Food Feature Articles

It's no surprise that multi-concept franchising continues to soar. So much so, that for a second consecutive year, we have devoted an issue of Multi-Unit Franchisee to covering it in detail. This high-flying approach to expansion is growing in popularity for a multitude of reasons. As a growth strategy it offers more units, brands, territory, and income--while spreading risk across the different concepts in a franchisee company's portfolio. Multi-concept operators typically have a solid infrastructure in place that, among other things, allows them to hire and retain talented individuals by providing growth paths within the organization. And of course there's the leverage of economies of scale in this type of operation.

Everyone knows what the McDonald's logo looks like and what the "Golden Arches" represent. No matter where you go in the world, if you set foot inside a McDonald's you can order a Big Mac or Quarter Pounder and know exactly what it's going to taste like. Established brand awareness, reliability, and uniformity are part of the power of franchising.

You'd think selling franchises in one of the worst economies since the Great Depression would daunt even the hardiest franchisor. But many franchisors, both well-established and new to the scene, keep on plugging when the economy goes south. Some even consider this a great time to grow.

Many franchisors have reached their limit on expanding into suburbia, but the imperative to grow remains strong. In response, an increasing number are training their sights on America's cities.The move to the suburbs has been a decades-long trend in the United States, and franchisors have followed suit. But more than half of the U.S. population live in the country's top 25 metropolitan areas, and nearly 80 percent live in the top 100 metro areas.Cities are complex, crowded places, running the gamut from blighted ghettos to luxury high-rises. Suburban commuters flood into them by the millions each day to work and shop, creating a vibrant marketplace. And the under-served inner cities are hungry for retail goods and services, jobs, and entrepreneurial opportunity, making them fertile ground for franchisors who take the time to learn, understand, and develop relationships with the people who live there.The Initiative for a Competitive Inner City (ICIC), founded in 1994 by Harvard Business School Professor Michael Porter, studies inner cities with a focus on economic development. According to ICIC, "[T]he inner city retail market offers significant profit potential for retail companies now operating in the highly competitive, over-saturated suburban markets." According to an ICIC study, the country's inner cities contain:

Greg Hamer, Sr. grew up working in his father's Louisiana oilfield service business. But in 1982, he began to put time and money into growing a franchise business that has since grown to 50 locations.

I have a suggestion that will raise your odds of winning--and it won't cost you any money. To clarify what I mean by improving your probability of winning, let me contrast that with an example of winning by chance.

It was like a gut punch for Charlie Marshall. In less than a year's time, the Spring-Green Lawn Care multi-unit franchisee went from paying $12 per bag for lawn fertilizer to more than $25 per bag. "That will make you look for ways to streamline and cut costs," says Marshall. To add insult to injury, gasoline prices were skyrocketing, making it even more expensive to fire up his seven trucks and dispatch crews to care for his customers' lawns each day.

About 20 years ago, Greg Cutchall learned a crucial lesson. An investor group he worked with forced him out of a chain of KFC restaurants in Omaha, units he had operated and helped to build. That fired him up to make things happen for himself.

All franchisors place a high priority on gaining new recruits and responding to contacts from prospective franchisees. But who's setting the pace on performance? Once again, Franchise UPDATE's mystery shoppers hit the phones--and the websites--checking out franchisors from coast to coast to see which were doing the very best work. The best and the brightest were recognized in the 10th annual STAR (Speaking To And Responding) Awards--from the three top national performers to the companies that excelled at fielding telephone contacts or quickly getting back to website leads.

Reciprocity Restaurant Group President Lyndon Johnson good-naturedly lets new acquaintances have a little fun with his name. That's because he's fine with his name. "I can think of a lot worse people to share a name with," says Johnson.

Retailers have never been shy about enticing customers to buy through all kinds of incentives. Now a franchisor has followed suit. During the last quarter of 2008, Seattle-based Emerald City Smoothie was offering a "buy one, get one free" franchise promotion. Seriously.

FRANCHISE OWNERS are awfully smug these days. While dismayed stockholders watch the red figures crawl on the ticker tape, entrepreneurs behind food kiosks and restaurant chains boast of maintaining control over their investments and even growing their businesses in these tough times.

As a marketing expert for a string of fast food chains, Bill Welter learned his craft under "three wonderful kingmakers" of the franchising world: Ray Kroc, Colonel Harland Sanders, and Dave Thomas. But it wasn't until Welter got inside the four walls of his own restaurant that he understood the true nature of the business and the keys to its success.

