Franchise Times October 2024

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UPFRONT

8 We check out three internationally inspired brands so you don’t have to, in FT Undercover

10 Church’s leans on new prototype, value positioning, in Behind the Sales By Megan Glenn

11 Nautical Bowls operators sue brand, plus more in FT Online

12 ‘An unbelievable ride’ at Jersey Mike’s By Joe Halpern

14 Big biz of weddings at Wed Society By Emilee Wentland

16 Multi-brand ‘zee adds what’s missing By Megan Glenn

18 Fleet Feet franchisees hit their stride By Laura Michaels

20 QSR operator finds growth in airports By Matthew Liedke

21 Larks chief wins with activity appeal, in The Upstart Megan Glenn

‘24 Volume 30 Issue 9

30: Crunch President Chequan Lewis 14: Wed Society founders Kami Huddleston, left, and Ashley Murphy 90: HTeaO CEO Justin Howe 20: Franchisee George Tinsley Sr. 92: Gaming at Sandbox VR

Cover photo by Daniel Motta

Franchise Times ranks the largest brands in franchising, in our exclusive annual research project.

Articles by Megan Glenn, Joe Halpern, Matthew Liedke, Laura Michaels and Emilee Wentland; Research by Matt Haskin and Michael Nelson

TOOLKIT

101 Rising insurance rates push telematics to forefront By Adam Wahlberg

INTERNATIONAL

105 PayMore takes electronics resale model to the U.K. By Laura Michaels

106 Franchise-friendly market in Ireland, reports Country Profile By Laura Michaels

NEWS & VIEWS

109 Tropical Smoothie operators add Another Broken Egg, in The Wire By Matthew Liedke

COLUMNISTS

115 Considering international expansion? Make plans to protect key IP overseas By Emilee Wentland

116 Consider these 4 points when selling during a contentious election season By Alicia Miller

117 Consumers: “QR codes still suck, your kids are annoying and we’re broke” By Nicholas Upton

IN EVERY ISSUE

6 First Things First

104 Scoreboard

112 Executive Ladder

118 Grab Bag

CORRECTION:

In the September 2024 issue of Franchise Times, a story titled “Six months of noteworthy M &A deals” incorrectly stated 40 percent of Subway’s total revenue in 2023 came from the company’s vendors that sell food and equipment to franchisees. Subway reported revenue increased 10.3 percent to $971.9 million last year; 40 percent of that growth came from the aforementioned vendors.

103: Economist and RFDC keynoter Dr. Pippa Malmgren 118: Massage Heights CEO Shane Evans 109: Another Broken Egg Cafe

Operators can gain key insights at RFDC, coming up November 11-13 in Las Vegas

By Laura Michaels

Franchise success must start with a strong model

I’ve done more than my share of presentations on franchising over the years, some on the state of the sector for industry groups, or for general business organizations on the considerations when choosing a franchise to buy. I’ll date myself here, but a national association for college bookstore owners once flew me to their annual meeting in Florida to talk about franchising. Seems the college kids were getting their books from a place called Amazon, and the bookstore owners were struggling to keep pace. The head of the association thought his store owners in the audience might want to pursue buying a franchise to mitigate their risk.

As entrepreneurs already, they knew this, but I still told them what I tell everyone looking at buying a franchise: You’ll be the first one in the morning to open the door, and the last one to lock up at night.

Take Nora Farhat, a franchisee of Mathnasium, British Swim School and other brands: “I think the biggest mistake people make going into business is that they’ll just hire out every position … I have to be the expert at my business to fully understand it and run it at a high quality,” she told Franchise Times for an article in this month’s issue. In the beginning, she even asked herself, “…did I really just quit a lucrative corporate job so I could go to work hundreds of hours a week?”

But since she opened her first franchise location in 2015, she’s enjoying success and looking to expand.

Then there are business partners Jorge Hernandez and Alvaro Garcia, who own 76 Jersey Mike’s units in southern California and 10 in Hawaii. They told Franchise Times Senior Writer Joe Halpern they flew into Hawaii when they opened their first store there because they couldn’t find employees—they had to work the store themselves. People weren’t familiar with the brand, so they had to stay and work there until the community learned more about them.

They are top operators in the system because, as Jersey Mike’s President Hoyt Jones said, “They are always in their stores encouraging their teams to focus on the fundamentals of the business.” Their average unit volumes are $1.4 million, and they have increased transactions by 3 percent this last year.

Crunch Fitness franchisee Tony Hartl knows that focusing on the basics helps attract and retain gym members. He told Joe Halpern it’s about keeping the parking lots clean, front desk attendants greeting gym members with a smile, and making sure the AC is working. He’s in the gyms, communicating with his managers to make sure the experience “is as good as it can be.”

Hartl is part of the larger story on the Crunch Fitness brand, which leads our coverage for the Franchise Times Top 400, the ranking of the largest 400-plus franchises in the nation based on worldwide sales. Crunch Fitness moved up 37 spots this year to No. 79, with systemwide sales of $957 million, a 23.3 percent year-over-year increase, according to Top 400 data. Crunch Fitness has 460 clubs worldwide.

Sure, franchisees have to work hard to be successful, but they need the right franchise model to do that. Chequan Lewis, who was named president in February, wants to increase profitability for franchise owners.

According to Lewis, it’s about lowering operating costs while at the same time giving the consumer more value. Six-unit franchisee Assaf Gal said the franchisor commits to branding and “is constantly innovat ing with new classes and bringing value to members. It’s been easier for me to grow the brand … because people know the name and what we offer.”

The Top 400 is lined with companies that focus on franchisee profitability. If all franchise brands would do that, they would be more successful. According to our columnist Alicia Miller, if you have a good model, you recruit franchise owners. If you don’t, you sell to them. Big difference.

Volume 30, Issue 9

Publisher/Vice President: Mary Jo Larson mlarson@franchisetimes.com

Associate Publisher Lucas Wagner lwagner@franchisetimes.com

Editor in Chief: Laura Michaels lmichaels@franchisetimes.com

Managing Editor: Emilee Wentland ewentland@franchisetimes.com

Senior Writers: Joe Halpern jhalpern@franchisetimes.com

Matthew Liedke mliedke@franchisetimes.com

Reporter: Megan Glenn mglenn@franchisetimes.com

Senior Graphic Designer: Joe Veen ads@franchisetimes.com

National Sales Director: Kevin Pietsch kpietsch@franchisetimes.com

Sales Support: Jenny Raines jraines@franchisetimes.com

Digital Marketing/Web Development: Adam Griepentrog adamg@franchisetimes.com

Raha Khan rkhan@franchisetimes.com

Sonia Franzen sfranzen@franchisetimes.com

Conference Services: Gayle Strawn Rachel Tegethoff Alie Leonard

Production Staff: Steve Hamburger, Manager Steve Schmidt

Accounting: Matt Haskin, Controller Jill Evans

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We check out three internationally inspired brands so you don’t have to

My ideal meals end with sauce-coated fingers. So when I opened my box of spicy chicken wings from Bb.q Chicken, the extra sauce at the bottom indicated this franchise would quickly become a favorite. My fellow wing-eater and I ordered the spicy galbi and Gangnam style sauces (an eight-pack runs $15). Spicy galbi’s sweet and spicy combination won me over and Gangnam style’s black pepper and garlic flavors were enticing. The Korean-born franchise has more than 2,500 units, most of which are outside the United States. Customers choose between a whole chicken, bone-in wings or boneless wings, which come in boxes of eight, 16 ($27.50) or 24 ($39.50). But wait, there’s more! I tried the kimchi fried rice ($12.95), a spicy and filling alternative to wings. The St. Paul, Minnesota, restaurant I visited was larger than expected, with tables and even a bar for in-house diners. The dining room was empty, though, on this Tuesday evening, but the K-pop music was enjoyable during the wait for my pickup order. The best part? The wings stayed crispy and hot during the 15-minute ride home.

The upshot: Bb.q’s Korean sauce flavors are a winner in my book. The prices run a little high, but the taste helps mitigate some of the sticker shock.

Food trucks and breweries are often a common pair, allowing customers to have some street food with their hoppy IPA. Spitz Mediterranean Street Food took that combo and put it into a brick-and-mortar restaurant. In addition to the multiple beers on tap, Spitz has a modern aesthetic and a hip, cool vibe that many breweries pride themselves on. At the same time, the food has a freshness and authenticity that a person would associate with street vendors. My gyro was made to order and full of flavor, while the pita bread tasted as though it was baked from scratch that day. The Spitz in Minneapolis is an inline unit, with a narrow space that could cause a bit of congestion in some areas. The operators make it work by ensuring there’s adequate seating space and room for customers to flow in and out. It shows that it’s a brand that can adapt to different types of spaces, and that’s also reflected in the franchise model. In its disclosure document, the typical size for a location is between 1,000 and 2,400 square feet.

The upshot: After tax and a tip, the total for the meal was just over $19. It’s a little high, but not too far off from other fast-casuals, and you get your money’s worth with the portions. —M.L.

The Mall of America houses several franchised snack concepts, but Sweet Paris Creperie and Café stands out as a worthwhile stop. As a café, it offers a cute setting to take a much-needed shopping break. With nearly 20 units open, the brand is all about crepes, which were brunch for this duo. Ingredients were clearly high quality, the whipped cream perfectly sweet without being overpowering and the crepe itself was chewy and light. Flavor and mouthfeel issues arose with the savory and breakfast crepes, however, as one was underseasoned and the other overcooked. Not inedible, but disappointing. The Nordic crepe, filled with smoked salmon and dill cream cheese, meanwhile, was a delight and had us wishing their was more of each ingredient packed in. The dessert lemon and sugar crepe was beautifully simple, lightly sour with crunchy sugar, so a solid two out of three. When paying nearly $15 per crepe, customers are less forgiving of product preparation issues, but I’d be willing to give Sweet Paris another try—if only to have an excuse to eat some Nutella.

The upshot: High quality ingredients were met with execution issues, but the overall experience and stellar sweet crepe options earn it a spot in the dining out rotation. —M.G.

From left, Bb.q’s chicken wings are saucy and tasty, Spitz serves up big portions and Sweet Paris has tasty sweet crepes, but savory options were lackluster.

Ever wonder how consumers feel about your franchise? Editorial staffers Laura Michaels, Joe Halpern, Megan Glenn, Matthew Liedke and Emilee Wentland check out three brands in a different genre each issue, and report back.

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Church’s leans on new prototype, value positioning

Church’s Texas Chicken is reemphasizing value to grow the franchise. Frank Costello, senior franchise executive, is one of many refocusing the brand’s image.

“One of the things that really separates Church’s Texas Chicken from everybody else

is the story itself and where it sits. It’s a value player,” said Costello. “And I think for a period of time, like any other evolution of a legacy brand, you sometimes lose focus on that.”

Founder George Church’s goal was to offer an easy and cheap meal to underserved communities. As fast-food giants compete in socalled “value wars,” the Church’s team has been drawing on that mission to amplify the brand’s positioning. Church’s has more than 1,500 global units, but its U.S. unit count has been declining in recent years, from 1,015 at the start of 2021 to 901 to end 2023.

“We’re not Chick-fil-A, and we’re not trying to be Chickfil-A,” said Costello. “It is about the clarity of the story, in reference to opportunity and the simplicity of the model versus other chicken players that are within the segment. They’re probably a little more complex.”

giving the brand a facelift through its “Blaze” concept, showing off new offerings via upgraded menus and tech at legacy locations. The brand provides a thorough Item 19 in its franchise disclosure document, giving franchisees a clear financial picture.

Frank Costello

The company introduced a smaller prototype with units at about 1,000 square feet. It’s also

These new models and updated looks allow for flexible unit placement. Renovated restaurants and new “Blaze” builds are performing well. Costello estimated roughly half of existing restaurants will be updated by the end of 2025.

Church’s is focused on development in markets that know the brand, such as its home state, Texas, as well as California and Nevada. Pushing the idea that Church’s offers affordable options, the team is looking to break into the northeast.

“The northeast is a huge area for us to potentially look at and grow as we re-emerge this brand,” said Costello. “The outlook is fantastic now.”

—Megan Glenn

NFLer invests in Little Caesars

Cam Jordan, the all-time sack leader for the New Orleans Saints and eight-time Pro Bowl defensive end, added another distinction to his resume in August: franchise owner. He joined franchisees Andrew Feghali and Michael Khalil in their acquisition of several Little Caesars restaurants in the Great Lakes region. The purchase brings Feghali’s total unit count in the brand to 53 as the founder and CEO of AMF Restaurants. “I have been a fan of Little Caesars pizza since my high school days, playing football at Chandler High in Arizona,” said Jordan. “As soon as they became an NFL sponsor, I knew I had to work with them.” After appearing in marketing campaigns and commercials for Little Caesars as part of the brand’s official NFL sponsorship, Jordan said it was earlier this summer that he began talking

with his manager, RKO Group CEO Rebecca Otto, about his interest in franchise opportunities. “And I wanted to start with Little Caesars,” Jordan said. —L.M.

KBP buys Sonic, KFC stores

KBP Brands grew its restaurant portfolio over the past two decades largely by acquiring underperforming restaurants. That was not the case this summer when the Kansasbased franchisee bought 41 KFCs in North Carolina and South Carolina from a pair of prominent restaurant groups. “The 13 KFCs we purchased in June were close to being on par with the national average in sales and the ones we purchased in July were high performing locations,” KBP founder and CEO Mike Kulp said. KBP also added a fourth brand, Sonic, with the acquisition of 85 units on the East Coast. —J.H.

Nautical Bowls operators sue

A smoothie bowl franchise is accused of breaking the “cardinal rule” of franchise sales by making financial performance representations not listed in its franchise disclosure document to prospective franchisees, among other unlawful practices. Franchisees accused Nautical Bowls of fraud, deception and violating state franchise practice acts in three lawsuits filed in December. The claims in all three cases state Nautical Bowls misrepresented or lied about sales expectations for the franchise. A suit filed in Minnesota by former franchisee Kirin Hawley states Nautical Bowls staff members told her “repeatedly” that she should anticipate 22 percent of gross sales as her bottom-line profit. Nautical Bowls, launched by Bryant and Rachel Amundson, fired CEO Peter Taunton in the fallout from the lawsuits.—E.W.

‘An unbelievable ride’ at Jersey Mike’s

With a tireless work ethic and a commitment to get the job done no matter what, Jorge Hernandez and Alvaro Garcia rose from humble beginnings to become two of the largest Jersey Mike’s franchisees.

Consider how far the California-based franchisees were willing to go for their business when, in 2017, they were unable to find employees to work at their first Jersey Mike’s in Honolulu. Instead of delaying the opening, they hopped on a plane, donned Jersey Mike’s shirts and prepared sandwiches for customers.

“Jersey Mike’s was an unknown brand in Hawaii at the time and we couldn’t find anyone who wanted to work for us for our life. So, we flew there and worked in the restaurant until we could find employees,” said Hernandez. “Once people came in and tasted the food, everything changed.” Hernandez, 54, and Garcia, 52, want their story told to inspire others. They own 86 Jersey Mike’s, with 76 in southern California and 10 in Hawaii. Their Pomona, California-based restaurant group, NISAMEX, added six restaurants in 2023 and seven so far this year.

Their growth is far from over. Four restaurants are under construction, with 20 in the pipeline. They expect to hit 100 units in the next two years.

“It’s been an unbelievable ride for us, and we’re not done. We’re always looking for new opportunities to grow our business,” said Hernandez, proudly pointing out the average unit volume for their restaurants was $1.4 million in 2023, with transactions increasing by 3 percent.

Hernandez and Garcia have come a long way since arriving to the United States, Hernandez from Mexico and Garcia from Nicaragua. They met when Hernandez was managing a Domino’s Pizza in Bell, California, in 1991, and a highly motivated Garcia showed up looking for work as a delivery driver.

“He was a few years younger than me and barely spoke English, but I saw something in him that reminded me of myself,” Hernandez said. “We were both immigrants and grew up in large families with strong mothers and fathers who weren’t around a lot. Like me, Alvaro also had this unbelievable work ethic. He was out of control. He wanted to deliver five pizzas at a time. He stayed until closing time even though he was in school and had to get up early the next day. An incredibly hard and dedicated worker.”

“Fast forward 34 years and we’re friends and business partners,” Hernandez said.

To help run their business, which they project will reach $86 million in sales this year with more than 1,500 employees, they have 13 district managers and two operations directors. Hernandez, who oversees operations, credited their business success with training staff well to provide top customer service, promoting their best employees and making invaluable community connections by donating to local charities. “My mom always told us we’re here to work hard, to earn money but to also contribute to this country,” Hernandez said.

Hernandez credited Garcia’s expertise in construction with a lot of their rapid growth.

“It’s a tough business but we enjoy it because we’ve got-

ten really good at acquiring and building restaurants and scaling them,” said Garcia, a general contractor by trade. “The work relationship I have with Jorge works because we know each other and trust each other.”

A turning point in their Jersey Mike’s operation, said Hernandez, was when they reached 40 restaurants in 2019 and their company needed a reset.

“I remember Alvaro and me looking at each other asking, ‘What now? Where do we go from here?’ We both felt like our company had kind of lost its way, not understanding what our mission and purpose was,” Hernandez said. “So, we had a retreat at Big Bear, California, with our district managers and operations people and together we came up with company mission statement that embraced the basics and prioritized great customer service.”

The contributions Hernandez and Garcia have made to the Jersey Mike’s system have not gone unnoticed. They were the first operators to launch in Hawaii and the first in the system to open on military bases in Hawaii and the contiguous United States.

“Alvaro and Jorge are phenomenal operators. It’s their focus on people development that separates them, elevating them to best in class,” said Hoyt Jones, president at Jersey Mike’s. “They are always in their stores encouraging their teams to focus on the fundamentals of our business.”

— Joe Halpern

Jorge Hernandez, left, and Alvaro Garcia are among the largest Jersey Mike’s franchisees with 76 restaurants in Southern California and 10 in Hawaii.

Big biz of weddings at Wed Society

Wondering about the local wedding trends in your area whilst planning for the big day? Look no further than one of Wed Society’s 11 territories, which publish area trends and reliable wedding vendors online and in an annual “Book of Weddings.”

Kami Huddleston and Ashley Murphy founded the company in 2007 after Huddleston experienced disappointment from one of her vendor selections. “I don’t have a wedding picture from my wedding day, just to hammer that one home,” Huddleston said. “We didn’t want anyone to have some of the pain points we had from our days.”

Murphy’s wedding was just two weeks after Huddleston’s—the pair were each other’s maids of honor— and they each struggled with the complexities of planning such large events, which on average require 26 vendors.

“People spend a lot of money investing in that day, but there really wasn’t anything that showcased what these vendors could do,” Murphy said. “We made some mistakes of our own along the way in planning, just because there really wasn’t a great resource in the marketplace.”

At the time, the resources now available, such as social media or blogs, weren’t as common. “We started blogging before blogging was a thing,” Huddleston said. They each invested $4,000 into the project initially, and Wed Society was live. “We sold enough advertising to actually pay for the magazine, which was great. You could say we broke even, which was a win for us. Then the phone started to ring. People wanted to be connected.”

Weddings are a huge industry in the United States. More than 2 million weddings take place in the country annually and, with an average cost of $30,119, that’s about $60 billion a year spent on weddings.

Now, the emphasis lies on social media and online, rather than print magazines, though each Wed Society territory still publishes an annual “Book of Weddings,” a coffee tablestyle book with photos from area weddings throughout the year. The issue highlights trends, vendors and venues in the region. Think of it like a high-end Pinterest Board.

Wed Society vets its vendors to ensure it’s not promoting unreliable businesses. The franchise uses a “Fit Test” that assesses each vendor on six criteria: client reviews, social media presence, talent, services offered, website professionalism and branding. Wed Society highlights the top third of vendors in each territory, “so the Fit Test is designed to help us identify those leading wedding vendors in each market,” said David Lewis, chief growth officer.

“Our owners serve as the heartbeat of the wedding industry in their local markets,” he continued. “Being at the center of it all, we keep a pulse on the vendor community and consistently hear about who is reliable, consistent and creative.” If a vendor is found to be unreliable, their Wed Society membership is revoked.

Wed Society started franchising in October 2023. This summer, the company closed its Series A funding at $5.78 million. “This Series A is really about growth capital, to build the back office and continue the acceleration,” Lewis said.

Franchisees are home-based and often working part time. About 85 percent of meetings are held virtually and each

territory requires two employees, including the franchisee, to start out. A mature market might have six employees on staff, Lewis said.

The initial investment ranges from $97,750 to $121,000. Revenue comes from advertising and two wedding industry events hosted annually. The average unit volume from four company-owned territories was $681,156 in 2023, the company reported, up from $633,601 in 2022. Last year, the average number of advertisers for those same four territories was 228, with just under $3,000 collected per advertiser.

The four corporate territories were converted to franchised locations. Wed Society’s territories are focused in the South, mainly in Texas, Oklahoma and Florida. Lewis said the company intends to grow in that region before expanding elsewhere.

Wed Society is unique in the franchise world. Its competitors are wedding websites like The Knot or Zola, which don’t franchise.

Huddleston and Murphy pride themselves on Wed Society’s corporate team, based in Oklahoma City, which makes sure franchisees are well taken care of. “Our headquarters team is probably the most dynamic of any brand new, emerging franchise,” Huddleston said.

Franchisees aren’t required to have experience in publishing because Wed Society has the technology for creating its annual book. “Our headquarters team really runs that entire process for them,” Huddleston said. “They just have to be the ambassador in the market.”

—Emilee Wentland

Kami Huddleston, left, and Ashley Murphy formed Wed Society in 2007 after Huddleston never received photographs from her wedding.

Multi-brand ‘zee adds what’s missing

“When I was looking to relocate back to the U.S., I thought it’s now or never,” said five-brand franchisee Nora Farhat. “This is something that I’ve always wanted to do.”

Living in the United Arab Emirates capital of Abu Dhabi at the time and working in corporate management for a government hospital system, when Farhat decided to move to Detroit she also decided to switch careers.

She opened her first British Swim School in 2015, followed by Mathnasium, Pool Scouts, Wonderly Lights and Real Time Property Management. The addition of brands is tied to her personal life and the needs of her community. As the mother of three daughters, she went with her first franchise because of them.

“My kids needed swim lessons,” she said. “They were young, and there were no good programs in the community that I was living in when I moved.”

The same thing happened with Mathnasium, as Farhat noticed a lack of math tutoring in her community. Neighbors didn’t have someone to take care of the pool?

Time to open a Pool Scouts. Winter means Pool Scouts’ maintenance services aren’t as needed, so outdoor lighting franchise Wonderly Lights fills the offseason.

“For me, it really is just more businesses that I feel that are missing in the communities that I’m in,” said Farhat. “Everything really has such a personal journey for me.”

On her podcast, “Upside Down Entrepreneurship with Nora Farhat,” she draws on her experience to offer advice to other franchisees. In addition to researching brand stability and the financial performance of a model, Farhat said self-reflection is key to the selection process as prospective franchisees consider their own needs and those of their market.

She needed to account for when her children were home, and she wasn’t about to open “the eighth pizza shop” in the neighborhood, she said.

“There’s so many different brands out there, and what I love about franchising is it does allow you to maybe explore things that you didn’t even know,” said Farhat. “If you’re able to see all of these different brands that have had success, whether it’s near you or in different states and cities, and then you can say, I love this brand and what it does.”

Farhat is often asked how she balances work and motherhood. Her answer? She doesn’t. Farhat said balance isn’t a factor. Instead, she keeps focus on what needs her attention in the moment. She’s in mom mode when she needs to be with her daughters and at their school, and will likewise put the needs of her business at the forefront, such as during prime operating months.

Farhat knows the ins and outs of each brand, and isn’t afraid to be the one doing the hard labor.

“I think the biggest mistake people make going into business is that they’ll just hire out every position,” she said. “I truly believe that I have to be the expert at my business to fully understand it and run it at a high quality.”

Once she masters her own business, finding employees is much easier. If they have questions or need further training, Farhat can provide it based on her experience. As her staff become more confident, she starts to step away.

Using that process, she opened five different franchises— but only when she was fully prepared to do so and not a moment sooner.

“I remember thinking, oh my God, did I really just quit my very lucrative corporate job so I could go work hundreds of hours a week?” Farhat said. “For me, business ownership paid off absolutely 100 percent. I think that the version of myself now nine years later, after owning different brands and being in this world, there is something so exciting to me about it.”

—Megan Glenn

Nora Farhat is a franchisee of Mathnasium, Wonderly Lights, Real Time Property Management, British Swim School and Pool Scouts. She opened a location for each brand because of needs she saw in her community.

