MRM Franchise Feed: News and Trends Affecting the Restaurant Industry Landscape

 Modern Restaurant Management magazine launches a glimpse at what’s new in the restaurant franchise environment. Send items of interest to Content Director Barbara Castiglia at bcastiglia@modernrestaurantmanagement.com.

Posting Calories in Canada

7-Eleven Canada began voluntarily posting calorie labels nation-wide on September. The introduction of Canada-wide calorie labels coincides with the lead-up to Ontario’s new menu labelling requirements in the New Year. 7-Eleven Canada chose to move with early implementation and extend this nutritional information to its customers across the country.

“7-Eleven Canada is committed to providing our customers with the information they need to make more informed choices,” says Raj Kapoor, vice president and general manager, 7-Eleven Canada. “We’re proud to take a leadership role to be among the first retailers to implement calorie menu labeling in Canada.”

7-Eleven Canada also posted a Nutrition Quick Reference Guide in stores to provide customers with comprehensive information on calories and 13 core nutrients for over 300 food and beverage entries.

Your Pie Looks to Grow

Dallas-based Falcon Realty Advisors, a national commercial real estate company that works exclusively with retail, restaurant and entertainment tenants, has been engaged by the local franchisee of Your Pie to advise on the North Texas expansion of its fast-casual pizza franchise. The chain’s first North Texas location is a 3,000-square foot store at 5110 Eldorado Parkway in Frisco, which officially opened September 16. Cal Marsh, Director of National Restaurant Accounts with Falcon Realty Advisors’ Restaurant & Entertainment Group, will continue to lead the search for additional locations across the North Texas area over the next three years.

“Your Pie remains a leader in the highly competitive fast casual market because of its passion for improving the way people experience pizza in a fast-paced environment, without losing the quality – doughs are always hand-tossed and made from scratch, customized using only the freshest ingredients and ready in four minutes,” said Marsh. “Your Pie has been widely successful across thirteen states and a delicious quick-fire pizza chain is exactly what the North Texas market needs.” 

On behalf of Your Pie, Falcon Realty Advisors is seeking 2,500-3,000 square-foot range spaces in middle-income markets across the North Texas area. Locations with corner or shopping center end caps with outside patios, healthy residential densities and high density retail corridors, are preferred. Suitable co-tenants include theaters, coffee shops, specialty grocers and complimentary fast casual users.

Your Pie currently has 34 locations across 13 states, with plans to open 11 restaurants by the end of 2016.

Carvel Eyes Garden State

Carvel is targeting significant expansion initiative across New Jersey, with plans to open up to 20 additional locations in the coming years. The brand, which currently operates 51 franchised New Jersey locations, is looking to attract qualified franchisees across the state.

“We have an extremely loyal customer base in the tristate area, and New Jersey represents an important region for us,” said Scott Colwell, President of Carvel. “We’re looking forward to finding qualified franchisees who will contribute to the record growth and momentum Carvel is experiencing.”

Carvel will host a Discovery Day event on Tuesday, Oct. 4 at the Saddle Brook Marriott at 138 New Pehle Ave. in Saddle Brook from 6:30 – 8:30 p.m. to learn more about the franchise opportunity and meet one-on-one with company executives. To register for the event, click here.

“The fact that Carvel continues to grow in the face of the ever-changing frozen treat industry speaks volumes to the passion that consumers and franchisees have for the brand,” said Colwell.

Carvel experienced a record increase in same-store sales growth in 2015 and is in the midst of an ongoing roll-out of its new shoppe design. The Carvel that many consumers grew up with now has a more contemporary look with wood-finished floors, vibrant colors, digital menu boards and new brand imagery. The new retail layout is designed to enhance the guest experience and spur a new wave of growth for Carvel.

The total initial investment for a full-service Carvel shoppe ranges from approximately $250,000 to $380,000 and varies based on location, square footage and equipment package. Full-service Carvel shoppes typically range in size from 800 to 1,600 square feet.

BurgerFi Opens in London

BurgerFi opened its first restaurant in London, accelerating the company’s international franchise development expansion efforts. Located inLondon’s Wembley Central Square, the new restaurant is owned and operated by franchise group Ground Round Limited. Led by entrepreneur Jamie Wood, son of Rolling Stones’ guitarist Ron Wood, and hospitality industry veteran Constantine Kulukundis, the group plans to develop a total of 10 new restaurants throughout the U.K. over the next several years. Their second location slated to open in downtown London later this year. 

