Franchising USA - Food Supplement, Pt. 2 - December 2013

FOOD FRANCHISES Page 27

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A T a st e o f

December 2013

part II

taco bell Tools for Owning a

Restaurant Franchise Wingstop:

6 0 0 S tr o n g a n d Gr o w i n g Franchising USA

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what’s new!

Authentic Appeal Creating Restaurant Investor Zeal Le Duff America Announces Strategic U.S. Expansion Plans for Café-Bakery Concepts, Bruegger’s Bagels and la Madeleine The world’s second largest restaurant company in the café-bakery sector has set the stage for its premier U.S. brands to significantly expand their franchise footprint during 2014 and beyond.

Groupe Le Duff SA and its North American’s subsidiary, Le Duff America, Inc., are creating dynamic growth opportunities for Brioche Doree, Bruegger’s Bagels and la Madeleine.

The brands have initiated newly formed franchise strategies designed to meet the demand of today’s discerning restaurant operators/investors seeking to team with concepts that have earned undeniable consumer appeal.

“There’s little debating that momentum is on our side. We’ve created a rock solid growth strategy to accompany the remarkable performance of our bakeries,” said Paul Carolan, chief development officer for Le Duff America, Inc. and a

proven restaurant industry leader who recently joined the company to head franchise and licensing. “Our ability to raise the bar in everything we do across both brands -- food, operations and design -- while differentiating ourselves in the crowded fast casual sector, puts us in a great position.”

For more information: Website: www.groupeleduff.com Email: pcarolan@leduffamerica.com

Brioche Doree Debuts in U.S. in NonTraditional Venues The authentic French café bakery brand initiated a licensing growth strategy in 2013 that significantly increased its North American presence for 2013 and the years ahead.

The focal point of the strategy to open new bakeries centers in non-traditional venues such as airports, universities and healthcare.

Brioche Dorée has a rich tradition as a popular, Parisian-style and urban café bakery. Dating back more than 30 years, there are more than 600 bakeries in operation throughout Europe and Asia. North America presents the brand with growth opportunities unlike anywhere else in the world.

“We’ve only begun to scratch the surface,” said Tina TooleWelch, senior director of NTV business development for Le Duff America, Inc. “Dining management groups want concepts that offer a unique experience…brands that are ahead of the curve and are relevant to today’s consumers. Brioche Dorée is different. We prepare and bake our gourmet breads, pastries, soups, salads and sandwiches on site, right in front of our guests.”

With more than 30 bakeries currently in the United States and Canada, Brioche Dorée menu offerings range from espresso-based coffees and croissant breakfast sandwiches to quiches, specialty

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crêpes and French-inspired desserts. The menu options and aura of the brand intend to re-create the French, street side café, but

in a modern, well-appointed environment that envelops all of the senses.

For more information: Website: www.briochedoree.us/

la Madeleine Continuing Success in Franchising Coming off an impressive first year of its franchising program, la Madeleine has pinpointed 2014 as another milestone timeframe.

The French-inspired bakery café brand, which has built a loyal following and fan base throughout its 30-year history in its core Texas, Mid-Atlantic and Southeast markets, continued its expansion into non-traditional venues with the addition of several airport locations, both kiosk and full-service.

Additionally, the strategic course it has charted to expand into high-profile U.S. markets includes awarding development deals to multi-unit, multi-brand restaurant ownership groups eager to enhance their portfolios with a concept ripe for growth.

“We differentiate ourselves in the bakery

café segment with a warm, come and stay environment (4,500 square feet and the brand’s signature fireplace), and a flavor profile that breaks though the monotony of our category,” said Darren Bothe, senior director of franchise development for la Madeleine. “The warm, authentic French bakery café feel creates an environment that is unlike any other in the segment.”

These distinctions come with attractive operational benefits, including consistent

customer traffic throughout the day (14 percent breakfast, 43 percent lunch, 43

percent snack and dinner). la Madeleine’s average unit sales volume is $2.1 million

(17 percent EBITDA), with a $1.1 million build out, figures that can compete with the segment’s largest brands.