Fleet Feet franchisees hit their stride

Going back to his college days at John Carroll University where he studied small business management, Frank DeJulius said he was drawn to the specialty retail business model and this idea of serving people “one foot at a time.” It’s fitting, then, that DeJulius went on to a career with Fleet Feet and now with wife Stacey owns seven locations of the running-focused retailer.

A runner and athlete himself, DeJulius began working in a Fleet Feet store in Cleveland while still in school. By 2010 and with his eye on eventually becoming a franchisee, he moved to Nashville, Tennessee, to gain experience operating a high-volume unit doing $2 million a year in sales. Joined by Stacey, then his girlfriend, a stint undertaking a turnaround effort at a store in Illinois followed before the couple headed home to Ohio in 2012 to take over operations of a company-owned Fleet Feet location in suburban Cincinnati.

At the time part of a fledgling program at the company designed to turn employees into future franchisees, the DeJuliuses became equity operators of the store in Blue Ash, Ohio, which they bought in 2018.

“Fleet Feet was a company of handshakes and hugs back then,” DeJulius said of the decision to relocate to Cincinnati with the aim—but no contractual guarantee—of purchasing the store from corporate. “We wanted to invest in ourselves. They followed through and we followed through.”

Three new stores followed, and, after a surviving a “rough” couple of coronavirus-impacted years that involved employee furloughs and rent abatements, “we are back to pre-pandemic numbers,” DeJulius said.

Following Fleet Feet’s acquisition in late 2021 of JackRabbit, a 56-unit system of running stores owned by CriticalPoint Capital, the DeJuliuses were confronted with an unexpected growth opportunity: to buy four of the JackRabbit locations in Cincinnati and convert them to Fleet Feet.

“We had some really honest conversations,” said DeJulius. “It was a negotiation and we had to think about if and how we could take on four more stores.”

After deciding to double their unit count in early 2022, “we had to dig in hard,” he continued, to integrate operations and ensure the people coming over to their company were the right fit. “We have higher performance metrics than JackRabbit did,” he said, and it took work to achieve alignment on culture and goals. They had to “delicately close” one of the acquired stores because it was near an existing Fleet Feet.

and another store is open on the campus of Fifty West Brewing, with which they run events such as the Drink N Dash Beer Mile.

Those in-store sales results mirror what Fleet Feet sees across its 275-unit system, said Chief Operating Officer Jason Jabaut, with 85 percent of sales coming from the brick-and-mortar locations and 15 percent via ecommerce. Fit experts, as Fleet Feet calls its sales associates, spend 42 minutes on average with each customer, he noted, and a “customer-obsessed culture” is ingrained in the model.

Franchisees focus on connecting with running groups in their communities, sponsoring and hosting races and also getting in front of corporate clients. Through the brand’s Workplace Fit program, owners will bring their 3D foot scanners to corporate customers and help outfit employees with shoes, insoles and socks.

The couple’s seven stores are now doing $10 million in total sales. Success, said DeJulius, comes from embracing the experiential aspect of specialty retail. “You can’t try shoes on online and you can’t get the expertise we offer,” he said. Fleet Feet has a robust ecommerce business, he added, but the in-store experience generates the bulk of sales.

“We have a coffee shop in one of our stores,” he added,

Fleet Feet in recent years has made an intentional push to drive franchise development, said Jabaut, as it’s made investments in its technology stack, training and overall marketing. “We’re investing in improving brand awareness and in how we show up to customers and potential owners,” he said.

The company’s “#ReasonsWeRun” campaign in 2023 was its largest ever, with a mix of paid and organic content, an integrated media plan and store-specific assets. Collaborative campaigns with apparel and footwear brands are yielding positive results, and Fleet Feet’s efforts to broaden its customer base beyond marathoners and athletes are ongoing, Jabaut said.

For a company founded nearly 50 years ago, it seems Fleet Feet is just getting warmed up.

—Laura Michaels

Fleet Feet emphasizes the in-store experience as its sales associates spend an average of 42 minutes with each customer.

Franchisees Stacey and Frank DeJulius have seven Fleet Feet stores open in Ohio.

QSR operator finds growth in airports

For nearly three decades, George Tinsley Sr. has served customers on the fly. Literally.

Since opening a TGI Fridays in the Tampa International Airport, Tinsley has built a multi-brand portfolio across multiple airports in Florida and Kentucky. Through his Tinsley Family Concessions, he operates 45 restaurants across brands such as KFC, Burger King, Pizza Hut and Chili’s.

His path to franchising goes back to his Kentucky roots, where he grew up and worked alongside Colonel Harland Sanders at KFC. His career there followed one in basketball, which he played professionally for several years.

Originally from Louisville, Kentucky, Tinsley played basketball at Kentucky Wesleyan College, where he won three national championships at the Division II level. He then headed to the American Basketball Association, a league that would later merge with the NBA.

After playing professionally from 1969-1972, moving from team to team, he stepped away from basketball to settle down with his wife. He taught and coached, then decided to look for a profession with a larger salary as he was starting a family.

Tinsley took a job at KFC in the mid-‘70s in the brand’s training department, where he learned all about the concept through classroom work and visiting different restaurants. Eventually, he taught others at a training school opened within the brand’s Louisville headquarters.

“I was added to the training department and worked with the Colonel himself,” Tinsley said. “He would come in a couple times a week to participate in the class as part of the basic management course.”

Tinsley was in the role for three years before becoming an area supervisor in Atlanta, overseeing seven restaurants. He continued to climb the corporate ladder until he became a regional director of human resources at KFC. As he gained more experience, he became interested in the franchising side of the business.

“I was working with franchisees and I fell in love with the model,” Tinsley said. “It was something that stayed in the back of my mind, but I knew I didn’t have the capital at first.”

That opportunity arrived in 1984, when a regional vice president he trained helped him get started with a location in Florida. Operations at his franchise were successful, and over the next decade, it set the entrepreneur up to become a large multi-unit, multi-brand franchisee.

In 1995, another business connection clued Tinsley in on an opening at the Tampa airport for a quick-service restaurant. Tinsley made a bid for the space with KFC, but wasn’t selected. He noticed, however, there was another open space in the airport that could house a causal dining restaurant.

Tinsley partnered with TGI Fridays for the spot and opened a unit, which became the No. 1 restaurant in the system for nine years in a row. Tinsley built on that accomplishment by going into other airports including the Miami International Airport and the Louisville Muhammad Ali International Airport.

While he’s moved completely to airport locations and sold his other traditional units, Tinsley said the operations have stayed nearly the same.

“It’s about taking that mentality, and what it takes to operate, into the airport,” Tinsley said. “We go with an aggressive approach to our customers in growing our business. In airports, it’s about attracting two types of customers: The frequent flyers that come Monday through Friday, and your casual travelers who you might see once and never again.”

He said being an airport franchisee requires staying nimble as contracts tend to be shorter and regular remodels can cause unit numbers to fluctuate. Additionally, as non-traditional units, the menus are often condensed versus a typical streetside location.

But the effort is worth it, Tinsley said, not only because of the potential for triumph as a franchisee, but the travelers he gets to meet along the way.

“I’ve loved it from the time we opened our first restaurant,” Tinsley said. “It’s exciting to meet new people, tell our story and get involved in the airports and communities we’re in.”

—Matthew Liedke

George Tinsley Sr., a franchisee since 1984, has built a portfolio full of restaurant brands with units at several airports.

George’s Trifecta: Worked with Colonel Sanders // College basketball national champ // Golden State Warriors and Orlando Magic fan

Larks chief wins with activity appeal

What led to the creation of Larks Entertainment?

We opened our first Altitude Trampoline Park in 2012 and in six years we had 100 open. Then we branched out. We ended up doing internal accounting, real estate and construction. We opened up other concepts similar to Altitude.

When you open a trampoline park, it’s a $3 million investment. You have to have over a million dollars, and even when we did SBA lending and such for people, it was prohibitively expensive. If we met with 100 people, only two could maybe afford to franchise with us.

While I was with Altitude, I was reaching out to things that weren’t as expensive. While I was doing that, we ended up selling to private equity. Then COVID happened. So here I am during COVID, writing a book and leaning into the idea of how do we make something multipurpose and optional. We called it modular franchising, and then we created Larks.

How is it different from other entertainment concepts?

Basically, Larks is a package. Some type of food, there can be liquor and an arcade of some sort. Those three things would be in every one of them. And then you’d have the option of adding other packages with shuffleboard, mini golf, obstacle courses and gel blasters, which is basically Nerf on steroids. You can literally go to us depending on your pleasure. If you’re not a big shuffleboard guy, you can go play mini golf.

CURT SKALLERUP

 Skallerup, also CEO, created Larks in 2023. It has one location open in Texas. A second is set to open in Kansas City, Missouri.

 Skallerup is the author of “Volume: The Path to Profit.”

they want just a café with shuffleboard, we can do that. They can also choose what activities they offer, and we’re looking for more to add in.

Why start another brand at all? Why not just retire?

I never intended on selling Altitude. Once it became sexy enough for private equity to be interested, we sold it. Simply put, I wasn’t ready to put up my cleats. I just wanted to do something else. I did a lot of speaking and different things at different venues, and I had the opportunity to revolutionize some of the franchise stuff that’s never been there. If you want a small franchise, you go to an accounting firm. You want a big franchise, you go to McDonald’s.

“You can come and everyone can eat, everybody can drink and our goal was always this.”

—Curt Skallerup

Since it’s modular, people get to design their own business. With all of our experience, we developed a manual, operations and training. So, when people come to us, we have everything they need to get started. We’re basically a one-stop shop. You can build a 10,000-square-foot Larks in Minot, North Dakota, or a 50,000-square-foot one in Madison, Wisconsin. We generally give you a plan of how you can get into your own business.

A lot of franchisees, their eyes are too big for their stomach. We’ve got a formula to not put them in deep debt. If

We wanted something everyone could do. You don’t need to cater to pro football players, you don’t need to be part of the cool kids. Everybody can play shuffleboard. Everybody can play mini golf.

We’re also not here to break the bank. We don’t have tokens; you don’t need to be a diamond member to get in. We really do want people to come in and enjoy themselves. I’d rather go into the smaller tertiary markets and grow from there. There are a lot of people looking to own their own business there, in my opinion. I would rather make 10 percent of $100 million than 50 percent of a million.

Reporter Megan Glenn asks what makes emerging brand leaders tick—and presents their edited answers in this column in each issue. To suggest a subject, email mglenn @franchisetimes.com

Illustration by Jonathan Hankin

ActiveCampaign HQ is the all-in-one marketing automation solution for franchises and multi-location brands. Multilocation teams can create, personalize, and send email and SMS campaigns across multiple customer bases from a single dashboard.

Connect up to hundreds of accounts, instantly sync templates, and consolidate your revenue reporting to power on-brand experiences for every customer. All while giving each location its own personalized voice.

An exclusive ranking of the largest brands in franchising

Top 400 Profiles:

Crunch Fitness President Chequan Lewis says among the brand’s efforts to drive sales is an emphasis on its personal training services, while it also touts a strong value proposition in the gym segment. Page 30

Sandwich maker Potbelly is working to pull market share from fast-casual and QSR competitors alike as it continues to push unit growth via franchising. Page 44.

Ford’s Garage is injecting some nostalgia into its casual dining restaurants as it draws on the automaker’s appeal among young and old customers alike. Page 62.

Specialty beverage franchise HTeaO is leveraging the popularity of its numerous iced tea flavors to expand in its home state of Texas and beyond. Page 90.

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Notable Gains

Largest franchises navigate a changing economy

Inflation declined at a frustratingly slow pace in 2023, while the U.S. Federal Reserve raised interest rates to the highest level since 2007. Yet for the majority of franchising’s biggest brands, sales gains indicate last year was a success.

Across the 200 largest franchise brands within the Top 400, total sales came to $707.1 billion globally, an increase from $666.9 billion in 2022. By category, nearly all grew sales, with just two, real estate and business services, experiencing a decline.

The widespread sales growth occurred over a 12-month span where inflation started at 6.4 percent and ended at 3.4 percent. A good sign for next year’s results is the inflation rate slowly but steadily continued to decline in 2024, falling below 2.9 percent in July, the lowest since March 2021.

Restaurant ranking leaders

With the most systemwide sales growth during 2023, McDonald’s kept its No. 1 ranking by generating an additional $11.3 billion to reach $129.5 billion in total sales. The company led a quick-service burger segment that pulled in $199.5 billion in sales, up 8.3 percent from 2022.

A major chunk of those burger sales came from the big three: McDonald’s, No. 4 Burger King and No. 11 Wendy’s, which combined for more than $170 billion. Percentage-wise, the

restaurants, and all holding on to their rankings from last year. This was despite the inflation rate for food away from home starting 2023 at 8.2 percent, though it fell to 5.2 percent by year’s end.

Along with QSR burgers, another strong segment in the restaurant category was chicken, with $76 billion in sales, up from $67.9 billion. No. 3 KFC led the category with $33.8 billion in sales, followed by No. 6 Chick-fil-A with an estimated $22.3 billion. KFC also added the most units across the Top 400, with a net new store gain of 2,140 locations to reach 29,900.

sales 3.6 percent to hit $13.3 billion. Both brands also increased their number of locations, with Domino’s adding 711 net new units and Pizza Hut another 832.

Missing from this year’s ranking is Little Caesars, which did not submit its sales and unit data. The brand last year was No. 21 on the list with an estimated $5 billion in total sales.

Some tougher times

By Matthew Liedke Research by Matt Haskin and Michael Nelson

A noticeable jump for the chicken category came in the wing space, with $4.3 billion in sales, a 22 percent boost. Leading the pack was No. 33 Wingstop, which grew its systemwide sales 27.1 percent to $3.5 billion.

Dave’s Hot Chicken, at No. 165, was another success story in the category overall, with sales jumping 40.1 percent to $406 million. Even more impressive was the brand’s unit growth, skyrocketing 76.5 percent as it added 78 restaurants to reach 180 overall.

Off-premises and dine-in pizza also produced good results in 2023, with the latter having a higher percentage jump in sales growth. The dine-in pizza segment grew 8.7 percent to reach

The five largest brands on this year’s ranking— McDonald’s, 7-Eleven, KFC, Burger King and Ace Hardware —combined for an incredible $311.1 billion in systemwide sales. McDonald’s alone accounts for $129.5 billion thanks to a 9.6% sales increase.

largest gainer in the category was No. 35 Culver’s, which exceeded $3 billion with a 16 percent sales jump.

Restaurant brands collectively generated $457.2 billion in sales for 2023, up 8.3 percent from the $422 billion in 2022. The category’s ongoing growth was reflected at the top of the ranking, with seven of the top 10 brands being

nearly $3 billion. Brands with a delivery-first bent, meanwhile, grew by 3.8 percent to reach $39.7 billion.

The major value players in the category, No. 8 Domino’s and No. 13 Pizza Hut, both reversed their systemwide sales declines from 2022. Domino’s pushed its sales up 4.2 percent to reach $18.3 billion, while Pizza Hut grew its

The category experiencing a far more difficult year in 2023, meanwhile, was real estate. As mentioned, it was one of two sectors of Top 400 brands that saw a decline overall, with sales dropping 16.8 percent, from $33.3 billion to $27.7 billion. Units also fell, with locations declining from 15,479 to 15,116.

The category had to deal with a few factors that put brands in a tougher position. The interest rate set by the Federal Reserve was already high to start the year, at 4.33 percent, and the central bank increased it a few times over the year, eventually setting it at 5.33 percent in August, where it has stayed since.

Housing prices have also been higher for the last two years, staying well above $410,000 nationwide. Leaders in the franchised real estate space, however, noted economic challenges weren’t the only reasons for the decline. The category was also dealing with the aftermath of an anomaly from a year earlier.

In 2021, the number of housing transactions reached 6.3 million, well above the average which sits between 5.3 million and 5.5 million. In 2023, the number fell below 4 million. Kuba Jewgieniew, the CEO of No. 92 Realty One Group, said he expects the number to stabilize as the industry goes through a “snap-back” in 2024.

The other category that struggled in 2023 was business services, coming in at $7.8 billion, down from just over $8 billion in 2022. That decline was reflected in the segment’s largest subcategory, employment and staffing, which had $5.2 billion in sales, $579 million less than the previous year.

There was a positive in the category with the coworking segment. Two brands, Office Evolution and Venture, X, both under United Franchise Group, combined for sales of $83 million in 2023, up 27.7 percent from $65 million the prior year.

Education, fitness help lift category

In a wide-ranging category that has fitness, hair care, education, swim schools, junk removal,

Top 400 Index:

pet care and wellness franchises in its lineup, personal services again made major gains in 2023, with overall sales of $27.7 billion, up 11.9 percent.

The 15 kids education and learning franchises on the ranking, which range from early childhood concepts and tutoring brands to music education services, were up 14.5 percent overall, generating sales of $5.25 billion last year.

The Goddard School, ranked No. 63, added $200 million in total sales for 2023, up 16.7 percent to $1.4 billion, making it the largest in the segment. Other strong kids education performances came from No. 64 Primrose Schools, up 11.6 percent to $1.3 billion, and Kiddie Academy, which saw a notable $624 million in systemwide sales to come in at No. 126.

Fitness franchises likewise helped power the personal services category, as the 14 brands on the list combined for $9.8 billion in sales, up 16.7 percent. Total units increased 6.1 percent, to 12,858 locations.

No. 25 Planet Fitness, the largest brand in the Top 400 fitness segment, showed demand for low-cost gyms remains strong as it grew systemwide sales by 15.4 percent, to $4.5 billion. Its total unit count expanded to 2,575, including 120 international locations. Big sales increases elsewhere in the segment came from No. 248 Burn Boot Camp, up 25.3 percent, and the brand on our cover, No. 79 Crunch Fitness, up 23.3 percent.

Retail starts shining

Positive news came out of the retail segment, the highest-earning category after restaurants. Sales grew by 3.9 percent, from $146.3 billion to $151.9 billion. Leading the charge was No. 2 7-Eleven with systemwide sales of $97.9 billion, followed by No. 5 Ace Hardware at $23.3 billion and No. 9 Circle K at $17.7 billion.

A retailer also had the second highest percentage jump in unit growth, with No. 88 Wireless Zone increasing its store count by 61.1 percent, from 447 to 720.

Netting the highest sales growth in the segment, meanwhile, was No. 101 Nothing Bundt Cakes, with total sales of $741 million, a 20 percent rise. The brand also had sizable unit growth, with a 17.2 percent boost from 477 to 559.

Unit growth across the 200 largest brands in the Top 400 was more modest, coming to 1.1 percent in the U.S. and 3.8 percent for international markets. In the U.S., units increased from 274,144 to 277,244, and in global markets for the 200 biggest franchises the total store count came to 254,806, up from 245,415. In total, all brands on this year’s ranking accounted for 594,319 global units.

By the Numbers

Sales for the 500 largest franchises grew 3.7% in 2023, to $740B. That’s a high-water mark for the past five years.

Consumers clamored for certain concepts and cuisine types in 2023. Among the major restaurant segments, here are the top three standouts: ▲

Powered by a year of strong performance from disaster restoration franchises, Cleaning Services leads in overall percentage sales growth.

Domestic vs. international: Overseas unit growth picks up as domestic development slows slightly.

But First, Coffee Puppy Love

Customers filled the drive-thrus of coffee concepts in 2023 as the six brands on this ranking pulled in $1.3 billion in total sales, up 44.3%.

The Coffee Bean & Tea Leaf alone did $605 million from 1,164 global units.

All six pet care brands on the list— Aussie Pet Mobile, Camp Bow Wow, Dogtopia, K-9 Resorts, Pet Supplies Plus and Woof Gang Bakery —were up in sales, combining for $2.4 billion in total. That’s a jump of 7.6%.

Rising Tide Buyer Boost

Demand for swim lessons skyrocketed in 2023, with sales at the four brands on this list up big. Big Blue Swim School led the way, with 73.3% growth, followed by British Swim School at 38.9%, Goldfish Swim School at 20.9% and AquaTots at 8.1%.

Specialty retailers attracted consumers last year to the tune of $3.2 billion in total sales, up $185 million or 6.1%. Nothing Bundt Cakes led the way in the segment with its 20% sales growth to hit $741 million.

Largest 200 sales growth ($M)

Largest 200 sales growth %

Power Move

Crunch Fitness flexes sales, unit growth

“What we’re doing in the Crunch experience is actually driving up value at a time when people need a little bit of relief on price.”

—Chequan Lewis, president, Crunch Fitness

By Joe Halpern

Chequan Lewis was greeted warmly at the Crunch Fitness-Plano club in Texas, but with little fanfare or acknowledgement of his notable position with the company. He exchanged pleasantries with a front desk associate and shared fist bumps with a personal trainer.

“I’ve been a member here since January and except for one other person here, I don’t think anyone knows,” said Lewis, of being named president of Crunch Fitness in February. “I kind of prefer it that way, to be honest. I get a unique perspective this way.”

While Lewis may wish to fly under the radar, Crunch is solidly in the fitness spotlight.

Crunch moved up 37 spots to land at No. 79 on the Top 400 list with systemwide sales of $957 million in 2023, a 23.3 percent year-over-year increase. The Portsmouth, New Hampshirebased fitness brand, owned by private equity firm TPG, boasts more than 2.5 million members at 490-plus clubs in 41 states, the District of Columbia, Australia, Canada, Costa Rica, Portugal, Puerto Rico and Spain. The company increased its unit count by 16.8 percent last year with 71 locations added in the United States and abroad.

By comparison, No. 25 Planet Fitness increased its overall unit count by 6.8 percent and No. 50 Anytime Fitness by 1.3 percent in 2023. Planet Fitness continues to lead the category with $4.5 billion in sales last year from its 2,575 locations. Anytime finished with $2.2 billion in systemwide sales from a category-leading 5,123 units.

of motivational phrases, such as “PERSPIRE TO GREATNESS,” “HUSTLE FOR THE MUSCLE” and “$#*%’S ABOUT TO GET HEAVY.” Also prominent was the company’s signature “NO JUDGMENTS. NO LIMIT.” branding philosophy, created early on to remove the intimidation factor of going to a gym.

While Crunch Fitness remains behind some of its high-value, low-price counterparts in total sales, units and membership counts, Lewis noted the company has gained enough traction in recent years to compete directly with them for customers.

“We’re certainly moving in the right direction,” said Lewis, the 40-year-old native Texan and former chief operating officer for Pizza Hut. “But at the same time, we know there is a lot of space left for growth and a lot of opportunity to continue to grow and get better.

At this 40,000-square-foot Crunch club in Texas, members of all shapes, sizes and ages huffed and puffed on rows of cardio and strength training machines while others pumped free weights, muscles bulging and with the occasional grunt of exertion.

Colorful walls throughout displayed a range

with members, the company went into bigger spaces and expanded quickly in other states. But like many gym concepts, Crunch was hit hard during the Great Recession as it dealt with declining membership and expensive leases. It filed for bankruptcy in 2009 and, after restructuring, began franchising a year later with it first operator-run location in Norwalk, Connecticut.

While many gym chains struggled again during the pandemic, the company held its own by offering virtual classes via Crunch Live. The chain added 93 net new units in the U.S. from 2020 to 2022 and membership climbed 31 percent compared to pre-pandemic levels. Following the success of Crunch Live, the company introduced a new streaming platform, Crunch+, with hundreds of ondemand workouts.

“With the multi-unit operators we have in the system and the 1,000 development deals and commitments we’ve signed, it’s not at all unrealistic for us to get to 1,000, even 1,500 clubs fairly quickly by opening more than a club a week.”

An eventful ride

Crunch’s 35-year history is filled with starts, stops and restarts. Founded by former stockbroker Doug Levine in 1989, Crunch began as a quirky fitness studio in a small Greenwich Village basement.

It was Levine who came up with the “No Judgments” tagline and launched unusual and entertaining group exercise classes such as bicycle-based yoga, coed wrestling, pole dancing, karaoke cycling and an “Abs, Thighs and Gossip” class run by drag queens.

As its irreverent, low-cost model caught on

The cost to open a Crunch can top out at more than $6 million, with gyms between 25,000 and 40,000 square feet. Average gross revenue for clubs open 12-24 months was $3 million in 2023; those open 49-60 months averaged $2.3 million.

Lewis said he wants to see franchisees increase their profitability and believes there’s opportunity to do so by lowering operating costs while at the same time elevating the member experience.

“We’ve been focused on improving our inclub tours and sales processes to highlight the benefits of Crunch’s value proposition and sell more memberships,” he said. “We’ve focused on growing our personal training revenue, which is a differentiator for us in the category. Our main focus remains on wholistic franchise profitably.

“If you look at just the general backdrop of the economy today, people aren’t seeing price and value move together. What we’re doing in the Crunch experience is actually driving up value at a time when people need a little bit of relief on price.”