“For the past five years, BurgerFi has done a great job establishing itself as a leader in the better burger space with immense potential, which drove my business partner and I to franchise the concept in London,” said Jamie Wood. “The corporate team has passion like I’ve never seen before, and they go above and beyond to set their franchise partners up for success. Because of that, I truly believe that BurgerFi will succeed in this new market, and I look forward to growing its presence even more over the next several years.”

The expansion in London has contributed to BurgerFi’s surge in franchise development, propelled by the brand’s goal to have 100 restaurants open by year-end. The company has experienced very strong growth in 2016, both domestically and internationally, expecting to end the year with 24 openings in the U.S. and four abroad. Furthermore, the company is on track to report record-high system-wide sales at the end of this year with a projected increase of 20 percent.

“Our next goal to open 100 restaurants is in sight, and adding a location in London is a significant milestone for the BurgerFi brand,” said Corey Winograd, chief executive officer of BurgerFi. “In just five years, we’ve grown from a single restaurant in South Florida to an internationally recognized franchise with 89 open locations, which has further fueled our franchise development nationwide. Our fast-paced growth is a true testament to BurgerFi’s commitment to providing a premier better burger experience in a fast-casual environment, and we’re confident that Jamie and Constantine, along with our other dedicated franchisees, will help us continue our growth worldwide and take the BurgerFi brand to new heights.”

To continue the momentum in 2017, BurgerFi plans to open 35 new restaurants next year, including the company’s first locations in Panama and Kuwait. With global demand and enormous opportunity for expansion, BurgerFi is poised for another year of phenomenal growth and will continue to seek qualified candidates to expand the brand’s presence domestically and internationally. 

“As we prepare for 2017, we recognize that setting development goals is crucial to the success of any business, but finding the right operators and restaurant sites is how you sustain long-term growth,” said Winograd. “We’re focused on recruiting franchisees that resonate with our chef-driven, all-natural menu, as well as our commitment to providing an environmentally sustainable experience in all of our restaurants.”

Schlotzsky’s Grows in Colorado

Schlotzsky’s^® continues its expansion in Colorado and is actively seeking qualified franchisees in this region as well as state-wide.

“Colorado represents an important part of Schlotzsky’s growth strategy, and we’re excited about the brand’s continued expansion into the region,” saidPeter Ortiz, Schlotzsky’s Vice President of Franchise Sales. “The Schlotzsky’s brand has become a top choice for some of the most successful multi-unit franchise owners in the country, so we’re excited to watch the brand grow in these new markets due in large part to the talent of our franchisees.”

As the company looks to open additional locations in the area, they are actively seeking qualified franchisees to develop in the areas in and around Denver. Currently, Schlotzsky’s has one location in Denver – in the Denver International Airport – and 12 locations throughout the state of Colorado.

In 2015, the brand had nearly $320 million in system-wide sales, a noted increase in same-store sales, the opening of 14 new restaurants, and the signing of 44 new franchise deals. This growth is fueled by both existing franchisees as well as new partnerships with experienced multi-unit franchise owners with notable portfolios. 

Schlotzsky’s currently operates more than 350 franchised locations in the U.S., across 34 states, and abroad. The company has attracted a record number of franchise inquiries in recent years due to its quality leadership, healthy sales to investment ratio, and exceptional company performance.

Old Chicago Inks Deals to Grow in Eight States

Old Chicago Pizza & Taproom, signed franchise development agreements with three of its existing franchise partners to open nearly two dozen new restaurants. These agreements will grow Old Chicago’s footprint across eight states, including Tennessee, South Carolina, Montana, Wyoming, Oklahoma, Arkansas, Missouri and Mississippi.

Mark A. Belanger, CFE, vice president of global franchise operations and development for CraftWorks Restaurants & Breweries, Inc., operating company of Old Chicago said: “We’re continuing to make significant investments into our company that reinforce Old Chicago’s growth potential and position our franchisees for success, so that they ultimately want to expand their portfolio and introduce Old Chicago to new markets. These agreements are a testament to the strength of our evolving business model and exceptional offerings, and we look forward to developing new Old Chicago locations across the country.”

