MRM Franchise Feed: McAlister’s Deli-cious Expansion and New Newk’s
14 Min Read By MRM Staff
Modern Restaurant Management (MRM) magazine's Franchise Feed offers a glimpse at what's new in the restaurant franchise and MUFSO environment.
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McAlister’s Inks Largest Development Deal
McAlister’s Deli® signed a development deal with Best Choice Restaurants, an affiliate of Sun Holdings, Inc., a franchise organization founded by mega multi-unit operator Guillermo Perales. As part of the deal, the franchisee will spearhead McAlister’s Deli’s growth in Florida, Louisiana and Texas, in addition to developing 47 restaurants over the next seven years. The company consolidated several franchises to get to 51 locations throughout the four states: 36 in Texas, eight in Florida, four in New Mexico and three in Louisiana. The agreement marks Perales’ entry into the fast-casual restaurant space.
“This particular development deal marks a very significant milestone for our brand, as it is one of the largest number of franchises that we have sold in a single transaction in our company history. This transaction accelerates our nationwide growth plans. Perales is the owner and operator of several iconic brands, and his investment in McAlister’s Deli showcases the strength of our business model and franchise opportunity,” said Joe Guith, president of McAlister’s Deli. “We are thrilled to welcome Guillermo and his team to the McAlister’s Deli family and know that his business acumen and knowledge of the foodservice industry will be invaluable to our brand.”
Sun Holdings operates Burger King, Arby’s, Golden Corral, CiCi’s, Krispy Kreme, T-Mobile, Taco Bueno, McAlister’s Deli and GNC locations across the country. During the past three years, the company has developed more than 200 locations and 200 remodels. In addition to multiple awards and recognitions that include four Golden Plate and four Silver Plate awards for Popeyes, the MUFSO Golden Chain Award and Nation’s Restaurant News’ Top 10 Power List, Perales was named Ernst & Young’s Entrepreneur of the Year in 2008, as well as Latino Leaders Magazine’s 101 Most Influential Latinos for several consecutive years.
“We recently opened our 1,000th location and have been looking for a best-in-class fast casual restaurant brand to add to our rapidly growing portfolio. As a segment leader with strong unit-level economics that consistently outperform competing brands, McAlister’s Deli exceeded our criteria and was the obvious choice,” said Perales, founder and CEO of Sun Holdings, Inc. “We are honored to be able to expand our impact in the communities we serve by offering great tasting food as well as contributions to education and meals for the underserved.”
McAlister’s Franchisor SPV LLC currently has more than 450 restaurants in 27 states and is part of the Focus Brands family, including Auntie Anne’s®, Carvel®, Cinnabon®, Jamba®, Moe’s Southwest Grill® and Schlotzsky’s® Austin Eatery. All franchisees within theMcAlister’s Deli system have the ability to use Focus Brands’ shared services, including marketing, real estate, technology and more, to help them successfully launch and operate their restaurants.
Fast Track for Johnny Rockets
Johnny Rockets is on track to open 23 new restaurants this year across Asia, South America, Mexico, Europe, the Middle East and Africa.
Leading the charge on the international front, bringing Johnny Rockets hand-crafted burgers, shareable sides and best-in-class indulgent shakes to markets around the globe, is Stephen O’Connor who recently joined the company as Senior Vice President, International Business, in May.
“Our success outside of the U.S. is a critical aspect of our company’s growth and is contributing to our current momentum,” said Stephen. “Our rapid expansion stems largely from our timeless all-American brand that deeply and instantly connects with consumers around the globe. The combination of our craveable menu items, engaging experiential elements and casual California-themed décor creates a unique dining occasion for our guests that keeps them coming back for more.”
Johnny Rockets has already opened eight restaurants this year in Brazil (2), South Korea (2), Chile, Mexico, Peru and North Cyprus, with an additional 15 openings scheduled through December in Brazil (3), Italy (2), Nigeria (2), Spain, Oman, Chile, Indonesia, South Korea, Peru, Mexico and Bangladesh.
As part of the global expansion – including the brand’s first restaurants in Spain and Oman this October, and its recent opening in Rome on September 19th – Johnny Rockets is investing in the rollout of a new store “Fusion” design for new locations.