For more information: Website: www.lamadeleine.com Email: DBothe@lamadeleine.com

Bruegger’s Bagels to Increase Presence in Core Markets For several years running, Bruegger’s Bagels has increased comparable-store sales and transaction count. The result…a current average unit volume (AUV) at franchise restaurants of more than $717,000 and EBITDA of 17 percent. With build out costs of $450,000 to $500,000, the brand provides operators with a strong sales-to-investment ratio.

The extraordinary performance of Bruegger’s Bagels bakeries is at the heart of the brand’s 2014 growth plans. A strong increase in new bakeries is expected in top-tier markets where operations are ongoing in states such as Colorado, Illinois, Kansas, Michigan and Tennessee, among others. Taken in sum, Bruegger’s Bagels projects opening more than 100 new bakeries during the next five years.

For more information: Website: www.brueggers.com

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Food for Thought: Welcome to The Food Supplement, Part 2 As I discussed in part one of the food supplement series, it’s true that often times when someone hears the word “franchise” the first thing that comes to mind is food, and reasonably so!

With thousands upon thousands of food franchises in many different shapes and sizes, the options are endless.

From fast food monsters to fine dining gems, the diversity in food franchises is just as diverse as the food itself. Seeing as food is a major part of every culture, it’s simple to see why there is such a variety in the various types of food franchises available today. So if food is your passion and you’re looking to start a career in it, you’ve chosen the right industry.

To give you a bit of history on how food franchises came to be, the concept became popular in the mid-1900s with the dawn of the baby boomers. This was around the same time that people began moving to the suburbs. Lacking restaurants in these remote areas, fast food chains began moving outside of the cities to develop in the newly populated areas- and thus, food franchises were born.

While it may seem like an easy win to invest in a food franchise considering society’s universal love for food and the vast number of restaurants available, it’s

important to consider what type of food franchise is first, of interest to yourself, and second, going to thrive in your area.

Just because you think it’d be great to have an all-you-can-eat Asian restaurant in the middle of Little Italy, or a Vegan Bistro in rural Texas, doesn’t mean the market is right.

Nonetheless, if you find a niche and the right location there are some wonderful advantages to owning a food franchise, the first being that your customers come to you. Also, since food franchises have been around for over 60 years, many times multi-unit companies will have a track record available detailing their highs and lows. Through due diligence it should be easy to see if the business you are considering investing in is a winning one, or if your dream job is likely going to follow suite of the seventeen predecessors that have been there, done that… and it didn’t work. Lucky for you we live in a transparent economy and it’s become easier to determine not only what type of restaurant will work and where, but also

“You’re the new kid on the block and if you’re not giving your potential customers a reason to leave their favorite burger joint to try yours, how do you expect to generate business?”

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“If you want to buy a pizza place, make sure it serves gluten-free, or if you’re thinking about a frozen yogurt shop, why not look into a DIY concept.” what consumers are looking for when dining out.

Taking a look at some of the different kinds of food franchises on the market today, these can be broken down into four general categories: fast food (quick service), casual dining, fine dining, and mobile. Different types of food, customer bases, atmospheres, and hours of operation can then break down these categories further.

For example, quick service food franchises can include anything from the 24-hour corporate monsters that clutter highways and convenience stores selling taquitos, to your morning coffee shop or favorite deli market. Typically serving foods such as burgers, pizzas, and sandwiches, these franchises can then be broken down further into niche groups such as takeout, drive thru or serve yourself. To paint the picture further for you, casual-dining franchises could be considered anything from a local sports bar, to seat-yourself diner, while fine dining is usually associated with champagne glasses and hefty bills.

A popular category in the food industry is mobile food franchises. These booths or trucks may opt to serve the standard fries or shawarmas on a busy street corner, or perhaps they choose to set up shop in central park, serving pretzels or bibimbap. A rising trend in the mobile sector is food kiosks. Found in shopping centers, hospitals and airports, while many franchises refer to these locations as “nontraditional” units, the flexibility and ease of operating this kind of franchise has its benefits.

Another hot trend in the food industry is healthy choice options. While the glutenfree fad has been around for a while, more and more businesses are picking up on the rising craze of healthy eating and offering products with fewer calories, less fat and lower sodium. With GMO-free

foods taking the spotlight most recently, these coincide with the popular trend of eating organic and whole grain foods, a movement that holds great customer appeal.

