MRM Franchise Feed: Krystal Refranchising and Pieology in China

Modern Restaurant Management (MRM) magazine's Franchise Feed offers a glimpse at what's new in the restaurant franchise  and MUFSO environment. 

Send news to Barbara Castiglia at bcastiglia@modernrestaurantmanagement.com.

Krystal Eyes Refranchising

The Krystal Company plans to refranchise approximately 100-150 company-owned restaurants to well-capitalized multi-unit operators as part of its ongoing business and fleet revitalization. To that end, Krystal has engaged The Cypress Group, a specialized investment banking firm, to manage the refranchising initiative. Restaurants in Alabama, Florida, Georgia, Mississippi and Tennessee will be refranchised.

"We're ready for the next step in the brand transformation that began when I came on board in 2018," said Paul Macaluso, Krystal president and CEO. "We've seen great success with the new restaurant prototype, remodels and operational upgrades. It's time to accelerate the redevelopment of the fleet and expand our footprint through strategic refranchising."

Macaluso added that the sales lifts from upgrading to a newer, smaller and more efficient prototype have been unlike others he has seen in his 25-year QSR career. The brand has rebuilt nine restaurants since 2018, generating first year-over-year comp sales ranging from +29.8 percent to +107.5 percent for the periods each has been opened. He added, "While we don't need full remodels on all the restaurants we intend to sell, we believe these facility investments demonstrate the appeal of Krystal. Same menu, same location, just a new building – and you see how people really flock back to the brand. We now want to bring this elevated experience to our customers across our footprint."

Macaluso hired Cypress to insure a consistent and disciplined approach to the process. Focused exclusively on the restaurant industry, Cypress has completed refranchising engagements for national and regional brands and is widely regarded as the category leader. 

Krystal recently signed veteran franchisees Anand Patel and Kalpesh Das of Slider Joint, LLC to a three-unit deal in Jonesboro, Arkansas. Das and Patel are the first new franchisees to join Krystal since 2005. Cypress will directly manage and coordinate all discussions and distribution of sale materials with potential buyers while maintaining a close, ongoing interaction with the Krystal leadership team. 

  Pieology Looks to China

California-based pizza innovator Pieology, top photo, announced a major strategic alliance into China  with Shanghai-based TZG Partners. Along with other franchisees in Mexico and Spain, the company expects to more than double in size in the next five years.

“When looking at the opportunity and market size of China, finding the right partner that has a shared vision for how we can ‘Serve Creativity’ and create local relevance in a meaningful way was of critical importance to us,” says Gregg Imamoto, Pieology’s Chief Executive Officer. “We’re very confident in TZG Partners and the team they’ve built to strategically grow our brand long-term.”

Pieology Founder and Chairman Carl Chang said, “We’re thrilled to see that what started as a family idea in Fullerton, California, to bring great food and community together, will now become a global destination for great fast casual pizza.”

TZG Partners is a global firm, led by a group of Stanford University alumni, that builds and invests in high-growth China-related businesses. Under an exclusive, long-term Master Franchise Agreement, Pieology will leverage TZG’s Partners’ robust experience in developing and growing successful restaurant retail brands while rapidly expanding and building Pieology’s innovative fast casual pizza in China.

Ben Tsen, Managing Director of TZG also added, “We’re excited to partner with Pieology as their master franchisee in China. Leveraging TZG’s deep experience and Pieology’s strategy and high-quality product offering, we’ll be able to create a unique market entry experience for our local customers and bring make your own pizza to life across China.”

Coolgreens Turns 10

“As we celebrate our 10-year anniversary, we look back at what we’ve done to get here, but we are staying focused on where the puck is going, not where it has been,” said Coolgreens CEO Robert Lee.

Coolgreens just turned 10 and is looking towards its future: the company has a goal of opening a total of 150 corporate and franchise locations within the next five years.

