Restaurant Refranchising

2008 was a big year for restaurant franchises to refranchise many of their corporate-owned units, according to a recent report from food service consultants Technomic. Top brands such as Applebee's, Pizza Hut, and KFC converted stores to franchisee operations.

The move didn't come without incentives as franchisors offered their franchisees enhanced credit support and easier terms. Some chains reduced or waived franchise, marketing and store-opening fees, offered small loans and payment deferrals, and temporarily reduced royalty rates as incentives to encourage successful franchisees to purchase additional locations during the credit crunch.

"The shift toward a heavily franchised business model presents new opportunities for suppliers," says Darren Tristano, EVP at Technomic. "Strong, successful franchisees will be expanding their market presence and growing sales by acquiring formerly corporate-owned units. Suppliers who focus on building and strengthening their relationships with these franchisors can participate in that growth."

These findings and more were reported in the 2009 Technomic/Restaurant Finance Monitor Top 400 Restaurant Franchise Company Report, a joint product of Technomic and Restaurant Finance Monitor. The publication ranks the 200 leading restaurant franchise companies by sales. In addition, Technomic reports on the Future 200--a ranking of the 201 through 400 leading restaurant franchise companies.

This year's report also noted:

 

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