The three membership tiers for Crunch are Base, Peak and Peak Results. The Base tier is

Tony Hartl

Assaf Gal

$9.99 per month and provides access to the gym floor with cardio and strength training equipment at a single club. Peak and Peak Results memberships, priced at $24.99 and $29.99, respectively, bring access to various group fitness classes and the option to visit more than 400 locations.

Crunch’s membership tiers, coupled with a range of class offerings, serve to further differentiate it in the fitness space.

“We want to meet each member at all their individual needs and also what they feel comfortable paying for,” said Lewis. “We try to be everything to everyone, but the area we need to improve on now is making the members and every staff experience legendary, and that happens the moment they walk in the door to the time they leave.”

“It’s not unlike what I did at Pizza Hut, really,” he continued. “At the end of the day, it’s all about making the customer experience the best it can possibly be while delivering value on a great product.”

Multi-unit New York operator Assaf Gal pointed to Crunch’s powerful branding and commitment to introducing new classes as top reasons he chose the chain over the other gym brands.

“Crunch is constantly innovating with new classes and bringing value to members. It’s been easier for me to grow the brand in New York

because people know the name and what we offer,” said Gal, a franchisee since 2012. His six clubs are in the Bronx, Queens and Brooklyn.

Lewis said Crunch will lean on its multi-unit operators for new development, as he noted nearly 40 percent of the brand’s franchisees in the U.S. have three or more clubs open or in presale. He also expects more new development in global markets.

“We really need to plant more flags in other countries,” he said. “The challenge for us, like it is for a lot of other people in this space, is finding the best locations for our gyms. Speed to market remains a big key for us. It takes on average six to nine months to get new gyms open. Ideally, I want to see us get all our new gyms open in six months, and that is very realistic when we take over second-gen gyms. Big-box retail space is another sweet spot now.”

A franchisee who’s not had issues opening Crunch gyms is Tony Hartl, CEO of Undefeated Tribe. Last year his company opened five units in a five-month span in Texas, Oklahoma and Missouri. It expects to have 27 open by the end of the year and has the rights to develop 137 clubs.

Undefeated Tribe attracted private equity backing in 2023, when Hartl sold a majority stake in the company to VMG Partners. The deal marked VMG’s entry into the franchise space.

Hartl said his group has been able to drive

“It’s not at all unrealistic for us to get to 1,000, even 1,500 clubs fairly quickly by opening more than a club a week,” he said.

membership growth and increase performance at its locations by focusing on data-driven analytics for site selection and by what he referred to as “the curbside coaching” of general managers and staff to ensure they’re making the member experience is as good as it can be.

“We don’t just want members, we want them to use the facilities so we can keep them around, and that all goes back to the basics: clean parking lots, smiling people behind the front desk, cool music playing inside and making sure the AC is working,” Hartl said.

“The other thing we have implemented is a managing partner program for our GMs that requires a $10,000 investment to be in the role,” he added. “By doing that they share in the bottom-line results of the business. We are financially and emotionally aligned.”

Crunch Fitness President Chequan Lewis is the former chief operating officer at Pizza Hut. He, along with the rest of the leadership team at Crunch, believe their company is primed for rapid growth.

Photo by Daniel Motta

More than $30 billion is separating McDonald’s from No. 2 7-Eleven as the burger behemoth generated $129.5 billion in systemwide sales last year. Of note: The company said it did more than $20 billion in digital sales for 2023.

Wendy’s debuted breakfast in 2020 and during the company’s fourth quarter 2023 earnings call CEO Kirk Tanner said the daypart is “one of the most compelling levers” for sales growth. He noted plans to invest about $55 million to advertise breakfast this year and next.

The addition of 165 net new gyms and high single-digit same-store sales growth helped Planet Fitness increase its systemwide sales in 2023 by a notable $600 million, or 15.4%. The largest gym brand on the list finished the year with $4.5 billion in global sales.

Top 400 Franchise Chains

#34

Remodeled restaurants, more marketing power and the addition of 286 locations helped give Jersey Mike’s a 24.7% sales boost. That’s $662 million more than 2022 to lift the sub sandwich brand to $3.3 billion in total sales.

#54

On its way to $1.7 billion in systemwide sales for 2023, Great Clips tapped into the power of college and professional sports sponsorships to raise the brand’s visibility in new markets. Campaigns during the NHL playoffs, March Madness and more yielded encouraging results.

#66

Tropical Smoothie Cafe added 176 stores to the system in 2023 as total sales climbed $177 million, to $1.25 billion. That’s a jump of 16.5%. Sold to private equity firm Blackstone this summer, expect more growth fuel to be injected into the Atlantabased brand.

#72

It was a consecutive year of sales declines for urgent care franchise American Family Care, which dipped by 13.4% in 2023 after a drop of 21.7% in 2022. The decrease last year came even as the brand added 71 units to its U.S. footprint.

#82

Freddy’s Frozen Custard & Steakburgers has the $1 billion mark in its sights as the brand grew total sales by $117 million to finish the year with $925 million. Improved execution in the kitchen and digital sales both played a role, CEO Chris Dull said.

#90

Vital Care Infusion made a big jump in the rankings thanks to its 64.2% sales growth to $868 million, a massive total from just 76 units. Vital Care provides physician-prescribed infusion therapies to patients with a range of needs.

#105

Smoothie King proves that sometimes losing units doesn’t lead to a drop in sales. The brand trimmed its unit count by 57 to finish 2023 with 1,321 global stores and still grew systemwide sales by 14.6%.

#114

Daycare and early childhood education franchise

The Learning Experience continues to benefit from increasing demand for its services. Up 13.5% in sales, The Learning Experience hit $651 million last year and added 27 centers to its system.

#130

Back on the list for the first time since 2014, The Coffee Bean & Tea Leaf ended 2023 with $605 million in sales, $55 million more than that last time it submitted Top 400 data. After a brand refresh, it’s again prioritizing franchise-led growth.

Scooter’s Coffee remained on a growth tear last year as the Nebraskabased drive-thru coffee concept added $165 million to its systemwide sales total. That’s up a mighty 41.4%. Scooter’s also expanded its system footprint by 195 units.

#148 #138

The rollout of a robust membership program helped Sky Zone drive growth last year as the trampoline park franchise finished 2023 up 18.4% in sales. It added 33 locations to the system as it takes advantage of big-box retail closures.

#165

There’s no sign of a chicken demand slowdown as Dave’s Hot Chicken pushed total sales up by 40.1%, to $406 million from 180 units. That’s an average of $2.4 million per store and big reason why Dave’s remains hot, hot, hot.

Snap Fitness was able to generate more sales out of fewer units in 2023 as its gym count declined by 25 but systemwide sales increased by 20.3%. Snap, which in 2018 had 1,366 units, was down to 1,015 to end the year.

#188 #173

Grease Monkey’s push to personalize the experience for customers—by cleaning windows and vacuuming cars—is one way it aims to stand out from major chains such as Jiffy Lube and Valvoline. It’s working, as sales rose 14.4% last year.

#200

Biggby Coffee is a growing player in the caffeinated drive-thru mix, one that emphasizes a farm-direct sourcing model and seeks to amplify its community focus. Up 22.3% in sales and with 49 more stores, it’s angling for more market share.

Powerhouse Potential

Market share gains, franchising propel Potbelly

“Our goal is to make sure that we continue to be a place where you can count on value that fits the needs of your dining patterns. So when you cut back, frankly, you cut back from someone else, not us.”

—Bob Wright, CEO, Potbelly

By Laura Michaels

Bob Wright and Potbelly aren’t afraid to steal.

With consumers still feeling pressure from multiple years of high inflation, and within a fast-casual segment where competitors are angling for a piece of shrinking spend, Potbelly is taking market share.

Traffic growth in 2023 was a major driver of the brand’s sales gains last year, said Wright, Potbelly’s CEO, and remains a focus as its stores aim to prove more appealing than someone’s refrigerator.

“Let’s be clear in what’s happening with today’s consumer: They are cutting back meals outside the home in favor of the refrigerator,” Wright said. “Our goal, with our everyday value, is to make sure that we continue to be a place where you can count on value that fits the needs of your dining patterns, so when you cut back, frankly, you cut back from someone else, not us.

“And that’s how you continue to grow share, even in tough times.”

No. 139 Potbelly, which climbed 26 spots on this year’s Top 400 ranking thanks to 12.6 percent sales growth, finished 2023 with $560 million in systemwide sales from 424 locations. The average unit volume at its 74 traditional franchise stores reached $1.2 million last year. Company-owned shops measured, 333 of them, averaged $1.3 million.

That AUV is almost double what it was in 2020, when Potbelly was contending with multiple years of sliding sales and unit closures. The years since have been more than pandemic recovery as Wright and his leadership team set about a comeback with franchise-focused development in mind.

Traffic-driven profitability

Wright joined Chicago-based Potbelly in July 2020, replacing Alan Johnson, who’d been at the helm less than three years. A customer for more than two decades, Wright said food quality and an antique shop ambiance put Potbelly in a unique position in the marketplace, but it had an issue with value.

Potbelly by 2019 was in a multi-year traffic count skid, which Wright said the company tried to compensate for by raising prices. Those moves only worsened the situation.

Customers loved the food, he noted, but didn’t think the cost of a sandwich matched the product. Enter the first in a five-pillar strategy announced after Wright came on board: quality food at a great value.

potential perils of discounting. He said while Potbelly will run promotions and some deals via its Perks loyalty program, it doesn’t discount core menu items.

“It’s really dangerous to do that. You kind of reprice your menu if you do that,” he said.

“By the middle of 2021 we were rolling out what is the foundation of today’s menu with the skinny size sandwiches,” Wright said. “We made our originals and our big sandwiches bigger, and we put more meat and cheese in them. We raised the food cost on those items, because that’s a great translation to value that we gave the customer.”

At a Potbelly in Minnesota, for example, a “Big” chicken club ran $13.89, while the “Skinny” was $6.89 and the “Original” came in at $9.99. Those three sizes “rebased the brand’s relationship with the customer,” Wright said, and the addition of a skinny option opened up an “everyday value layer” with pick-your-pair combos.

Wright, who came from quick-service and before Potbelly spent more than five years as chief operations officer at Wendy’s, knows the

“You’ll see brands do $1 hamburgers for a hamburger that’s on the menu for over five bucks. It’s difficult for the customer to absorb why that makes sense.”

A recent Potbelly promo, the $7.99 Skinny Combo with choice of turkey, ham or chicken, protects margins versus including roast beef or a specialty sandwich with higher-cost ingredients. Like the slimmed-down sammie before, the promo is driving traffic and sales without breaking $9, which research by the brand showed is the price point when consumers look elsewhere.

Positive work environment, customer experiences that drive growth, digitally driven awareness and franchise-focused development are the remaining pillars, which Wright acknowledged “can often read like platitudes.”

“The strategic initiatives that underpin those five pillars of our strategy is where the work came in,” he said. “And I think we’ve got, you know, almost four years of success against those strategic initiatives, because that’s what really separates the work from the talk.”

Enhanced operations, marketing

While the third pillar may read as “customer experiences that drive growth,” for Wright, that translates to operations execution. And it was an area in need of attention, from store cleanliness and throughput all the way to staffing in the restaurants and tools to run better shops.

Despite being a chain of 400-plus locations, Potbelly didn’t have some of the essential tools to enable more efficient operations, or, those tools

Randy Pianin

Bob Wright

were in need of an upgrade. One key missing component, said Wright, was a labor guide

“Labor was being measured as a percentage of sales after you were finished with the shift, with the day, with the week,” Wright explained, but there was no deployment guide based on forecasted sales and with a scheduling platform for managers. “Frankly, without those tools in place, we had some bad habits in a lot of places, managers weren’t working balance schedules.”

With proper staffing practices came an opportunity to improve the bottom line and enhance sales outside of the typical lunch daypart. Evening and weekend business saw a lift. Managers, using a new scorecard with operational success metrics such as sales and profitability, are incentivized via a bonus program.

With 40 percent of its total sales coming through digital channels, Potbelly last year began accelerating the rollout of the Potbelly Digital Kitchen, a tech-driven system better able to sort orders and utilize a restaurant’s second make-line.

“We saw food quality scores, order-readyon-time scores, accuracy scores, all of that was positively benefited by PDK,” Wright said. Restaurants are also using inline order-taking tablets to increase throughput on the front line.

By the end of 2024, Potbelly will have retrofitted close to 100 shops with the PDK, and all new builds feature the system.

Digitally driven awareness, meanwhile, is Chief Marketing Officer David Daniels’ purview. Potbelly in 2020 was spending just half a percent on marketing. Today that spend is 3 percent of sales, with heavy emphasis on all things digital.

“We knew we needed to fight for share of voice,” Daniels said, with paid social media, video and connected TV content proving effective to boost overall brand awareness and impact actual

sales and traffic.

With a revamped Perks app and loyalty program, Potbelly is seeing 30 percent growth each quarter in active members, he noted, “and we’re not just driving frequency with our most valuable customers, but we’re driving frequency with new customers.”

‘We are supremely franchise-able’

Potbelly’s 400-plus stores are flung across 30 states, with high concentrations in Illinois, Michigan and Texas, and others with just a shop or two. The broad footprint proved the brand travels, Wright said, but having a system that’s 80 percent company-owned meant many markets were “woefully underpenetrated.”

Enter franchising. Potbelly in 2022 announced a goal to hit 2,000 units over the next 10 years, 85 percent of them franchised.

“We are supremely franchise-able. We have great volumes with good margins. We’ve got low cost of capital,” Wright said. “Our sale-to-investment ratio is still two to one.”

Refranchising about 25 percent of the system is part of the equation, with 34 company stores sold so far. Paramjit Josan and Randy Pianin were among the acquirers.

Josan’s United One Group was the first to buy in, purchasing eight shops in New York City last year and signing on to open 13 more. Also a Checkers operator, Josan said he was looking for “an established brand that thinks their best days still lie ahead of them,” and found that in Potbelly.

“Potbelly’s commitment to offering support, from digital systems to marketing materials, that help us operate efficiently was a huge differentiator for my team and I,” Josan said. United One is upgrading to the Potbelly Digital Kitchen and refreshing stores, and at press time was set to

open its first new unit in September, with two more slated for this year.

“I’m also excited about the new shop prototype, which includes design elements like a customized-drink station and pickup shelves,” Josan said. “It’s also a smaller footprint, which means cheaper build costs and more options when it comes to picking locations moving forward.”

Pianin formed Royal Restaurant Group with Robert Negron in 2023, acquiring 23 Burger Kings in Florida. Royal now has 61 BKs in that state plus Georgia and South Carolina. Unfamiliar at the time with Potbelly, it was initially a shared Wendy’s connection with Wright that brought them to the brand, as both operators are former C-suite executives for large Wendy’s franchisee JAE Restaurant Group.

“Bob was a big part of the improvement in the Wendy’s operations,” Pianin said. “He was always laser-focused on the customer experience and how do you improve operations so it’s the best it can be for customers and team members.”

Royal in October 2023 acquired four Potbelly units in the Columbus, Ohio region and inked a deal to develop 36 stores in Ohio and Florida.

“We wanted to get into a brand that was in a growth cycle,” Pianin said. Potbelly, he continued, “sits between a Jersey Mike’s and a Panera,” has amazing product quality and a leadership team “that understands how you have to work with franchisees.”

As for the thievery, franchisees can embrace it, too.

Potbelly in 2021 underwent a menu revamp aimed at improving the value perception of its sandwiches, adding more meats and cheeses.

#213 #207

Signal Security, which in 2022 rebranded from Signal 88, provides mobile patrol security, dedicated security guard services and camera monitoring and alarms. Sales were up 25.8% last year for the Nebraska-based company.

Car wash franchise

Tommy’s Express is adding locations at a brisk clip—46 of them in 2023. The growth is likewise helping increase systemwide sales, which were up 29.5%. One advantage?

Proprietary equipment that moves vehicles through at a faster pace.

#230

Playa Bowls, which was just acquired by Sycamore Partners, made big gains in 2023 as it pursues nationwide expansion of the acai bowl and smoothie concept. With nearly 50% unit growth and similarly high sales growth, it climbed 50 spots on this list.

Take advantage of more than $107,000 in incentives for new franchisees when you open at least one store before the end of 2024

This incentive package, designed to ease the path to ownership and profitability, includes substantial savings such as reduced franchise fees, discounts for Veterans, First Responders, and BiPOC owners, waived royalties, free inventory, and freight relief incentives. By minimizing upfront costs and maximizing early revenue potential, Batteries Plus aims to attract driven business owners who are ready to capitalize on the high demand for essential products and services.

Acquired by Roark-backed Youth Enrichment Brands in 2023, School of Rock is positioned to remain at the top as the largest music education franchise. The brand grew sales to $205 million last year, up 19.2%.

#251 #244

Making its Top 400 debut is fast-growing 7 Brew, which is quickly gaining on competitors in the drivethru coffee space. Owned by Drink House Holdings and franchising since 2021, it ended last year with 180 units and $191 million in total sales.

#260

Rita’s Italian Ice reversed a unit count decline as it added 31 stores in 2023 and kept sales churning to the tune of 15.5% growth. A standardized POS, online ordering and new kitchen display system are helping boost operational efficiencies.

$1,487,436** TOP QUARTILE AUV

$1,000,000+*** DOMESTIC SYSTEM

#287 #277

While unit growth slowed—it added 13 locations in 2023 versus 69 in 2022—regenerative medicine franchise QC Kinetix kept sales humming as it hit $157 million. That’s a 56.3% increase for the concept treating joint and soft tissue pain.

Ford’s Garage makes its first Top 400 appearance as the casual burger and beer joint continued measured franchise growth last year. Thanks to a licensing agreement with Ford Motor Company, it leverages the Ford name— and the nostalgia.

#289

Nathan’s Famous is back in growth mode after sales and unit count dips in 2022. The hot dog chain, which continues to push a conversion initiative, hit $139 million in total sales. That’s more than double its sales in 2018.

Hawaiian Bros is making waves in the QSR space with its island-inspired concept and a simple plate lunch menu that lends itself to faster throughput. Systemwide sales were up 20% in 2023, which helped Hawaiian Bros make this ranking for the first time.

#317 #309

Stretch Zone, which counts former NFL quarterback Drew Brees as a franchisee and backer, pushed systemwide sales up $32.5%, to $109 million. In 2023 it attracted Princeton Equity Group as a strategic investor.

#335

Bubbakoo’s Burritos, which positions itself in the Mexican category as a premium brand with an inventive menu, upped its unit count by 18 in 2023 and boosted sales by 18.8%. It did $95 million from 116 stores.

Automotive accessory and window tinting franchise Tint World boosted its system size by 25 locations last year and kept sales humming with a 19.8% increase. Just like its unit count, Tint World is up 25 spots on the ranking.

Founded in 2020 by Scott Marr, Koala Insulation found a buyer in 2023 as MidOcean Partnersbacked Empower Brands acquired the brand. Among its services are insulation installation and removal, air sealing, and solar attic fan installation.

Continuing the category’s strong performance, PJ’s Coffee pushed total sales up 38.9%, to $77 million. Under Ballard Brands, PJ’s aims to stand out in a competitive space by leaning into its New Orleans roots with items such as beignet pastries and pralines.

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#382 #373

Area 15 Ventures, funded by Re/Max co-founder Dave Liniger, bought Port of Subs in 2023 with an eye toward expansion. While it grew total sales 6.8%, its unit count shrunk by six last year as it rightsized the footprint.

Beyond massages, MassageLuxe offers more than a dozen facial services, plus waxing, along with four membership tiers to drive revenue. Its systemwide sales were up 15.3% in 2023, to $70 million, and it added 11 units.

#392

Ellie Mental Health added 151 centers to its system in 2023, unit growth that helped drive a 133.2% increase in systemwide sales for the Minnesotabased franchise. Its $65 million in sales helped it move up on the list from No. 495.

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#423 #415

Sandbox VR, which among its offerings has “Squid Game”-inspired virtual reality experiences, makes its first appearance on this ranking with $57 million in sales from 46 units. Early investors included Katy Perry, Justin Timberlake and Kevin Durant.

Though perhaps not a thrill-inducing concept, dumpster rental franchise RedBox+ put up a big percentage growth number in 2023, when systemwide sales increased 34.9%. Portable toilet rentals present another top-line sales driver.

#432

Boutique fitness concept Barre3 makes its debut on this ranking with $51 million in total sales last year, up 25.8%. Its unit count will start to increase as it rebrands studios from The Barre Code, which it bought in late 2023.

#457 #446

Big Blue Swim School turned in a big sales growth percentage last year, up 73.3% to $45 million as it appears on this list for the first time. A provider of swim lessons, it’s backed by Level 5 Capital Partners.

Acquired by United Franchise Group in 2022 and now under that company’s Vast Coworking Group umbrella, Office Evolution grew sales 46.8% last year. Its expansion focus is on suburban and secondary markets.

#462

Tex-Mex restaurant franchise Surcheros, which loosely translates to “Southern friends,” comes onto this ranking for the first time with $41 million in system sales in 2023. That’s a 16.9% increase over the prior year.

#483 #470

It’s newbie status for Naf Naf Grill, which while its unit count remained flat last year was able boost systemwide sales by 40.7% to land on this ranking for the first time. The Chicagobased brand started franchising in 2018.

Kids haircare franchise Sharkey’s Cuts for Kids added 18 units to the system last year, which helped the Connecticut-based company grow sales 21.4%, to $33 million. It remains led by founder and CEO Scott Sharkey, who started the brand in 2001.

#499

Kelsey, Kris and Kevin Stuart are the three brothers behind Bloomin’ Blinds, the window coverings franchise that in 2023 did $28 million in systemwide sales, enough to land the company on this ranking for the first time.

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Top 400 ranks the largest franchise systems by worldwide sales

Nostalgia Effect

Retro vibes draw customers at Ford’s Garage

“What gets them in there is, without question, the Ford name. They want to see what it’s all about at Ford’s Garage.”

—Dave Ragosa, vice president of franchising and development, Ford’s Garage

By Emilee Wentland

At Ford’s Garage, the ambiance is just as important as the food. The walls are lined with Ford memorabilia, guests are greeted with vintage vehicles outside the front doors and servers are dressed as retro mechanics. What customers might not realize, though, is the franchise has incredible bathroom selfie game.

“We say we have the highest rate of Instagram photos in our bathrooms,” said Dave Ragosa, vice president of franchising and development. “It’s kind of weird to say, but if you’ve gone in there, you’ve seen the sinks are old tires, the urinals are old kegs. It’s that experience that really resonates with folks.”

The casual dining restaurants mimic a 1920s service station. Ford’s Garage aims to please kids, their parents and their grandparents. “It’s that 8-year-old that walks in and they’re like, holy cow, this is pretty cool. I see engines and cars and that fun stuff. And it’s that 82-year-old that either owned a Ford, worked at Ford … there was some type of affinity to the brand,” Ragosa said. “That’s what I found has really resonated with our guests.”

Ford’s Garage, officially licensed by Ford Motor Company, is new to the Top 400 list this year. The franchise makes its debut at No. 287 with $140 million in sales, a 23.7 percent year-over-year increase. That percentage sales growth means it’s the top performer in the casual dining category.

years Ford’s Garage expanded to Kentucky, Ohio, Indiana, Michigan and Texas.

Burgers and craft beer are the stars of the Ford’s Garage menu, including a fan-favorite Estate Burger, which comes with cheese, sweet onion marmalade, fried onion straws and a white truffle bacon aioli. The franchise also serves other kinds of sandwiches, such as pulled pork, a handful of salads, plus a variety of appetizers and desserts.

“What gets them in there is, without question, the Ford name. They want to see what it’s all about at Ford’s Garage,” Ragosa said.

Ragosa took on the development role at Ford’s Garage over a year ago, bringing experience from his previous job leading franchising for Arby’s and Sonic Drive-In at Inspire Brands. He’s also worked at Jimmy John’s, Rusty Taco and Buffalo Wild Wings.

“I was so excited to come over, quite honestly,” Ragosa said. “I spent 20 years on the QSR, fastcasual side of it, and no one was really doing casual dining well. There were a few regional players that were good, but no one on a national level was really focused on the right thing.”

The systemwide sales, meanwhile, are notable as Ford’s Garage generated them with just 24 units open in 2023. The company reported an average unit volume of $6.3 million in 2023 from the 20 franchise and company-owned locations listed in its franchise disclosure document.

Founded in 2012 in Fort Myers, Florida, the flagship location is less than a mile away from Henry Ford’s winter home. Over the past 12

As a system, Ford’s Garage is significantly smaller than Ragosa’s previous companies, but for him that was part of the appeal. “I wanted to take a brand on my own and see what I can do with it in supporting the brand, the franchisees and the growth,” he said.

