Tag Archives: franchise

Featured Client: LemonShark Poke

LemonShark Poke is a fast-casual, Hawaiian restaurant concept serving quality-crafted and sustainably sourced Poke and more! The California-based brand was founded in 2016 by Wallflowers’ guitarist Tobi Miller and ex-racecar driver Richard Gottlieb.

LemonShark Poke is expanding nationally and seeking sites throughout the country.

Real Estate Requirements:

  • 1,500 – 2,500 square feet
  • Daytime & evening traffic
  • Upscale co-tenancy
  • Patio preferred

 

Featured Client: Waxxpot

Waxxpot is a head-to-toe waxing salon that offers services to both men and women in a comfortable, modern atmosphere.

Waxxpot has salons in both Columbus and Atlanta (coming soon) and is currently seeking sites in Austin and Denver.

Real Estate Requirements:

  • Approximately 1,500 – 2,000 sf
  • Trendy neighborhoods
  • Good visibility
  • Strong daytime & evening populations

So You Say You’ll Have 100 Units in a Year or Two?

If I had a dollar for every young franchisor that says they’ll get to 100 units in a couple of years and surely 500 units in three to five, I’d have a whole lot of dollars. In fact, I edit such predictions out of the stories we publish in Franchise Times because they almost never come true.

A new report by FranchiseGrade backs me up: Only one out of five start-up franchises, or 20 percent, reached 100+ locations and that was after their eighth year of franchising. Twenty-three percent had 26 to 50 locations after six years in business, and 29 percent of franchises had only one to 10 locations after six years.

After two years in business, 65 percent of franchises had no locations; 27 percent had one to 10; and only 1 percent had more than 100.

What that means to new or young franchises: Plan for a lot more capital and time to get the business to a sustainable level, which FranchiseGrade pegs at 26 or more locations after five years. That’s an “acceptable rate of growth and provides a foundation to continue their franchise development,” writes Ed Texeira, COO of FranchiseGrade, in the report.

“Undercapitalization is the biggest challenge for start-up businesses and emerging franchisors are no different,” points out Lori Kiser, CEO of The Decide Group, in the report.

She advises would-be franchisors to first work out the bugs by operating three to 10 profitable locations in multiple markets; expand locally then regionally, building a strong presence in markets “close to headquarters where you have more support” in place; and understand “when you become a franchisor, you are operating two businesses—the actual operating business and then a franchise system.”

Other advice in the report: Be willing to adjust the franchise program. “Too often, a floundering franchise is unwilling or incapable of making changes to their franchise. The result is wasting resources trying to sell a flawed franchise,” Texeira wrote.

As for industry breakdowns, personal services, quick-serve restaurants and commercial/residential services accounted for 61 percent of the emerging franchises in FranchiseGrade’s study. Personal services represented the largest sector at 27 percent.

On the flip side, lodging, real estate, automotive and retail food totaled 12 percent of the emerging franchises in the study. “These low numbers are most likely the result of the investment these franchises require and the competitive challenges from comparable non-franchised businesses,” said the report.

By Beth Ewen

Original article published 1.5.2018 by Franchise Times

7 Things You Need to Know Before Becoming a Franchise Owner

Recently, I was sitting, drinking an iced latte macchiato at a well-known chain, when my wife said to me, “We spend so much time in here that maybe we should think of starting one ourselves.”

Which she promptly followed up with, “I’ve always wanted to run my own business, and let’s face it: How hard can making lattes be? Everywhere we go, [this chain is] opening a new franchise. So, it’s got to be an easier option than starting my own business right?”

Well, not exactly.

My wife is not the only one to think the way she does, given that franchise-growth rates in 2016 again exceeded non-franchise business growth rates and continue to increase by 2.6 percent per year. There’s reason for this, specifically the 300 franchise business lines that already cover ten distinct business areas (automotive, business services, commercial and residential services, lodging, personal services, quick service restaurants, real estate, retail food, retail products and services and table/full-service restaurants.

So, not only are there a lot of franchise categories and companies to choose among, but there are advantages to opening a franchise as opposed to starting your own business from scratch.

Still, those choices and advantages don’t mean a franchise is a guaranteed success. To get to that point, you still need to do your due diligence to increase your chances of making it work.

To better grasp the challenges of running a franchise, I met with Tom Portesy, CEO of MVF Expositions, which runs franchise expositions around the world. I asked Portesy his thoughts on what a new entrepreneur should know before taking on this challenge.

Here are the seven things he said to be aware of before you dive into that franchise opportunity.

1. How much will it cost?

The first thing to know is the total investment to get your franchise up and running. This should include the purchase costs, your opening inventory and the amount of working capital you are going to need before you break even. Understanding these costs is crucial, as you don’t want to run out of money when you are on the verge of success.