While some consumers don’t think twice about what’s in their food, the notion of knowing what you’re consuming and where it came from is becoming more and more commonplace. Jumping on board with this trend are some of the world’s biggest food franchises. Seeking to appeal to the growing consumer demand for more humanely produced fare, in doing so these company are committing to serving food such as eggs and pork from cage-free chickens and pigs. Although the free-range movement may not be a new trend, it is most definitely headline worthy in the food franchise world.

Food franchise categories and trends may sound straightforward, but there are many types of businesses that can fit into several of these depending on their product and operations. Catering companies for example, or table service coffee shops, where do these fit in? To complicate the matter even further, these categories can overlap. For example, the concept of fusion menus featuring dishes that marries two or more ingredients from various cuisines to create a new dish is exploding across North America. Or, as recognized by Forbes, the category of fast-casual niche restaurants is on the rise.

The ideal situation, and perhaps recipe

for success, is to choose a category that not only suites your needs and your markets needs, but also serves a unique niche or caters to a particular trend. This may sound like a mission but in today’s evolving society niches and trends can be found from street corner to street corner. If you want to buy a pizza place, make sure it serves gluten-free, or if you’re thinking about a frozen yogurt shop, why not look into a DIY concept. These tailored franchises may seem tedious and over zealous but how are you going to stand out in a hungry metro area if you don’t offer something different, something special.

Yes, you could buy into a monster chain with a proven success rate, but if you don’t have the means in which to buy the billion-dollar-brand, what is your plan?

After all, you’re the new kid on the block and if you’re not giving your potential customers a reason to leave their favorite burger joint to try yours, how do you expect to generate business?

At the end of the day, the most important thing to be sure of before you sign the papers and choose your site, is that you are happy. Asides from investing a large sum of money into your new business, you’re also going to be investing your time, hard work and dedication to the brand. Make sure this is what you want to do, because the saying goes, “Money can’t buy you happiness.”

Jessica Spoto Editor, Franchising USA

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COV ER STO RY

A Taste of Taco Bell “The new products are well being received, we’re developing new restaurants, sales are up; all in all it’s a phenomenal time to join the team!”

The nation’s leading Mexican-inspired quickservice restaurant (QSR), Taco Bell serves made-to-order and customizable tacos, burritos, quesadillas, nachos, and other specialties like Doritos Locos Tacos to 36 million customers each week.

Founded in 1962 in Downey, CA by Glen Bell, a World War II Marine Corps. veteran, Taco Bell Corp. is a subsidiary of Yum! Brands, Inc. Today Taco Bell has nearly 6000 restaurants in the United

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States and sells more than two billion tacos and one billion burritos each year. Franchising since 1964, Taco Bell currently has more than 350 restaurant franchise organizations and is now looking to bring its innovative Mexican food to consumers in new markets throughout the country. Announcing a ten-year growth plan to add 2000 new restaurants, Taco Bell will create an estimated 100,000 jobs nationwide.

Seeking new franchisees to join the team, Taco Bell franchisees must be brand builders, interested in bettering the brand, contributing ideas and being innovative; good operators, efficient with running their store and satisfying customers; and developers, willing to take and tackle development in a big way.

Dedicated to its ‘Live Más’ philosophy, which includes giving back to the community, franchisees should embody such beliefs and be willing to develop and expand the brand. “We’re looking for candidates with multi-unit QSR

experience,” says Sean Reaves, Senior Manager of Franchise Recruiting and Development. Franchisees must possess excellent customer service skills, an energetic personality, entrepreneurial spirit and a devotion to their co-workers.

The ideal Taco Bell franchise candidate is also well capitalized or may be an individual with high net worth who is interested in being paired with someone with operational expertise. The minimum financial requirement to become a Taco Bell Mexican restaurant franchisee in the United States is $1.5 million net worth and $750,000 in liquid assets.

Interested candidates can visit tacobellfranchises.com to learn about franchising opportunities and complete the application form. A Taco Bell team member will then contact the candidate, at which point they will be required to provide background information and undergo a financial review. Candidates will then be interviewed in the field to ensure their interests in development match Taco Bell’s expansion strategy.