Supporting franchisees starts with finding the right owneroperators, Ragosa said. The right franchisee, in his mind, is willing to put in the work to run the stores successfully and be a team player.

“I’ve been in this for 20 years and I learned from sitting down with my team and having that mindset, saying we’re going to do this together,” he said. “I’ve always said this: Your success is my success, and my success is your success.”

Revving up development

As it is for most franchises right now, one of Ford’s Garage’s challenges is finding real estate at a fair price and in a prime location. The company competes with other casual dining brands for the same property in similar areas, Ragosa said. Ford’s Garage restaurants are typically 6,000 to 9,000 square feet, which further limits its options.

Then there are the labor-related issues every other restaurateur is facing. Ford’s Garage requires 120 to 130 team members to run each restaurant, which adds up in terms of costs and the work that goes into hiring that many people.

The opportunities at Ford’s going forward, however, outweigh any headwinds, Ragosa said. “Our AUVs are so strong and folks really enjoy themselves at the restaurant, whether it’s a team member or guest,” he said.

The company’s had luck finding quality employees, Ragosa said. “If we open a new Ford’s across the street from a competitor, and that restaurant happened to be doing” $3 million

Dave Ragosa

Ford’s Garage’s signature burger has bacon, cheese and barbecue sauce on a brioche bun.

or $4 million, and Ford’s is averaging $5.8 million across all restaurants, “where would you go if you were a server, a bartender?” he said. “We’re getting a better-quality team member … which has helped us recruit at that high level.”

New technology, such as more efficient cooking platforms and a switch from flat-top grills to clamshell grills, is helping to improve backof-house labor, making it more efficient for team members and guests. “When you’re a line cook and some other team members are back there, it gets stressful and it’s not an easy job,” he said. “We can bring technology in that supports them. They’re going to obviously produce at a higher rate, which you can see from the numbers.”

The initial investment range to open a Ford’s Garage location is $2.8 million to $6.5 million, depending on if it’s a new build or a converted restaurant. It opened four stores last year, an increase of 20 percent, three of which are franchised.

Ford’s Garage’s competition includes No. 26 Chili’s, which did $4.46 billion in sales, according to Franchise Times’ estimate, with 1,605 units. Similarly sized Applebee’s, at No. 23, had systemwide sales hit an estimated $4.58 billion last year from 1,642 restaurants. Sales for Chili’s were up 8.4 percent, while Applebee’s saw a drop of 0.2 percent.

The company’s success, Ragosa said, is attributed to Ford’s Garage’s corporate team as much

as its franchisees. Everyone from the marketing team to the culinary team are “kicking butt,” Ragosa said. Franchisees are given a comprehensive operating playbook and are tasked with execution.

“How fast and how well you do above the playbook is on you, and they’ve done a great job adopting some of the initiatives we’ve done,” he said.

Menu innovation is another factor. The brand offers quarterly limited-time offerings to drive sales. Ford’s Garage restaurants host watch parties every year for the Kentucky Derby in May, with bourbon-infused menu items. “That helps drive unit sales to the franchisees and … really helps the guests enjoy their time,” Ragosa said.

Preparation for those LTOs and menu updates starts the year prior, involving the marketing, distribution and culinary teams. They come together to brainstorm ideas, ensuring costs aren’t too high for franchisees and the menus are marketable.

‘A

proven concept’

Marc Brown’s company, 23 Restaurant Services, is the largest Ford’s Garage’s franchisee with 20 restaurants in Florida, New York and Virginia. His franchisee experience is untraditional as he is one of the founders of Ford’s Garage, alongside Mike McGuigan and Daniel Kearns.

Brown also owns or partners with Capone’s Coal Fired Pizza, Yeoman’s Top Golf Swing Suite

Florida-based Ford’s Garage debuts at No. 287 on the Top 400, with $140 million in sales in 2023 from just 24 units.

and Tiki Docks, among others. “Restaurants have always been in my life,” he said.

Henry Ford’s former estate is now a museum coupled with Thomas Edison’s adjacent former estate, so the Ford name has a major presence in Fort Myers. Brown’s business partners owned another restaurant called The Edison and were looking to open another. “We all got together, we decided to create one: Ford’s Garage,” Brown said.

“We believe in the brand and we’re still continuing to invest heavily,” he said. “We build other restaurant concepts now, too, but we still build more Ford’s than anything else because it’s just a great return on our investment. We have a very proven concept and we’re going to continue to build as many Ford’s in the state of Florida as we can for the next five to 10 years at least.”

Brown emphasized the importance of the ambiance and food at the concept’s outlets.

“There’s a lot to look at and see,” Brown said. “We want to activate all five of their senses while they’re on a visit to our restaurant.”

Repairs ramp up Quick-lube appeal

Whether the economy is strong or struggling, car owners need vehicle maintenance. Leadership at multiple auto repair brands said it’s that consistency that led to another year of sales growth. Auto repair accounts for the largest segment within the automotive category, accounting for $7.6 billion of the $17.7 billion in total sales. Repair sales rose even with a slight 0.6 percent decline in units, from 5,712 to 5,676. Lenny Valentino Jr., president and CEO of Midas, said the brand’s $1.9 billion in sales meant another record year. “It was the highest-volume year in the company’s history, and we’re 65 years young,” Valentino said. “We’ve had 40 out of 41 months of record growth. The strategy of that growth is that you have to be a unified organization between franchisor and franchisee. We have a great relationship with our franchisees, we’ve put together a governance program for our owners and we make decisions together.” Big O Tires, which is part of the TBC Corp. portfolio with Midas, also had a strong year in sales, reaching $1.3 billion, a 16.9 percent increase. Gary Skidmore, senior vice president and chief operating officer of Big O Tires, said higher sales were driven by a 2.5 percent increase in the number of cars serviced and a 3 percent increase in tires sold. Skidmore said because of inflation, customers looking for value purchased lowertier tires, but transactions remained strong. With inflation beginning to cool, Skidmore said higher-cost tires are being purchased more often.

“We’ve had positive growth with cars, sales and tires. There was a bit of a shift to lower tiers of tires, not a tremendous amount, but a noticeable move toward a value shopper. But there’s been a rebound back up into tier two and tier one.”

– Gary Skidmore, senior vice president and chief operating officer, Big O Tires

Last year was a successful one for the oil change brands in the Top 400, with five of the six experiencing sales growth of more than 10 percent. Even Jiffy Lube, the brand below 10 percent, had strong growth, with sales increasing by 6.2 percent. The highest-ranked brand, No. 40 Valvoline Instant Oil Change, did $2.8 billion in sales in 2023, up 16.7 percent. Valvoline Chief Franchising Officer Adam Worsham said the company benefits from demand for car maintenance. “When new car sales increase, three years down the line and beyond, we start to see those cars,” Worsham said. “So, when the economy is strong, people are buying new cars, helping us fill the pipeline for the coming years. And when the economy is soft, new car sales decline, and people keep their cars longer, which also fits for us.” In addition to the need for vehicle work, Worsham said Valvoline benefits from how fast it services cars. “I think what we continue to see with the economy is that the consumer is being more choiceful with where they’re spending their money,” he said. “However, there’s also examples out there where if consumers value the services you provide, they will continue to reward those retailers. With the shift to convenience, being able to offer quick and trusted service around 15 minutes also benefits the consumers.” The importance of convenience was noticeable across the oil change brands, as Strickland Brothers Oil Change and Take 5 Oil Change, which both offer fast service, had high percentage sales. No. 313 Strickland Brothers increased its sales by 65.5 percent, reaching $116 million, while sales for Take 5 Oil Change rose 24.6 percent, to $1.2 billion.

Tommy’s Express, a car wash franchise, increased sales by nearly 30% to $259 million. The company jumped up 36 spots from No. 249.

* Franchise Times Estimate

TBC Corp. Brands

Midas and Big O Tires, both under the TBC umbrella, had sales increases. Sales for Big O Tires rose by 16.9% while Midas increased by 4%. Both brands had slight declines in units, Midas by two and Big O Tires by eight, as part of a reduction by TBC as it closed company-owned sites.

Reaching the No. 40 spot, up from No. 43 last year, Valvoline’s shift was bolstered by a 16.7% sales increase to $2.8 billion and the unit count reaching 1,799, up 10.9%.

Auto Style

Automotive detailing franchise Tint World , No. 345, pushed sales up 19.8% in 2023, to $89 million, as it added 25 units to the system, an increase of 22.9%

* Franchise Times Estimate

“The consumer is being more choiceful with where they’re spending their money ... if consumers value the services you provide, they will continue to reward those retailers.”

No. 213

Slick Finish

Up and down results

Labor shortages led to staffing franchise struggles last year as each Top 400 firm in that segment saw sales decline. At Spherion, the company reduced required quotas by 25 percent after hearing from franchisees that they were worried about meeting them. Sales at Spherion decreased by about 23 percent, from $554 million to $426 million. But Spherion, owned by Randstad Holding, is getting creative.

“Our industry is evolving, and much faster than we had seen in the past,” President Kathy George said. “One of the things we’re able to do is leverage the resources of the global parent company.” Murphy Business & Financial Corp. grew sales by 14.1 percent. The brand faced some troubles last year related to inflation, and CEO Thomas Coba said that trend may continue. “The country has had 11 interest rate increases in 18 months,” Coba said. “That’s alarming for potential buyers who are thinking about using some form of financing to help buy the business that they want to buy. Those are our clients.” The coworking and shared office segment saw a big jump last year with two brands: Venture X and Office Evolution, both under United Franchise Group’s Vast Coworking Group. Vast President Jason Anderson said location sizes, from 6,000 to 50,000 square feet, mean the concepts can “really fill any footprint in any office space.” Vast’s goal is

“Our industry is evolving, and much faster than we had seen in the past.”

—Kathy George, president, Spherion

Sales Growth: Business Services

Top 3 Bottom 3

Employment Woes

The largest subcategory under business services is employment and staffing, which encompasses five brands. The segment brought in $5.2 billion last year, down 10%, or about $579 million less than 2022. Unit growth was about even.

Sharing Is Caring

The largest growth spurt was in the coworking category, which comprises two brands, Office Evolution and Venture X, each owned by United Franchise Group’s Vast Coworking Group. The sector grew 27.7%, or about $18 million, in 2023.

Units Down, Sales Up

No. 225 Goosehead Insurance has the most units in the category, at 1,169. Its unit count decreased by 256 units, or 18%. Sales, on the other hand, went up 23.9% to $233 million.

“All of us collectively are still a bit of a small segment of the overall franchise industry.”

—Thomas Coba, CEO, Murphy Business

No slowdown here

Demand for cleaning services refuses to wane as the category overall did $12.4 billion in sales, a jump of 15.8 percent. In a disaster restoration segment that pulled in $7.3 billion in sales last year, a boost of 25.1 percent, PuroClean set the pace. The top percentage grower in the segment at 44 percent, PuroClean closed the year with $454 million in systemwide sales as it added 75 locations. President and Chief Operating Officer Steve White credited marketing initiatives, along with the company’s reputation for providing reliable 24-hour restoration services, for the brand’s growth last year. “For the first time we have somebody here dedicated to being in the field to provide training and education workshops to not only our franchisees but to their sales people,” he said. The other big winners in the disaster restoration space are CRDN, Rainbow International, ServPro and Paul Davis Restoration as they all exceeded 21 percent sales growth. Also of note, No. 24 ServPro crossed another billion-dollar milestone as its $912 million increase put it at $4.6 billion. It’s by far the largest brand in the segment, followed next by Paul Davis Restoration at $1.4 billion.

Big Get Bigger

Already the largest disaster restoration brand by units (and sales), ServPro added 93 locations to its system in 2023 to finish the year with 2,229.

No. 119

Despite adding 562 units, commercial cleaner

Jan-Pro saw sales drop by 2.9%. It fell six spots to No. 119 with $641 million in systemwide sales.

Up & Down

Coverall saw a 5.5% increase in sales despite losing 308 units, a 4% decrease to 7,404 locations.

Wspotless offices

hile the commercial cleaning sector didn’t turn in the same monster sales percentage increase as the disaster restoration segment, it did end the year up 4.6 percent, and there were some notable gainers in the space. Anago Cleaning Systems, City Wide, Stratus Building Solutions and Fish Window Cleaning all posted double-digit sales increases. Anago led the group with a 21 percent sales increase despite seeing a slight drop in unit count. “A big piece of what our numbers resulted from last year was a combination of our investment in our master franchisees. We’ve been investing pretty aggressively in the group, and helping the master franchisees grow their sales teams. We’ve also changed website providers and a CRM that automates a lot of the sales process,” said Anago CEO Adam Povlitz as he referenced the customer relationship management tool. City Wide, meanwhile, increased sales by an impressive $111 million and unit count by 11.1 percent. Founded in 1961, City Wide is targeting further expansion in the United States and Canada, said Jeff Oddo, the CEO. “There really wasn’t any secret sauce to our success. We are one of those companies that is benefiting from a 25-year-old strategy of attracting and retaining very talented folks who execute really well on our plan,” he said. Stratus saw sales increase by $29 million, and a 25.3 percent unit increase with 741 new locations.

“We’re the property version of the emergency room. When something bad happens and your home or office get damaged from a natural disaster or a fire or maybe your sprinkler systems turns on and causes floods, we’re there to fix it.”

“Last spring, we reached the $100 million mark in sales. I want us to be a $300million company and we have laid out a road map to get there by 2028.”

—

Adam Povlitz, CEO, Anago Cleaning Solutions

— Steve White, president, PuroClean

Senior growth engine

While the makeup of the Top 400 Health & Medical category is changing, with regenerative therapy, mental health and infusion concepts all experiencing growth, senior care brands still drive the lion’s share of sales. The 12 franchises on this year’s list generated $7.1 billion in total sales for 2023, an increase of 11.5 percent. The largest player, Home Instead, closed out 2023 with $2.6 billion in systemwide sales, a 9.8 percent gain. FirstLight Home Care saw a double-digit percentage increase as its sales hit $232 million, up 23.1 percent. The company introduced a new memory care program to its franchise network last year, and CEO Glee McAnanly said the need for those services is rising. “Two out of three people over 80 die with some form of dementia, so we’re looking at how do we make sure we’re taking care of those people,” she said. Franchisees are focused on enhanced caregiver training and solidifying relationships with client referral sources, McAnanly continued, and the brand last year emphasized a “deep instead of wide” strategy with owners to help them maximize their territories. Thirty-six territories grew sales by $500,000 last year, she noted, and 13 grew by more than $1 million. Margaret Haynes, CEO of Right at Home, said last year brought an increased focus on business fundamentals and working with franchisees to leverage best practices in caregiver recruitment and retention. An applicant tracking tool helps owners effectively engage with prospective caregivers, and through its innovation team formed in 2023 the brand is testing client monitoring tools and other technology “that works alongside the caregiver,” she said. Right at Home hit $877 million in sales from 729 units last year, up 12.7 percent.

“We’re

on the cusp of so much demand out there. And we need equal numbers of caregivers to take care of those individuals.”

Sales Growth: Home Healthcare

Top 3

“A

Bottom 3

at Home

—Margaret Haynes, CEO, Right

focus last year was getting franchisees back out and talking to referral sources in their communities.”

—Glee McAnanly,

CEO,

FirstLight Home Care

Therapy Shift

“The destigmatization of mental health all around has gotten franchisees really excited to get their clinics open,” said Erin Pash, CEO of Ellie Mental Health. The Minnesota-based franchise grew its unit count by 151 in 2023 to finish the year with 206 clinics and $65.3 million in sales. Personalized therapist matching means there’s a “warm handoff versus a cold click on a website,” Pash noted, and as a licensed clinician she also remains connected to the needs of providers.

$628 Million in Adjustments

The three chiropractic franchises on the Top 400 list did $628 million in total sales last year, led by The Joint Chiropractic with $488 million. By far the largest player with 935 units, The Joint’s sales were up 12.1%. New on the list is 100% Chiropractic, which did $74 million in systemwide sales from 118 units. Healthsource Chiropractic finished 2023 with sales of $66 million from 130 units.

Homes get facelifts Repair services rise

Within home services, home improvement franchises generate the majority of the category’s more than $13 billion in sales. The 30 brands on this ranking combined for $6.1 billion last year, up 3.6 percent. No. 241 Superior Fence & Rail grew to 242 units in 2023, which helped it drive $210 million in systemwide sales, a massive 96 percent boost. President Zach Peyton attributed the growth to the ease of scaling. “Once you achieve that scale, then you realize all of these efficiencies, and the world makes sense,” he said. “Like they say, the proof is in the pudding, but we’ve got the pudding.” With increased demand for home improvement, Superior Fence upgraded its technology stack with a new “business process management tool,” said Peyton. The program helps franchisees scale their business without overwhelming themselves. No. 132 Precision Door Service also took advantage of the heightened home improvement interest. “Homeowners are increasingly investing in their properties, seeking to enhance curb appeal, security and energy efficiency, which has boosted demand for Precision’s services,” said President Mike Brickner. PDS focused on training its franchisees and technicians on the latest upgrades to garage doors and related services. Since these brands rely on reputation, communicating new information clearly and efficiently is paramount. Both brands, like others in the segment, are still dealing with fluctuating supply costs.

“We look at how we can take better care of our customers and leave our customers’ homes safer than when we got there.”

—Dan

Mock, vice president of operations, Mister Sparky

Percentage Power

Superior Fence & Rail wasn’t just the top performer in sales growth. It added 164 units to its system last year, an increase of an astounding 210.3%.

Top 100

No. 96 CertaPro Painters jumped 10 spots on the ranking to break into the top 100. The brand ended 2023 with $770 million in sales, up 6.6%, and finished the year with 488 units.

In the Billions

Electrical, HVAC and plumbing franchises combined to finish 2023 with $4.8 billion in sales, up 4.5 percent. Aire Serv attributed its 4.4 percent growth to interest in indoor air quality and energy efficient solutions. “Aire Serv’s focus on providing environmentally friendly and cost-effective solutions also resonated with consumers, further driving brand growth,” said President Brad Roberson. To equip franchisees to handle the demand, the brand launched a new training program with an emphasis on the latest technology, along with improved marketing. Mister Sparky is also testing new marketing tactics, said Dan Mock, vice president of operations. “It’s always been a challenge,” he said. “Probably always will be, because it is so hard to put your finger on the pulse of what’s happening.” Since electrical repairs and updates are not things the average person thinks of until it’s needed, Mister Sparky focuses on community involvement to boost brand awareness. Franchisees sponsor community initiatives and ensure when the time comes, consumers think of Mister Sparky when they need it. Mister Sparky is also upgrading its tech stack with artificial intelligence tools to improve the customer experience. The largest franchisees are testing it, said Mock, with plans to roll it out broadly if beneficial.

Franchise Times Estimate

“We can help you get to scale, and then once you achieve that scale, then you realize all of these efficiencies, and the world makes sense.”

Plumbing repair provider Roto-Rooter is the largest in the segment with $1.67 billion in sales last year, an increase of 4% compared to 2022. It closed 2023 with 484 units.

Small Player, Big Gains

In good shape

The wide-ranging personal services category with $27.7 billion in sales includes everything from do-it-yourself painting class concepts to eye care brands, junk removal companies and, of course, fitness. StretchLab made the biggest move in the fitness category, climbing 85 spots to No. 247 as it pushed sales up an estimated 100 percent, to $200 million, and units up 53.1 percent to end 2023 with 467 locations. “We have fantastic franchisees that are passionate and that are able to follow systems and truly deliver as leaders in their organization. By arming them with the right tools, they can execute a lot more efficiently and move faster to open more studios,” CEO Verdine Baker said. Another big gainer in the fitness space was Club Pilates, which like StretchLab is owned by Xponential Fitness. It moved to No. 102 on the list with a 40 percent sales increase to an estimated $735 million from its 996 units. “It wasn’t that long ago that Pilates probably intimidated a lot of people because they didn’t know what it was. Now, it’s a widely accepted health benefit and as a result we’ve been able to grow into new markets and bring Pilates to more people,” said Tianna Strateman, the brand’s president. Other segment standouts include Burn Boot Camp, with sales up 25.3 percent to $199 million, and Crunch Fitness, with its 23.3 percent increase to $957 million.

Sales Growth: Fitness

“Our job as franchisors is to grow the brand and better the brand. Because of that we’ve been very mindful of listening to our franchisees and what are their immediate demands that will help drive sales at the unit level and maximize opportunities in their marketplace.”

— Tony Zaccario, CEO, StretchZone

Style to drive sales

My Salon Suite President Susan Boresow credited her brand’s rapid growth in 2023 to a stronger focus on marketing and operational tactics to increase member occupancy. The company, which Propelled Brands bought in 2022, provides independent hair stylists and beauticians leased spaces to build their own business. The brand moved up 24 spots in the rankings to No. 306. My Salon Suite grew sales by $20 million and added 56 units to the system. “There were many initiatives that impacted sales last year, including recruitment and retention strategies and tactics as well as industry partnerships with iconic brands like Modern Salon and Behind the Chair,” Boresow said. The franchise launched an app to make operations more efficient for franchisees and renters, so they can “pay their rent, submit maintenance requests, view hundreds of hours of business and industry education on demand and access all of the other perks we offer to help them succeed as business owners.” The other big gainers in the hair care category included Phenix Salon Suites with 10.7 percent sales growth and 8.5 percent unit growth, and Great Clips, which increased sales by $143 million to reach $1.7 billion in total revenue.

Sales Growth: Hair Care

$600 Million

That’s the sales growth for Planet Fitness, already the largest brand in the fitness segment. It hit $4.5 billion in sales last year, up 15.4%, and ended 2023 with 2,575 global locations.

Snapshot of Category Sales

• Goldfish Swim School +20.9%

• Sky Zone +18.4%

• Dogtopia +14.7%

Sales Growth: Education/Learning

Slower, but a slight uptick

Mailing, shipping and packaging franchises generated nearly $5 billion in total sales in 2023, though growth slowed to just 0.4 percent for the segment within an overall printing and shipping category that grew 2.8 percent to $8.6 billion. The UPS Store, which in 2023 added 110 global net new units, pushed franchise development in non-traditional sites such as hotels, military bases, college campuses and grocery stores, and hit systemwide sales of $3.8 billion. In the printing, graphics and signs segment, AlphaGraphics grew sales 10.8 percent to reach $341 million as President Ryan Farris noted an emphasis on lead flow management paid dividends. The brand enhanced its customer relationship management platform to better track leads, provide job estimates and “turn estimates into wins,” said Farris. “We dramatically improved our lead conversion.” Primarily a business-to-business concept, AlphaGraphics also rolled out a national accounts program with improved digital order capabilities and, to enable more consumer business, partnered with online graphic design tool Canva.

“We have a mature network with longtime franchisees and so we have to ensure our franchisees embrace and are championing our efforts at corporate.”

—Ryan Farris, president & COO, AlphaGraphics

Sales Growth: Printing, Graphics, & Signs

Top 3

Bottom 3

Sales Growth: Shipping & Packaging * Franchise Times Estimate

Down across the board

The number of homes bought and sold fell off last year, leading to a decline in sales for the segment. Total sales for real estate brands fell by 16.8 percent, from $33.3 billion in 2022 to $27.7 billion in 2023. Realty One Group CEO Kuba Jewgieniew said the industry’s total number of transactions in 2023 was below the average of about 5.5 million, but the drop isn’t expected to last. “Looking back, 2021 was spectacular, it was about 6.3 million,” Jewgieniew said. “In 2023, we dipped below 4 million. It’s been a huge swing. However, we’re very well positioned for a market snap-back. The year 2021 was an anomaly, and for 2024, our trajectory is close to over 100,000 transactions.” Those transactions, Jewgieniew said, should help sales for the brand, which fell to $843 million in 2023, a 15.1 percent drop. House flipper HomeVestors did $1.6 billion in sales, down 5.5 percent. CEO Larry Goodman said the brand is still positioned well as the average home resale price for its franchisees is $250,000, versus an overall average sale price above $500,000. “That’s the key,” he said.

“The amount of homes bought and sold has varied a little bit, but it’s still pretty high. The economy has had some impacts on that ... but with pricing continuing to go up, our sales volume and gross revenue has stayed high.”

—Larry Goodman, CEO, HomeVestors

Sales Growth: Real Estate

Slimmer System

No. 14 Re/Max shed 153 units from its system in 2023 to finish the year at 9,022. It’s still the largest by several thousand locations and did $10.4 billion in systemwide sales. In at No. 100 is Epcon Communities, which also saw a decline in units, down 237 to 1,264.