In addition, you also need to know how you are going to finance the business, as many people can actually afford a bigger franchise opportunity than they think.

2. What are you good at, and what are you passionate about?

You don’t have to love coffee to open your own franchise coffee shop. Nor do you have to do all the work.

When it comes to running that shop, you’re actually the business owner and can hire people to deliver the service or sell the products; you don’t have to do all of that yourself. Success is dependent on how well you work on the business, not just in the business. 

Still, not everyone is cut out to be a franchisee, to thrive within someone else’s system. “Before buying a franchise,” Portesy told me, “one of the most important questions to ask yourself is, “Do I have the right personality to be a franchisee? People are all different, and so are franchises.

“As a result, one of the worst mistakes you can make is buying a franchise when you are not suited to be a franchisee, or compatible with the business.”

3. How much time do you need to invest?

While starting a franchise is different from starting your own business, it is still a business, and you won’t be the first person who’s traded a 10-hour-a-day job he (or she) hated for a 16-hour-a-day job he hates.

So, make sure you understand what’s involved. There are seasonal franchises that require you to work especially hard at certain times of the year; but it’s still your business that you’re going to be running, and you need to be clear about how much time you will need to invest to make it a success.

4. What is the franchisor like?

Not all franchisors are the same, so you need to do your research and get to know everything you can about the franchisor. This includes things such as how long has this company been in business, what is its average success rate and how long do franchisees stay on average.

Just because a franchisor is new doesn’t mean it’s not a great opportunity, but the more you know, the better informed your decision can be.

5. What does it take to run a successful franchise?

When you do your due diligence, make sure that you speak to other franchisees and not just the most successful ones. Ask them:

  • What were the key success factors they found?  
  • What were some of the challenges, and how’d they overcome then?
  • If they were starting today, knowing what they now know, what would they do differently?
  • For those that failed, what were the factors that caused that to happen, e.g. poor location, weak marketing, etc? 
  • How long did it take for them to start to make a profit?

It’s great to learn from your mistakes. It’s even better if you can learn from those of others so that you don’t repeat them.

6. What kind of help does the franchisor provide?

When you take on a franchise, unlike starting your own business, you’re not alone, and that can be a great comfort. Just make sure you know how much support you will get from the franchisor, what other people’s experiences were and how much help the company offered those people when the going got tough. How much support did those other franchisees receive, or were they left to their own devices?

One of the hardest things is asking for help when things are going wrong. But if you know that the support will be there and that the franchisor is willing to help, the process will be a little easier.

7. What’s your end game?

I am a big fan of Stephen Covey’s “second habit” of highly successful people:  Start with the end in mind. 

plies to franchising. Before you take up your franchise, know and understand what your exit strategy is going to be. Are you planning to leave the franchise to your children, are you looking sell it or do you plan to just run it for a couple of years and then get out?

The better you know and understand your end game, the easier time you’ll have selecting the right kind of franchise opportunity, which fits you in the short term, and supports your long-term objectives.

Running a franchise can be a great way to start running your own business, but you need to understand why you are getting into it, what you are getting into, whom you’re getting into it with and of course how you plan to get out of it. The better you understand the answers to these questions, the better your probability of selecting the franchise segment and company with the best potential for you.

By Gordon Tredgold

Original article from Entrepreneur.com, November 22, 2017

Most Franchises Struggle to Grow, but Then There’s the 20%

We routinely write about young franchise concepts because everybody likes to know what’s new in franchising, but a study released recently by Franchise Grade shows how long the odds are for those so-called emerging brands.

Just over 30 percent of brands that started four years ago had one or fewer locations, the study said, while 52 percent that started 10 years ago had 50 or fewer franchise locations, according to Ed Teixeira, COO for Franchise Grade, the market research company for franchising in Long Island.

But of course that leaves 20 percent, the percentage of franchises that started from six to 10 years ago and reached or surpassed 100 locations—in other words, the amount that causes prospective franchisees and emerging franchisors to keep on trying.

Emerging franchise systems are defined as having 100 franchised outlets or fewer and account for 71 percent of franchise systems in the United States. Fifty-seven percent of all franchise systems in the United States have 50 or fewer locations, the study says.

“We did it for a couple of reasons, not the least there’s been so much attention lately on emerging franchises,” said Teixeira, about why Franchise Grade did the study. He cited the Springboard event in Philadelphia in September that drew hundreds of emerging franchises, and the International Franchise Association’s offerings for young brands. “Last year the IFA had a workshop for emerging franchises,” after its annual convention, and it drew a standing-room only crowd. In early November the IFA is hosting an Emerging Franchisors Conference in Phoenix.

He said the stats aren’t depressing, as I had opined, “but rather just to show what the situation’s like.” Twenty percent are doing great, the study shows. “Unfortunately there are some others that either should not have franchised, or maybe should have waited until they had more units up and operating or more working capital,” he said.