“Our franchise business operations team help develop and manage the business throughout different stages and growth.”

Lastly, they will visit the Restaurant Support Center (RSC) to meet with the franchise department and determine a match in ‘Live Más’ qualities.

Offering ongoing quality training and support, Taco Bell believes these steps to be the foundation for building a successful restaurant franchise business.

As franchisees enter the Taco Bell franchise system, they will focus on four primary areas of emphasis: building their restaurant, building their team, setting up a strong start for the restaurant franchise and operational excellence. The training program has been designed into two parts. A one-week session at the RSC for the Primary Owner and eight weeks of training for the Principle Operator. The Principle Operator training consists of in-restaurant, web-based, and classroom training, and is taught by a certified Taco Bell training instructor in a certified Taco Bell training restaurant.

Once training is complete, Taco Bell has a system in place to assist with site selection, as well as internal programs to help franchisees build their restaurant.

Believers that ongoing support is necessary to succeed, Taco Bell also provides coaching, recognition and continuous backing for its franchisees.

“The real strength of Taco Bell is our extensive experience with operations.

Our franchise business operations team help develop and manage the business throughout different stages and growth,” says Nicolas Boudet, Vice President of US Development and Franchising at Taco Bell.

Taco Bell’s newest development is the Starting Bell program. A weeklong training course for new franchise owners to become indoctrinated in the brand, Starting Bell captures the essence of how to be a successful franchisee while paying respects to the company’s humble beginning and traditional tacos. The perfect means for new teams to learn the company’s values, passion, and get a taste of what being a Taco Bell franchisee entails, this program also allows franchisees to meet one on one with executive leadership members, creating an open door environment. “One of the greatest qualities of the Taco Bell brand is how accessible the senior team are to franchisees,” Boudet says. “The team is very hands on, and in-tune to what’s happening on the ground. This makes a difference with the brand as there is no separation of thought. Executives are able to see what’s coming next, what needs to be fixed, and able to act and react very quickly.”

Taco Bell’s strong culture is largely due to the genuine relationships between franchisor and franchisees. “The

transparency in the relationships with franchisees is the company’s advantage in the industry,” Boudet says. “We’re open to honest, healthy debate and engagement, and we help our franchisees go through any challenges.” Taco Bell’s strong national and international brand and known products are also key advantages to being a Taco Bell franchisee. Other benefits include; a proven operating system, access to the United Foodservice Purchasing Cooperative (UFPC), and a peer network of franchisees, of which more 35 percent of them have 25 years experience with the brand. “We are the leading Mexican QSR in the world,” Boudet says. Taco Bell was also recently awarded Marketer Of The Year, demonstrating the company’s ability to attract consumer attention with the iconic, re-energized brand.

Continuing to build relationships with consumers and help them Live Más, Taco Bell is dedicated to giving back to the community and keeping connected with its customers. “We feel that we hit the mark when it comes to engaging customers and talking their language. We understand what they want, and we provide the product while also sharing our values,” Boudet says. Pushing to elevate the Taco Bell experience, the brand is committed to providing a compelling encounter that will keep customers coming back for more.

With ambitious growth goals Taco Bell is looking for the best of the best to join the team, and now is a great time to get on board with the brand. “We’re at a point where everything is resonating with consumers,” Reaves says. “The new products are well being received, we’re developing new restaurants, sales are up; all in all it’s a phenomenal time to join the team!”

For more information: Website: www.tacobellfranchises.com

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Lawrence Eade, CEO of Wok Box

Necessary Tools

For Owning a Restaurant Look In The Mirror Being honest with oneself on what is involved in operating a restaurant, especially in new markets or with a newer less established brand, is a critical first step in the evaluation process of whether to buy a franchise restaurant or not.

The largest variable to the success of a restaurant business is the operator. A great operator of the business can overcome mediocre location and food offerings nine times out of 10. A prospective franchisee needs to be realistic with their abilities, look objectively at their strengths and weaknesses, and come to an understanding that they have what it takes.

Two questions we always ask our potential franchisees are: • Are you prepared to work 60 to 80 hours a week for months on end to get the business on its feet?

