Franchising Frenzy
COVID presented a host of issues for full-service restaurants, but for some, it granted significant opportunity.
Take Applebee’s, for example. The casual-dining giant spent five years cutting 300 restaurants from its portfolio, a process that was accelerated by pandemic conditions. The chain also leveraged to-go, virtual brands, and pent-up dine-in demand to string together consecutive quarters of double-digit same-store sales growth. In fact, comps sales grew 6.2 percent last year compared to 2019, the best performance since joining Dine Brands in 2007. The chain is now partnering with franchisees to reach net unit growth in 2023.
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Multiple brands across the U.S. have experienced similar success, and are preparing to increase expansion efforts in a landscape forever changed by the global pandemic. Here are 13 full-service brands looking to grow and bring excitement to the franchise community.
Walk-On’s
The COVID pandemic has done little to stop Walk-On’s growth in the past couple of years. The chain closed 2021 with 27 percent same-store sales growth year-over-year and $5 million in AUV. The company also opened 15 new stores and saw 100 more enter various stages of development. New markets opened include Kissimmee and Tallahassee, Florida; Oxford, Mississippi; Wilmington, North Carolina and more.
In Lakeland, Florida, Walk-On’s rolled out its “Bulldog” prototype in partnership with franchisee Walking Tall Brands. COO Scott Taylor said the design is less expensive because it doesn’t require as much steel, which is a precious and expensive commodity. The restaurant is also capable of 20-30 percent takeout and features elevated graphics and a new beer garden.
One of Walk-On’s most well-known franchisees is Dabo Swinney, Clemson’s head football coach and two-time national champion. He recently became an operator as part of a multi-restaurant development agreement in the Carolinas. He’s associated with Pavilion Group, which is led by President Rich Davies and retired Wells Fargo executive Kendall Alley.
Perkins Restaurant & Bakery
Perkins, which has more than 290 restaurants across the U.S. and Canada, rolled out a national franchise initiative in May 2021.
To increase the appeal of its franchise offering, Perkins brought in design firm Louis + Partners, a company that’s worked to modernize the likes of Hilton, IHOP, and Chili’s. As part of the process, Perkins shrunk its prototype to 4,100 square feet and constructed it in a way that leverages the growing takeout and delivery business.
Although Perkins is receiving inquiries from all over, the plan is to target markets where the brand has the most name recognition. A few examples are Florida, Minnesota, Tennessee, Wisconsin, Iowa, Pennsylvania, and Mississippi. After filling those areas, the brand will move toward contiguous states and go from there.
“I’m all about real estate, and the day of those 5,000, 6,000, 7,000-square-foot places—that’s just a dinosaur,” said Chief Development officer Peter Ortiz. “We’re to be at 4,100 square feet and still be able to provide the same great service that we did in the past.”
Dae Gee Korean BBQ
Dae Gee Korean BBQ tasted a bit of fame when it appeared on Guy Fieri’s “Diners, Drive-Ins and Dives” reality television show in 2015. Six years later, the Korean barbecue chain launched a franchise program to show people across the country exactly why Fieri selected it.
In March, the Colorado-based Dae Gee announced that it signed its first agreement, which envisions two restaurants in Amarillo, Texas. The stores will be owned and operated by local entrepreneur Phuc Nguyen, who already oversees two nail salons in the area. While leases have yet to be signed, Nguyen is committed to opening the first of his two units within the next 12 months. Each restaurant will occupy approximately 1,500-2,000 square feet and employ as many as 10 people.
With five corporate-owned restaurants already open and operating across Colorado’s Front Range, Founder Joseph Kim expects as many as five to 10 new Dae Gee restaurants to open by the end of 2022 and at least that many each year thereafter.
Taffer’s Tavern
Taffer’s Tavern, founded by Jon Taffer, star of reality television show “Bar Rescue,” entered the culinary scene in Alpharetta, Georgia in November 2020. The company followed that debut with an even stronger 2021.
Last year, the brand opened a second location as a concessionaire in FedEx Field, home to the Washington Commanders. It also secured three new multi-unit franchise deals in key markets across the country, including 10 locations in Savannah, Georgia, and Northern and Central Florida, with an initial focus on the Orlando metro area, Gainesville, Jacksonville, and Panhandle regions.
