COLORADO SPRINGS, COLO. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
“Some franchisors have figured out that you are different,” analyst Darrell Johnson, president of Arlington, Va.-based FRANdata, told multiunit, multibrand operators at the franchising event, held this month at The Broadmoor resort here. Franchisors “are trying to establish training and operational processes that are modified for multiunit [operators].” —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
According to FRANdata, operators with multiple outlets account for nearly half of all franchisees across all industries, and 53 percent of franchisors have franchise agreements with multiconcept operators. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
The data suggest there is growing business sophistication and strength in the ranks of franchisees—and a declining dependence among franchisors on smaller, potentially riskier “mom and pop” franchisees. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
Fast-food and sit-down restaurants lead other industry segments in multiunit franchising, the FRANdata figures indicate. About 35 percent of fast-food franchisees own more than one store, and 30 percent of sit-down restaurant franchisees also own more than one unit. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
Running multiple units and brands can give franchisees leverage when negotiating with a franchisor and in trimming overhead costs, operators said during the conference, which was produced by Franchise Update Media Group. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
“Franchisors are going to hate this, but negotiate the hell out of everything in your document,” said Jett Mehta, whose Pittsford, N.Y.-based Indus Cos. operates several Ponderosa Steakhouse, Dunkin’ Donuts and Baskin-Robbins units as well as hotels and apartment buildings. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
Mehta advised other franchisees to ask for contract concessions even if they don’t think they will get them. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
“The moment they tell you it’s not negotiable, start pushing harder,” said Mehta, who participated on a panel discussion about managing multiple concepts. His fellow panelists were Stan Novack, vice president of concept development for on-site feeder HMSHost Corp., and John Metz, president of RREMC LLC, a franchisee of 24 Denny’s and eight Bennigan’s restaurants as well as health care facilities in Florida, North Carolina, Tennessee and Maryland. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
The franchisees said they were able to save on such overhead costs as accounting and technology by operating multiple concepts, though sharing employees across brands is not as simple. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
“We had one instance where we took one of our Denny’s folks to become a district leader for our Bennigan’s,” Metz said. “We put them through all the training Bennigan’s required. It was a total disaster. It was the family restaurant versus the casual-theme culture. Now we don’t mix the cultures at all. We keep them totally separate.” —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
Mehta recalled a similar experience of moving a Dunkin’ Donuts manager to the Ponderosa brand, after which the manager had a hard time adjusting to the later hours. It had also been difficult to move hotel operators into the restaurant businesses, he said. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
Some franchisors will require multiconcept franchisees to keep back-office support separate because of confidentiality concerns, said Novack of HMSHost. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
“We had to silo management between Outback and Chili’s [concepts], although with some of the QSRs, we’ve been able to have one manager over three brands,” Novack said. “It varies, by brand, [as to] who allows us to do what.” —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
Customers’ needs have driven their decisions on which brands to pursue, the franchisees said. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
After the terrorist attacks of Sept. 11, 2001, the concession business in airports changed, Novack explained. Airlines halted or limited food offerings, and beefed-up security screening caused customers to spend more time in airports. As a result, the demand grew for more casual restaurant venues instead of just fast food. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
“We didn’t wake up and say, ‘Let’s get into casual dining,’” Novack said. “It was the customer demand. It was a horrendous learning curve for us, though. We had restaurants that were doing $5 million, and we were losing money. It took us a good 12 to 15 months to figure it out. Once we figured it out, it was great.” —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
HMSHost’s Chili’s branch at Los Angeles International Airport did $9 million in sales last year, Novack said. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
Adding a brand can be a way to extend a franchisee’s existing business, Mehta said. After developing multifamily apartment buildings, opening a family-dining concept like Ponderosa Steakhouse was a natural next step, he said. Hotels create a good balance with restaurants, too, he said. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
Metz’s company is looking for a fast-casual restaurant concept with a breakfast menu to complement its Denny’s restaurants. —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
“We see quick-service constantly eroding our breakfast daypart in family,” Metz said. “If you can’t beat them, join them.” —Franchisees who own multiple restaurants and branches of multiple chain concepts are gaining in influence and power in the franchisee business, more than 400 attendees of the Multi-Unit Franchising Conference and Expo 2007 learned.