“Our new design is an opportunity to lean into the brand’s nostalgic elements like our juke boxes, soda fountains and California heritage, and combine that with contemporary elements such as vibrant murals,” said O’Connor. “We are also remodeling existing units with key Fusion elements that create a unique dining experience.”
The Johnny Rockets franchisee in Italy, Groppetti Giangiacomo, currently owns four restaurants in Brescia, outside of Milan; this is the company’s first restaurant in Rome and is opening through a sub-franchise agreement. Giangiacomo also plans to open another Johnny Rockets restaurant later this year in Bergamo for a total of six by year-end.
“Italian consumers appreciate good food and ambience,” said Giangiacomo. “The taste and quality of our menu items and the inviting décor have surpassed the expectations of our guests. Based on our strong reception in the market, we look forward to bringing Johnny Rockets to customers throughout Italy.”
MOD in Canada
MOD Super Fast Pizza Holdings, LLC plans to expand its into Canada. The development agreement for Canada was signed with V.I. Pizza Inc., led by Jim Hayden, Jeff Jefford and Ken Whitaker, who have deep food industry experience and operate several successful brands across Vancouver Island. Their agreement includes development rights to bring five MOD locations to the island over the next several years. Mike Yasinski, co-founder of Hudsons Canada’s Pub and executive committee member of Restaurants Canada, is also an investor.
“We are confident that MOD will translate well in the Canadian marketplace, and that the V.I. Pizza team will be great partners as we further expand our footprint. With Vancouver Island’s close proximity to our home base of Seattle, this feels like the perfect first step into Canada.” said Scott Svenson, co-founder and CEO of MOD. “For us, the most important factor in selecting our franchisees is finding those who not only share our business values, but are committed to cultivating the MOD culture in their stores. The V.I. Pizza team are aligned with our belief that taking care of people, and using the platform of MOD to make a positive impact, leads to a successful business. As we continue to grow MOD’s footprint, we hope to identify additional like-minded partners who are interested in helping us expand across Canada.”
Seattle-based MOD Pizza is a pioneer of the fast casual made-to-order pizza segment, founded in 2008 by entrepreneurs Scott and Ally Svenson. The Company has been recognized as the fastest growing restaurant chain in the United States for the past four years, and currently has over 455 locations system-wide, with an additional 20+ stores slated to open by the end of 2019. At its core, MOD is a purpose-led company committed to using the business to make a positive social impact in the communities it serves.
“We’re absolutely thrilled to introduce MOD Pizza to Canada, and to share its compelling combination of superior food quality, value, speed and most importantly, its platform for doing good,” said Jim Hayden, COO of V.I. Pizza Inc. “MOD embodies everything we believe a brand should stand for – a people-first culture, a community driven approach, and a best-in-class business model. We can’t wait to debut the first store in our home market of Vancouver Island.”
V.I. Pizza Inc. will open its first MOD location in late 2019 in Langford, British Columbia, in the newly developed Belmont Market Shopping Centre.
Captain D's Eyes Midwest
Captain D’s signed two franchise development agreements that will grow its brand footprint in Illinois, specifically in the Chicago metro area and Champaign. The brand currently has six locations throughout the state, and Illinois remains part of Captain D’s greater expansion plans for the Midwest region. In addition to opening a new location in Carbondale earlier this year, the fast casual seafood leader has two additional locations slated to open in Milwaukee, Wisconsin and Chillicothe, Ohio before the end of 2019.
Bringing Captain D’s first restaurant to the Chicagoland area are new franchisees Tina Patel and Hardik Patel of Sheiva 11, Inc. Tina is an experienced multi-unit franchisee, operating a portfolio that includes three Dunkin’ restaurants and one Subway in the Chicago metro area. In addition to their Chicago location, the duo has agreed to develop a second Captain D’s location in Wisconsin, slated to open in the next few years.