“We want to grow aggressively while still being able to support our franchisees,” Lee said. “Coolgreens is exactly what consumers are looking for – a comfortable place that is focused on fueling healthy lifestyles. There are many markets that haven’t even heard of us yet. We aim to change that.”

The company began franchising in 2019, adding three new restaurants outside of its home-market of Oklahoma City. The brand already has commitments to open 24 new locations over the next three years.  

With growth comes evolution. What started as a restaurant only serving salads, wraps and desserts in 2009, is now serving a chef-inspired menu of signature salads, wraps, grain bowls, and sandwiches.

“I feel that it’s important that you enjoy the work that you do, which is why we are always on the lookout for new franchisees that share our passion for making our communities better places to live,” Lee said. “Most recently, we’ve been focusing on our service levels, speed of service and the overall quality of our food. We want to enhance the overall guest experience and improve our processes to ensure we always  provide great food and warm, friendly service that encourages our guests to live a healthy and happy lifestyle.”

In addition to menu innovation, Coolgreens has implemented many changes. For example, the company has incorporated Combi and TurboChef ovens into its kitchens in order to deliver a faster experience while maintaining its high-quality standard. 

Further, Coolgreens just introduced a new tagline – “Feed Your Life” – which focuses on the overall experience, not just the food. “Coolgreens is more than just fresh and delicious meals, it’s a place that feeds your life,” Lee said. “Our people will greet you with a smile, and no matter what your lifestyle is – trying to lose weight, gain muscle, or just eat better – you can do all of that at Coolgreens. We want every guest to leave our restaurant feeling better than when they walked in.”

Additionally, Coolgreens recently debuted its Rewards App systemwide, which enables guests to order online, pay in-store, and earn points. Initially, it has been well-received with an increase in dollars spent and rewards redeemed.

“With our new app, it has never been easier to get our food,” Lee said. “As we continue to increase our speed and efficiency in-store, we needed a way to provide that same experience outside the store. In addition, this has given us the ability to better understand our customer, so that we can continue to design dishes that are popular among our guests.”

IHOP in Canada 

Dine Brands International inked an agreement with Saeed Minhas, of Minhas Holdings, to bring the IHOP brand to exclusive locations in the Greater Toronto Area. The agreement calls for 15 new IHOP locations over seven years. The first location is expected to open mid-year 2020.

The new locations are expected to create approximately 900 jobs and contribute up to $15 million to the construction industry in the Greater Toronto Area.

“IHOP is a strong brand with a huge fan base around the world, and we are excited to expand its presence in Canada,” said Saeed Minhas, CEO of Minhas Holdings. “We can’t wait for guests in the Greater Toronto Area to experience the brand’s warm hospitality and commitment to quality in its breakfast, lunch, and dinner menu offerings.”

“Canada was the first international market we opened for IHOP back in 1969, making this year our 50th anniversary in the country,” said Steve Joyce, Chief Executive Officer, Dine Brands Global. “Canada continues to be a key market in our international development and growth strategy.”

“The opportunity to partner with Saeed Minhas as a franchisee was also a major factor in our decision,” Joyce continued. “In addition to his work as a real-estate developer, Saeed has valuable experience in the hospitality industry as a franchisee for Marriott and IHG as well as local market knowledge and presence.”

“Canada is a great strategic business choice for expansion outside of the U.S. for many reasons including geographic proximity and great brand awareness,” said William Urrego, Vice President of International Operations, Dine Brands Global. “We are interested in further expanding our presence in Canada and we are looking for great partners to take that step with us.”

Earlier this year, Dine Brands also announced a five-restaurant agreement in the Atlantic provinces with the first IHOP location expected to open in Moncton in December of this year.

New Prototype for Garbanzo

Garbanzo Mediterranean Fresh has debuted a prototype in the southwest Denver suburb of Littleton.

The restaurant, located at 5846 S. Wadsworth Blvd., Ste. 3300, in Littleton, is the first new ground-up build out of a GARBANZO restaurant to open in the Denver Metro since 2014, and it’s the company’s first new prototype in Denver. 

