Top Franchisors Share Tips On Expanding Your Business

Many individuals who breathe and live entrepreneurship have faced, in one way or another, the enormous challenge of worrying about their lack of experience or resources. With majority of businesses reportedly failing in the first five years, many entrepreneurs are becoming too picky about the industry they intend to become part of. Without the right brand, the right know-how and the right support to back them up, many are convinced that starting up their own business may be a risk not worth taking.

Those who know better, however, turn to one of the fast-rising business sectors that analysts say is showing positive signs of recovering from the ill-effects of recession that nearly crippled it. Restaurant franchising is proving to be a highly viable option. Many entrepreneurs who have taken the risk by tying up with known brands are now enjoying their ventures that are rapidly transforming into extremely successful businesses.

The franchise arena has seen unprecedented growth over the past few years. The sector accounts for nearly 10 percent of new employments, or additional 8 million new jobs, as of 2013 alone. Experts were making positive projections for 2014, particularly pointing to the food industry, which was expected to expand more rapidly as franchisors ink contracts with the biggest franchisees.

In allowing prospective franchisees to use the recognition of their brand or business, restaurant franchisors are being exercising prudence. It’s a two-way investment street, after all, with both the franchisor and franchisee leveraging the current stature of an existing business.

True enough, Restaurant Finance Monitor revealed in a Monitor 200 report how the leading franchisees are looking at diversified brand portfolios to reach their growth targets. The report further stressed that that “the average franchisee among the 200 largest operators” raked in the total revenue of $143.5 million from their 109 locations last year.

According to the editor of Restaurant Finance Monitor, Jonathan Maze, the present scenario of restaurant franchisee consolidation and growth is exceptional. In fact, many of such restaurant franchisees have bigger business operations and therefore are making more profits than several restaurant brands.

Talking to Nation’s Restaurant News,the nation’s emerging franchisors tell all on how their expansions are significantly solidifying their place in the industry. Underscoring the importance of implementing the right systems, upholding the right values and stressing exclusivity, the famous food service and restaurant brands are drawing franchisees willing to forge multi-unit partnerships.

KeshAggarwal of Houston-based KK Group . . . inked an eight-unit development deal with nearly 100-unit Wing Zone . . . because [he] sensed the brand had the infrastructure as well as the temperament to support a large, sophisticated operator.

Michael Knobelock, owner of 47 Church’s Chicken and 21 Little Caesars outlets, agreed to buy two Captain D’s locations and build four more in Houston.

Elsewhere, 600-unit Rita’s Italian Ice announced . . . its largest area development deal in its history, a 75-store agreement with East Bay Ice Empire Inc., which includes as a partner Misty Young, owner of the Squeeze In diner chain in Nevada and author of “From Rags to Restaurants.”

Bar Louie, which has 79 units, recently signed a franchise operator of more than two dozen Subway locations to open six Bar Louie restaurants in the Chicago area.

Kansas City, Mo.-based Spin Neapolitan Pizza recently signed Canadian franchise operator Dee Jay’s, which has been in business for half a century and operates more than 50 locations of KFC, Taco Bell, Long John Silver’s and A&W in Canada and North and South Dakota. Dee Jay’s, a larger company than Spin, will open a minimum of five Spin locations in the Dakotas and Nebraska over the next six years.

Aziz Hashim, chief executive of Atlanta-based NRD Holdings, has a “5 P’s” process for evaluating possible brands to add to his portfolio of more than 50 Domino’s Pizza, Popeyes Louisiana Kitchen and Rally’s locations. The “product,” “people” and “profitability” aspects of his system are fairly self-explanatory, he said, but he spends a lot of time on the last two, “process” and “partnership.”

“When a brand crosses the bridge to being established, it’s exciting for multi-unit operators,” Hashim said. “For people like me, if we control a territory for a brand like that, it gives us a lot of flexibility to build out for the next few years.”

Photo by Martin Abegglen

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