• Can you do this while maintaining a positive attitude to lead your staff and give your customers the best experience in your restaurant?

Ask any successful owner of a restaurant and they will nod their head that answering with an unqualified ‘yes’ to these questions is necessary to be successful in our industry.

So You Want to Buy A Restaurant Franchise?

We hear this story all the time. These

You like food. You like to cook food for your friends and family. There’s a great location in your neighborhood, and you want a career change – why not open a franchise restaurant?!

into the business but there are several

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motivators for potential franchisees

are often the impetus for them to jump considerations that one should put time and thought to when making the leap

from employed to self-employed in the restaurant industry.

Do You Have The Cash?

It seems like an answer that one should have well before they really start digging into the finer details of opening a business but in our experience that is not always the case. Every franchisor, whether in the restaurant industry or not, will require the franchisee to have approved financing

“A great operator of the business can overcome mediocre location and food offerings nine times out of 10.”

estaurant Franchise and capital in place before signing their franchise agreement. When looking at one’s financial position the following questions should be asked: • How does the potential business fit into your overall investment portfolio?

• How much equity are you able to put into the business?

• Are you relying on the business as a significant source of income for you and your family?

• How much debt do you believe your business can service after all operating expenses?

• If your business cannot pay its debt, do you have alternate income to help pay the debt?

• Are you willing to sacrifice your current lifestyle if your business requires

additional funding from you?

A business is a risky venture, there are no guarantees of results and profit. Looking at the worst-case scenarios and what those situations may bring is something many potential franchisees fail to do.

They buy into the up-side stories and imagine themselves becoming wealthy quickly. Making money is the goal of each and every business owner and properly evaluating the financial risks involved will allow one to be successful.

For example if a potential franchisee is 50 years old and is putting all their retirement savings into the business the risk for them becomes even greater. If they are going to be wholly reliant on the business to pay their lifestyle it is again riskier. Conversely if a potential franchisee has alternate income sources (spouses income, investment or rental properties

Lawrence Eade

that pay dividends), and is able to fund the restaurant capital with a portion of their savings their risk is reduced. Remember no one can predict exactly how a business will perform so understanding the downside risk is very important.

Passion For The Brand Do you really like the product you will be serving? Every business owner goes into business to make money first and foremost but it becomes much easier to achieve that end goal if you love what you do. In the restaurant industry if you do not believe whole-heartedly in the product you are serving your guests they will notice.

Having conviction about the products and food your restaurant puts out is critical.

A potential franchisee cannot just go into the business because they think it is a moneymaker, they have to love the food and the brand they are representing.

What Does The Franchisor Offer For Support?

Buying a franchise goes beyond serving a recognizable product, having standardized systems, and marketing support in driving ones business. Having support past the basic systems manual will significantly reduce the risk of opening a business and will allow a franchisee to focus on the operation, provide great customer experience, and ultimately drive the profitability of the business. I would encourage franchisees to look at these areas of the franchisor’s support offering

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Lawrence Eade, CEO of Wok Box

“A potential franchisee cannot just go into the business because they think it is a moneymaker, they have to love the food and the brand they are representing.” a training store or do they train you in another franchisees restaurant? Does everyone pass their training or do they stop some franchisees from opening because they don’t pass training?

Training is critical to a franchisee’s success and the longevity and future of the brand. Ask other franchisees in the system how their training experience was and what could be improved on by the franchisor.

Franchisees should be excited to join a brand and open their own business. They should not let this excitement cloud their objectivity and decision making process.

Giving proper consideration to the aforementioned areas will not guarantee success or eliminate the risk involved in a new business but it certainly will allow a potential purchaser to be more confident in their ultimate decision.

when considering a business: 1) Location Selection: Each franchisee comes to me with a site already in mind and it is understandable why – when they envision themselves opening the store they have to have a place in mind! A franchisor intimately knows what each premise needs to have to properly open their brand and to keep construction and leasing costs in line with their projections. Furthermore because of the relationships that a franchisor likely has within the real estate community they are able to negotiate stronger leasing terms and understand the demographics of markets in a manner that is better than

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the individual franchisee. A franchisor should open up these strengths to each franchisee as a part of their support.

