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Growth Strategies

Feature Story:

Consolidation Nation: Large Franchisees Continue Expanding »

By Eddy Goldberg

In the world of multi-unit franchisees, the big keep getting bigger. In our Multi-Brand 50 rankings, which we began publishing in 2008, the number of units operated by both the top 5 and top 10 franchisees has climbed steadily since 2010, following a post-recession drop-off when franchisees retreated from growth and instead focused on operational efficiency and selling or closing under-performing units.
Also during the past decade: many franchisors worked hard to refranchise their corporate stores; a generation of retiring franchisees with sizable portfolios sold them, whole or in part, to other large operators; and to help grease the skids for all these asset transfers, bankers relaxed their underwriting criteria, alternative lending sources sprang up, and the coffers of private equity firms (overfilled and searching for investment opportunities) expanded their strategic and acquisitional sights from franchise brands to franchisee organizations...

Feature Story:

When Is Big Too Big?: Re-Evaluating Unlimited Multi-Unit Growth »

By Dean Zuccarello

Consolidation is perhaps the single most significant trend we have seen in the restaurant industry over the past decade. It is easy to understand why franchisees and investors have chosen this direction. Under the right leadership, consolidation leads to greater predictability of operational results and returns through economies of scale, implementation of modern technology, market control, and fixed-cost leverage. We have entered into the era of the "mega-franchisee," but as these entities become ever more massive, is there a case to be made for these organizations to strategically divest assets, becoming smaller over time?
There are two catalysts for where a mega-franchisee could find deconsolidation the best course of action: 1) when it reaches an inefficient tipping point in the context of day-to-day operations, or 2) when it becomes more beneficial to break apart the whole to maximize shareholder value as it relates to an exit strategy...

Feature Story:

Branching Out: Non-Traditional Franchisees Deliver The Goods »

By Helen Bond

Ross Harried has found that a "small" strategy can serve up big business success. His Maui Wowi Ka'anapali Carts (Tiki huts on wheels) are 8 feet wide, 3 feet deep, 8 feet high and can squeeze in most anywhere, which allows him to provide a memorable presence at events ranging from youth and professional sports to concerts, graduations, dance competitions, corporate gatherings, and wherever he's asked to serve up his smoothies.
The mobile units are a signature of Maui Wowi Hawaiian Coffee & Smoothies, which also offers storefront, kiosk, food truck, and enclosed concession trailer options to franchisees. The lower start-up costs of the mobile carts appealed to Harried, who became a Maui Wowi franchisee in February 2013. Since then, he has built a book of repeat customers and lucrative venue contracts in the Minneapolis area and catapulted himself into the fourth largest franchisee in a system with more than 450 units in 7 countries...

Feature Story:

Franchise Growth Strong In 2016 »

Multi-Unit Franchisee

2016 should be another big year for franchises. Franchise small businesses will once again grow at rates that exceed non-franchise business growth this year, according to the Franchise Business Outlook: 2016 released by the International Franchise Association.
"We are forecasting that for the sixth consecutive year, franchise businesses will grow at rates that exceed the economy-wide growth of industries where franchises are concentrated," said IFA President & CEO Robert Cresanti. "Franchise businesses are showing tremendous capability to provide new jobs for working families and new businesses for first-time business owners across all sectors in local communities, despite the fact that franchisees are facing many new regulatory threats at all levels of government...

Feature Story:

Cambridge Franchise Holdings Adds 42 Burger Kings In Southeast »

Multi-Unit Franchisee

Cambridge Franchise Holdings is becoming a major player in the Burger King system by taking on another 42 BK locations in the Southeast U.S. The growing restaurant and real estate company also just added 5 All-in-One convenience stores to its holdings.
Cambridge Franchise Holdings bought the restaurants and convenience stores from Mirabile Investment Corporation, which is owned by real estate developer and restaurateur Joseph Mirabile. All the acquired properties are located in Tennessee, Mississippi, and Arkansas.
“Joe Mirabile built a phenomenal business with a focus on operations and restaurant quality,” said Ray Meeks, CEO of Cambridge Franchise Holdings. “We are excited to work together with our new team members and are committed to maintaining the high standards of operations and development set by Joe and his team...