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All brands up

Franchises across the segment grew sales in 2023, as Einstein Bros. Bagels led the pack with its 12.8 percent increase to $588 million. In growing sales by 10 percent to $2.9 billion, 3,996-unit bakery franchise Paris Baguette treats its franchisees as business partners by giving them the resources and training required to succeed. “It’s the support we’ve provided and laid out, coupled with the incredible products and offerings,” that contributed to unit sales growth, CEO Darren Tipton said. The sales growth in 2023 is a turnaround from 2020, when the brand was the only bakery/café franchise to see a systemwide sales decline, down 1 percent. When Paris Baguette hired Tipton in 2020, he began a rebrand to help customers recognize it as a North American bakery café. That included a new prototype in 2021 with a layout designed to keep guests in stores longer. These initiatives have long-lasting impacts, Tipton said, like sales and unit growth last year. Newk’s Eatery, which FSC Franchise Co. acquired last year, focused on off-premises revenue channels such as third-party delivery and catering to help drive systemwide sales of $217 million. That included using franchisee advertising dollars to promote Newk’s on apps like Uber Eats and holding a catering seminar for owners to talk about ways to improve the offering, CEO Frank Paci said. “That’s really where we drove some of the business,” Paci said. At 50-year-old La Madeleine, guests most frequently order the tomato basil soup or the Caesar salad, the latter of which is Chief Operating Officer Christine Johnson’s favorite. The company finished 2023 with 90 units, primarily in southwestern states. “The last few years has been a big focus for us on how do we take this wonderful legacy brand that garners such loyalty from our customers,” she said, “and translate that into a model that can be replicated and that will allow us to grow outside of our original market.”

“A lot of people ask me, who are your competitors? I think it’s nobody and it’s everybody. There’s nobody doing what we’re doing on the scale that we are.”

Sales Growth: Bakery, Café & Deli

Top 3

Bottom 3

* Franchise Times Estimate

—Darren Tipton, CEO,

Paris

Baguette Beefin’

Up

Billions Club

French-inspired bakery franchise Tous les Jours (No. 75) and GoTo Foodsowned McAlister’s Deli (No. 74) each broke the $1 billion mark in system sales. Tous les Jours, French for “every day,” increased sales from $936 million to $1 billion, and McAlister’s jumped from $956 million to $1 billion.

Beef O’Brady’s parent company FSC Franchise Co. bought Newk’s Eatery late last year. Newk’s did another $2 million in sales in 2023 to reach $217 million as it closed four stores to end the year with 95 units. It had 122 at the start of 2020.

Moving Down

Panera Bread is the only bakery/café concept to slip on the Top 400, going from No. 17 to No. 19. The franchise did an estimated $6.3 billion in sales last year, the highest in the category by far. The company added 55 net new stores last year, for a total of 2,173 units.

“There has been a big shift as far as the customer expectation on convenience, and the fast-casual model that we operate plays into that really well.”

—Christine Johnson, COO, La Madeleine

Consistency wins

With $8.6 billion in total segment sales for 2023, an increase of 5.7 percent compared to 2022, it’s clear consumers want their breakfast and brunch. The Original Pancake House, the top performer by sales growth percentage at 17.5 percent, doesn’t have the biggest marketing presence. Instead, it relies on consistent quality and word of mouth to bring in hungry customers. “We don’t tend to follow trends or cut corners,” said President Elizabeth Highet of the brand that did $316 million in systemwide sales last year. “We just steadfastly adhere to our quality.” Denny’s did nearly $3 billion in systemwide sales last year, up 4.4 percent. “We have quite the footprint and people have grown up with the brand,” said Executive Vice President Steve Dunn. “It’s a brand that’s kind of just part of the culture.” Bringing back signature items such as the Grand Slam attracts customers looking for something nostalgic, Dunn said. Denny’s also leveraged third-party delivery as a sales channel alongside virtual brands Banda Burrito, Burger Den and The Meltdown.

“I think it’s really refreshing for some franchisees that every single detail matters. We try to get out and help franchisees when they need it.”

— Elizabeth Highet, president, The Original Pancake House

Sales Growth: Casual Breakfast

Top 3

Bottom 3

Small But Growing

Of the 13 breakfast brands on this ranking, seven are under 100 units. Those seven— Another Broken Egg Cafe, Broken Yolk Café, Eggs Up Grill, The Flying Biscuit Café, Huckleberry’s, The Big Biscuit and Famous Toastery all grew sales. Another Broken Egg Cafe, the largest in this group, hit $166 million in sales, up 0.6%, from 97 units.

QSRs say execution wins

What a year for beef. Quick-service burger brands were pumping out their products to the tune of nearly $200 billion in total sales for 2023. The three largest brands— McDonald’s, Burger King and Wendy’s—combined for more than $170 billion in sales. In a category rife with competition, a handful of smaller but fast-growing franchises generated double-digit percentage sales increases, with Culver’s leading the way at 16 percent. The Wisconsin-based company topped $3 billion in sales last year as its unit count rose to 945. CEO Rick Silva noted traffic was up 4 percent in 2023 and said a “crazy commitment to people and hospitality” is what keeps customers coming back. To support that focus, Culver’s drew on data science to more efficiently deploy workers in its drive-thrus and, as it added third-party delivery and an order-ahead app function for the first time, its owneroperators are hiring more people to support the growing digital business. The additional sales justify the expense, he noted, “and we were obsessively focused on we didn’t want our digital activity to negatively impact dine-in guests.” For Chris Dull, CEO of Freddy’s Frozen Custard & Steakburgers, the 14.5 percent systemwide sales growth to $925 million comes as the brand makes strides in its digital channels and improves execution in the kitchen. A mobile app and new web platform launched in 2022 are generating more first-party sales, while “third-party delivery is up in the teens,” Dull said. Freddy’s rolled out a new restaurant prototype last year with better grills, an improved kitchen display system using graphic instructions and repositioned its cold lines. Freddy’s took some price, he said, “but we’re very cognizant that price can be detrimental to traffic and we fend that off as much as possible.” Texas icon Whataburger is firmly in growth mode, said CEO Ed Nelson. Sold to BDT Capital Partners in 2019 when it had 828 units, Whataburger finished 2023 with 997 stores, including 72 it added last year. The average unit volume increased by $800,000 from 2022 to 2023, Nelson said, to $4 million, and the brand is “constantly investing in quality,” from ingredients to technology improvements and franchisee support.

Sales Growth: QSR Burgers

“I will never be your fastest drive-thru because I want to be make-it-fresh good, the best quality, best experience.”

—Ed Nelson, CEO, Whataburger

Big Mac Boost

No. 1 McDonald’s pushed global sales up 9.6% in 2023, good for a massive gain of $11.3 billion as it hit $129.5 billion overall. New unit growth helped drive up that sales total as the brand’s net store count increased by 1,547, a huge jump from the 244 locations it added in 2022.

Whopping Cut

No. 4 Burger King shed 405 net stores in 2023, by far the most in the segment. Its global store count dropped from 19,789 to 19,384. Over at CKE Restaurants, Hardee’s lost 54 units overall while sibling brand Carl’s Jr. added 33. Sales at Hardee’s likewise dipped, down 1.9%, with Carl’s Jr. up 8.4%.

Better Box

Jack in the Box did more sales out of existing units in 2023 as its store count grew just 0.2% but systemwide sales jumped 7.5%, to $4.4 billion. Its AUV hit $1.99 million.

An uptick, plus challenges

In a better burger segment that’s constantly working to attract customers willing to pay a bit more than they would at their fastfood counterparts, total sales growth slowed slightly in 2023 to 5 percent versus 7.8 percent the prior year. Five Guys continues to lead the segment in systemwide sales and growth percentage, up an estimated 5.6 percent to $3.2 billion. It gained 63 net new units last year, to reach 1,863 global stores, the bulk of which (1,453) are in the United States but with a growing international presence in Europe, Hong Kong and the United Arab Emirates. Five Guys emphasizes its own ordering channels, Chief Marketing Officer Molly Catalano said, and aims to drive business in its stores while still utilizing delivery platforms. “In the end, our burger is better if you eat it right away,” she said. Elsewhere in the segment, Fatburger and Elevation Burgers, both owned by FAT Brands, had opposite sales growth in 2023. Fatburger was up 5.1 percent, while Elevation was down 7.2 percent. Mooyah Burgers, Fries and Shakes, a smaller brand at 82 units, grew sales slightly by 3.3 percent. A more compact prototype is intended to better accommodate carryout orders, while a new online ordering system launched in late 2022 enables a better customer experience. At BurgerFi, sales declined 3.1 percent in 2023 and its total unit count shrunk by 12, perhaps a foreshadowing of what was to come in 2024. At press time, BurgerFi International filed for bankruptcy as it said a “drastic decline in post-pandemic consumer spending amidst sustained inflation and increasing food and labor costs” meant it needed to stabalize the business “in a structured process.”

Sales Growth: Better Burgers

3 Up, 2 Down

* Franchise Times Estimate

“Following the debut of our first Fatburger and Round Table Pizza co-branded concept last year, we’ve seen remarkable interest in the pairing with over 50 new locations currently under development.”

—Andy

Wiederhorn, chairman, FAT Brands on company’s Q2 earnings call

Positives and negatives

It was uneven year for the casual dining category as it managed a modest 3.7 percent sales increase, but lost 97 total units. Making its debut on the ranking, Ford’s Garage was the top percentage grower at nearly 24 percent to reach systemwide sales of $140 million with just 24 units open. Chili’s and Johnny Rockets landed in positive territory despite struggling to grow unit counts, especially in the United States. “What fueled growth for us in 2023 was international expansion,” said Jake Berchtold, president of Johnny Rockets. “We had over a dozen international restaurants open in 2023. We also leveraged FAT Brands’ scale and purchasing power to source higher-quality food items at a lower price point.” Johnny Rockets pushed sales up 7.8 percent, to $288 million. Chili’s, meanwhile, told investors in late 2023 that its sales increases were coming primarily from price increases and favorable menu item mix. It finished last year up an estimated 8.4 percent. The brands hit hardest were The Melting Pot, which saw total sales fall $8 million, and Applebee’s, down an estimated $10 million.

“We rolled out a new menu for Johnny Rockets in 2023. Before FAT Brands’ acquisition, every franchisee had their own unique menu offerings, and it was really important for us to consolidate and bring consistency to the brand.”

— Jake Berchtold, president, Johnny Rockets

Sales Growth: Casual Dining

Top 3 Bottom 3

* Franchise Times Estimate

No. 59

Red Robin fell in the middle of the casual dining category with a 2.3% increase to $1.6 billion in sales, according to a Franchise Times estimate. Unit count decreased by 1%, or five units.

More chicken, please

The demand for chicken continues to skyrocket, from sandwiches to wings and yes, items with scorching heat levels. No. 165 Dave’s Hot Chicken added 78 units last year, a 76.5 percent increase, ending 2023 with 180 stores. “There are shortages of products and commodity fluctuation. But all in all, the headwinds are not really there,” CEO Bill Phelps said. “The category is growing. People are eating more chicken and we continue to see improved sales in the category.” Dave’s sales were up 40.1 percent to $406 million. Korean fried chicken franchise Bonchon, at No. 181, is up five spots on the list. The addition of two new sauces last year—yangneyom, a sweet and spicy variety, and Korean barbecue—to the propriety sauces it’s had for two decades helped drive traffic and sales, CEO Suzie Tsai said. Bonchon, up 5.6 percent in sales, forms a collaborative relationship with its operators, allowing for flexibility. “We’re letting our franchisees pick the right service model and type of kitchen and menu that they need, based on the market that they want to go into,” Tsai said. At Zaxby’s, a “world-class” development team is behind a lot of the company’s recent growth, Chief Development Officer Mike Mettler said. “We’re a large business in a very competitive space. I need a best-in-class team and tools,” Mettler said. Zaxby’s is up one spot on the list to No. 44, with $2.5 billion in system sales. Sales were up 5 percent and unit growth was up 2 percent. The franchise ended 2023 with 145 corporate units out of 941, which Mettler said is part of his development plan for Zaxby’s. No. 164 Chester’s didn’t see major sales gains but still grew by nearly 4 percent. Chester’s franchisees often operate in convenience stores, which is helping to drive sales at the unit level. “The c-store industry over the last decade or so has experienced a dramatic change in terms of elevating foodservice, and most of our franchise locations are in convenience stores,” Vice President of Marketing William Culpepper said. Slim Chickens boosted its unit count by 58 stores last year, which helped it get to $388 million in systemwide sales from 233 restaurants and climb 12 spots to No. 168. Even before the coronavirus pandemic, Slim Chickens emphasized multiple revenue channels to drive sales for franchisees, such as a loyalty app and online ordering. “The price of poultry can go up, and it fluctuates,” CEO Tom Gordon said. “We have to do our job for our franchisees of managing that fluctuation and making sure that we can deliver quality cost of goods on their P&L as it comes.”

“The headwinds are not really there. It’s a great business. The category is growing. People are eating more chicken and we continue to see improved sales in the category.”

—Bill Phelps, CEO, Dave’s

Hot Chicken

Top 10

Chicken powerhouses Chick-fil-A and KFC remained in the top 10 this year, keeping their same No. 6 and No. 3 rankings, respectively. KFC did $33.86 billion, an 8.8% increase, across its 29,900 units. Chick-fil-A increased sales by 15% to $22.28 billion with 2,981 restaurants.

King of the Coop

Dave’s Hot Chicken jumped 38 spots, breaking into the top 200 at No. 165. The company did $406 million, a 40.1% jump, and opened another 78 restaurants, a 76.5% increase, last year. That’s an average unit volume of $2.25 million.

Sales Growth: Chicken

Top 3 Bottom 3

Wingin’ It

Chicken wings are soaring high in sales. The eight-brand subsegment did $4.3 billion in sales last year, a 22% year-over-year increase. Unit growth increased by 10.5%. Wingstop is the top grower among chicken wing concepts on the list, with a 27.1% increase to $3.5 billion. The 80-unit Wings & Rings rose 25 spots to No. 265.

No. 227

In June 2023, Lee’s Famous Recipe Chicken bought four units in Indiana from franchisees who were retiring. The franchise ended the year with 17 corporate-owned restaurants and 106 franchised ones. Lee’s climbed 17 spots with systemwide sales of $229 million.

“The c-store industry over the last decade or so has experienced a dramatic change in terms of elevating foodservice, and most of our franchise locations are in convenience stores.”

—William Culpepper, vice president of marketing, Chester’s

Gains all around

Burritos, tacos or bowls, people can’t get enough Mexican cuisine. The category pulled in $20.5 billion in sales last year, an increase of 7.6 percent. After hitting $1 billion in sales in 2022, Qdoba Mexican Eats added $98 million to that figure last year, an increase in systemwide sales of 9.8 percent. “Mexican fast-casual happens to be, in my opinion, the most attractive category of the restaurant industry,” said Qdoba CEO John Cywinski. “We freshly prepare everything and that’s not something that you can get at McDonald’s or Chick-fil-A.” Catering proved a gamechanger for Qdoba, as it was at Moe’s Southwest Grill. “We do a pretty big piece of our business in catering,” said Moe’s Chief Brand Officer Tory Bartlett. “We’ve been leaning pretty hard, and that had a lot of success the last two and a half years of growing that piece of the business.” Catering became so big that restaurants were renovated just to accommodate the channel. Flat-tops grills were replaced with ovens, and tech investments improved prep and ordering functions.

Biggest Player

No.10 Taco Bell kept its seat as the top Mexican brand, growing sales by $1.3 billion, or 8.6%. Taco Bell also added 346 units, bringing its total to 8,500plus worldwide.

Breaking 100

No. 335 Bubbakoo’s Burritos surpassed 100 units in 2023, adding 18 to end the year with 116. The brand jumped 30 places in the ranking with its 18.8% sales increase to $95 million.

Sales Growth: Mexican

Top 3 Bottom 3

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The delivery- and carryoutfocused pizza franchises vied for market share in 2023 as consumers continued to spread their spending around. Major value players Domino’s and Pizza Hut reversed their systemwide sales declines from 2022 and continued to push unit growth, especially outside the United States. For Domino’s, a 4.2 percent increase in sales translates to a jump of $736 million and a year-end sales total of $18.3 billion. CEO Russell Weiner in the company’s year-end earnings call noted the Hungry for MORE strategy is delivering results. “You’re probably also noticing a shift in our advertising as we’re beginning to romance the product more to showcase the deliciousness of our food,” he told investors. Service times, he added, are back to pre-pandemic levels. Pizza Hut turned in 3.6 percent sales growth to hit $13.3 billion, while Papa Johns pushed systemwide sales across the $5 billion mark for the first time. At Marco’s Pizza, Chief Growth Officer Steve Seyferth said a “challenger brand mentality” underpins the company’s approach. Marco’s grew total sales to $1.1 billion, up 7.5 percent, and finished 2023 with 1,206 stores. National advertising campaigns, which the brand started in 2019 after establishing its first national ad fund, helped push aided brand awareness to 79 percent last year. “We still have a ways to go to catch the top four ahead of us,” said Seyferth. “They’re all at 99 percent awareness, so we’ve got a lot of white space out there.” Menu innovation proved key to attracting customers, he noted, as Marco’s deployed an “artillery of new products” in 2023, such as its Mike’s Hot Honey limited-time offer and a lineup of $5.99 handheld Pizzolis. It rolled out a new cloud-based technology platform to franchisees in October. Elsewhere in the segment, Donatos Pizza saw a 7.8 percent sales dip and Hungry Howie’s was down 2.3 percent. A missing slice in this year’s ranking is Little Caesars, which did not submit its sales and unit data.

“Driving traffic and taking care of the customer and bringing them back is paramount.”

—Steve Seyferth, chief growth officer, Marco’s Pizza

Store-Opening Spree

Pizza Hut went on an international new unit tear in 2023, with 800 of its 832 net new unit openings happening outside the U.S. The brand’s global store count hit 19,866 as its openings outpaced those of the largest pizza player, Domino’s. With its 711 net unit increase, Domino’s finished 2023 with 20,591 locations.

$200 Million

That’s the sales increase for Papa Johns even as the brand’s global unit count dropped by 13, to 5,693 to finish 2023. A 4.1% increase in systemwide sales pushed it just over $5 billion.

Billion-Dollar Mark

Boston’s Pizza surpassed $1 billion in sales for 2023, even as its net unit count dropped by 11. The chain finished the year up 10.7% in sales from its 418 restaurants.

Sit and stay

Consumers continued to hit the buffet, gather to watch sports and opt to mix in a sit-down meal when they craved pizza, as the sales for the largest dine-in pizza brands show. The nine franchises in this Top 400 segment churned out nearly $3 billion in total sales for 2023, with companies such as Mountain Mike’s Pizza remaining firmly committed to the dining room even as digital sales channels grow. “Dine-in is well over 50 percent of our business,” said CEO Jim Metevier. “People think of us as a dinein experience. And I’d like to grow our dine-in even more.” Based in Newport Beach, California, and with a strong West Coast presence of 279 units, Mountain Mike’s grew systemwide sales 23.5 percent last year, to $344 million. The brand kicked up food innovation in 2023, Metevier said, after an 18-month process to build systems and discipline around R&D. That resulted in the successful introduction of its Garlic Not-Knots and iterations including jalapeno and cinnamon that “lifted our sides category 31 percent,” he said. Sports partnerships—Mountain Mike’s is the official pizza of the San Francisco 49ers and Los Angeles Angels, and sponsors the Sacramento Kings—have brought greater brand visibility. Other marketing efforts focused on “romancing the brand with our consumers,” said Metevier, and highlighted the lunch buffet, salad bar and large dining rooms with plentiful TVs. At Pizza Ranch and Cicis, up 8.5 percent and 4.6 percent, respectively, kids gaming arcades help amplify the dine-in experience. Cicis is leaning into its game rooms, said President Jeff Hetsel, as it continues a brand revitalization effort that started in 2021 when SSCP Management joined with Gala Capital to buy the brand out of bankruptcy. Hetsel said in the years since, the new ownership “basically put rocket fuel” behind a revamp that had been underway since 2019 but was hampered by the pandemic. It finished 2023 with $355 million in sales from 275 units.

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Some big breadwinners

Subway, the behemoth in the category at an estimated $20.5 billion in systemwide sales, was up 7.3 percent as its global unit count swelled by 557 stores. Much of those gains came from its international presence, as the brand continued to shutter domestic locations last year to the tune of more than 700 closures. For Jersey Mike’s, a net store increase of 286 helped it surpass $3.3 billion in total sales, up 24.7 percent. At Cheba Hut, a marijuana-themed sandwich chain, core values dictate every move the corporate team makes. “When you do that, it makes tough conversations easy and you tend to get the right outcome,” Chief Relationship Officer Seth Larsen said. The brand is the top percentage grower in the sandwich category, with a 28.3 percent increase in sales last year. Cheba Hut added nine stores in 2023, to give it 60 units, a more than 17 percent year-over-year increase. Larsen said last year’s rising costs forced the company to be mindful of passing along price hikes to consumers. “We want to be the brand that people can come and enjoy multiple times a week,” he said.

No. 208

About 80% of Penn Station East Coast Subs’ sales come from offpremises channels. Craig Dunaway, chief operating officer for the 323-unit brand, said the category has shifted from telling customers how to order, to customers telling brands how they want to order. “The initiatives of being where the customer is … I think that’s helped drive transactions,” Dunaway said.

Sales Growth: Sandwiches

Top 3

Bottom 3

“Eighty-five percent of the growth is existing franchisees. It’s really fueled by the success of the franchisees within the system.”

— Hoyt Jones, president, Jersey Mike’s

More craveable results

The snacking didn’t stop in 2023, with consistent demand for the mid-morning smoothie, afternoon bubble tea and indulgent, savory pre-dinner bite. The snacks segment pushed sales up by $2.1 billion overall. Tropical Smoothie led the way with its 16.5 percent increase, a gain of $177 million as it hit $1.3 billion in systemwide sales. “Much of that growth is coming from our existing franchisees and, in this industry, that’s a true testament to the brand,” said Cheryl Fletcher, chief development officer. “They believe in the brand, they believe in the commitment and they’re continuing to grow.” Wetzel’s Pretzels was another big sales gainer, up 15.2 percent. With more than $13.3 billion in sales, a jump of 7.5 percent, No. 12 Dunkin’ is the highest-ranking snack brand. Tim Hortons, a Canadian coffee brand making another big push in the United States, increased sales by 9.5 percent. Elsewhere in the segment, fresh pretzel stalwart Auntie Anne’s tacked on 61 net new units to finish 2023 with a global store count of 2,015 and $909 million in sales.

“We’re working hard on keeping the messaging on our story fresh to give more exposure for the brand and help drive business to our franchisees.”

—Jon Fischer, head of development, Wetzel’s Pretzels

Sales Growth: Snacks

Top 3 Bottom 3

Keep Counting

Dunkin’s 7.5% increase equals a $928 million boost to systemwide sales as the coffee and donut brand also added 429 stores to its global footprint, finishing 2023 with 13,790 stores.

Gong Cha accelerated store growth last year, adding 384 net new units—a 20.1% gain—to push its global count to 2,290.

Sales get sweeter

Smaller frozen treat players were among the concepts fueling consumers’ sugar highs last year, while well-known brands such as Baskin-Robbins and Marble Slab Creamery watched sales slide. Andy’s Frozen Custard, at 147 units in 2023, grew sales to $190 million, up 30.7 percent as it climbed to No. 254. “We’re a very operationally focused company and ultimately we have a great product and we’ve been able to maintain the high quality of our ingredients even when food prices keep increasing,” said CEO Andy Kuntz. Handel’s Ice Cream did $106 million in sales from its 124 units, with that store count up by 30 over the prior year. “Sales in 2023 were strong and sales in 2024 are shaping up to being even stronger, with same-store sales year-todate up 8 to 9 percent in a year where restaurant industry same-store sales were flat, at best,” Handel’s CEO Jennifer Schuler said. Rita’s Italian Ice turned in another solid year of sales growth, up 15.5 percent, to $182 million. Dairy Queen hit $6.4 billion; Crumbl added 289 units and generated an estimated $75 million in sales.

“We

have great operations, and then you couple that with franchisees that are sophisticated enough to want to continue to build even though interest rates are

high and the world seems more uncertain than it’s been.”

—Andy Kuntz, CEO, Andy’s Frozen Custard

Sales Growth: Treats

Top 3

3

No. 18

Dairy Queen surpassed the $6 billion mark. The company grew systemwide sales by $625 million, a 10.9% increase to $6.4 billion, and grew its unit count by 3.8% with 276 locations added.

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Cool Rise

Emerging brand Jeremiah’s Italian Ice added 39 stores last year to help fuel a 36.9% systemwide sales increase to $58 million. It ended 2023 with 136 units.

