Restaurant industry franchisors have signaled their intentions to resume growth in 2013 and beyond through their hiring of new executives to oversee renewed franchise expansion.
Several of those leaders, including those for Captain D’s Seafood Kitchen, Toppers Pizza, Trufoods and HoneyBaked Ham, remarked that even though limited access to growth capital and escalating real estate costs might hamper plans to ramp up franchising, the near future still looks bright.
Nation’s Restaurant News surveyed the state of the franchise space with Michael Arrowsmith, who joined Captain D’s as chief development officer in late March; Chris Cheek, who became Toppers Pizza’s chief development officer on Aug. 7; Anthony Leone, the founder of Energy Kitchen who joined multibrand franchisor Trufoods on Aug. 15; and Melissa McFarlin, who joined HoneyBaked Ham as director of franchise development in April.
What does the hire of a new executive to oversee franchise growth say about where your brand is and what its near-term potential is?
Michael Arrowsmith, Captain D’s: It’s a sign that we’ve fixed the basics and have turned around the brand. We’re positioning it in the fast-casual space with a new remodel program… When chief executive Phil Greifeld came in here, he fixed the operations execution, and now, because we’ve had success there, we have existing franchisees who want to grow and franchisees from other concepts who want to talk to us.
Chris Cheek, Toppers Pizza: My experience has been that when a company wants to grow, it has to be by new-store openings, and in order to hit store-opening objectives, a lot of people have to tie it together, including someone in my position recruiting the right franchisees on the front end. Getting the best candidates in the right markets and getting the right real estate sites translates into opening restaurants, which helps the construction piece of the business as well.
Anthony Leone, Trufoods: Trufoods buys underperforming restaurants and works to turn them around, and they wanted me to come in and make Pudgie’s menu and décor more relevant in today’s marketplace. We’re making it more appealing, because it’s a 1980s-looking brand, but we’re keeping the core products like its skinless fried chicken and adding new items for the 2013 palate. We’re going to try and offer more dayparts for Pudgie’s and Ritter’s. For Wall St. Deli, we have strategies for traditional and nontraditional sites, and we’re also tweaking their menu and décor.
Melissa McFarlin, HoneyBaked Ham: Previously, we didn’t offer franchising in Northeastern states, and now we’ve opened up that territory for franchisees, so there’s huge potential for multiunit and single-unit operators alike. HoneyBaked fell into franchising when they purchased Hickory Ham and Heavenly Ham, who were set up on a franchise structure. We have 400 locations but only 189 franchise stores, so there are secondary markets across the country that might not support a corporate store right now but could be very successful as a franchise market.