“The whole idea of this is not only to shine a light on what these startups and emerging franchises look like, but what’s needed to get them off the mark, so to speak,” Teixeira said. “It’s always grow, grow, grow, which is important, but maybe there should be more focus on having a sound system in the first place.”

Franchise Grade has 2,500 FDDs or franchise disclosure documents in its database, and based its study on those franchises it could identify as start-ups. Part two of the study, expected to be completed in about a month, will drill down into industry sectors and compare systems’ growth patterns.

Original article by Beth Ewen

Published 10.24.17 on FranchiseTimes.com

Featured Client: DoubleDave’s Pizzaworks

DoubleDave’s Pizzaworks is a regional pizza chain based in Austin, with locations throughout Texas and into Oklahoma. The first restaurant was founded by David Davydd Miller in College Station in 1984. In addition to several varieties of fresh, hand-tossed, scratch-made pizza, the chain is famous for its delicious ‘Peproni Rolls.’ 

DoubleDave’s is currently seeking sites throughout the greater Austin area.

Real Estate Requirements:

  • 1,200 – 2,400 sf (3 prototype models)
  • Prefer 2nd gen restaurants
  • 3+ miles away from existing locations

Why Becoming a Franchisee Offers the Best of Both Worlds

Partnering with the right franchise can help an entrepreneur reach their dream of financial independence—without the common pitfalls.

According to the U.S. Census Bureau’s Survey of Entrepreneurs, the key drivers for entrepreneurship are earning more income and the desire to be one’s own boss.

No surprise there.

As the chief development officer for Überrito, I see that every day in my efforts to drive franchise sales and development for the company. My daily interactions are with highly motivated individuals looking to grow their income while maintaining their autonomy by working for themselves.

To be sure, the lure of independence and the ability to control one’s destiny has created many a entrepreneur.

However, there can be considerable unforeseen pitfalls along the way:

Lack of guidance: Many entrepreneurs will tell you, it can get lonely at the top. It helps to have someone with experience in all of the aforementioned areas—and many others—that can provide guidance and examples of what has worked and what has not—and why.

Building a customer base: Everyone thinks they are a marketing expert, but it is easier said than done. Marketing is part art and part science, and it’s important to get it right to be successful. When the time comes to develop and execute marketing strategies that will bring foot traffic to your door, and keep those customers coming back again and again in a crowded marketplace, having access to a team that has a strategy that is successful and repeatable is extremely valuable and is a key to success.  

When you consider the advent of Twitter, Facebook, Yelp, and more, there are countless ways to reach customers. Geotargeting and other methods can be much more precise in promoting your brand and measuring results. Social media is constantly evolving and while it can be extremely positive, there are also just as many ways for it to have a negative impact.  

It makes less sense to swim upstream alone in such a noisy, fragmented marketplace. Tapping into the marketing resources of a franchise enables entrepreneurs to focus on day-to-day operations, and, profitability.

Unforeseen start-up costs: A blank slate is difficult to build from. If you are negotiating a lease, or choosing a contractor to build a storefront—the margin for error is thin and will impact your business for years. It doesn’t take much to come out of the gate in a deeper hole than anticipated.

Furthermore, the amount of decisions to be made in terms of location, layout, and finishing touches can be paralyzing. If you are going to operate a storefront, it can be useful to rely on experts regarding items such as traffic flow, point-of-sale considerations and more.

Human Resources quagmires: Most entrepreneurs are driven by success. They like to set goals and then attain them. The endorphin rush from making a sale or achieving purchase goals is hard to beat.

But nothing disrupts such positive momentum more than navigating complex human resources issues. While these are important issues that must be resolved, they can become burdensome, and get in the way of making sales. They are often fraught with legal considerations and are best left to those who are up to date on labor laws and best practices.

Beyond managing current employees, attracting and hiring the right ones presents its own challenges. A national franchise can be a helpful resource on many of these issues.

Distribution and Inventory control: It is a simple concept that you cannot sell what you do not have. Yet one of the most critical mistakes a business owner can make is having an incorrect amount of inventory, whether that is having too much or not enough. This is critically important in the food-services industry where product can often have a very limited shelf life.  Over ordering product often results in spoilage while under ordering results in unhappy customers and a loss of sale.

Even if you do not have product that can spoil, all products have a shelf life to consider. Timing is everything and it is of great benefit to have an idea as to what to expect and what has worked for others.

Finding distributors to supply your raw material needs—especially if those needs include fresh food items—can be difficult and costly if you are operating alone. Having the purchasing power and relationships afforded by a franchise eliminates guesswork in choosing distributors and promotes favorable costs. 

Financing considerations also come into play here. Depending on the carrying cost it may be that alternative financing can be provided through a franchise, often at more competitive rates and terms than what a traditional bank offers.

