It’s taken a while for fast-casual brands priding themselves on product quality and coolness to embrace franchising as an avenue for growth. So it’s no surprise that up-and-comers in the chain casual-dining set have shied away from a model historically affiliated with diluted product and outdated, cookie-cutter decor. Not to mention that casual dining is a singularly challenging segment of dining.
“High-volume casual dining is one of the more difficult concepts to run in our industry,” says Fred Herrmann, senior vice president of operations for Washington D.C.-based Matchbox. “The traffic is fast and furious, the menu is much larger than quick service. Then there’s the labor component that has to be managed, which gets pricier and pricier.”
Matchbox bills itself as a come-as-you-are neighborhood spot with premium wood-fired pizzas, chef-driven entrées, specialty cocktails, and local craft beers. After opening in 2003, it quickly swelled to 10 restaurants in the Washington, D.C., metropolitan area. By 2015, the brand was on a path toward massive national expansion but got into financial trouble after several new storefronts went over budget and opened late.
Following a management shake-up and a lawsuit, the struggling chain received an $11 million investment from Thompson Hospitality in 2018. It has since slowed down its growth trajectory to a few new locations per year, focusing instead on existing footprints in the greater D.C./Northern Virginia area, Texas, and Florida. It has also capped unit sizes at 5,000 to 6,000 square feet. In that vein, franchising is the smartest way to expand outside the brand’s home territory, Herrmann says.
“Training along our standards is expensive and flying our directors out once a month is expensive—both of which I think should be standard,” he says. “Franchising is a textbook way to grow the brand without a lot of overhead and incurring a lot of expenses.”
Thompson tapped into existing developer relationships in Texas and Florida to promote expansion in those areas, with Dallas and Sunrise, Florida, acting as hubs. Having all but saturated D.C., Matchbox is attracted to areas like Houston and Fort Lauderdale for their density, income levels, and vibe. The latter’s bustling main drag, Las Olas Boulevard, is a cool strip with “small, funky little restaurant groups,” like beloved regional Italian brand Louie Bossi’s, Herrmann says. “That’s what makes it attractive. We don’t want to go so chainy.”
Franchisees are empowered to tap into their local expertise; corporate grants them wiggle room for certain elements, such as varying menus regionally and building out beer lists to reflect local tastes.
“Corporate beer lists tend to be not very exciting but are obviously attractive because putting a tap handle in every restaurant assures great pricing,” Herrmann says. “We’ve found that local breweries are willing to do the same thing on a smaller scale. Our partner here in D.C., Lost Rhino Brewing, brews our proprietary Matchbox IPA, and it’s a fantastic symbiotic relationship. It’s about applying that thinking on a smaller scale with much better product. That’s a sliver of what we’re trying to do.”