Among existing franchise groups to sign new agreements are The Collier Group, who will be developing seven additional Old Chicago locations in South Carolina and Tennessee; The Johnson Group, who has plans to bring three restaurants to Wyoming and Montana; and The Nursariwala Group, who will be expanding their portfolio with six new locations in Oklahoma, Missouri, Arkansas and Mississippi.

“It’s an exciting time to be part of the Old Chicago family, as we propel Old Chicago’s national expansion efforts forward,” says AJ Nursariwala, principal of The Nursariwala Group and Old Chicago franchisee. “Old Chicago is a strong concept and based on the success we’ve been seeing in our Joplin restaurant, the company is poised for tremendous growth over the next several years. I’ve seen firsthand the company’s commitment to its franchisees and am eager to continue the relationship with the development of my new restaurants. I look forward to being part of the brand’s continued success and becoming an integral part of the communities we will serve.”

Nursariwala has been an Old Chicago franchisee for just over a year, and currently operates a location in Joplin, Missouri. His first restaurant under the new development deal is slated to open in Rogers, Arkansas in 2017.

In 2015, Old Chicago achieved $254 million in system-wide revenue, and is currently reporting 27 consecutive months of positive comp sales. Old Chicago also launched its new restaurant prototype – a 5,000 square feet build with an additional 1,000 – 1,200 square feet of outdoor patio space, a new kitchen and upgraded bar technology. To further enhance the experience, the company has also updated its training programs and guest proven menu categories.

Five Guys Looks to Quadruple Global Footprint

Five Guys is accelerating international franchise expansion with plans to nearly quadruple its global footprint from eight countries to 28 over the next five years. The company’s immediate focus is on continued expansion throughout Europe and the Middle East and entering the markets of Australia, Japan and South Korea.

“We always knew international was going to be a strong opportunity,” Five Guys Chief Operating Officer Sam Chamberlain said, “but the results have outpaced even our most optimistic projections.”

Five Guys opened its first restaurant outside of North America in 2013 in London. In three years, Five Guys has grown to more than 50 locations in the UK, and in the past year has successfully entered five new markets – Ireland, United Arab Emirates, Saudi Arabia, Kuwait and France. Average unit volumes in international markets are running as much as five to seven times that of domestic locations.

“The demand from international consumers has been overwhelming and we are applying resources to meet this demand,” Chamberlain said.

Senior executives from Five Guys are traveling to Asia in October to meet with prospective partners. 

Newk’s Likes Indy Prospects

Newk’s Eatery is expanding into Indiana with the company’s latest development agreement to open 15 locations in the Indianapolis and southern Indiana markets over the next several years.

Indy Eatery LLC is co-owned by Stephen “Kent” Mabe and Mitias Garrett Investments, LLC. Carmel, Indiana, native Kent Mabe, will serve as the local operating partner, also boasts a long track record as a successful fast casual operator in the Indianapolis market. Mabe served as an Operations Specialist in the US Navy for three years where he fine-tuned leadership skills.

“Indy Eatery will be locally operated by a native of the Indianapolis area who understands the market and, with his deep experience in fast casual, is an ideal partner to introduce the Newk’s brand to Indiana,” said Newk’s Chief Development Officer Chris Cheek. “Our Indianapolis locations will provide a strong base from which to build the Newk’s brand in the Midwest.”

“Newk’s is designed from top to bottom for the way people want to eat today, and we think the concept will take off in the Indianapolis area,” said Mabe. “We look forward to being part of Newk’s overall growth strategy.”

Indy Eatery is the fourth multi-unit franchisee to sign with Newk’s in 2016. Combined, the new franchisees will open more than 45 new restaurants in the next four years, consistent with Newk’s goal to reach 200 units by 2019.

Captain D’s Pursue Central Florida

Captain D’s LLC,  has accelerated franchise development expansion in Central Florida. The company currently has 29 restaurants located throughout the state of Florida and is targeting the Central Florida region to further expand its presence in the state.   