Mixed bag of results

Though inflation declined over the course of 2023, higher prices were still a factor for retailers in this category that ranges from clothing resale to convenience stores and specialty concepts. Franchises overcame a challenging environment to push total sales up 3.9 percent, to $152 billion. Nothing Bundt Cakes led the specialty retailer segment in sales growth, up 20 percent to $741 million. On the flip side, sales for hobby and craft retailer HobbyTown dipped 6.4 percent. Metal Supermarkets, a convenience store of sorts for small metals, dealt with volatile metal prices. “We’re in a special industry because metal prices are something that goes up and down as a commodity,” CEO Stephen Schober said. “We’re going into our 40th year, and we’ve seen all these issues before. We recognize there was a spike in metal prices during the pandemic, so we switched what we emphasized to our franchisees.” The message was to focus less on the dollar sales and more on the number of invoices and pounds of metal sold. Metal Supermarkets had sales of $273 million in 2023, up 4 percent.

Wireless Zone, a major Verizon retailer, added 273 stores to its system last year to end with 720 units, an increase of 61.1%. Owned by Round Room Holdings, No. 88 Wireless Zone did $878 million in systemwide sales.

Sales Growth: Specialty Retail

C-Store Slump?

7-Eleven’s global store count dropped by 1,306 in 2023 as the convenience store giant finished with 82,755 units. It’s still the largest franchise system by far and managed to boost sales 4.7% from fewer locations as it did $97.9 billion system wide.

Drink It In

HTeaO harnesses demand for Texas sweet tea

“But I don’t think this is a fad. It’s a long-term trend, just as coffee has proven to be.”

—Justin Howe, CEO, HTeaO

By Matthew Liedke

It started simply as an idea to bolster restaurant sales during the Great Recession. That’s the humble origin story of Texasbased HTeaO, a specialty beverage concept that has surged in units and sales in recent years as its products delight the tea-drinking tastebuds of customers in an expanding number of regional markets.

HTeaO’s performance in 2023 was enough to land it on the Top 400 this year, coming in at No. 359 with $80 million in sales.

Back in 2009, the brand’s co-founders, Gary and Kim Hutchens, began selling fresh-brewed iced tea at Buns Over Texas, their burger restaurant in Amarillo, Texas, to help drive sales. The six flavors they introduced quickly impressed their clientele, with customers buying the tea by the gallon. Sales increased by 15 percent that first year.

The Hutchens, in working with son Justin Howe, leveraged that popularity into a new brand that today has 117 units. Howe, who has a background in construction and real estate, said he partnered with his parents in 2012 to develop the prototype, which opened in 2014 as Texas Tea.

The first location under the HTeaO name would open four years later, in Midland, Texas, as the brand prepared to build a franchise system.

“As a brand that’s potentially first to market and ahead on a trend, to try to grow it corporately as a national concept would have been very difficult,” said Howe, now CEO. “I was also familiar with franchising as a concept and I loved the model. It gives you the ability to move fast and nimble, and there’s no way we could be here with this store count now if we had just expanded with company-owned units.”

go with others. I think that mentality of shared ideas, thoughts and building that community is exactly what we’re trying to do with franchising. We seed markets with corporate stores, and then start to move the franchisees in. The idea is to maintain a total of eight to 10 corporate stores.”

HTeaO sells freshly brewed, large cups of iced tea, which can be customized with 26 different flavors and varying levels of sweetness, such as sweet mango fresco and Texas chai. The brand’s small size is 24 ounces and the largest, Huge Tea, is 51 ounces. Gallon and half-gallon jugs are also available.

Of the 117 stores open in late August, 110 were franchised. Most of the locations are in Texas and Oklahoma, though the brand’s presence in Arizona, Arkansas, Florida and New Mexico is quickly growing. Average sales in 2023 were $1.4 million.

number,” Nielsen said. “That’s who we’re looking for. When we look at markets like Orlando, Nashville or Phoenix, you want somebody that can take it and really roll with it, penetrating that area right away. Ending up with just one or two here and there isn’t the best strategy.”

One of those multi-unit franchisees is Bryan Benson, who was so enamored with HTeaO that he wanted to become an owner before the franchise program was even live.

With a career that’s wound its way through lending, insurance and real estate development roles, Benson was traveling often when, in 2016, a Texas Tea location in Amarillo caught his attention. Its drive-thru, Benson said, regularly had a line of cars wrapped around the building.

“If you want to go fast, go alone,” said HTeaO President Heath Nielsen. “If you want to go far,

“The eight states where we are primarily in still have an enormous amount of white space where we can grow in,” Nielsen said. “What’s next, I think, is going to be Florida and South Carolina. However, the regional aspect of Texas and Oklahoma is where we remain focused on.”

Finding the right franchisee

With growth accelerating early, Nielsen said HTeaO is not only becoming a regionally recognizable brand but one that’s gaining awareness within the franchise community. Its development pipeline is starting to swell: it’s signed 49 franchise agreements since the start of 2024 and has 183 units sold. Especially promising with the recent deals is the number of multi-unit developers joining the system, Nielsen said.

“We love franchisees that are in the 10-to-20

“We started calling them in 2017 and kept reaching out quarterly,” Benson said. “They would tell us, ‘We’re not franchising now, but we’re thinking about it and working on it.’ In 2018, when they announced they were franchising, we were the first to apply and first to sign.”

Benson now owns six units in Texas, with three in Lubbock, where he attended college at Texas Tech University, and the others in San Angelo, College Station and Fredericksburg.

For Howe, Benson’s connection to the area with his alma mater is another reason he feels franchising was the right choice for the brand’s growth.

“I would say eight out of 10 franchise partners have a local collection to their markets, and it’s absolutely a differentiator,” Howe said.

Nielsen said the brand ramped up its public relations efforts to further expand the system, but expansion remains largely driven by word of mouth.

“It’s phenomenal,” Nielsen said. “I think we have a good story with a great product and that’s what’s feeding our development right now.”

Justin Howe

Heath Nielsen

Meeting challenges, building sustainability

The timing of the franchise launch in 2018 put the growth of the brand on a collision course with the coronavirus pandemic. Howe said it was an experience that kept the leadership team on its toes throughout.

“We were fresh out of the gate when the pandemic hit, with a handful of stores,” Howe said. “Part of our charm is also the ability to walk in the stores and participate in the experience. That was taken from us in an instant.”

“Thank God we had a drive-thru, but we still had to figure out how to bring that experience to the guests,” he continued. “I think now, it was a blessing to be challenged with that so early in our career, so we don’t take those guest experiences for granted.”

The franchisor’s ability to handle the issues that have come its way earned praise from Benson, who said upper-level management maintained a good relationship with operators.

“We’ve seen growth, and we’ve seen growing pains,” Benson said. “But they’ve handled all of it appropriately. I’ve seen them take every challenge head on.”

For Howe, the strategy for handling problems at restaurants and planning for the future is inspired by what he learned growing up in the restaurant industry his parents were part of.

“All restaurants operate with the same sort of

categorical metrics,” Howe said. “We have what we call prime costs. Those are essentially occupancy, labor and the costs of goods sold. With my family, early on, I learned that these were not things that we discussed lightly. These were hard and fast rules that could not be violated. Understanding these targets and achieving these targets is absolutely life or death for unit-level profitability.”

To enhance the profitability of HTeaO’s model and push top line sales, Nielsen said the brand is incorporating a mix of promotions and adding to its product lineup.

“It seems like there’s a chase for promotions right now and we love promotions,” Nielsen said. “We have a happy hour every day from 2 to 4 p.m., and we love the buy-one, get-one strategy. But that’s only one angle.

“What we’d also like to do is continue line extensions. This year alone, we released a lip balm and we’ve designed new tea bags which are going exceptionally well, as our customers can enjoy beverages at home.”

Nielsen said HTeaO partnered with “Yellowstone” actor Cole Hauser’s Free Rein Coffee for hot coffee beverages, and works with Rubicon Bakers to offer pastries in its stores. The company is also evaluating the purchase habits of customers and their preferred ordering channels.

“We identified that an app development was

Specialty iced tea concept HTeaO cracks the Top 400 list at No. 359 after hitting $80 million in systemwide sales last year.

much needed for us,” Nielsen said. “We’re excited about launching our HTeaO app on December 10 of this year. It’s going to be a fully integrated mobile order and pay app, with our loyalty program included. We have some very loyal customers today, and we’re looking forward to interacting with them on the app.”

Following the app, the next digital project for HTeaO is a new inventory control program. “It will be a system that allows us to look at autoshipping opportunities and trends,” Nielsen said. “We can then follow that all the way through from sourcing, to inventory, to our warehouse, and finally to the sale of it at the store level.”

As for where the CEO sees the brand in the future, Howe said he isn’t the type to look too far down the road.

“I live in the here and now, looking at our shorter-term goals,” he said. “We’re looking at 2026 right now and talking about 2027. We’re focused on doing what we’re doing right and continuing to look at how to grow the brand strategically. But I don’t think this is a fad. It’s a long-term trend, just as coffee has proven to be.”

Meet 5 concepts making their ranking debuts with strong sales

The climb up the annual Franchise Times ranking starts now for these five franchises,whichgeneratednoteworthysales growth in 2023. Sandbox VR, The Now Massage,SavvySliders,TheBigBiscuitand BestBrainsLearningCenterseachturned in strong system growth performances last year, showing consumer and franchisee interest in entertainment, restaurant, wellness and education brands.

#415: Cutting-edge games help Sandbox VR make a virtual reality splash

When founder and CEO Steven Zhao started Sandbox VR in 2017, he hoped to create a similar experience to an escape room but with virtual reality technology. With systemwide sales of $57 million in 2023, a 101 percent increase over 2022, the brand finished the year with 46 locations.

“When you consider a vast number of leads are Sandbox VR customers first, it’s an incredible endorsement for the brand and something we’re very proud of,” said Director of Global

Franchise Operations Lee Hebditch of prospective franchisees. “We put a lot of stock into being transparent with prospects looking into the franchise offering.”

Sandbox VR locations range in size from 4,400 to 12,800 square feet and feature immersive, full-body virtual reality gaming. New game development with themes such as Star Trek and Squid Game and the zombie-inspired Deadwood Valley keep customers engaged and help drive repeat visits. Videos captured during gameplay double as marketing material, with participants encouraged to share their experience on social media channels.

“At the end of the day, a large part of our business is the combination of a lot of technology together to create a great experience for our customer,” said Zhao, who has decades of game designing experience.

When introducing Sandbox VR in a new market, the development team draws on demographic and other data to help with site selection. Some units take vacant shopping mall or strip center space, while others are standalone locations. Franchisees, meanwhile, balance walk-in business and pre-booked groups, including parties and events as an important revenue stream.

“There is a network effect with the more stores we have, the more that we can take a portion of our royalty and invest it back into content,” said Zhao. “Every store will benefit from bigger and better content over time.”

—Megan Glenn

#417: Self-care brand strategy enables growth at The Now Massage

An emerging brand out of Los Angeles is using its aesthetics and ethos to stand out and grow in a competitive category that includes Massage Envy, Hand & Stone and Elements Massage.

“People are so much more in tune with that mind-body connection,” said The Now Massage co-founder Gara Post. “Everyone is talking about mental health … so we lean into that with the healthy benefits of massage and an overall focus on wellness” versus other concepts that emphasize massage as a treatment for pain.

The Now Massage, founded by Post in 2015, had 22 locations by early 2022. That number increased to 57 by year-end 2023 and the brand

did $57 million in systemwide sales to land it on this ranking for the first time. In its locations, canvas draping separates the therapy spaces instead of drywall to create an airy, relaxed feel while the brand’s signature coconut jasmine scent evokes beach vibes.

“The brand is what hooks you,” said President Jeff Platt, who joined the company in 2021 after he grew Sky Zone, the trampoline park franchise started by his father, to 195 units before it was sold to CircusTrix Holdings. “Maintaining brand integrity as you grow can typically be difficult in franchising, but that is the least of our challenges because our franchisees are so bought into the brand.”

Unit growth and the ability to hire and retain therapists proved key to driving sales for the business, Platt noted, and franchisees establish relationships with area massage therapy schools to help meet that need. Demonstrating the customer demand is there to fill therapists’ schedules is also essential. The brand began emphasizing its membership model in 2022 and 2023, and revenue is now roughly split between members and non-members.

The Now is also leaning into brand partnerships. It worked with haircare brand Ouai last year to use its scalp serum for The Now’s scalp massages, “and we saw a 50 percent increase in our enhancement sales over eight months,” said Post.

—Laura Michaels

A full-body virtual reality experience is what draws customers to Sandbox VR.

The Now Massage’s Jeff Platt, left, and Gara Post say the brand’s wellness focus is a differentiator.

#440: Stacked sammies bring repeat customers to Savvy Sliders

Anyone can see photos online and read the drool-worthy descriptions of Savvy Slider’s burgers, chicken tenders and milkshakes, but Vice President of Franchise Sales and Business Development Mark Wolok said tasting the food will “take you over the edge.”

Savvy Sliders is new this year at No. 440. The company did $49 million in sales in 2023 from 42 units. “Things couldn’t be any brighter or better at Savvy Sliders,” Wolok said. “We are bigger, we’re better and we’re bolder.”

Savvy’s sliders are anything but tiny. The Michigan-based franchise serves beef, chicken, fish and vegetarian patties. Some signature offerings include “The Hangover,” a beef slider with bacon and a fried egg; the “English Cod,” with cheese and pickles; “Spicy Falafel,” with hot giardiniera mix and tomatoes; and the “Steakhouse Ribeye,” with steak, cheese and fried onions. Restaurants serve custard shakes, with mix-ins such as Reese’s Pieces and strawberry shortcake.

The franchise offers catering, drive-thru, dinein and third-party ordering, giving franchisees multiple revenue streams.

Wolok said the brand looks for multi-unit owner-operators. The investment range to get started with Savvy Sliders is $411,000 to $965,000, with a $35,000 franchise fee. The brand is opening two or three new stores a month. “Really the key for the brand that has made our success is the support that we provide” to franchisees, Wolok said. “That’s crucial today in the QSR industry.

Trying the food once will get customers hooked—or at least that’s what the franchisor banks on.

“We use the slogan, ‘We’ll see you tomorrow,’” Wolok said. “Customers that have not had Savvy’s before that experience it, they go crazy. The ones that have had Savvy Sliders continuously are coming back.”

—Emilee Wentland

#476: Big Biscuit serves up slow, steady growth in breakfast segment

Big Biscuit President Chad Offerdahl believes remaining a privately held company and maintaining a high percentage of corporate-owned locations has its advantages. “We have no private equity investors, which makes us very flexible, nimble and adaptable. We answer only to our guests,” he said. “And then the other thing is that by having a very strong corporate footprint, it gives us a lot of credibility as a proven concept.”

The Big Biscuit debuts on this ranking in the No. 476 spot with $35.6 million in sales last year from 23 locations—17 of which are company stores. The breakfast and lunch concept, founded in 2000 by Dan Gerson, is known for its signature “Bonut,” a biscuit made like French toast and topped with powdered sugar. It has stores in Kansas, Oklahoma and Missouri.

Offerdahl said the brand anticipates adding at least three more locations this year and another five next year. “We’re not pushing rapid growth. We’re much more focused on sustainable and organic growth. We’re being very careful who we select to be our operators and the geographic areas we want to grow in,” he said.

The Big Biscuit made a number investments last year as it added several new specialized positions with the intent to better support a franchise

system. It hired a director of training and development, and supply chain and IT managers. It also built out its communications and digital marketing department with key hires, said Marita Swift, vice president of brand strategy.

“We also made a substantial investment in our technology by switching our POS system to the Toast platform,” Offerdahl said.

A major initiative for Big Biscuit is attending the big franchise trade shows this year with the hope of recruiting new operators.

“We want to find the right franchisees for our brand, multi-unit operators with extensive experience in the food and beverage industry who share our mission,” Offerdahl said.

—Joe Halpern

#491: Brand awareness push paying off for Best Brains Learning Centers

Since it began franchising just over a decade ago, after-school education concept Best Brains has largely built its system through word of mouth.

The brand finished 2023 with 151 locations and today has 186 across the United States, Canada and Australia. It appears on this ranking for the first time with $30 million in systemwide sales, up 8.7 percent over 2022.

Elanor Smith, franchise development manager for the Illinois-based company, said Best Brains in recent years has taken its franchise growth to the next level by investing more in its recruitment.

“Most of our growth pre-pandemic was organic, with many of our owners being former Best Brains parents,” Smith said. “When you look at where our locations are, they tend to ripple out. One will open, and a few more will open over the next couple years. I will say our growth has expanded now because we’ve started advertising our franchise program more.”

In addition to its marketing boost, Smith said the brand increased the franchisee referral bonus given to existing owners. At the same time, Smith said the brand remains committed to ensuring its owners are also the operators and administrators so they work every day in the center.

It’s one of several ways Best Brains aims to serve as an alternative to others in the category, Smith said. Another way is to only hire state-certified teachers for the brand’s math and English programs while maintaining a low student-teacher ratio.

Pricing, too, is critical to the brand’s success.

“A lot of that I would say is because we keep a rigorous eye on the pricing of our locations, making sure each region has a pricing that is equal to the competition, so they’re able to stay competitive,” Smith said.

—Matthew Liedke

Savvy Sliders emphasizes a menu that extends beyond the typical tiny beef burger.

The Big Biscuit serves hearty breakfast platters at its 23 locations.

How we rank the Top 400 franchises

The Franchise Times Top 400 is an annual ranking of the largest franchise systems in the United States by global systemwide sales, based on the previous year’s performance.

In a five-month research process and building upon a database that began in 1999, our research team uses a combination of companies’ voluntary reports and publicly available data, including the franchises’ most recent franchise disclosure documents and Securities and Exchange Commission filings.

To qualify, a company must be a legal U.S. franchise. Franchisees must own at least 10 percent of the company’s total units. The company must also be based in the United States, or have at least 10 percent of its total units in the United States.

Systemwide sales is defined as the total sales for both franchise and company units. Those sales figures should represent sales to customers,

and not corporate sales to franchisees or prospective franchisees, such as royalty revenue or franchise fees. Other revenue not directly related to franchising should not be included.

If two companies reported the same systemwide sales, the higher ranking is given to the company with the most units. Preference is also given to companies that voluntarily report their systemwide sales, rather than those companies for which we must estimate the sales figures.

Franchise Times’ estimated revenue for real estate companies is based on 2.5 percent of their reported sales volume. Real estate companies report sales based on total volume of homes sold. So, if a home is sold for $200,000, it would

be listed as $200,000 in revenue. Franchise Times’ estimate would count $5,000 in revenue earned as a commission from the sale.

We estimate travel agencies based on 12.5 percent of their total sales volume. Like real estate companies, travel agencies report sales volume based on the value of the vacations sold, rather than their commissions. Research begins for next year’s project in late April. To submit your brand’s numbers or for more information, contact Franchise Times General Manager Matt Haskin, who leads the research effort for the Top 400, at mhaskin@franchisetimes.com.

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• Meet the top lenders and investors in the restaurant business

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Delivery Savings Rising insurance rates push telematics to forefront

Franchises with delivery as a major part of the modelaregrapplingwithhighercommercialinsurancecosts,leadingsometoexploretheadvantages of telematics or usage-based insurance.

By Adam Wahlberg

Everyone knows a back-seat driver. That passenger who interjects opinions while in route. They’re annoying. But often right. Which is even more annoying. These days the back-seat commentator has moved to the front seat, and the feedback isn’t coming from a passenger but your phone. Welcome to the world of telematics, also known as usage-based insurance.

Here’s something every restaurant owner knows: commercial insurance rates, including for hired and non-owned auto coverage, are brutal. And they have been for a while. They have been rising for 25 straight quarters, according to the Council of Insurance Agents and Brokers. Read that again. Twenty-five straight quarters. With no sign of abatement.

Domino’s, which relies on drivers, has noticed. On its

last earnings call, when it reported a slowing of revenues, it named rising insurance costs as a factor and blamed it for cutting into margins.

And the issue isn’t just rising rates. It’s about getting coverage at all.

“The way carriers determine premium is they do a rate per $1,000 in delivery sales,” explained Zach Kuperman, the national restaurant practice leader at insurance broker Hub International. “Let’s say it’s $30. If you have a store that does $1 million in delivery, that’s $30,000 in premium for just the hired and non-owned auto insurance. If I’m the carrier I collect $30,000, but I have 18-year-old kids trying to deliver pizza as fast as they can. One accident is going to do $50,000 in damages, even if no one gets hurt, because cars are so expensive these days.

“That’s why rates have been going up. That’s why fewer carriers are even offering hired and non-owned auto coverage.”

Spencer Duvall of global insurance brokerage Lockton Companies is noticing the same thing.

“Restaurants are kind of a niche market. It’s not like there are 30 insurance companies out there that like to write

Franchises that rely heavily on delivery drivers could find some insurance savings via the use of telematics to track how a vehicle is operated.

insurance for restaurants. A lot of insurance companies are in and out of it.”

Yikes. But there is hope. Telematics.

Every move you make

Businesses that rely on delivery often hire vendors to provide tracking devices that plug into a vehicle’s onboard diagnostics port. After that, every move is recorded and assessed. The device can give gentle audible reprimands on everything from speeding to hard stopping to breaking and more. It’s like a “Police” song without the melody. And it works. Fleets using telematics have experienced a sharp decrease in accidents, including a 30 percent reduction due to improved driver behavior, according to the National Highway Traffic Safety Administration.

But these days an external device isn’t even needed. You just need a smart phone. Many telematics vendors can aggregate and analyze data through an app.

“I see telematics as helpful in curbing distracted driving, which plays a huge role in auto claims and accidents,” said Jeannie Hylant of Hylant Insurance. “The technology can tell if you pick up your phone and are playing with it. It can disable phone usage in a car by blocking the signal. It can help modify these behaviors that are so destructive.”

Geotab is one of the world’s leading commercial telematics providers and has identified the reduction of driver distractions as one of its selling points.

“We offer features like hands-free communication, real-time alerts, driver fatigue monitoring,” said Carole Reader, business development manager at Geotab. “By leveraging these tools, food-service operators can enhance their safety protocols, ensuring that their drivers remain focused. This enables insurance providers to offer lower premiums to businesses that demonstrate consistent safe driving records.”

Kuperman thinks telematics will soon be the norm. “It will be mandatory in the next two years or you won’t find carriers willing to offer commercial auto insurance at all.”

Financial rewards for safe driving

The gee-whiz factor that matters to your bottom line is the ability for carriers to make rate changes in real time. Gone are the days when an insurance company would give quotes exclusively based on industry averages and historical losses. Now they can give a figure based on how a driver is doing today. Insurers can also see how drivers behave at certain times of the day, in metro or rural areas, while driving certain kinds of vehicles.

With all this tech talk it’s tempting to overlook something elemental, which is still important: your relationship with your carrier. That means a human. Have a conversation. Ask about telematics. Make sure you both plan to even be around

for the long term.

“Think about what your business may look like in the future,” said Duvall. “Are you trying to grow? Are you planning to sell off some stores? Make sure that your carrier aligns with your strategic needs. Where operators get in trouble is when they jump ship and go to a new carrier but then that carrier is out of the market in a couple years. Then you’re in a tough spot.”

And of course, operators have another option that would allow them to avoid the issue altogether.

“A lot of restaurants are saying, you know what? I’ll push all this to third party. It costs me a percentage but I don’t have to pay the driver or the insurance,” said Kuperman.

For a lot of operators that may be a decision that tracks.

Geotab, a commercial telematics provider, can track vehicle usage metrics such as speeding and harsh braking, and issue driver safety scorecards.

Operators gain key insights at RFDC

By Laura Michaels

At a time when the restaurant economy is showing signs of weakness, well-capitalized operators—as is typically the case—are better positioned to face challenges and pursue opportunities. The Restaurant Finance & Development Conference is all about the business of running restaurants, and it’s where operators can tap into expert insight, network with leading lenders and meet prospective investors.

Produced by Franchise Times sibling publication the Restaurant Finance Monitor, RFDC will be held November 11-13 at the Fontainebleau Hotel in Las Vegas. Educational sessions will cover a wide variety of financial, economic, technology, real estate and restaurant operations topics.

Keynote speakers Dr. Pippa Malmgren and Lt. Gen. H.R. McMaster will start things off during the opening general session on Monday, November 11. Malmgren is an economist who served as a special assistant to President George W. Bush on economic policy and on the president’s working groups for corporate governance and financial markets.

Lt. Gen McMaster served as a commissioned officer in the U.S. Army for 34 years before retiring in June 2018. He is a former national security adviser and now is a senior fellow at the Hoover Institution and a lecturer at Stanford University’s Graduate School of Business.