Feature Story:

Preparing To Perform In 2016 »

By Sherry B. Jordan

A new calendar year is just around the corner. For the majority of small business owners, that means it is time to examine performance for the year that is past and adjust the vision and action plans for the year ahead.
Success does not happen by accident. If you want to reach your full potential you can't just "wing it." You have to have a clear and concise plan and be ready to take action on the first day of the new year. Anything less and you have missed an opportunity to be all you can be, have all you can have, and accomplish all that is possible for you and your business. Don't worry, it does not have to be complicated. Set aside a little time and simply:

Feature Story:

A Question Of Balance: Improving Franchise Agreements For A New Era »

By Eddy Goldberg

Franchise agreements: can't live without 'em, can't kill 'em. However, there is a major effort under way--by franchisors and franchisees alike--to cure what ails them.
One big goal is to make them more balanced, to shift the preponderance of power from franchisors to create a more equitable document. This doesn't mean weakening brand standards: the brand and its intellectual property must be protected, or the entire system will suffer. However, it does mean things like greater franchisee participation, collaboration, transparency, and clarity written into the agreements.
The list of complaints about onerous or restrictive terms is well known: liquidated damages, personal guarantees, transfer rights, binding arbitration, default provisions, system changes, and more...

Feature Story:

Outstanding In The Field: Getting What You Need, When You Need It »

By Debbie Selinsky

What franchisees want from corporate field support is pretty straightforward. Basic expectations include great products, marketing and brand support, ongoing training, site selection, purchasing power for goods and services, and participation in product and program testing. While those are the table stakes, what makes systems really successful and builds strong relationships between franchisor and franchisees is communication, consistency, and listening,
"For our organization, what's most important is for our field consultants to communicate the same message," says Spencer Smith, CEO of the Smith Group in Cortez, Colo., which operates nearly 50 Aaron's stores and 3 Rent A Wheel units across 8 western states. "We have 46 Aaron's locations, so we have 5 different field consultants from Canada to Mexico...

Feature Story:

Jamba Refranchising Efforts Moving Along »

Multi-Unit Franchisee

Jamba, Inc., the parent company of Jamba Juice, is continuing to make good on its rebranding initiative launched late last year. Just last month the company announced the completion of a refranchising agreement for 73 stores in the San Jose/East Bay and Sacramento markets. A company release said the brand expects to sell the remaining 27 company locations in the San Diego market by the end of the year.
Last December, Jamba announced the refranchising initiative with a stated goal of refranchising "up to 114" stores during 2015. The company has exceeded its initial plans with closed deals so far this year already representing 150 stores. The company expects that deals for 74 additional stores will be refranchised for three California markets by the end of 2015 and the Chicago/Midwest market by the first quarter of 2016...

Feature Story:

Congress Authorizes Additional Funds For SBA »

Multi-Unit Franchisee

The House of Representatives approved a bi-partisan measure last week that would lift the cap on the Small Business Administration's (SBA) 7(a) loan program to $23.5 billion, which would enable SBA to continue approving much needed loans to business owners - like franchisees. The House vote follows the Senate's approval of the same increase just two weeks ago.
The IFA and other pro-franchising groups are praising the move. "We are extremely pleased policymakers on both sides of the political aisle recognized the importance of the 7(a) loan program, which provides critical funding to small businesses, including franchise small businesses," said IFA President & CEO Steve Caldeira, CFE. "For every $1 million in lending to a franchise, 40 new direct and indirect jobs are created - a sizable return on investment...