In 2022, the goal is to more than triple in size to seven locations. In the coming months, the concept will open in the Arsenal Yards neighborhood of Boston and the Penn Quarter neighborhood of Washington, D.C. For the years beyond, Taffer’s Tavern is seeking experienced franchisees in the 50 largest media markets throughout North America.
Twin Peaks
Twin Peaks, which was purchased by FAT Brands for $300 million in 2021, instantly became one of the company’s fastest-growing chains. In the fourth quarter, the sports lodge experienced 15.8 percent growth compared to 2019 and a 30.4 percent uptick against 2020. The concept also has about 144 restaurants in the pipeline, which far and away the highest among FAT Brands’ casual-dining portfolio. The chain finished 2021 with 87 stores in 26 states.
CEO Joe Hummel projects the brand will top the 100-unit mark sometime in late summer 2022. And by the beginning of 2027, Twin Peaks should be at more than 275 stores.
Most recently, the brand signed a seven-unit deal with franchisees Rodolfo Garcia and Federico Muñoz of Dos Montes Corp to open across Chicago. One location is scheduled to open each year beginning in mid-2023. Garcia is an existing franchisee that signed a 32-unit deal in Mexico in December with his partners at Operadora 2 Montes.
Toasted Yolk
For Toasted Yolk, Cofounder and CEO Chris Milton called 2021 “a really fantastic year” and currently, sales are increasing anywhere from 15–20 percent at the chain’s roughly 20 locations.
Ten locations are in various stages of construction, which takes the brand through August. Several more are looking for sites or in the final stages of signing franchise deals. Milton said Toasted Yolk could realistically see 14–15 openings in 2022, which would nearly double the brand’s footprint. At least 16 more stores are in development for 2023.
The Houston market, where Toasted Yolk is headquartered, is sold out, but other Texas cities are ripe for growth. The concept plans to open its first three stores in the Dallas-Forth Worth area this year and open another unit in Austin. Outside the Lone Star State, there’s growth planned in Southeastern states like Kentucky, Arkansas, Mississippi, Tennessee, and the Florida Panhandle. All of Toasted Yolk’s footprint is in Texas, except for a Dothan, Alabama, unit that opened in December.
Famous Dave’s
Famous Dave’s franchisees are on the forefront of innovation, bringing the casual-dining chain into new operating segments.
In August, a franchisee opened the brand’s first line-serve store in Las Vegas. Another operator debuted the second fast-casual unit in Coon Rapids, Minnesota, in October. The model was inspired by Real Urban BBQ, a cafeteria-style restaurant in Illinois that Famous Dave’s parent BBQ Holdings acquired in 2020.
In March, an operator opened the brand’s first drive-thru restaurant in Salt Lake City, Utah. The unit is a converted KFC store that’s just under 3,000 square feet.
“Our goal is convenience for the customer,” said CEO Jeff Crivello. “Four years ago, we had this idea because it can be done. Barbecue takes many, many hours to prepare properly, and so it’s not as if we’re cooking the food, the proteins, on demand. So we’re ready to go when the customer comes in, and we can do that in a format that is conducive and convenient for the guest, which is a drive-thru.”
Another Broken Egg
In 2020, Another Broken Egg debuted nine restaurants despite the initial wave of the pandemic, and saw same-store sales growth in the final quarter of that year. The next year, the brand opened 10 restaurants, including entrances into Arizona and Virginia. And 2022 is shaping up to be even more successful.
Since the beginning of December, the chain has signed four franchise development agreements representing 13 locations. Both new and existing operators have inked deals for markets in Virginia, Maryland, Mississippi, and Texas. Up to 18 stores are opening this year, and several dozen more will be added to to the development pipeline through multi-unit franchise deals.
The recent growth reflects Another Broken Egg’s most updated prototype, which features a full bar and takeout staging area for handling off-premises orders. In late 2021, the brand launched a catering initiative to further expand its business outside the four walls.
The brand claims its average buildout costs are $850,000, which offers a sales to investment ratio of more than 2 to 1.
Turning Point Restaurants
Turning Point Restaurants was founded by Kirk Ruoff in 1998 after he purchased a 12-table restaurant in Little Silver, New Jersey, where he took orders, washed dishes, and cooked food. The chain has grown to 21 units across New Jersey, Pennsylvania, and Delaware.
Twenty-four years later—without a single store closing permanently—the brand launched its first franchise program, hiring BurgerFi and Pret a Manger veteran Graham Buckley to lead the charge.