Always geared toward restaurant owners and financial executives, this year’s program features top financial officers from several leading companies, including: Kate Jaspon, Inspire Brands; Michelle Hook, Portillo’s; Joshua Guenser,

Dutch Bros.; Steve Cirulis, Potbelly; James McGehee, Dave’s Hot Chicken; and Kristin Mana, KBP Brands.

To start the day Tuesday, November 12, the popular “Around the Restaurant Industry in 60 Minutes” session will bring intel from top Bernstein restaurant analyst Danilo Gargiulo, technologist Paul Barron, profitability expert Jana Zschieschang and many more leaders.

Our conference speaker lineup also features Greg Flynn, founder, chairman and CEO of Flynn Group and Flynn Properties. With 2,700-plus Applebee’s, Taco Bells, Paneras, Arby’s, Pizza Huts, Wendy’s and Planet Fitness units generating more than $4.7 billion in sales, Flynn will share his approach to building a franchise business for the long term when he speaks Wednesday, November 13, during the MMB Success Breakfast.

Session highlights

Attendees will hear experienced multi-unit franchisees detail acquisition strategies and how they’re navigating a tough operating environment. Learn from Greg Grambling, CFO of Guernsey

A. Lt. Gen. H.R. McMaster B. Dr. Pippa Malmgren C. Inspire Brands CFO Kate Jaspon D. Flynn Group founder Greg Flynn

Holdings (franchisee of Sonic, Zaxby’s, 7 Brew); Anil Yadav, founder of Yadav Enterprises (Jack in the Box, Denny’s, TGI Fridays); and McDonald’s franchisee Cosme Fagundo.

Leaders from disruptor brands 7 Brew, PopUp Bagels and Hattie B’s Hot Chicken will detail how they’re fueling consumer cravings.

M&A-focused sessions will cover navigating the acquisition path for growth, what experienced buyers and sellers have learned over years of due diligence and valuation work, and the outlook for 2025. A special franchise-focused session will provide insights into current deal activity in franchising and what it means for the coming year, including the lending and M&A markets, valuations, and credit underwriting.

Off-premises experts will tackle topics including negotiating delivery contracts and share strategies for pricing, menu management, technology and marketing.

November 11-13, 2024, at the Fontainebleau Hotel, Las Vegas Register at www.restfinance.com

H&R Block keeps its stock gains going

Astrong fiscal year ending this summer has led to encouraging stock growth for tax services brand H&R Block.

The company’s closing price on September 11 was $62.10, a 12 percent increase from the stock finishing at $55.32 on August 7. It was the second highest stock increase over the last period on the Scoreboard and comes after the company released its report on its 2024 fiscal year, which ended June 30.

According to the report, H&R Block saw full revenue of $3.6 billion over the 12-month period, a 4 percent increase. The report notes how the brand benefited from the repurchasing of $350 million of outstanding shares at an average price of $43.66.

H&R Block also announced a new share repurchase authorization of $1.5 billion. Additionally, the report released a revenue estimate for fiscal year 2025 between $3.69 billion and $3.75 billion.

“In fiscal 2024, we made strides across our

different products and services that provide value to our clients and help enable their financial confidence,” said H&R Block President and CEO Jeff Jones in the report. “We continue to make progress, gain new insight and translate this client success into value for shareholders, and are well positioned to build on this momentum in fiscal 2025 and beyond.”

The positive trend for H&R Block has been ongoing for the last several years after a decline during the coronavirus pandemic period. The stock price previously reached a strong mark between $29 and $36 from 2013 to 2015 before coming in lower, between $19 and $30 from 2016-2019.

By mid-year 2020, the stock price fell to $14. Since that low, the price has recovered, ending close to $16 at the end of 2020, $23.50 at the end of 2021 and $36.50 to close 2022. As 2023 ended and 2024 began, the stock reached $46.77. Yearto-date, the stock price has increased 28 percent.

Ahead of H&R Block with the highest percentage gain over the last period was Krispy Kreme, with an 18 percent jump. The donut brand’s stock closed at $11.34 on September 11, up from $9.63 on August 7. Year-to-date, though, the stock is down 25 percent from $14.18 on January 5.

The latest close continues an up-and-down trend for the concept, which has ranged between $10 and $12 since May after reaching a high of $15.33 in April. The year before, the stock was at $11.50 to start 2023 and was above $15 by March, and stayed between $14 and $15 until August before another decline. However, the price rebounded to close the year.

A positive for the brand, which may have led to the stock increase, was its report for the 2024 second quarter, with net revenue at $438.8 million, up 7.3 percent from the prior year.

—Matthew Liedke

Top 10 Public Companies Ranked in the Top 400,

Device Demand PayMore takes electronics resale model to the U.K.

Two Scotland natives with experience developing SubwayplantoputPayMorestoresthroughoutthe United Kingdom, where they say the brand’s polished model will appeal to buyers and sellers alike. In Canada, the brothers behind Freshii are getting into the retail space.

By Laura Michaels

Liam Dalgarno and Nin Atwal “worked flat out” for 20 years to develop Subway in the United Kingdom, starting in the northern Scotland city of Inverness in 2004 and eventually becoming the master franchisees with a system of more than 350 stores.

“We’ve always worked the really long hours, seven days a week, you know, maybe closing our stores one or two days a year, Christmas and New Year’s,” said Dalgarno. “We’ve kind of worked flat out, and we’ve had heads down as that was our goal, developing Subway.”

The prospect of growing a non-food franchise, however, was always of interest, with electronics reseller PayMore a

frontrunner. The timing of Roark Capital’s acquisition of Subway in April proved fortuitous for the pair.

After the sale, Dalgarno explained, Subway sought to repurchase some master territories in international markets to run corporately, including in the U.K. “We agreed to negotiate our exit, and they bought us out just earlier on this year,” he said. Almost instantly, “we’re over in New York, training and signing the master franchise deal with PayMore.”

Dalgarno is still a Subway franchisee with 12 stores, and he and Atwal are now in site selection mode as they identify areas in and around London for their first PayMore. As master franchisees, they have a deal to open 60 units in the U.K. and Ireland through their own development and the signing of sub-franchisees. With a flagship store they run themselves, Dalgarno said the intent is to prove the concept before bringing other franchisees into the business.

“We’ve always had the ethos that franchisee profitability is the most important aspect of our business. It’s the number one thing that we have to look at. In all honesty, for many years we were behind our given development targets with Subway,” said Dalgarno. “We held our case strong that we

PayMore CEO Stephen Preuss says international expansion is the next logical step for the brand after proving the concept in the United States.

Franchise-friendly market in Ireland

Location: In Western Europe and officially the Republic of Ireland, it occupies five-sixths of the island of Ireland in the North Atlantic Ocean. It’s slightly larger than West Virginia.

Language: English and Irish

Total Population: 5.2 million

Capital: Dublin

Government: Parliamentary republic

Religion: Roman Catholic (69.2%), Protestant (3.7%) and other

Economy: Ireland’s gross domestic product exceeded $533 billion in 2022, with a per capita GDP of $103,534. Driven by foreign direct investment and exports, its economy is among the most open in the world. Its economic strength in the Eurozone comes from its high concentration of technology, pharmaceutical, medtech and other large multi-national enterprises, though its pharmaceutical and tech exports fell markedly in 2023. The country continues to battle inflation caused by the effect of rising fuel costs precipitated by Russia’s invasion of Ukraine. Inflation hit a 38-year record high of 9.5 percent in October 2022, and has moderated since, slowing to around 2 percent earlier this year.

News note: Ireland, which remains in the European

LINKING FRANCHISE OPPORTUNITIES BETWEEN US & JAPAN FOR 38 YEARS

A US FRANCHISE COMPANY?

We assist US franchise companies enter the Japanese market by identifying qualified master franchisee candidates

Possible Franchise Categories: Food & Beverage

Fitness / Wellness

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Entertainment

Flag Facts

While officially its flag colors have no meaning, a common interpretation of Ireland’s flag is that the green represents the Irish nationalist (Gaelic) tradition of Ireland; orange represents the Orange tradition (minority supporters of William of Orange); and white symbolizes peace (or a lasting truce) between the green and the orange.

Union (Northern Ireland is part of the United Kingdom, which exited), continues to roll out Project Ireland 2040, the government’s plan for regional development and improvement of the nation’s infrastructure with a focus on green and digital economies. The plan is based on the expectation that one million more people will be living in Ireland by 2040 and that population

growth will require “hundreds of thousands of new jobs, new homes, heightened cultural, and social amenities, enhanced regional connectivity and improved environmental sustainability,” according to the government.

GDP (official exchange rate): $545.6 billion

Currency: Euro (conversion rate at press time: 1 € equals $1.10 USD).

Franchising in Ireland: In a market that’s friendly to franchise systems, Ireland adheres to EU laws governing their operation. The EU Regulation 4087/88 EEC regarding franchising provides a unified code for all the member states. It primarily addresses price fixing, transfer pricing, non-competition clauses and exclusive dealing. It also exempts certain franchise agreements from the EU anti-trust regulations. A cautionary tale: Get your trademarks and trade dress registered long before entering Ireland. A case in point is a Johnny Rockets lookalike, Eddie Rocket’s, a ‘50s-style American hamburger diner with more than 40 locations franchised by Rockets Restaurants. McDonald’s, meanwhile, lost its EU trademark for “Big Mac” this summer after a years-long battle with Irish fast-food chain Supermac’s.

—By Laura Michaels

SEEKING JAPANESE FRANCHISES IN THE RESTAURANT CATEGORY?

We assist US companies connect with Japanese brands that want to expand in the US market.

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City Hub

In the harbor city of Galway, Eyre Square is dotted with various monuments and surrounded by restaurants, plus the city’s largest shopping center.

Sea Routes

Ireland’s strategic location between North America and northern Europe means its many ports are busy. Cork is home to one such major port, along with the famed Blarney Stone at Blarney Castle.

Irish Advantage

Boknafjorden

Ireland is the only European market that is a member of the European Union, a member of the Eurozone and is English speaking. It’s considered a gateway to the EU’s 448 million consumers.

North Sea

Test Market

The Irish perceive U.S. goods to be of high quality and are especially receptive to U.S. companies, which also get positive support from local partners.

Coastal Capital

Along with being the country’s economic hub, Dublin boasts numerous historical sites, such as the 12th century Malahide Castle, plus the original Jameson Distillery Bow St., where the Irish whiskey was distilled until 1971.

Established Presence

There are nearly 1,000 U.S. firms in Ireland employing 210,000 people. This represents about 20% of total employment in the country.

and

plus more opportunities for readerto-writer engagement.

PayMore continued from 105

would only open in the right locations; we would only open with the right franchisees.”

Dalgarno expects the PayMore model to prove viable in the U.K. for the same reason it has appeal in the United States: the sheer volume of unused smartphones, tablets, laptops, gaming consoles, digital cameras and other tech gadgets collecting dust in people’s homes. One main competitor in the U.K., Cex, has nearly 400 stores, and Dalgarno believes PayMore will stand out because of the wide variety of inventory it accepts, the ease of buying, selling and trading, and the ability of the brand to live up to its name by paying sellers more for their items.

Customers “trust that they’ll be looked after,” he said. “They’ll get the right price.” And there’s no haggling. With the brand’s proprietary software that calculates device demand and a top selling price, customers are presented with a fair trade-in value but not pressured into a sale.

As he and Atwal evaluate site options in an expensive real estate market such as London, Dalgarno noted another advantage of PayMore is the ability to consider secondary locations.

People are “not going to be carrying their game consoles or their old computers or laptops with them down the high street,” he said. If someone is looking to sell or trade in a device, they’ll search first on Google, making PayMore a destination retailer that doesn’t require prime visibility.

That real estate flexibility proved an attractive factor for Adam Corrin, who with brother Matthew Corrin is bringing PayMore to Canada after signing a 120-unit master franchise deal. Matthew Corrin is the founder and former CEO of health-focused fast-food chain Freshii, now owned by multi-brand Canadian franchisor Foodtastic.

Adam Corrin, who helped scale Freshii in franchise development and chief growth officer roles, was looking for an emerging U.S. brand to bring to his home country when a friend alerted

him to PayMore. Corrin sought “simplicity,” a concept with “little to no direct Canadian competition,” a low labor model, “little commodity pressure” and something with omnichannel capabilities.

PayMore, he said, checked every box. “I visited the stores and realized how purposefully built” they are, he said. “It’s anything but a pawn shop.”

The brand has about 40 stores open in the U.S., and Corrin said he spoke to 90 percent of the franchisees in the system. The feedback was “overwhelmingly positive,” he said, and many owners are expanding on their original agreements. “That’s the healthiest of metrics,” he continued. “That gives us a lot of conviction.”

PayMore earlier this year signed a five-unit agreement for the Toronto market with Richard Price, and Corrin said they’re “working hip to hip” as both groups move ahead on development.

To PayMore co-founder and CEO Stephen Preuss, international expansion is the next “natural progression for us.”

“We’ve put our stores in every market: urban, suburban, rural, and they perform well,” he said.

Gross sales across eight franchise locations open at least 12 months ranged from $903,504 to $1,635,970 in 2023, the company reported in its franchise disclosure document.

Preuss and Erik Helgesen, the company’s president, opened the first PayMore in 2011 in Massapequa, New York. By elevating the experience and environment beyond a typical secondhand store or pawn shop, Preuss said they’ve been able to “give optionality to the masses” when it comes to buying, selling and trading electronics. Locations also safely recycle items, and any device sold or traded in is data wiped to remove personal information.

“The secondhand space is really having a moment right now,” said Preuss.

Liam Dalgarno, left, and Nin Atwal are the Scottish franchisees set to bring PayMore to the United Kingdom.

Brunch Builders Tropical Smoothie operators add Another Broken Egg

Dennis and Nicole Drake look to fill the brunch gap in their area as new franchisees of Another Broken Egg Cafe, which they think will stand out with its Southern cuisine-infusedmenu.Plusmulti-unitnews from the Red Chickz, Blaze Pizza, Pepper Lunch and more.

By Matthew Liedke

Dennis and Nicole Drake are both from New York City, where there are brunch places aplenty.

As Nicole Drake put it, “you can throw a stone anywhere and hit a brunch place.” That hasn’t been the case though in northern Virginia, where they reside now. Seeing how their region was severely underserved, they decided to take matters into their own hands by signing a three-unit agreement with Another Broken Egg Café. While they will be new to running a breakfast

and brunch brand, the Drakes are no stranger to franchising. They’ve been Tropical Smoothie Cafe franchisees since 2013, with four stores open and a fifth coming through their company, D2 Ventures.

Their journey into franchising began when they were looking to shift careers after working in various defense-related sectors.

Nicole Drake had a background with defense and intelligence organizations as an aerospace engineer, while Dennis Drake is a U.S. Navy veteran.

“By 2012, we were starting to look at what would be next for us,” said Dennis Drake. “We knew we wanted a business model that can set up a legacy and quality of life. I was also training for a triathlon at the time, and was looking for a place to juice. Right there in our area was Tropical Smoothie. I walked in, loved what they offered and figured it might be that right model.”

A year later, the Drakes became Tropical Smoothie franchisees. Fast forward to today, Dennis Drake said areas of growth with the smoothie brand were limited, so the couple chose to expand their portfolio with another brand.

Another Broken Egg Café popped up on their radar and became a match not only because it offered brunch, but because of its Southern cuisine-infused menu.

“That’s something we definitely appreciated,” Nicole Drake said. “My husband has a large amount of family in North Carolina and I went to school there. So, we have an appreciation for that Southern cuisine. Being that their food is infused with that set them apart.”

Dennis Drake said they met the leadership team and became fast fans of the brand’s leaders,

THE LATEST MULTI-UNIT DEVELOPMENT DEALS, FROM FRANCHISE TIMES

Jeff Sturgis

model and structure.

“On the business side, our Tropical Smoothies run from 7 a.m. to 9 p.m. which can be resource intensive,” Dennis Drake said. “With Another Broken Egg, it’s open from 7 a.m. to 2 p.m., so it’s a smaller window with mainly one shift.

“They also have people diving in on things like time, efficiency, tools and technology at their headquarters,” said Dennis Drake. “That made us excited. We had a lot of questions with regard to time from order to table and the technology being used, and we felt that they were heading or already had that efficiency back in the kitchen.”

Another Broken Egg Café has built its structure for nearly 30 years. Founded in 1996, the daytime-only restaurant concept has more than 100 locations open across 16 states, with 58 franchised and 44 company-owned. The brand has a large presence in the Southeast, but has moved up along the East Coast in recent years.

“We opened our first café in Virginia in 2021 and opened in Baltimore in 2023,” said Jeff Sturgis, chief development officer at Another Broken Egg. “We’ve gained momentum in the region, so it makes sense for the brand to continue initiating growth in the area. You get synergy with operations, marketing, supply chains and all of the good things a franchisor should be looking at with expansion.”

In Virginia, Dennis Drake said there’s potential for growth beyond the three units they’ve signed on for initially.

Outside of the mid-Atlantic region, Sturgis said the brand has some plans in western markets, with developments in Arizona, California and Texas. Most of the growth, however, focus remains east of Missouri.

“Looking at a map, go up from San Antonio to Kansas City and east through Ohio and down to Florida, that’s where we plan to continue to grow,” Sturgis said.

Chicken Salad Chick signed a four-unit agreement to expand its Louisiana footprint. A pair of couples, Bill and Anne DiPaola, as well as Tiffany and Paul Spring, partnered to open the locations in New Orleans. Bill DiPaola brings experience as the CEO of franchise ownership holding company NHG, already a Chicken Salad Chick operator. Anne DiPaola has a background in communications, and the Springs work in healthcare. Founded in 2008, Chicken Salad Chick has more than 270 locations in 19 states. The Wire continued from 109

“We believe we can get significantly more in the future, but we need to cut our teeth on the three locations so we define and refine our operations,” Dennis Drake said. “This is the start, but our goal is to grow larger than the three. Our approach to business is we get the concept, refine it, develop it and then pause. Do a gut check to make sure we’re doing good, see where we need improvement and then move forward.”

Dave’s Hot Chicken is entering the Pittsburgh market with an experienced operating group. Danny Costa, Michael Costa, Jonathan Wise and Raj Patel will develop Dave’s over the next five years, adding to their franchise portfolios. Patel, an existing Dave’s Hot Chicken franchisee with seven units, also has more than 100 McAlister’s Deli and Dunkin’ stores. The Costas and Wise are likewise large Dunkin’ franchisees, with 75 units in Pennsylvania and Maine. Established in 2017, Dave’s Hot Chicken has more than 200 locations.

The Red Chickz inked a 10-unit deal to develop stores in North Carolina. The agreement is with Kamran Awan, the founder, president and CEO of Greensboro-based Mega Hotel Management. Along with hotels, he owns five restaurants, two real estate offices, a jewelry business and a Vitamin Shoppe store. Established in 2018, The Red Chickz has four locations open in Los Angeles.

BurritoBar, a fast-casual Mexican brand with a counterpart in Canada, signed a master franchise agreement for the state of Virginia. The 18-unit deal is with franchisee WV ADYK, LLC. BarBurrito got its start in Canada in 2005, and in 2020 introduced a U.S. version, BurritoBar. In Canada, BarBurrito has more than 330 locations.

Pepper Lunch, a fast-casual brand originating in Japan, signed a five-unit agreement for the San Diego market. The agreement is with ownership group TD Family Ventures, led by Bao Doan, co-founder of San Diego-based bubble tea café Urban Bubble. Founded in 1994, Pepper Lunch has more than 500 locations across 15 countries.

Another Broken Egg Café franchisees Dennis and Nicole Drake are expanding in Virginia.

Hot chicken concept The Red Chickz set to grow in North Carolina.

Blaze Pizza is increasing its international presence with an expanded deal for the United Arab Emirates.

Tex-Mex brand Sucheros is set to enter Tennessee with a seven-unit deal for the Nashville market. The partner for the expansion is franchisee WilCo Fresh Mex, which is set to open its first location in October. Founded in 2007, Sucheros has 30 locations, mainly in Florida and Georgia.

Bad Ass Coffee of Hawaii inked a three-unit deal to bolster its Colorado presence. Denver entrepreneur Bill Leary signed on to open a location in his own city and two more in the state’s

northern region. Leary comes to Bad Ass Coffee with experience as the owner of beverage brand Jackson Hole Soda. Originating in 1989, Bad Ass Coffee has more than 30 U.S. locations.

Retailer Buddy’s Home Furnishings is set to enter the Miami market with a three-unit deal. Signing the agreement is entrepreneur Brian Landau, the owner of a sports cards collectable business and three ice cream stores. A subsidiary of Franchise Group Inc., Buddy’s Home Furnishings

has more than 335 stores in the U.S. and Guam.

Blaze Pizza is continuing its international push with a six-unit agreement for the United Arab Emirates. The deal is with NAD Holding, led by CEO Nabeel Dabwan, which last year acquired a Blaze Pizza location in Manama, Bahrain. Founded in 2011, Blaze Pizza has about 300 locations across 38 states and three countries.

Pizza Inn signed a master franchise agreement with Al Ruwad Hospitality Services & Restaurants Management Group to develop markets in Egypt. The group, led by CEO Magdy Al Khazrjy, plans to open the first of seven locations in Cairo later this year. Founded in 1958, Pizza Inn is part of the Rave Restaurant Group portfolio and has 112 U.S. units and 18 international locations.

The Wire is the place to find news of multi-unit development agreements, brought to you by Senior Writer Matthew Liedke. Want more? Sign up for the e-newsletter at franchisetimes.com/enewsletter. To share your brand’s multi-unit deals, email details to mliedke @franchisetimes.com

CHECK US OUT

We can’t claim more white pages than a library (remember those?), but we can claim a library of whitepapers that will give you the inside track on moving your franchised business to the next level and beyond. Written by franchise experts, whitepapers give in-depth information on a variety of topics that busy execs need to get a handle on—all downloadable on computers or mobile phones. New research is constantly being added to the papers already posted on the site.

Here is the current collection of Franchise Times’ whitepapers:

Download any or all of these papers at www.franchisetimes.com If you’d like more information on how to submit your whitepaper, contact Mary Jo Larson at mlarson@franchisetimes.com or Lucas Wagner at lwagner@franchisetimes.com.

Tex-Mex brand Sucheros is ready to develop the Nashville market after signing a 30-unit agreement.

Executive Ladder

FullSpeed Automotive —franchisor of Grease Monkey , SpeedDee Oil Change & Auto Service and Kwik Kar—appointed Harry Jenkins as president of retail operations.

John-Paul Ovadia joined Restaurant Brands International as counsel for business development.

Cilantro Taco Grill appointed Camila Vicens as director of compliance.

Pizza Hut appointed T.J. Wolfersberger as chief operations officer.

Jesse McBain joined Pause Wellness Studio, a float therapy concept, as senior vice president of franchise operations and development.

Zaxby’s appointed Gregg Brickman as senior director of menu innovation.

Poolwerx named Steven Greenbaum as a board member.

Gotcha Covered hired David Dunsmuir as brand president.

Denny’s announced Monigo Saygbay-Hallie as chief people officer and Patty Trevino as chief brand officer.

SPB Hospitality—franchisor of Old Chicago, Krystal and Logan’s Roadhouse—announced Andy Somers as vice president of operations for Old Chicago and brewery divisions.

Erin Zide was hired as vice president of franchise development for Archadeck Outdoor Living and Outdoor Lighting Perspectives.

Enviro-Master Services hired Marty Hulse as chief operations officer.

Happy Joe’s Pizza and Ice Cream promoted Haley Lueth from franchisee general manager to franchise business consultant.

Scooter’s Coffee named Tyler Marpes its vice president of technology operations.

Dine Brands International made several appointments: Hari Shankar , marketing coordinator; Kelly Gumann , executive director of finance; Jennifer Garrett, senior manager of architecture; Henry Kaplan , senior manager of finance and business analytics; Kelsey Koster , manager of communications; Jason Lee , manager of culinary operations for Applebee’s ; Jason Chapman , operations specialist; Joo Wan Park , senior analyst of franchise development; Alex Koyama, senior analyst of talent and organizational development; Candice Wisdom , guest relations specialist; Jesse Solis, test kitchen support chef for IHOP; Mary Zhou, manager of non-traditional development; and Dominique Brown and Deshaun Cornett, IT support specialists.

Heather Harris was named CEO of Uni K Wax

EverSmith Brands , parent company of Kitchen Guard Services , appointed Cassidy Ford to director of franchise development.

Luxury home building franchise AR Homes named Donald Whetro CEO.

Footprint Floors announced Taylor Murphy as vice president of operations.

Mark Chinski joined Wingstop as restaurant technology solutions manager.