Feature Story:

Arooga's Grille House & Sports Bar Coming To New York »

Multi-Unit Franchisee

JGJO Development Co. LLC, has signed an agreement that will bring at least 10 Arooga's Grille House & Sports Bar locations to Long Island (Nassau/Suffolk Counties) and Queens areas of New York. This marks the brand's fourth multi-unit franchise agreement and its sixth state.
The JGJO agreement, under the direction of Joseph A. Alagna, Jr. and Stephan A. Stein, gives the Arooga's brand a total of 44 units, 10 corporate and 34 franchise locations, either built or under contract. Alagna and Stein are the principals of Joseph Gunnar & Co., the Wall Street brokerage and investment banking firm, and the general partners of Buttonwood, a private equity venture capital fund.
Alagna, chairman and CEO said, "We are thrilled to partner with Arooga's and are anxious to bring the exciting Arooga's experience to the Long Island, New York marketplace...

Feature Story:

KBP Foods Adds Two Dozen Restaurants In Three States »

Multi-Unit Franchisee

Overland Park, Kan-based KBP Foods, LLC, is making news again. The group has just inked a deal that adds 24 more units to its portfolio, bringing its total quick serve restaurant count to 247 units across 10 states.

The new deal includes 24 restaurants in Kansas, Missouri, and Florida that were acquired from D-Carr Investments and related entities. The acquired units include all three restaurants under YUM! Brands, as well as Long John Silver's franchises. The move means KBP Foods now operates franchise locations in Florida, Georgia, Illinois, Iowa, Kansas, Missouri, Nebraska, North Carolina, Texas, and Virginia.

"KBP's success by growth-through-acquisition strategy has been incredibly successful, and this acquisition is right in line with our business model," said Barry Dubin, KBP Foods chief development officer...

Feature Story:

Franchisee Group Brings Dunkin' To New Mexico »

Multi-Unit Franchisee

Amin Habib, Murad Fazal, and Menjinder Bhambra are the principals behind NMR, LLC, a franchisee group that has more than 30 years of experience with Dunkin' Brands as well as the gas and convenience industry. They will now bring five Dunkin' Donuts restaurants and four multi-brand restaurants with its sister brand, Baskin-Robbins, to Albuquerque and its surrounding areas. The first restaurant is planned to open in Summer 2016.
Amin Habib, already owns four Dunkin' Donuts restaurants in Chicago, two of which are multi-brand restaurants with sister brand, Baskin-Robbins.
"We are excited to expand the brands' presence in New Mexico and play an important role in the daily lives of people who live, work and visit here," said Habib...

Feature Story:

Franchisee To Bring Persona Wood Fired Pizzeria To Houston »

Multi-Unit Franchisee

Houston franchise group Spicy Ketchup, LLC, has inked a deal to bring 5 Persona Wood Fired Pizzeria locations to the Lone Star state. The group has experience operating Jimmy John's shops and is scheduled to open its first Persona Wood Fired Pizzeria in the fall, with the remaining locations opening over the next four years.
"We were initially impressed with the company's operations and experienced executive team, but it wasn't until we tried the pizza that we were completely sold," says Dan Stansel, one of Spicy Ketchup's managing partners, noting that the group considered several other emerging brands before deciding that Persona had the most potential for becoming what they believe will be the next big brand in the fast-casual pizza industry...

Feature Story:

Successor Prep For The New Generation »

By Champ Rawls

Picture a 50-something year-old multi-unit franchisee who has been in business for more than 20 years and has tirelessly worked to grow and build a diverse business. His kids are in their mid- to late-20's and have been getting more involved in day-to-day operations. They are ecstatic to be entering the family enterprise and proudly fly the family name. The company has a fantastic reputation in the community and the family name holds weight and notoriety in the industry. It is well-established with sound business practices and a formula for success that has produced generous profits and provided a great place of employment for many families. Sound familiar?
Now picture the next generation, a generation that has been to trainings and workshops, developed an "understanding" of business operations from watching their mom and dad avidly stay on top of franchisor procedures and directives, and has an opinionated and vocal vision of how they see the business changing for the future...