To start, Turning Point will focus on markets where it has the most brand awareness, which is east of the Mississippi River. Some examples include Delaware, Pennsylvania, New Jersey, Florida, North Carolina, Washington, D.C., Massachusetts, Maryland, Connecticut, and Virginia. Some groups want to be a single-unit operator, which Ruoff has no problem with, as long as the franchisee has “hospitality in your DNA and love the business.”
Restaurants are typically 3,500 square feet with space for an outdoor patio. The preference is endcap or standalone along a busy corridor, but the brand also knows how to take what the market gives it.
California Pizza Kitchen
California Pizza Kitchen hired Giorgio Minardi as executive vice president of global development and franchise operations in the fall of 2019 with the intent of initiating its first-ever domestic franchise program.
After a global pandemic and working its way through bankruptcy, sales clawed back to pre-COVID levels in 2021. Now the brand is returning to what it set out to do when Minardi came onboard—solidifying franchise partnerships and kickstarting U.S. expansion. The goal is to reach at least 300 restaurants globally in the next decade, including 25 U.S. operators.
Four layouts will be offered to potential candidates. The first is the “flagship,” a design that comes with an extended bar and outdoor patio within 5,800 square feet or more. Then there’s the “standard,” a roughly 4,800-square-foot prototype with a counter bar. The final two are smaller versions; one is a kiosk for malls, business centers, and parks, and the other is an express model for concession-style counter service in stadiums and universities.
Uno Pizzeria
To spark franchise growth, Uno Pizzeria recently launched a new prototype inspired by its original location in Downtown Chicago.
The model a hybrid between fast casual and full service, with counter service at lunch and table service at night. The menu, about two-thirds the size of the brand’s typical casual-dining menu, is more pizza-centric but still includes natural add-ons like wings, salads, sandwiches, and desserts. The concept is roughly 2,000 square feet, which isn’t too far off from the 3,000-square-foot space of the original Chicago location. But CEO Erik Frederick said that number is by no means an exact target. Instead, the model comes with a customizable floor plan that encourages operators to enter second-generation spaces that invoke a unique feel as opposed to a one-size-fits-all approach.
The prototype, which uses the same recipes and ingredients as the original location, opened last summer in Highland, Indiana, a suburb of Chicago. Off-premises orders make up more than half of sales, higher than what leadership anticipated.
Margaritas Mexican Restaurant
Margaritas Mexican Restaurant features a strong leadership team, including Larry Cates, former president of Applebee’s, Paul Twohig, former president of Dunkin’ and MOD Pizza, Anthony Ackil, founder of fast casual B.GOOD, and Mitch Kahn, founder of investment firm Hexagon Hospitality.
With those industry veterans in place and more resources to leverage, the chain plans to revitalize franchise efforts and grow market share. Of the brand’s 25 stores, 18 are corporate and seven are franchises across Massachusetts, Maine, New Hampshire, Connecticut, New Jersey, and Pennsylvania.
Franchisees will be offered a restaurant that operates much differently than it did pre-COVID. The biggest shift was in hours of operation, with Margaritas deciding to remove the lunch daypart and become a restaurant focused on evening and late-night. In addition, the company decided not to open on Mondays, with the idea that it would recapture business throughout the rest of the week.
Angry Crab Shack
Angry Crab Shack set a goal to sign 20 franchise agreements in 2022 through multi-unit deals. Targeted franchise expansion states include Arizona, Delaware, Florida, Georgia, Indiana, New Mexico, South Carolina, and Texas. To ensure expansion is solid and sustainable, the company is mostly seeking multiunit owners who wish to diversify their portfolios or flip their current restaurants.
In 2021, the full-service brand signed deals to to bring restaurants to Atlanta; Casa Grande and Scottsdale, Arizona; Houston, and Seattle. Also, Angry Crab Shack increased AUV by 33 percent year-over-year and 10 percent against 2019.
The 16-unit brand’s long-term goal is to hit the 100-unit back by 2025.
“You’ve always got to keep your brand fresh, even when you’re a young brand. You want to look at where you can keep improving your menu,” says Brand President Andrew Diamond. “Our vision statement is, ‘Never be satisfied with what’s already been achieved.’ So we’re always going to be looking to innovate. We’re always going to be looking to improve and get better.”