The new GARBANZO restaurant exudes a bright, open and fresh aesthetic for the brand. It features a stand-alone bakery area where guests will be able to see their pitas being lovingly kneaded, placed in the oven and puffed to perfection right before their eyes.

GARBANZO has partnered with Tractor Beverage Co. to offer an updated beverage station including USDA Certified Organic, entirely natural and 100% non-GMO “softer drinks” in the fountain and new Mediterranean “agua frescas” in bubblers. The new “better-for-you-beverage” line-up features flavors as bright as the Mediterranean itself like cucumber, lemongrass, blood orange as well as brighter versions of staples like cola, diet cola and root beer. In addition, there are now non-carbonated “Mediterranean Agua Fresca” drinks that all start with an apple cider vinegar base and offer flavors such as “Berry Patch” (strawberry and raspberry), blackberry spearmint, Mediterranean tart lemonade and a fall-themed orange blossom and cardamom apple cider. 

“This new category of “Mediterranean agua frescas” is further evidence of the shift from Mexican to Mediterranean and the result is uncarbonated, unaltered and utterly refreshing.” said VP of Marketing Devin Handler.

“I’m extremely proud to bring the GARBANZO restaurant of the future to Denver and, specifically, to my neighborhood in Littleton,” said VP of Marketing Devin Handler. “GARBANZO fans will immediately notice the difference when they step into the new restaurant. It features brighter décor updated lighting, countertops, booths and wood accents as well as redefined beverage station. We did this because we are always looking for ways to help our guests feel brighter. We are super excited to bring this enhanced experience to our hometown.”

This marks the 13th GARBANZO in the Denver market, 16th in Colorado and 29th systemwide. 

I Heart Mac & Cheese Signs Three-Store Deal

I Heart Mac & Cheese signed a three-store development agreement with Full Circle Restaurant Group to bring the concept to Colorado. The first two locations will open next year, with the final debuting in 2021, introducing the brand to Boulder, Stapleton and Downtown Denver.

“I Heart Mac & Cheese is a fun, attractive concept and an affordable franchise model that is easy to operate, with support systems in place to help our partners be successful,” said Stephen Giordanella, I Heart Mac & Cheese CEO and Chairman. “We are thrilled to bring our popular concept into the state of Colorado and introduce our new vegan menu that caters to varying ages, lifestyles and cravings.”

Full Circle Restaurant Group is led by military veteran and local entrepreneur, Vu Tran, who will drive operations for each of the restaurants. Tran was attracted to I Heart Mac & Cheese due to the brand’s proven franchise concept, training and services, and the potential growth opportunity.

I Heart Mac & Cheese is well-known for custom, build-your-own macaroni and cheese bowls and grilled cheese sandwiches. Guests select a pasta, bread, quinoa, broccoli or cauliflower base along with seven different proteins, vegetables, and cheeses. Most recently, the brand unveiled a new vegan menu featuring plant-based options through an official partnership that was launched with Beyond Meat®. Gluten-free options are also available. 

A unique franchise concept in the restaurant industry with no fryers, grease trap systems or hood systems, I Heart Mac & Cheese requires a low investment and can be opened in a small space, such as a mall kiosk or food court. Shopping malls, sports venues, areas close to colleges and universities, and high-traffic pedestrian areas are also ideal locations.  With a home office in South Florida, I Heart Mac Cheese offers franchise owner training, marketing support and ongoing development opportunities.

Chicken Salad Success

Chicken Salad Chick experienced continued success during the third quarter, marking its 15th consecutive quarter of positive same store sales growth. Additionally, Chicken Salad Chick opened seven new restaurants throughout Q3, including a location opened by founder Stacy Brown in her hometown of Rome, Georgia. The brand also inked franchise agreements to develop 13 new restaurants across eight states, including Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Missouri and Texas. Of these agreements, Chicken Salad Chick executed its first deal for the Kansas City market, where it will develop three new locations with first-time franchisees Myron and Alesia Ashley, as well as its first deal in Indiana with the Dugger Family, where they will develop a new restaurant in Evansville, along with two in Kentucky.