Captain D’s aggressive growth plans for Central Florida are part of the brand’s overall franchise development plans for this year. This expansion is further driving Captain D’s ongoing success, with the second quarter of 2016 signifying the company’s 19th consecutive quarter of system-wide growth, generating a 3.1 percent system-wide same store sales increase for franchisees. Fueling the company’s compounding success is its ongoing menu innovation and new restaurant beach design. To date, 50 percent of all restaurants have been reimaged to the brand’s new vibrant, coastal design, with another 50 locations to be remodeled by the end of this year. 

“Central Florida has proven to be a successful region for Captain D’s, with existing restaurants in the area consistently performing well,” said Michael Arrowsmith, chief development officer for Captain D’s. “There is tremendous potential to catapult our presence through franchise development.”

Dunkin’ Opens 12,000th Restaurant

Dunkin’ Donuts  opened its 12,000^th restaurant worldwide, in Riverside, California. Dunkin’ Donuts continues its steady and strategic westward expansion, opening more than 30 new restaurants in California with plans for about 300 new locations total to be developed in the state over the coming years.

“We now have 12,000 Dunkin’ Donuts restaurants around the world with tremendous opportunities for continued growth both domestically and internationally. We and our franchisees are proud of the fact that Dunkin’ Donuts has become part of the daily ritual of millions of people who depend on us for great coffee and other beverages, baked goods and sandwiches,” saidNigel Travis, Chairman and Chief Executive Officer, Dunkin’ Brands. “Looking ahead, we plan to keep growing and innovating, bringing customers the Dunkin’ Donuts products they love, as well as new offerings like our Cold Brew coffee and new Dunkin’ Mobile App, which allows members of our DD Perks Rewards Program to place their order in advance with On-the-Go Ordering.”

The new Dunkin’ Donuts location in Riverside is owned and operated by franchisee Parag Patel, who opened two Southern California Dunkin’ Donuts this summer in Villa Park and Yorba Linda. The Patel family has been a part of the Dunkin’ Donuts franchisee community since establishing their firstMaryland location in 1989. Patel’s extensive experience in the restaurant industry and personal connection to Dunkin’ Donuts continues to inspire his West Coast expansion efforts as he plans to open about 20 new Riverside and Orange County locations in the coming years.

“Each new restaurant we open is just as exciting as the first. My family has a strong connection to Dunkin’ Donuts and we are honored that our newest location is the 12,000^th Dunkin’ Donuts in the world. Most importantly, we are excited to bring Dunkin’ Donuts’ famous coffee, baked goods and other delicious products, along with our fast and friendly service, to guests here inRiverside,” said Patel. “The Southern California community has been more than welcoming, and we look forward to sharing our love for the Dunkin’ Donuts brand with our new guests!” 

Taking it Personnely

 IHOP^® restaurants named Nevielle Panthaky as Vice President, Culinary. In this role, he is responsible for directing the breakfast leader’s culinary strategy and team, including a sharp focus on refining the signature food and beverage offerings synonymous with the IHOP brand, introducing exclusive promotional menus, and ensuring a robust gastronomic pipeline.

Panthaky joins the IHOP team with 15 years of culinary experience at  casual dining brands, fast casual concepts and fine dining establishments. Most recently, he served as Vice President, Culinary for Wok Holding’s P.F. Chang’s Bistro and Pei Wei Asian Diner, where he oversaw culinary direction and menu execution. During his career, he also made a mark at establishments such as the iconic Hotel del Coronado in San Diego and Union Square Hospitality Group; was responsible for food and beverage innovation and branding at Panda Express; and served as Executive Chef at Milestones Grill and Swiss Chalet, part of CARA Operations.

Panthaky will report to Kirk Thompson, Senior Vice President of Marketing for IHOP and will be a key member of the IHOP leadership team.

“Nevielle’s proven success in leading culinary teams for global franchised brands and at casual dining concepts brings a unique perspective to IHOP and his leadership ensures our menu remains inspired and contemporary,” said Kirk Thompson. “He has the know-how and the creativity to build on the signature foods and beverages that are hallmarks of the IHOP brand, introduce distinctive limited-time breakfast dishes that excite guests, and propel our lunch and dinner menus forward to meet the changing tastes and needs of our guests.”

Panthaky is a graduate of the Culinary Institute of America.