That statement from Franchise Update Media Group Publisher Steve Olson got the attention of more than 300 industry leaders at this year's Franchise Update Leadership & Development Conference, as he presented an overview of the results of the 2009 Annual Franchise Development Report (AFDR).

Lisa Flynn, a mother of two young boys, never relished having her children photographed. For her, birth announcements and holiday portraits meant either spending a small fortune for a professional photographer who didn't cater to colicky clientele or settling for cheesy props and fuzzy blue backdrops at the mall portrait studio.

In our previous column, we covered the first two elements of security and loss prevention when setting up a new business: site selection and employee screening. This issue we look at alarm systems.

Anil Yadav knows what it's like to work his way to the top of the food chain. In 1984, he was a fry cook at a California Jack in the Box, a part-time job intended to help pay his expenses while attending college. Within 18 months he was manager, and after five years had bought his own restaurant. He never quite finished that engineering degree, but today he owns and operates 78 Jack in the Box locations, along with 16 Denny's restaurants.

Seventy-year-old Kelly White waited a long time before exploring the world of franchising. In fact, he came out of retirement at age 66 to open his HoneyBaked Ham store in Silverdale, Wash. "Retirement was just too boring for us," says White, referring to himself and his wife Sue. Together they manage the store and a staff of eight part-time and full-time employees. White's hands-on style and love of running the business have served him well. That's probably because he founded and operated his own construction company for 25 years, much of that while concurrently running an apple orchard.

Only 7 percent of respondents to Franchise Update's Annual Franchise Development Report said they are exceeding their 2008 goals. Another twenty-one percent said they were meeting their goals. 72 percent of those responding said they were falling below their sales goals for the year.

For more than a decade now, has been carefully monitoring the radar screen, gathering information on franchise lead generation and sales.

This article from 2008 could almost be written today. Learn how the more things change, the more they stay the same (except for Covid, of course).

David Ostrowe is a man on a mission--or 20. First, he says he's really working hard to be a great dad. "It's important to me to be the 'Jolly Green Giant' to my daughter, so I'm really working at it," he says.

As the credit crisis and the economic downturn begin to bite on Main Street America, restaurant row is in for a shake-up. For the first time in nearly two decades, the $550 billion restaurant industry has suffered stagnant sales this year, creating painful cash-flow problems for restaurateurs who can't get credit lines to cover investment and operating costs even as food and labor costs have risen sharply. That's made it harder for chains and independent eateries alike to upgrade equipment, hire new staff and renovate facilities. "The credit crisis is having a devastating effect on nearly every segment of the industry," says Aaron Allen, CEO of the Quantified Marketing Group, an international restaurant-consulting firm. "This is the death knell for a number of restaurant chains."

Reciprocity Restaurant Group President Lyndon Johnson good-naturedly lets new acquaintances have a little fun with his name. That's because he's fine with his name. "I can think of a lot worse people to share a name with," he says.

It is a quiet Saturday morning. If you are the average American, the downturn in the economy has started you to think about how it will impact your career and the opportunities for your children as they enter the workforce. Articles about Enron and Tyco and Global Crossing and other corporate scandals abound and some of the most respected brand names internationally are talking about layoffs and bankruptcy.

When Steve Foltz graduated from Eastern Oregon University in 1985 he thought he might be interested in city or government work. To bide his time and help pay bills while he was interviewing for jobs during the day, he took a night job at Rax Restaurant in Portland.

The franchising continues to grow, not only in size, but complexity—and in recent years, a huge part of that is attributable to multiunit, multi-concept franchising. Today one of every two franchise operators has more than one location. And really, why not? If the cookie-cutter approach works in one location it will most likely work in another, and another. In fact it really boils down to a simple numbers game: the more sales and revenue generated, the more profit potential there is.

Florida-based businessman Peter Economys and New York entrepreneur Rob Tobias have a very special talent important to area developers: they're champion multi-taskers. But the concentration and mental agility necessary for the success of any area developer is doubly important for them--because each oversees multiple concepts.

John Prince has done a lot in his 66 years. He's been a radio talk show host, reporter, stockbroker, and even ran a small hot dog and soup stand. He's worked at SmithBarney, Citibank, been a multi-concept owner, and even started his own franchise brand (more on that later). He's seen franchising from more than both sides now.

Unfortunately, many franchisors flounder in direct-response recruitment advertising. Typically, their development efforts focus on improving their sales and media sources, with minimal attention paid to increasing ad performance.