District Taco welcomed Victoria Stratton as director of design and John Deacon as director of real estate development.

Dutch Bros Coffee hired Jill Bays as senior field marketing manager.

Phoenix Franchise Brands , parent company of Spray Foam Genie and Fetch Pet Care, announced Michael St. Jacques as chief marketing officer.

Pestmaster brought on Lynette Robinson as director of franchise development.

The Riverside Company ’s Evive Brands announced Ryan Patterson as director of digital marketing.

Larks Entertainment, a family entertainment concept, named its leadership team: Curt Skallerup and Ricardo Dunin as co-founders, Courtney Skallerup-Wilde as chief operating officer, Zach Barton as executive vice president of finance and accounting, Kenny Hughes as senior vice president of sales, Nicole Kornegay as vice president of construction and Joseph Williams as vice president of real estate.

Jim Mizes accepted a seat on restaurant technology firm Ovation’s advisory board.

KFC named Catherine Tan-Gillespie in two roles, chief marketing officer and chief development officer.

The DripBar Canada hired Dr. Steve Rallis as its chief medical officer.

Tide Services named Lawrence Brown as senior vice president of franchising and development, Ryan Stuckenburg as director of construction and Emilie DeBonadonna as director of real estate.

Five Star Franchising hired Tyson Bills as vice president of marketing and Colt Florence as senior vice president of franchise development.

Strategic Franchising appointed Daniel Murphy as CEO.

BurgerFi hired a chief restructuring officer, Jeremy Rosenthal

The International Franchise Association appointed Matthew Gourgeot to its Supplier Forum Advisory Board. George Ray III was appointed as senior director franchise ascension initiative.

Nathali Oliveira was named president of the Latino Franchise Association

European Wax Center appointed Julie Hunter to its board of directors.

Send promotions and new hire news in franchising to Emilee Wentland, ewentland @franchisetimes.com.

Monigo Saygbay-Hallie

T.J. Wolfersberger

Uni K Wax's new CEO emphasizes brand’s strong following

A lacrosse and basketball fan with 30 years of experience boosting underperforming brands, Uni K Wax CEO Heather Harris is showing off what makes the concept special. Harris previously worked as president of Intelligence Office under Empower Brands.

“I really wanted to go back into the health and wellness space and I wanted to do it with a heritage brand that had been around for a while,” said Harris. “Uni K has, what I would call, a cultlike following in the markets that we’re in.”

Uni K’s customers come for its natural, pinebased flexible wax that’s applied at body temperature, is ideal for sensitive skin and can remove even the shortest of hairs.

Most of its 34 units are in Florida, with a few scattered in Texas and the northeastern United States. Harris’ goal is to do what she does best: quickly grow an emerging concept.

“We’ve been around, but we are starting to grow pretty aggressively,” she said. “The business is such at a great size where we can kind of test

and react in a really meaningful way, and then impact our franchisees.”

Conscious Capital Growth joined with Exaltare Capital Management in June 2023 to acquire Uni K Wax from founder Noemi Grupenmager.

To expand into new markets, Harris plans to demonstrate what makes Uni K stand out from other waxing concepts. The brand debuted a new website and membership program, launched in March, and it continues to add new services.

Harris highlighted how sanitary every step of the process is for customers. Clients get their own pot of wax at each appointment. What isn’t used during the session is disposed of. And because the wax isn’t hot, technicians don’t need to blow on a client’s face to cool down the wax.

Loyalty is strong among Uni K’s consumer base, and Harris emphasizes that brand love in discussions with prospective franchisees while detailing the model’s financial specifics. The company in its franchise disclosure document reported average gross sales were $669,624 in 2023, with toptier studios averaging just over $1 million.

Expansion efforts are focused now on the saturation of existing markets. The franchise has three units signed in Orlando and interest is growing, Harris said.

“There’s a lot of opportunity to tell new markets, new consumers, why we’re different and how we’re different,” said Harris. “From a growth standpoint, there’s a lot of opportunity to grow in our existing user base.”

—Megan Glenn

Main Squeeze CEO leads rebrand to highlight nutrition

Jennifer Dodd started her restaurant career 30 years ago, initially dressing up as the Wendy’s girl (red wig and everything) before eventually running her own businesses. Since March, she’s been the CEO of Main Squeeze Juice Co., a brand she loves on a personal and professional level.

“The choice for me to join Main Squeeze Juice was easy because it not only aligns with my professional ambition, but also my personal values,” said Dodd.

Dodd worked for several brands, including Applebee’s and Tim Hortons. By the time she launched her own consulting firm, she was mentoring CEOs and interim executives. Still, she always liked being part of a brand and helping it grow.

“I like to claim that I’m really a Swiss army knife,” said Dodd. “I know a thing or two because I’ve seen a thing or two, as the insurance commercial says, but I really missed growing a business.”

Dodd also has a passion for healthy food. As someone who grew up impoverished, Dodd found fulfillment helping the hungry via her work. When she encountered Main Squeeze as a customer, she was immediately interested.

Since being hired, Dodd added a new marketing executive to help Main Squeeze compete in the booming health and specialty drink segments. Part of that includes rebranding, with Main Squeeze taking the position of a nutritional lifestyle concept instead of just juice.

As CEO, Dodd will continue to make key hires and find in future franchisees the same passion she has for the brand. Communication with customers is also a priority with the rebrand, Dodd said. To that end, the company organized consumer focus groups, which are already reporting to Main Squeeze about what they see with the brand.

Utilizing that data, Dodd is deploying public relations to boost awareness. This year, the brand hired its first digital ad agency to target several audiences. Strengthening supply chain partnerships for further expansion is also in the works to benefit future franchisees.

Dodd also plans to take advantage of the growing interest in plant-based food, which has been trending over the last few years.

To keep herself going through busy days, Dodd loves the elevated Java Nut, a peanut butter banana espresso smoothie, from Main Squeeze or one of the protein smoothies for an easy snack.

“We have the throne,” said Dodd. “We were the first out of the gates franchising, at least, to be in the nutritious lifestyle.”

—Megan Glenn

Heather Harris

Jennifer Dodd

Considering international expansion? Make plans to protect key IP overseas

In June, headlines circulated about McDonald’s losing its Big Mac trademark in the European Union—not for its legendary two all-beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun, but for poultry products and brand names.

McDonald’s couldn’t prove it was using the trademark for chicken and other purposes for a continuous five years, the length of time required before the EU could revoke a mark, according to a release from the Court of Justice of the European Union. The EU’s General Court also ruled that other chains could use “Mac” in brand names.

McDonald’s—which last year did $129.5 billion in global systemwide sales with nearly 42,000 units, earning it the No. 1 spot again in the Franchise Times Top 400—held the Big Mac trademark in the EU since 1996 for meat, poultry and services.

Ireland-based Supermac’s, which sells Irish cuisine and is a Papa Johns franchisee, tried to register its name in the EU so it could expand, but McDonald’s objected, saying customers could think the chains are related because of its Big Mac sandwich, according to the Associated Press. In 2017, Supermac’s filed to revoke McDonald’s trademark, to no avail.

The Irish company challenged the decision, which McDonald’s argued against, and the EU’s General Court ultimately ruled in favor of Supermac’s. McDonald’s continues to sell its Big Mac sandwiches in Europe.

“The evidence submitted by McDonald’s does not serve to prove that the contested mark has been used in connection with ‘services rendered or associated with operating restaurants and other establishments or facilities engaged in providing food and drink prepared for consumption and for drive-through facilities; preparation of carryout foods,’” the European court said.

'Mac' name up for grabs

The win allows Supermac’s to expand in Europe with its original name. The company doesn’t sell anything called a Big Mac, but the usage of “Mac” in its name was the issue.

“It’s very much the little guy versus Goliath to be in a protracted battle with McDonald’s over trademark rights,” DLA Piper attorney Alexander Tuneski said. “It’s not a new concept. When it came down to it, they weren’t using the mark. … It’s quite possible they’re gonna appeal it anyways, so we’ll see.”

In the case of Supermac’s, filing for the Mac

trademark when it wanted to expand internationally would’ve been quite hard, as McDonald’s first opened in Europe in 1971 and Supermac’s wasn’t founded until 1978. But in the case of other companies looking to expand outside their home country, Tuneski said filing early is the way to go—if they can afford it.

“If I knew I was going to Japan for whatever reason, then it’s certainly an incentive to get that done. The reality is that for a lot of franchisors, especially start-up franchisors, the last thing they have money for is an international trademark,” he said. “A lot of them are lucky to get their U.S. trademark. There’s not extra cash lying around to think big when they’re still trying to get their first 10 U.S. franchises.”

It’s not a quick process by any means, either. That said, it’s probably a better idea to file and then not use the mark than vice versa.

In the United States, it takes about a year before the government looks at an application. In Canada, it can take even longer. So it’s best to file early, “long before they look to put together a franchise disclosure document” in a new country, said Andrae Marrocco, an attorney at Canadian law firm McMillan.

Managing global marks

If one of Zimmerman’s clients is looking to go international, the firm will hire a trademark attorney in that jurisdiction to do a “clearance search,” in which they investigate to find out if anyone is using the same trademark, or something that’s similar, she said.

If there is a potentially confusing trademark already registered, Zimmerman said then it comes down to how that mark is being used.

“McDonald’s had a much wider scope of protection for the trademark than they were actually using,” she said. But if, say, Burger King wanted to expand into China and there was already a brand with that name, it might be in BK’s best interest to rebrand, Zimmerman said. “You may want to consider having a different brand strategy for varying jurisdictions,” she said.

LEGAL BEAT

By Emilee Wentland

In the United States, trademarks are based on use and intent to use, while in most international markets it’s based on first to file. There’s no universal trademark system where a franchisor can file and apply it to every country.

The U.S., Canada and the EU, however, are part of what’s called the Madrid Protocol, which essentially means brands can file in their home countries, and then file in one of the other entities using the basis of that home application, said Kaleigh Zimmerman, an attorney at McMillan.

“There’s a lot of benefits to that because there’s ease of registration across various jurisdictions,” Zimmerman said. “But just because you have a registration in the U.S. doesn’t mean that you can enforce those rights in other jurisdictions.”

But what if, like in the case of Supermac’s, there’s an existing trademark in the country preventing a brand from filing their own mark?

Avoid language goofs

Consideration must also be given to the language differences from country to country. So, an English-speaking company might need to trademark a Japanese phrase, rather than it’s English variant.

That can lead to some mishaps, however. When KFC looked to use its famous “Finger Lickin’ Good” slogan in China in the 1980s, the Chinese translation used actually meant “Eat Your Fingers Off”—which is probably not the message KFC was trying to convey.

“You want to make sure you’re doing your due diligence when you are entering a new market in order to make sure that you’re not stepping on anyone’s toes, but you’re also not offending the public,” Zimmerman said.

Franchisors looking to expand outside their home countries have a lot to do before opening that first store—whether that’s securing a trademark, going up against a fast-food giant or hiring a native speaker to review your translated slogans and avoid any (albeit quite funny) language faux pas.

Emilee Wentland is managing editor of Franchise Times, and writes the Continental Franchise Review® column in each issue. Send interesting legal and public policy cases to ewentland @franchisetimes.com.

Illustration by Jonathan Hankin

Consider these 4 points when selling during a contentious election season

Beginning in the summer leading up to recent U.S. presidential elections, some portion of prospective franchisees hit pause on their start-up plans, saying they want to see which ticket wins before committing to the franchise. Election jitters can plague franchise development efforts like clockwork every four years. And as expected, the “election excuse,” along with justified concerns about inflation and staffing, have again been a recent drag on franchisee recruiting.

Decision procrastination. How can you get candidates to make a commitment? How can you still achieve your growth objectives?

1. Strong brands put franchisee profitability and satisfaction first. Always.

“Responsible franchising” is getting attention right now. But the primary franchise success formula hasn’t changed. There must be balance and good communication between franchisors and franchisees. Franchisees must be satisfied and profitable.

If your new unit growth plan is under pressure, before shoveling more money into lead generation efforts or giving your sales team a hard time over their conversions, look again at unit-level economics, or ULEs, and franchisee validation. Has your team done everything possible on the corporate side to improve ULEs? Is the relationship as strong as it could be? Devote more time and energy to your core value proposition.

2. Trying to sell “around” a weak model is irresponsible. Don’t ask your development team to sell into headwinds created or fanned by the corporate team. Development is already managing prospects’ jitters related to a slew of outside pressures. Development isn’t responsible for solving your new license stall-out. Management is responsible.

Read that again, because it’s counter-intuitive to many.

Franchise development RECRUITS talent to expand when it’s a good franchise model. But a bad model and/or weak franchisee validation forces franchise development to SELL. Are you asking your development team, including any third parties involved in your process, to recruit or sell?

When franchise development stalls, marketing and lead generation efforts are usually blamed first. Then marketing pushes back and points the finger at development’s ability to convert. Professional development leaders with strong ethics will simply leave for greener pastures

where they can confidently make deals happen and don’t have to make excuses to candidates about a weak model. As they leave, management may then blame team turnover for the dearth of new license agreements. This returns to haunt management later when only B and C-level talent are willing to interview for open development roles.

Broker networks may take the listing (and your listing fee), but savvy consultants won’t waste time on struggling concepts. Suddenly the only way to close deals is to SELL. This is where slick tactics and earnings claim shortcuts can creep in. Management can’t claim ignorance when they personally stand up at discovery day and dance around the reality of a weak model or poor validation.

Franchisees watch this drama unfolding with a mix of schadenfreude and dismay. Franchisees might be thinking, “it’s about time” corporate feels some fallout from what franchisees have been saying for some time about weaknesses in the model. But franchisees also know it hurts their own exit options and resale value.

igation. What three initiatives can you undertake right now to remove some element of risk (or risk-related costs) for your franchisees? How often do you discuss franchisee risk and associated costs for franchisees in your management meetings?

4. Refocus on commitment and culture.

Entrepreneurial grit pulls business owners through tough times. If a candidate seems an overall fit for your system but drags their feet in the final hour, how far will you let them drag out the decision? This is should be embedded into your standard awarding process. You need franchisees who will do whatever it takes to be successful. It takes real commitment, not a willingness to move forward or be highly engaged only when all the lights are green, and the breeze is warm and welcoming. What happens to that uncertain franchisee when things get tough?

DEVELOPMENT SAVVY

By Alicia Miller

The solution isn’t a sales fix. If you ignore this and try to sell around problems, you’re likely to set the wrong expectations. This can take a mere stallout and turn it into a downward spiral.

3. While resilient brands and categories have advantages, don’t ignore franchisees’ perceptions of risk.

If prospective franchisees show heightened sensitivity to risk during an election cycle, it can unfortunately lull management into blaming that event—or whatever temporary external force appears to be smothering new license sales. Elections are cyclical and pandemics are thankfully rare. But weather events, supply chain issues, geopolitical stress, cost increases and other disruptions can happen anytime.

“Risk” from the franchisee perceptive should be on management’s radar in addition to the franchisor-franchisee relationship and unit-level economics. If you’re confident in the underlying strength of your model and the franchisee relationship is solid, turn your focus to risk mit-

If your operating model and validation are otherwise strong and a candidate is dragging out their decision, my advice is to stop the recruiting process. It may simply be the wrong candidate. Sometimes that inconvenient truth reveals itself late, but you must still see and react to the signal when it presents itself. Let them go.

It’s easy during times of market stress to make excuses for why candidates won’t move forward. But even through the pandemic, license agreements were signed.

Grit, commitment and culture are fundamental to your brand and deserve constant vigilance. Election noise may therefore do your brand a favor. Marginal candidates are more easily revealed. They were never a fit in the first place.

Alicia Miller is the founder and managing director of Emergent Growth Advisors. Her Development Savvy column covers smart ways to market and grow a franchise. She is also the author of “Big Money in Franchising: Scaling Your Enterprise in the Era of Private Equity.” Reach her at amiller @emergentgrowthadvisors.com.

Illustration by Jonathan Hankin

Consumers: “QR codes still suck, your kids are annoying and we’re broke.”

Ilove restaurants. I’m not shy to splurge on a great meal. I geek out about food and what’s going on in the back, and I’m forgiving of mediocre experiences here and there because I know operating a restaurant can be a nightmare.

I also like checking in on consumer surveys to see what the less-biased masses outside the industry think about restaurants.

Among the most recent surveys, there are insights from big consulting firm KPMG, pointof-sale provider HungerRush, surveyor Vericast and marketplace Lending Tree. There are plenty of juicy tidbits about pricing, frequency and some interesting distinctions among different consumer groups. But one survey from market researcher YouGov had a lovely level set on what people want out of restaurants—and fellow diners.

Ninety percent of people said it’s unacceptable to demand a complimentary meal if they’ve already eaten the food in front of them, so operators, don’t take any of that nonsense. Also at a 90 percent unacceptable rate: letting children roam freely. If a brat is causing a ruckus, the vast majority of diners will appreciate a scolding for child, parent or both. Two-thirds of diners said they think showing up for a reservation 15 minutes late or more is unacceptable, so get your cancel trigger fingers ready, and maybe surprise and delight a walk-in.

The survey also offers some more direct insights into what consumers want from restaurants. Eighty-eight percent of respondents say charging for tap water is not acceptable (duh). Eighty say not having prices on the menu is not OK. While that’s a major pet peeve of mine for finer dining restaurants, this transparency mantra should apply to all menus. Paper, digital, whatever, prices should be obvious at a single glance. And aligning with another peeve of mine, 77 percent of respondents said loud music is unacceptable. Finally, my fellow elder millennials are the survey set—turn that crap down.

Despite years of squinting at our phones, people still don’t like digital menus. In all, 59 percent of respondents said using smartphone menus exclusively was not acceptable.

One last timely tidbit from the YouGov survey that goes hand in hand with pricing transparency: 65 percent said dynamic pricing was unacceptable. How exactly respondents perceived that question is not totally clear, but it’s yet another of many reminders to step carefully toward a dynamic future. It is fraught.

The perils of pricing

That sentiment is amplified by another survey around restaurant surge pricing by HungerRush. In the company’s survey of 1,000 consumers, 81 percent said they’d change their meal time or completely skip eating out instead of pay a dynamic “surge” price. Before Wendy’s or any of those flirting with dynamic pricing call to remind me that they want to do timed discounts, all these consumers and I know how slippery that slope is.

Diners are slightly more lenient on one group. Nearly half (48 percent) said they are more understanding of small chains and local restaurants using dynamic pricing.

Extra fees for service or operations seem to be less surprising, but only to a degree. In the HungerRush survey, 56 percent of respondents said they would err toward restaurants with lower fees, though 63 percent said they were willing to pay some amount. Twenty-one percent of diners said they would only pay up to a 3 percent fee. I, for one, still think these fees, while not prevalent in the franchise space, amount to little tantrums on receipts. I’d rather just pay an extra 3 percent for a burger than do more dinner math.

retailers will want to consider whether placing more emphasis on product sizing and the experience they offer consumers may be more effective in the long run than just lowering prices.”

Salient advice at any time, I think. Who wants to chase the bottom of profitability?

I always wonder about some of these broad “all consumers” surveys. Ask me any day and I might also tell you I plan to spend less at restaurants, then poof, it’s Friday, or I simply don’t want to cook.

TECH STACK

By Nicholas Upton

Alas, maybe that’s a bourgeois thing to say as the masses are tightening their budgets, at least according to KPMG surveying.

In a survey around expected spending, 41 percent of respondents said they would spend less on restaurants, compared to 21 percent who said they expected to spend more in the next 12 months. On average, respondents said they expected to reduce their monthly spending on restaurants by 9 percent, entertainment and media by 8 percent, and vacations by 7 percent.

The consultants have some guidance to weather the foreseeable bumps.

“Consumers are tightening their belts another notch as they hunt for discounts, and even some essentials are being impacted. We have already seen a few retailers lower prices, as they look to maintain the balance between their margins and demand,” Duleep Rodridgo, KPMG’s U.S. consumer and retail sector leader, said in the study. “If consumers continue to tighten their spending,

There is more evidence the average household is already spending less. In marketing and analytics firm Vericast’s 2024 Restaurant TrendWatch Survey, 68 percent of respondents are trading down from restaurant meals to grocery stores and 60 percent are trading down from casual dining to fast food.

This trend toward cheaper options has been going on for a couple of years now, but the latest results show the tightening trend continues as prices rose 5.1 percent in restaurants versus 1.2 percent in grocery stores. Seventy-one percent of respondents age 18 to 42 said they are eating at home more, higher than last year, when 64 percent said the same.

“There’s a noticeable decrease in consumers dining out, especially with consumers that have a household income under $75,000,” Dana Baggett, executive director of Vericast’s restaurant division, said in the report. “Many diners are choosing to dine out less, trade down to less expensive restaurants, order less, or opt to eat out for more affordable meal times like breakfast or snack.”

One last stat. Online lender LendingTree's survey showed fast food is becoming a “luxury.”

Of course, what to do with all this sentiment depends on the restaurant and its demographics. But I’d sure be wary of raising prices right now, and I certainly would announce my record profits quietly.

Nicholas Upton has reported on retail and restaurant technology for more than a decade. His Tech Stack column aims to distill complex ideas into actionable insights. Send interesting tech topics to upto0013@gmail.com.

Illustration by Jonathan Hankin

Count Massage Heights CEO in for all the mountain hikes and 1800s living

Who would play you in the biopic about your life?

Angelina Jolie. She takes on roles that require strength, resilience and a strong sense of purpose. Her ability to convey authority and vulnerability most resonate with me.

What’s something not many people know about you?

I love the outdoors; it’s where I feel grounded. I love being in the mountains mostly. I love to camp, go fishing, all of it. Two of my favorite places are, there’s this hike in Aspen called the Maroon Bells, it’s stunning. And also the Grand Tetons in Jackson Hole, Wyoming.

What’s your biggest pet peeve?

Probably not having a detailed plan. I like to know there’s a plan. In business or in my personal life, I want to know the details.

What’s something you would seriously stockpile if you found out it wasn’t going to be sold anymore?

This sounds funny, but it’s a specific body oil that I love. It smells good, it makes your skin feel super smooth. It’s called Balaayah Black Gram Body Booster, and it’s these Ayurveda essential oils. I have stockpiled it, actually. I ordered three or four bottles because there was a time when I couldn’t get it.

What’s one trend you wish would disappear?

thinking of the family on ‘Succession.’ It’s so interesting to watch but so dysfunctional. I actually wouldn’t want to join any family but my own. My family is perfectly imperfect.

Which time period in history would you want to visit?

I’d go back to the 1800s. I love the Wild West and am amazed by that life. It was a simple life, but also hard. It goes back to being a little girl and watching ‘Little House on the Prairie.’ Growing up, my parents didn’t have a lot of money at the time and our vacations as a kid were road trips, going camping and just finding a fishing hole. So I’ve always been drawn to just that more simplistic life, before there were all these distractions and devices. I’m intrigued by how people lived life at that time.

“I’d go back to the 1800s. I love the Wild West and am amazed by that life.”

—Shane Evans, CEO, Massage Heights

The social media trend of perfection. I think it’s dangerous to young women, older women, men, too. Really to just everyone. I’ve got daughters and just this idea of perfection that’s presented on social media, it can be so damaging.

If you could be a member of any TV show family, which would it be?

Hmm, well, the ones that interest me I would not want to join. I’m

What superhero power would you most like to have?

I go between flying and being a mind reader. Ideally, I’d have both, but probably more mind reading because I want to be able to understand how people think. I’m always thinking about how to be a better communicator and would want to know how my words affect someone else. In a franchise system, you have to expect change. And there’s a fine line between being confident and being empathetic. In a franchise, how you communicate is so important.

What’s your guilty pleasure?

Well, I love ice cream. But actually, my guilty pleasure doesn’t even make me feel guilty. It’s massages. I get a massage every week, sometimes twice a week. I truly believe in the service we offer. I also love going to resorts and exploring how they’re executing on new services. I like to be inspired by the environment as well as the service.

Outdoorsy inclinations

Editor in chief Laura Michaels asks the tough questions—What superhero power would you most like to have?

What’s the weirdest thing you’ve ever eaten?—to show a side of franchising execs you don’t normally see. To suggest an industry professional, email lmichaels@franchisetimes.com.

Illustration by Jonathan Hankin

• Island-inspired plates with sweet, savory and spicy options.

• Simple menu with only 84 SKUs (6 Entrees, 5 Sides and 1 Dessert)

• No freezers, no fryers, no microwaves

• Rapidly growing, emerging concept with 55+ locations in 9 states, founded in 2018

• 30 seconds or less speed-of-service at the drive-thru windows

• Multiple flexible building formats (drive thru, end cap, in-line, 2nd generation building conversions)

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