“Being longtime franchisees of well-established legacy brands, when Hardik and I began looking at concepts to diversify with, we didn’t want to stray too far from our values, but also wanted something different that would allow us to continue operating our existing locations without conflict. When we came across Captain D’s, we knew we had found the one,” said Tina Patel. “In its 50th year, the brand continues to prioritize innovation and has developed a best-in-class support infrastructure that has made the entire process seamless for us. We’re very excited to be part of its early growth in the Chicago market.”
In addition to the development in Chicago, first-time Captain D’s franchisee Sunil “Sunny” Modi and his nephew, Nirav, will be bringing a new restaurant to Champaign. Sunny is a franchising industry veteran with more than 20 years of experience in multi-unit operation. He brought the first five Dunkin’ franchises to the Champaign area in the late 1990s and early 2000s before retiring in 2016. During a trip to Nashville, he tried Captain D’s for the first time and immediately inquired about becoming a franchisee. His first Captain D’s will open at 1409 N. Prospect Ave. in early 2020.
“Our ongoing growth in Illinois and throughout the Midwest is a direct reflection of our strong unit economics and leadership in the fast casual seafood space, as well as the unwavering commitment we have to our franchisees’ success. We’re thrilled to continue driving our development throughout the region and to be bringing several new restaurants to the area in the near future,” said Brad Read, chief development officer of Captain D’s.
With more than 530 restaurants in 22 states, Captain D’s is the fast-casual seafood leader and number one seafood franchise in America ranked by average unit volume. The company is currently seeking multi-unit operators to join in the brand’s rapid expansion. For more information about franchise opportunities, visit http://www.captaindsfranchising.com or call 800-314-4819.
Making a Habit in South Korea
The Habit Burger Grill is setting its sights on South Korea as the next international growth target as the burger-centric restaurant concept continues its steady march abroad. To support its expansion plans, The Habit has partnered with business development consulting firm Bridging Culture Worldwide to attract multi-unit franchise development companies.
“South Korea, with its savvy consumers, open minded culture and interest in global brands is an ideal marketplace for The Habit Burger Grill’s expansion,” said John Phillips, The Habit Burger Grill’s Chief Global Business Partnership Officer. “The people of South Korea appreciate quality food and enjoy the fast-casual experience. We look forward to working with Bridging Culture Worldwide to find the right franchise partner to ensure our mutual success.”
The Habit Burger Grill’s entry into South Korea marks the next phase in a larger international expansion plan. Bridging Culture Worldwide will help The Habit lead its expansion into the broader Asia-Pacific region. The consulting, strategic planning and market entry service is excited to join this venture.
“South Korea has embraced premium Western brands and The Habit Burger Grill delivers exactly what consumers are seeking – great food and excellent service. With their distinctive fresh off the grill Charburger and hand-crafted sandwiches, fresh salads and other menu items, we know South Korea will appreciate all that The Habit Burger Grill has to offer,” said Don Southerton, Bridging Culture Worldwide’s Founder and CEO.
Fazoli's Grows in Florida
Fazoli’s will continue its commitment to aggressive franchise development with the addition of three new restaurants in Florida. President and CEO Carl Howard said the company has executed an area development agreement with Franchisee Matt Clift of CliftClem Holdings, LLC, to bring three Fazoli’s restaurants to the Orlando and Clermont areas, with the first one scheduled to open in fall of 2020.
After residing in Lexington for more than 35 years, Clift retired and moved to Florida. He said Fazoli’s is a favorite within his family, and because guests can sit down and enjoy a delicious, made-to-order meal with an innovative menu, breadstick service and overall excellent service after the sale, they all missed dining at the prominent brand after they left Kentucky.
“We couldn’t believe there wasn’t a Fazoli’s here,” Clift said. “Our family loves Fazoli’s and whenever we go back to Kentucky, we always find a way to eat lunch there. We’ve been going to Fazoli’s for 30 years and remember when they first opened. We believe in the brand’s staying power.”
Clift said he thinks the Fazoli’s concept is evolving, and the brand has done an excellent job transforming the restaurant, especially with the recent brand refresh, to highlight Fazoli’s commitment to quality and unmatched service.