Feature Story:

Multi-Unit Franchisee 'Strategies For Growth' Collection Available »

Multi-Unit Franchisee

Multi-unit franchisees who are looking to gain an edge on their competition have a new resource at their disposal. Franchise Update's Franchise Learning Academy has just released its "Strategies For Growth" Collection, a series of 14 video seminars, covering more than 20 hours of programming, and providing access to the insights, experience, and success stories of more than 40 multi-unit and multi-brand franchisees and franchising professionals.
The timely and topical information found on the videos comes straight from many of today's top multi-unit franchisees who have been there, done it, and successfully lived to tell the tale. Their invaluable advice can provide tips and insight for taking your business to the next level. All video seminars were produced at Franchise Update's Annual Multi-Unit Franchising Conferences in 2014 and 2015...

Feature Story:

Tropical Smoothie Cafe Lands 51 Franchise Agreements In First Quarter »

Multi-Unit Franchisee

Tropical Smoothie Café has been on the grow this year. The fast casual concept negotiated 51 new franchise agreements in the first quarter of this year. The deals represent 51 cafés that will expand the sandwich and smoothie franchise in Atlanta, Detroit, Providence, Miami, Charleston, SC, and Fayetteville, NC. The brand also reported a 12.31-percent growth in same-store sales over the first quarter of last year.
"We had great momentum heading into 2015 after reporting incredibly strong results last year, including positive comp sales of 11.4 percent and our highest average unit volume of more than $526,000 -- with the top 50 percent reporting an AUV of $669,000," says Mike Rotondo, CEO of Tropical Smoothie Café. "Clearly, Tropical Smoothie Café is well-positioned to continue our aggressive growth and reach our goal this year of signing franchise agreements to develop an additional 150 new locations...

Feature Story:

Melting Pot Launches New Recruiting Incentive Program »

Multi-Unit Franchisee

The Melting Pot is looking to reopen some franchise locations and it has created a new incentive to help recruit qualified restaurant operators. The new program will provide financing to those who sign a franchise agreement to purchase an existing Melting Pot location in select markets across the country, starting with Chattanooga and Memphis.
Under the guidelines of its new "Path to Grow" program, approved restaurant operators can inject as little as 5 percent liquidity into the purchase of the restaurant to partner with the franchisor, who would provide the financing. In exchange, the franchisor would initially assume 51 percent ownership of the restaurant under the conditions that the operating franchisee agrees to pay back the initial loan within three years of signing the franchise agreement...

Feature Story:

Fresh CREAM Deal Coming To Florida »

Multi-Unit Franchisee

The cold rush is coming to Florida. The Sunshine State will be the location of more than 30 new shops of the San Francisco-based dessert franchise CREAM over the next 7 years. The franchise specializes in premium ice cream sandwiches and other frosty treats.
The new agreement marks CREAM's largest and most significant franchising announcement since launching its franchise opportunity in 2012, and will develop stores starting in South Florida before moving towards West Florida and beyond.
"There's definitely a lot of excitement around the brand," says CREAM president and COO Jim Ryan. "We are very excited to have over 30 units available to entrepreneurs in Florida and to make our East Coast debut."
The initial deal was inked with Armando Martinez Stone, who discovered the brand while participating in his High School DECA program in which participants were given the challenge to outline a plan to improve a company's national and international success...

Feature Story:

Georgia Franchisees Are Back To Fazoli's »

Multi-Unit Franchisee

Allen Peake and Mike Chumbley are the powers behind C&P Restaurant Company, a Macon, Georgia-based company that operates Captain D's and Cheddar's locations. The duo has just inked a deal for six Fazoli's restaurants in Georgia and South Carolina.
The new deal brings Peake and Chumbley back to Fazoli's. As executives and minority owners of RMS Family Restaurants - where they worked together for 15 years - they previously operated 12 Fazoli's in Florida, Georgia, and South Carolina. RMS sold its Fazoli's restaurants in 2000; they eventually were closed.
Under the new agreement, C&P Restaurant Company plans to open Fazoli's restaurants in Macon, Warner Robins, Athens, Augusta, Columbus, and Savannah.
"We always knew that we wanted to again be part of Fazoli's, and now the timing is right," says Peake...


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Multi-Brand 50    

Multi-Unit Franchisee Magazine

Issue II, 2016

Multi-Unit Buyers Guide    

2016 Multi-Unit Buyers Guide

Special Edition

Top Opportunities »

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