“The third quarter was incredibly special to us, as Chicken Salad Chick’s founder Stacy Brown became a franchise owner of the brand she created 11 years ago and opened her very own restaurant in her hometown of Rome. Having our founder invest in the brand she started is the ultimate testament to its character, stability and unlimited potential for success,” said Scott Deviney, CEO of Chicken Salad Chick. “In addition to Stacy’s Chick, we opened our doors in six other communities and welcomed several new franchisees who will be opening their own Chicks soon. We’re thrilled to have such outstanding and dedicated owners by our side as we continue to grow Chicken Salad Chick’s brand footprint.”

As part of its ongoing growth strategy, Chicken Salad Chick is targeting franchise development throughout the South and Midwest regions, specifically in states like Virginia, Texas, Nebraska, Iowa, Kansas and Missouri, and is actively seeking individuals with an entrepreneurial spirit who possess high energy and enthusiasm about the brand, marketing skills and the ability to manage a strong team. Restaurant experience is preferred. Interested candidates should have a minimum net worth of $600,000 and liquid assets of at least $150,000. Franchisees can expect the initial investment to be approximately $515,000 – $683,000 with a $50,000 initial franchise fee.

Blaze in Southern Louisiana

 Blaze Fast-Fire’d Pizza signed a multi-unit development deal that will grow the brand’s footprint in Southern Louisiana.

Seasoned restaurant owner-operators Kaleb and Khai Duong and Jacob Strider signed an agreement to open five Blaze Pizza locations, with restaurants between Baton Rouge and New Orleans. 

“With our experience in the franchise industry, we know how to spot a good thing,” said Kaleb. “We love the fast-casual pizza category and have been keeping a close eye on Blaze Pizza. We admire what they have accomplished with worldwide expansion, and we are excited to be a part of their growth here in Louisiana.” 

The Duong brothers and Strider are multi-unit franchise owners of MOOYAH in New Orleans and own a series of frozen yogurt locations. The team also owns a construction business in Louisiana. With their experience in franchising and with business management, the trio is set to hit the grounding running in Southern Louisiana with Blaze Pizza. 

“With enthusiasm for the build your own pizza category and proven franchise success, Kaleb, Khai and Jacob are a perfect fit for Blaze Pizza,” said Carolyne Canady, President International, Chief Development Officer for Blaze Pizza. “They are eager to grow their portfolio with a forward-thinking brand, and we’re thrilled to support their development plans for Southern Louisiana. We’re confident they’ll be top performers for years to come.” 

From its inception in 2012, Blaze Pizza has built momentum and developed a cult-like following as it expanded from its California base to bringing over 340 restaurants into 41 states and six countries. 

Each restaurant features an interactive open-kitchen format that allows guests to customize one of the menu’s signature pizzas or create their own, choosing from a wide selection of real ingredients that are free of artificial colors, flavors, preservatives and sweeteners. The generously-sized pizzas are then sent to a blazing hot open-flame oven – the centerpiece of the restaurant – where dedicated pizzasmiths ensure the artisanal pies are fast-fire’d and ready to eat in just minutes. Restaurants make fresh dough from scratch using a proprietary recipe developed by Executive Chef Bradford Kent (the “Pizza Whisperer”), which requires a 24-hour fermentation period to produce his signature light-as-air, crisp crust. For pizza fans with specific dietary needs, Blaze Pizza offers gluten-free crusts and vegan cheese.

Melting in Philly

Melt Shop will open its third restaurant in the Greater Philadelphia area. The newest Melt Shop will open on November 2 in Downingtown, PA at Brandywine Square located at Quarry Road & U.S. 30, Space P2-1. Melt Shop in Downingtown will celebrate its grand opening by giving away free grilled cheese for a year* to the first guest in line on opening day.