“I like the vision and strategy around staying true to the consumer needs and providing numerous ways for guests to order some of their Fazoli’s favorites from delivery to carry out,” Clift said. “By opening Fazoli’s, we’re building a family legacy with a solid franchise that we can grow. Derrick Clemmons, my son in-law, will be the franchise operator, and we can’t wait for this to become a family affair. Family is important to me. We all love the concept, including our young grandkids. It’s something our family will treasure for years to come.”
“We think this is the perfect opportunity to expand into central Florida and show the area what Fazoli’s is all about,” Howard said. “Matt has been a loyal Fazoli’s fan from day one, so he knows firsthand our commitment to innovation and excellence. Matt joining the Fazoli’s family as a franchisee is sure to make our brand even stronger than it was before.”
For others looking to join the Fazoli’s family as a franchisee, the brand is offering one of the best franchise incentives on the planet. Seeking multi-unit operators across the U.S. to join its growing, successful franchise network, the new incentive program offers a guaranteed savings of at least $125,000 for franchisees developing at least three locations. Franchisees developing more than five locations will save over $200,000. For more information about franchise opportunities visit ownafazolis.com or contact Senior Director of Franchise Sales Steve Bailey email@example.com.
Project Strive at Newk's
Newk's Eatery today announces the grand re-opening of all seven locations in its home market of Jackson, Miss., with a new restaurant prototype inspired by the brand's 'Project Strive' initiative. At the milestone of 15 years since the first unit opened in Oxford, Miss., the brand took pause to seek feedback from guests on what's important to them.
Guests praised Newk's for offering the right balance of wholesome and satisfying meals that can be shared in a comfortable dining room, ordered online or delivered to meet their busy lifestyles. "The purpose of Project Strive is to build from what our guests love about Newk's and evolve the brand to be more aligned to their lifestyles. It stems from our brand mission to strive to exceed expectations for all Newk's guests," said Michelle Spohnholz, VP of marketing at Newk's Eatery.
Newk's has always featured an open kitchen, where guests can see everything that goes into their meals. Historically, guests have not necessarily been aware of the brand's commitment to fresh preparation and careful ingredient selection. The new prototype features an updated red soffit that reflects the tagline, "Our Kitchen is an Open Book" and several fun facts about the ingredients and preparation methods.
"This project connects our brand story with the guest experience through an upgraded restaurant environment, paired with a generous dose of hospitality," said Mike Clock, president of Newk's Eatery.
The design is contemporary and comfortable with updated light fixtures, new countertops and millwork, tufted booths, hardwood accents, new plate ware and menu boards. Updated artwork will tell the story of Newk's roots as a homegrown brand with a passion for food and family, along with their purpose to Strive To Make A Difference with every guest every day. The color teal, which represents their Newk's Cares initiative and efforts to raise awareness and money for research to support Ovarian Cancer, has also been infused into the design in a prominent way. "The new teal mosaic tile wall is an important feature that weaves our philanthropic work into the restaurant experience," said Director of Design, Rachael Myrick.
The restaurant will also feature an updated beverage station for Newk's signature iced tea and new all-natural lemonade. The exterior will be upgraded with new awnings, string lights and an inviting patio for families to dine.
"My goal is for guests in our restaurants to feel the passion behind the Newk's name, particularly our love for food and family coming together to nourish meaningful relationships that matter most," said Newk's CEO and co-founder Chris Newcomb. "We want to feed what matters in our Newk's communities, so guests can share in wholesome ingredients crafted for real living through scratch-made meals and some of our favorite Newcomb Family Recipes."
The brand aims to continue to renovate and refresh its restaurant locations across all 16 states as they grow in new and existing communities to Feed What Matters.
Tropical Smoothie's Record Year
Tropical Smoothie Cafe awarded 64 franchise agreements in the third quarter alone. The brand expects to sign 200 franchise agreements, open 130 cafes, and grow same-store sales by 5% in 2019. Year to date, Tropical Smoothie Cafe has opened 90 cafes and awarded 179 franchise agreements to drive its development.
Tropical Smoothie Cafe franchisees have signed multi-unit franchise agreements for a number of markets across the country, including Chicago, IL; Tampa, FL; Orlando, FL, Cleveland, OH, and New Haven, CT. The Chicago-area remains a tremendous growth market for the brand, where a total of 36 franchise agreements have been signed since October 2018 with both existing multi-unit and new franchisees. One of these openings, outside of Chicago, was the brand’s 800th location. The franchisee that opened that location plans to develop an additional 17 units in the coming years.