2) Construction Support: You want to become a restaurant owner not a construction expert. Franchisors often provide turnkey builds of their restaurants for franchisees to take this workload off the shoulders of the franchisee. At the very least a franchisor should be involved in the design and drawing process and have an open door for ones contractor when they have questions on the build process.

3) Training: How long is training?

Where is it held? Does corporate have

Lawrence Eade developed great interest in the restaurant industry at a young age when he worked at a national fast-food restaurant chain in Red Deer, Alberta.

While earning a Bachelor of Commerce from the University of Alberta, he spent evenings working at a local pub where he gained the valuable business experience that is needed to operate restaurants effectively and efficiently.

Upon graduation, he spent two years working as an accountant for KPMG in Edmonton, Alberta, where he earned his Chartered Accountant designation.

Since joining the Wok Box team, Lawrence has provided leadership and decision-making to grow the brand from three locations in Canada to over 75 franchises globally.

For more information: Website: www.wokbox.ca Email: lawrence@wokbox.ca Phone: 778-545-0233

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A MST ER DA M FA L A FELSHO P

Amsterdam Falafelshop: Feeding Franchisees A Winning Concept

Top-it-Yourself Falafel Shop with Amsterdam vibe and cult following kicks franchising into high gear; announces new financing program to support franchise growth.

It’s 3 a.m. and you have an insatiable craving. Your stomach is turning and the room begins to spin. You’ve reached your limit and need relief.

Chances are you’ve got an extreme case of munchies after a long night out…OR, if you’re a multi-unit restaurant operator, the instability of your portfolio has overcome you with anxiety and you’re in need of a high-performing concept.

There’s good news for both bar crawlers and restless restaurateurs. Amsterdam Falafelshop, which has turned fresh falafel into an around the clock sensation in Washington D.C.’s famed Adams Morgan neighborhood, has announced a growth strategy that will satisfy the appetites of the tipsy…as well as talented entrepreneurs.

The renowned top-it-yourself falafel shop with a vibe, culture and flavor that commands a global fan base is moving forward with an aggressive U.S. franchise growth plan calling for expansion into select urban centers where the brand can maintain its originality among a diverse collection of consumers. With two franchise shops currently operating in Boston and Annapolis, an additional four shops are in development in the D.C. area and another four in Boston. Plus, the brand just inked an agreement to open in

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the Dallas/Fort Worth market and in Salt Lake City.

“We created a movement in D.C. that reflects our quirkiness, and we’re incredibly excited about extending it to other great American cities,” said Arianne Bennett, co-founder and CEO of Amsterdam Falafelshop. “You will not find a restaurant concept with the food and environment that we offer, and that’s why we have fans around the world.

We’ve done our homework and it is clear that restaurant franchise investors are jonesing for what we’re cooking.”

Launched in 2004, Amsterdam Falafelshop has become the darling of Washington, D.C., consistently topping best-food lists, receiving widespread food-critic acclaim, and winning over the hearts of customers. In addition to serving fresh-made falafel sandwiches and Dutchstyle fries [“frieten”], the shops offer nearly two-dozen toppings for patrons to customize their falafel.

Focused franchise growth plans call for expansion into key U.S. areas throughout the Northeast, Eastern Seaboard, Midwest and Southeast. Target markets include Atlanta, the Carolinas, Miami, the New York metro area, Philadelphia, Richmond, and Tampa. Amsterdam Falafelshop has also pinpointed Chicago, Ohio, and major metro markets in Texas.

Amsterdam Falafelshop is targeting multi-unit franchise developers that have experience in restaurant ownership and a desire to break into a fast-growing

franchise at the ground level. Similarly, the brand will award franchise opportunities to qualified, transitioning professionals who are willing to follow the concept’s proven business model. All candidates must embrace the brand’s commitment to community and share the progressive spirit that embodies Amsterdam Falafelshop.

Beyond consumer appeal there are additional factors drawing franchise investors to Amsterdam Falafelshop. In particular the concept’s low overhead and simple operating model. Shops are housed in fewer square feet than typical fast casual brands, saving franchise owners on rent and build-out expenses.