Following an opening in Newtown, PA in June, Melt Shop’s Downingtown restaurant is also owned and operated by local multi-unit franchisee, Drew Smith of Rockham Melt, LLC. In addition to Melt Shop restaurants, Smith and his team operate 28 Five Guys locations across the greater Philadelphia area. The multi-unit operator has plans to develop 17 additional Melt Shop restaurants across Pennsylvania, New Jersey and Delaware over the next few years.

“We’re excited to continue Melt Shop’s expansion in my home state of Pennsylvania. We received tremendous feedback following our opening in Newtown earlier this year and wanted to give our guests in Downingtown an opportunity to experience food that elicits moments of joy with family and friends,” said Smith. “Our food is delicious and is made from the highest quality ingredients and we look forward to serving guests from Downingtown and the surrounding areas.”

Cheek Joins GHG

Global Franchise Group® (GFG) named Chief Development Officer, Chris Cheek, a seasoned restaurant development executive with 20 years of experience in the QSR industry. GFG also announces the promotion of key leaders: Annica Conrad (Executive Vice President of Brand Marketing), Pam Maxwell (Vice President of Franchise Operations) and Lisa Cheatham (VP of Growth Marketing).

Chris Cheek is a franchise and restaurant development veteran with 20 years of experience in the industry. He comes to GFG after serving as CDO of Newk's Eatery where he led development efforts as the restaurant grew from 65 franchise locations to 130 and from 10 to 24 company owned-operations. As CDO, he helped the brand achieve consistent year over year growth. He also has served as CDO of Toppers Pizza and was VP of Franchise Development for Freebirds World Burrito in Emeryville, CA and VP of Franchise Development for Le Duff America (Bruegger's, La Madeleine, Brioche Doree, Timothy's Coffee, Michael's Bakery Café, and mmmuffins). As CDO of GFG he will lead franchise brand expansion, new store development, construction and international growth.

"As the footprint of Global Franchise Group grows and we look to acquire additional best-in-class brands, the experience and talent within our organization is at an all-time high," said Chris Dull, President and CEO of Global Franchise Group. "GFG is proud of our team members and the level of support we offer our franchisees. Championing our brands and the people who build them is at the core of what we do." 

GFG also promoted the following team leaders:

• Annica Conrad to EVP of Brand Marketing. Conrad is the former EVP of Great American Cookies and Marble Slab Creamery and will now oversee strategic marketing efforts for all GFG brands.
• Pam Maxwell to Vice President of Franchise Operations. Maxwell is the former VP of Operations for Marble Slab Creamery and Great American Cookies. She will now have oversight of all GFG snack brands.
• Lisa Cheatham to VP of Growth Marketing. Cheatham is the former Senior Director of Marketing for Pretzelmaker and will now focus on e-commerce, merchandising and licensing for all brands – a major focus for the organization. 

Global Franchise Group's mission is to champion brands and the people who build them. It builds great brands that connect people with craveable products and memorable experiences. GFG currently supports more than 1,400 franchised and corporate stores across all brands located in 16 countries and has system wide sales close to $1 billion.  

Peaking Success

After seeing a 1.23 percent increase in traffic and 3.3 percent increase in sales in addition to its average unit volume booming to a notable $4.35 million throughout its third quarter, Twin Peaks Restaurants will enter the final quarter of 2019 with significant numbers that have been steadily on the rise all year.

“Twin Peaks set a dominant pace in Q1 that we have kept up throughout Q2 and Q3,” said Joe Hummel, chief executive officer of Twin Peaks. “We’re finding success in many different avenues, specifically in our innovative work as we continue to evolve our menu and in our aggressive plans for expansion. I’m proud of our achievements so far in 2019, and I look forward to what’s in store for the end of the year as we head into 2020.”