“Our focus on operational execution and delivering a remarkable guest experience have been integral to the growth we are experiencing. We are privileged that new franchisees recognize our commitment to the franchise community and that existing franchisees continue to reinvest in the brand by executing additional multi-unit agreements,” said Charles Watson, CEO of Tropical Smoothie Cafe, LLC. “This is a testament to our Support Center team, leadership, and passionate franchisees that position Tropical Smoothie Cafe as a brand with tremendous value to small business owners.”
The brand recently celebrated raising a record breaking $1.14 million in 2019 for their longtime charitable partner Camp Sunshine, in addition to various industry accolades, most recently including the Inc. 5000, Franchise Times Top 200+ and Entrepreneur’s Best Franchises at Any Budget lists. The Tropical Smoothie Cafe brand has experienced an impressive surge in nationwide expansion during the last few years, which continues to fuel new growth. Looking ahead, the fast-casual cafe concept has the goal to have 1,500 cafes open across the U.S. and reach an average AUV of $1 million by the end of 2025.
GFG Starts Franchising
With six locations in New York and New Jersey currently in operation and additional locations opening soon, GFG Bakery-Café today announced it is now franchising with the help of Fransmart, the industry-leading franchise development company, to bring its authentic Greek flavors across the globe.
In 2017, entrepreneur Georgios Drosos opened GFG Bakery-Café in Hoboken, New Jersey. Five other locations soon followed throughout Manhattan and New Jersey. Drosos is an award-winning franchisee himself, with over 100 franchise locations with concepts including bakeries, cafes, frozen yogurt and furniture stores throughout Greece and in the United States, France, Austria, Romania and Russia. His business expertise and passion for Greek food promise to be a winning combination for new GFG Bakery-Café franchisees signing on with Drosos as franchisor. With 30 GFG Bakery-Café franchise locations already slated to open within the next year, Drosos talks of the heart of his passion for food.
Growing up spending summers with his Yiayia and Pappous, he remembers his grandmother baking spinach pies and hand-rolling phyllo for hours. Her recipe was sought after in Epizus, which is renowned for its pies. There, the word “pie” is synonymous with the word for “hug,” because the phyllo hugs the filling and they are hand-baked with love.
Drosos’ mother baked spinach pies to take in his pack for school lunch—every day for six years. Much to his chagrin, his favorite treat at Yiayia’s house became tiresome somewhere around year four! To this day, he receives monthly care packages of home baked spinach pie hugs from his mamá, who bakes using Yiayia’s famous recipe. And luckily, he still enjoys eating them. Baking was, and remains, a family tradition.
According to Drosos, “Back in the 1930s, our great-grandfathers worked their way up from selling ‘koulouria’ (buns) in the local fairs to opening two of the biggest bakeries in Athens, the famous Lavrion located in the most central part of the city. Greek From Greece Bakery-Café is a reincarnation of this culinary and baking past, on a mission to make every neighborhood we settle in a bit more like home – where you can always count on simply good food!”
Through this franchise expansion strategy, GFG Bakery-Café upholds the same Yiayia-tested standards of loving care and authentic Greek taste baked into every bite.
GFG Bakery-Café is partnered exclusively with Fransmart, the industry-leading franchise development company behind the growth of brands like Five Guys Burgers & Fries, Qdoba Mexican Grill and The Halal Guys.
“As the fast-casual industry continues to embrace organic, natural ingredients, the upside and growth potential of Mediterranean concepts like GFG Bakery-Café is unlimited,” said Fransmart CEO Dan Rowe. “All of GFG Bakery-Café’s products are made in Greece, enabling franchisees to create a truly authentic, unforgettable experience for diners.”
GFG Bakery-Café is currently seeking experienced multi-unit foodservice operators and scouting potential markets across the globe. Those interested in joining GFG Bakery-Café as franchisees will get support from start to finish, from site selection expertise and sample floor plans to custom training systems and localized brand building.