MW,S, SE,SW

NO

996/0

1,006/0

1,032/0

$59.5K-$140K/$0

0

YES

NO

YES

2010/2015

SW,W

NO

1/5

2/5

9/5

$315K-$599K/$30K

5%

YES

NO

NO

1998/2013

ALL*

NO

63/19

70/17

74/18

$468K-$831K/$35K

4%

NO

NO

NO

2017/2018

ALL

NO

0/1

0/1

0/1

$178.8K-$249.8K/ $24.9K

5%

NO

NO

NO

1950/2003

S,SE, SW

NO

10/2

11/2

9/2

$266.99K-$2.1M/$35K

5%

YES

NO

NO

2004/2005

ALL

C,I

36/1

41/2

39/1

$189.8K-$921.9K/$35K

6%

YES

NO

YES

1941/1994

ALL

C,I

549/5

525/5

505/5

$256.4K-$443K/$20K

5%

YES

NO

NO

1987/1996

MW,NE, S,SE, SW

NO

23/3

24/3

26/8

$142.96K-$463.2K/ $30K

4%

NO

NO

NO

1988/1991

ALL

NO

91/122

161/52

163/52

$466.8K-$1.9M/ $15K-$40K

5%

YES

NO

NO

2010/2018

NE*

NO

0/15

0/18

0/18

$633K-$1.5M/$45K

6%

NO

NO