Twin Peaks also hired a new director of franchise sales in August. Hummel announced that industry veteran Mark Ramage would join the team as director of franchise sales development. A leader with a proven record of success, Ramage boasts more than 20 years of experience spearheading development, sales and real estate of restaurant and hospitality brands.

“Mark adds a great deal of industry knowledge to the team,” Hummel said. “He’s already playing a significant role in driving Twin Peaks to meet its franchise goals for the remainder of the year. I feel confident that with Mark on our team, our unique franchise opportunity will excel to new heights.”

Looking into Q4, the ultimate sports lodge will launch its 2020 Twin Peaks Calendar in November. The calendar will feature $75 in coupons valid throughout the year, and Twin Peaks will donate $5 from every calendar to its national nonprofit partner Folds of Honor. Since their partnership began in 2017, Twin Peaks has raised $655,000 for Folds of Honor. 

With expansion as a high priority in 2019, Twin Peaks will open two new restaurants in November in West Chester, Ohio and San Marcos, Texas. The brand is growing rapidly with more than 30 locations in the pipeline. 

“This is a very exciting time for Twin Peaks,” Hummel said. “We are outperforming the industry, and we have many more franchise opportunities for those interested in joining the Twin Peaks brand. Now is the time to join, as I have no doubt that we will continue to show impressive momentum heading into the last few months of 2019 and the start of 2020 as we expand into new markets.”

Twin Peaks welcomes every guest with primetime matchups, ice-cold 29-degree beer and now, new smoked menu items. The entire menu is prepared in-house, to order and in generous portions to satisfy every appetite. The hearty made-from-scratch comfort food pairs perfectly with a frosty draft beer or a classic whiskey cocktail.

Twin Peaks currently has 83 locations in 26 states.

Waters Edge in Peoria

Waters Edge Wineries® signed a franchise agreement that will introduce its concept, Waters Edge Winery & Bistro, in an ideal high-traffic retail center in Peoria Heights, Illinois. This new location joins 11 others already operating throughout California, Colorado, Ohio, Oklahoma and Texas. Each Waters Edge Winery & Bistro location is individually owned and operated by local entrepreneurs in their communities. The Peoria Heights, Illinois location is owned by local entrepreneur Michael Vandy of MRVandy Inc., and is expected to open in spring 2020.

“We are excited to expand our brand further into the Midwest, allowing Illinoisans the opportunity to expand their palates and learn more about the fine art of winemaking,” said Ken Lineberger, president and CEO of Waters Edge Wineries. “With Michael as the newest member of our family, we are confident he will provide his guests a unique and exciting experience, sharing his love for wine with the local community and creating treasured memories in the process.”

After spending nearly two decades as a certified public accountant, Vandy was interested in identifying a franchise concept that would allow him the freedom to work as an entrepreneur, trading in his cubicle for a career focused on his love of wine.

“I’m thrilled to share my love for wine with the Peoria Heights community and to offer a fun and unique space for guests to enjoy a glass of wine with family and friends,” said Vandy. “Being a native Illinoisan, Peoria Heights holds a special place in my heart; I couldn’t be happier to introduce this great town to a concept I’ve quickly fallen in love with.”

As an emerging franchise concept, the Waters Edge Winery & Bistro model is ideal for entrepreneurs passionate about wine who seek a way to share their love and knowledge without being in the agriculture business. Franchise owners receive comprehensive training on the micro-winery tank system and are provided with pre-opening training courses, both hands-on and classroom based, to help prepare for the launch of their winery. The company also offers social media and marketing support to help franchise owners realize success.

Earlier this year, Waters Edge Wineries announced three new franchise agreements to introduce its concept in Madera, California; Toledo, Ohio; and Richmond, Texas. In August, a new location opened in Davidson, North Carolina, a suburb of Charlotte, and a new flagship location showcasing an updated design footprint opened in Long Beach, California this month. Waters Edge Wineries® currently operates 11 locations in California, Colorado, Ohio, Oklahoma and Texas with expansion in North Carolina, Kentucky and Montana.