Amsterdam Falafelshop franchise shops are independently owned and operated.

Individuals interested in owning a location need between $365,000 and $493,000 in working capital, which includes the $29,500 franchise fee.

For more information: Website: www.Falafelshop.com

Wingstop:

60 0 Strong and Growing Created by an aspiring entrepreneur in 1994, Wingstop quickly expanded from a small neighborhood restaurant in the suburbs of Dallas, Texas, into a worldwide fast-casual dining experience.

With a unique menu, the focus is on chicken wings being the “center-of-theplate” food item.

With 600 locations in 30 states and internationally, it is how Wingstop delivers the dine-in and carryout experience for a commuter-type individual that has driven much of the company’s success. The “Wing Experts” menu features classic and boneless wings with 10 intense flavors.

Wingstop wings are always cooked to order, sauced, tossed and served with a variety of house-made sides including award-winning fresh-cut seasoned fries.

More than 75 percent of store sales are carryout, allowing the Wingstop concept to lower operational and development costs. Each restaurant is designed to create a fun, comfortable dining atmosphere for customers and for the ease of operations by the franchisee. This has resulted in Wingstop being one of the fastest-growing franchises that appeals to both multi-unit and single-unit operators.

Beyond the made-to-order wings, it is the simple operating platform that has led the brand to adding new stores at a rate of 20 percent per year. To date, 95 percent of Wingstop restaurants are franchised and on average, a restaurant functioning

within the traditional layout produces a $900,000 average unit volume (AUV)—a performance barometer that continues to attract franchisees looking to own their own business.

Approaching 2014 and 10-plus years of same store sales growth, Wingstop continues its successful journey. This type of financial and developmental success is largely attributed to a strategic business model and the Wingstop Franchise Program that supports franchisees in the following areas: • Hands-on orientation that focuses on restaurant operations • Administration and customer relations

• Readily available on-going marketing and operations guidance

Recently, Wingstop further kicked-off its expansion efforts with the opening of its 600th location in the Washington, D.C.

area -an identified 2014 growth market.

With a momentum of opening three

stores a week and closing the year with 65

restaurant openings in new and established markets, Wingstop is on track to reach 1,000 stores in the coming years.

In preparation for 2014, Wingstop is now offering franchise opportunities in the

following markets: Baltimore, Maryland;

New York City; Minneapolis; Washington,

• Professional architectural, design and engineering services for restaurants

D.C.; Miami-Fort Lauderdale; and

• Restaurant launching and operations support

For more information:

Cincinnati, Ohio

www.wingstopfranchise.com.

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W i ngsto p

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Jason Power and Lynne Shelton, Shelton & Power, LLC

Quick Service Restaurant

Doesn’t Always Mean Quick Profits Franchising USA

“The QSR industry accounts for 37 percent of all employment in the franchise industry. In 2013 there is over three million employees in QSR’s, and it is growing every year, quite substantially.”

It is not surprising that when most people think of franchising they immediately jump to thoughts of McDonalds, Burger King and Subway.

These quick service restaurants, or QSR style franchises have a big footprint in not only the restaurant market, but the franchise market as a whole. Although the QSR industry is slated to rake in over $206 billion dollars in 2013, an increase of over 5.2 percent, what many prospective franchisees do not realize is that these and other restaurant franchises are not always automatic moneymakers. They take effort and the right person to make them work.

For years, restaurant franchises have been the number one growing sector within franchising and for good reason. There is money to be made in quick service restaurants, but there is also a lot of work and energy that must go in to the restaurant to make it a profit center.

QSR franchises require the owner/ operator to have great people skills and a staff with equally excellent abilities to be successful. Any reader can relate to a bad experience at a QSR restaurant where they encountered an employee who was not right for their position. A time when an employee involved in customer service could not make the experience an enjoyable one, and instead ruined what you had hoped would be a good meal out with friends or family.

A QSR franchise owner must also understand that a franchise in the restaurant industry can be costly. With many restaurant franchises being

standalone buildings, the costs can be high for the land, build out and architectural fees. In many instances costs will surpass $800,000. Along with higher fees to start a QSR restaurant, the fees for the food served can be costly as well, depending on the QSR, their vendor’s location and shipping methods, and the availability of closer or less expensive supplier options in a franchises location.