Dunkin‘ Brands Group, Inc., parent company of Dunkin‘ Donuts and Baskin-Robbins, named David Hoffmann, 48, president of Dunkin‘ Donuts U.S. and Canada, effective October 3. He will report to Nigel Travis, Dunkin‘ Brands Chairman and CEO, and will serve on the Dunkin‘ Brands Leadership Team. Mr. Hoffmann joins Dunkin‘ Brands after 22 years with McDonald’s Corporation, where he most recently served as President, High Growth Markets, which includes China, South Korea, Russia and several additional European markets.

Hoffmann replaces Paul Twohig who, as previously announced, is retiring and will stay with the company through the end of the first quarter 2017 to ensure a smooth transition. In his new position, Hoffmann will be responsible for Dunkin‘ Donuts operations and marketing in the U.S. andCanada, as well as global franchising and store development for both Dunkin‘ Donuts and Baskin-Robbins.   

“Dave is a proven leader with a wealth of quick service restaurant and franchising experience, and a solid track record of delivering growth in a wide range of economic and competitive environments. His financial and industry expertise, combined with his strong talent development skills and experience using digital technologies to enhance the restaurant experience, makes him uniquely positioned to help accelerate Dunkin‘ Donuts’ strategic expansion in the U.S.,” said Travis. “His appointment also further solidifies our Leadership Team and supports our succession planning efforts as we work to position the company for long-term growth. We are delighted to welcome Dave to the Dunkin‘ Brands team.”

Hoffmann began his career with McDonald’s as a crew member while in high school and later re-joined the company, post M.B.A., through its management training program. After holding a series of field operations positions, Mr. Hoffmann moved to the corporate office where he held leadership positions in numerous key functions including strategy and insights, development, training, operations and supply chain. Since 2008, when he was named vice president of strategy and franchising in Japan, Mr. Hoffmann has held general management positions covering a wide range of international markets including Asia Pacific, the Middle East and Africa, most recently adding several European markets to his portfolio as President, High Growth Markets. Prior to McDonald’s, Mr. Hoffmann  worked for Arthur Andersen.

Rave Restaurant Group, Inc., the parent company of Pie Five Pizza Co and Pizza Inn, hired Brett Heinen as the new Director of Franchise Development. In this role, Heinen will be tasked with maintaining a robust development pipeline for both Pie Five and Pizza Inn as the brands look to expand in new and existing markets across the country. 

Heinen joins Rave with extensive experience in the restaurant and hospitality industries. During his tenure as Director of Franchise Sales at Dickey’s Barbecue Pit, Heinen led the sale of more than 250 units throughout the country.

“It’s an exciting time to join Rave Restaurant Group!  With some of the most brilliant minds in the industry working behind the scenes, Pie Five Pizza Co. and Pizza Inn are both positioned for continued growth in the coming years,” said Heinen. “My unique experience working with aggressive growth concepts and brand development has given me the right tools to take the Rave portfolio to the next level.”

Most recently, Heinen served as a founding partner and Vice President of Development for the Golden Chick area developer in the Houston region. In that role, he and his partners successfully introduced the brand to the crowdedHouston/Beaumont DMA in just 12 months by opening the brand’s first company-owned store and franchised unit.

 Famous Brands International, a portfolio company of Z Capital Partners, L.L.C. and the parent company of Mrs. Fields Cookies and TCBY Yogurt, appointed Dustin Lyman as Chief Executive Officer. Lyman joined Famous Brands in 2013 as Director of Finance and as part of the management team appointed by Z Capital Partners, the private equity management arm of Z Capital Group. He has held positions of increasing responsibility since that time and played a key role in the development and implementation of the Company’s strategic plan. Most recently, Lyman served as Famous Brands’ Chief Financial Officer, where he focused on driving growth and profitability with a range of initiatives, including:

• Investing in store-level improvements at existing locations; 
• Adding locations in key markets, across both franchised and owned-and-operated stores;
• Streamlining supply chain contracts and improving operational efficiencies; 
• Implementing innovative technologies, including the TCBY vending machines; 
• Revamping the Company’s e-commerce sites; and 
• Expanding the direct-to-consumer business and the licensing and corporate gifting programs.

Prior to joining Famous Brands, Lyman held key financial positions at large organizations, including Vail Resorts and Dish Network. He was previously a professional athlete, playing Tight End for the Chicago Bears from 2000 through 2005. He holds a B.A. in Economics from Wake Forest University and an MBA from the University of Chicago.