One benefit to buying a QSR franchise is that financing can be easier to obtain.

Banks and other lending sources are familiar with restaurants, they understand the costs associated and the inventory, furniture, fixtures, and equipment that are available as collateral. This knowledge means that it is easier for them to justify financing for the business over that of many service based businesses where tangible assets are limited, and intangible assets are harder to justify.

When buying a quick service restaurant, employees are an issue that can be very stressful. The QSR industry accounts for 37 percent of all employment in the franchise industry. In 2013 there is over three million employees in QSR’s, and it is growing every year, quite substantially.

Just within the last year the employment rate grew by 2.2 percent for owners. Not

only must you consider payroll, overtime, and whether to offer paid time off, but you also have to consider health insurance, workers compensation, and scheduling.

One of the hardest juggling acts reported by QSR owners and managers is determining work hours for people dealing with family lives and many times school schedules. With most quick service restaurants hiring younger employees who will work for less than some of their older counterparts, the turnover in a QSR can be quite high when school starts or during seasonal changes. Depending on the QSR franchise purchased, employees may be required to attend some level of training with the franchisor. This training can greatly hinder profits if training is constantly be required due to high turnover of various employees. This is why it is imperative to find employees who have long-term goals with the restaurant or can be groomed for management positions with higher salaries as incentive to stay within the QSR business longer.

Regardless of whether you are the first franchisee for your particular brand in your city or you are just one of the many franchise owners in the region, remember that you are buying the brand, and the goodwill associated with it.

Branding is what has led businesses, not

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Jason Power and Lynne Shelton, Shelton & Power, LLC

just restaurants, worldwide to experience high profits. Branding teaches people to know what to expect when buying that businesses product or service. This is the crux of what a franchise is all about. When someone walks into a Subway restaurant in Austin, TX they know that they will experience the same smells, flavors, colors, and general atmosphere that they are used to when they go to a Subway in any other city. This branding is what has led many businesses to success because their customers know and rely on the fact that they will have an equally pleasant experience regardless of whether they are at the restaurant near their home or the same restaurant across the country.

The key to owning and operating a QSR franchise is to ensure that you have the skillset to handle multiple employees all housed within a small area, while still maintaining the proper customer service skills to gratify the customer and ensure that they will return. With most variations of quick service food types being saturated in the marketplace, a savvy franchise purchaser must ensure that when buying their QSR they will stand out from the competition. If your restaurant serves hamburgers, then you will have a lot of competition, but if you can differentiate your hamburger or your customer service from that of your competitors, in a positive way, then you can many times overcome the competition and make a name for yourself in the area.

With more and more people on the go and avoiding long lunches and dinners, quick service restaurants are filling a need for consumers everywhere. From 2012 to 2013, the QSR franchise industry grew by 1.7 percent, which brought their numbers up to over 153 thousand establishments just in the United States. In the last ten years the industry has continually grown and it does not seem to have a plateau planned in the near future. Profits may not come quick for the average franchisee, but for the willing entrepreneur, the long game may well be worth the investment of both time and money.

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“From 2012 to 2013, the QSR franchise industry grew by 1.7 percent, which brought their numbers up to over 153 thousand establishments just in the United States.�

Jason Power has been helping entrepreneurs review and negotiate franchise purchases since 2009. Jason is a regular speaker at the International Franchise Expo, West Coast Franchise Expo, Franchise Expo South and various other franchise expos where he gives tips on how to analyze and negotiate a franchise purchase. Jason is a senior attorney with Shelton & Power franchise law firm.

Lynne Shelton, Esq., is a Senior Partner over the Franchisor division

Jason Power

at Shelton & Power, LLC, a Franchise and Intellectual Property Law Firm; a Certified Franchise Executive; and has been involved in the franchising industry for over 20 years. Ms. Shelton is asked to guest speak to franchisors and franchisees at national and international franchise shows.

For more information: Website: www.SheltonPower.com Email: Franchising@SheltonPower.com Phone: 1-866-993-7262

Lynne Shelton

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