This is a small sample and many of these misadventures can be mitigated when partnering with a proven franchise.

While these issues can pose a significant challenge to a startup, it is very likely these issues have already been considered and solved on a franchise level.

A franchisor is aware of all the nuances and challenges franchisees may encounter. Much of this knowledge is taken into consideration when removing or alleviating barriers to entry.  This experience also better positions franchisees for success due to the systems that have been tested and put in place.

A franchise only does well if its franchisees are doing well and it is in a franchise’s best interests to help its franchisees succeed.

Partnering with the right franchise provides a stronger likelihood of your reaching your dream of financial independence—without the common pitfalls that plague many entrepreneurs.

By Peter Ortiz, September 2017

Original Article from QSRMagazine.com

Peter Ortiz is the Chief Development Officer for Überrito, a fast-casual concept that is part of Mexican Restaurants Inc., which currently operates 47 Mexican restaurant locations across five brands: Überrito, Casa Ole, Monterey’s Little Mexico, Tortuga Mexican Kitchen, and Crazy Jose’s.

Franchise Businesses Expected to Grow Faster Than the Economy This Year

Eighty percent of franchisors, 64 percent of franchisees, and 76 percent of suppliers expect their business to do better in the next 12 months. This is according to the Franchise Business Economic Outlook Report released by the International Franchise Association.

Franchise Business Economic Outlook for 2017

Prepared by IHS Markit Economics for the International Franchise Association’s Franchise Education and Research Foundation, the report goes on to say franchise businesses are expected to grow faster than the economy in 2017.

Why the Positive Outlook?

In assessing the indicators driving the positive outlook for franchises, IHS highlighted several points. It is basing the growth on solid gains in consumer spending, residential investment, business fixed investment and exports.

Consumer spending, which franchises rely on, is projected to increase by 2.6 to 2.7 percent annual rates during the final two quarters of 2017. This is based on increases in household finances with gains in employment, real incomes, stock prices and home values.

The public sector is also going to play a role with the release of federal funds for surface transportation projects as well as defense and security. 

Challenges

The biggest concerns for franchisees are joint employer, tax reform, minimum wage, and health care costs.

A joint employer ruling was enacted during the Obama administration, and the ruling was particularly burdensome for small businesses. But the Labor Department rescinded the ruling under the Trump administration, and the Save Local Business Act is gaining traction with bipartisan support.

Robert Cresanti, International Franchise Association President and CEO, is positive about the Trump administration as it applies to businesses. Cresanti said in a release, “We’ve seen positive steps toward a more business friendly environment, such as rolling back unnecessary regulations, but there is still much work to be done. With a burdensome tax code and a confusing joint employer standard, franchise businesses are still competing with one arm tied behind our back.” 

Additional Data Points from the Report

The number of franchises is set to increase to 745,000 in 2017, an increase of 1.6 percent or close to 12,000 new establishments. This of course will increase the employment rate, growing the sector by 3.1 percent, which is much better than the 1.7 percent of total private nonfarm employment.

In terms of monetary output, franchises will generate $711 billion in nominal dollars, an increase of 5.3 percent in 2017.

Franchise businesses across 10 broad business lines were surveyed. Commercial and Residential Services is expected to grow at 3.0 percent, while personal businesses will experience even higher at 6.1 percent.

Franchise growth also varies according to region, but the top five States in the survey were, Utah, Florida, South Carolina, Washington, and Wisconsin with growth of 7.6, 7.0, 7.0, 6.7, and 6.5 percent respectively.

Original article from Small Business Trends

September 17, 2017 by Michael Guta

VitalityBowls 

The Retail Strategy is proud to represent Vitality Bowls, a rapidly growing brand with over 40 current locations throughout the country. Vitality Bowls specializes in making delicious açaí bowls, which are a thick blend of the açaí berry topped with organic granola and a selection of superfood ingredients. Additional antioxidant-rich menu items include smoothies, fresh juices, soups, salads and panini. All items on the menu are made fresh and in non-cross contamination kitchens to ensure that those with food allergies will feel safe eating at Vitality Bowls. No ingredient fillers such as ice, frozen yogurt, added sugar or artificial preservatives are used, giving the purest taste possible to each item.

Vitality Bowls is  currently seeking sites in Texas and throughout the US.

Real Estate Requirements:

800 – 1,500 sf 

Strong daytime population 

Proximity to daily needs generators

 

How to Become an Elite Restaurant Brand

Dreaming of your brand joining the QSR 50? These three milestones will help get you there.

In today’s limited-service landscape, competition is fierce, growth is key, and companies are doing everything they can to turn their brand into one of America’s elite.

But what does it mean to be elite in this industry? While there are countless paths to success, industry experts agree there are three sure-fire milestones that signify whether a brand is a limited-service heavyweight: 1,000 units, $1 billion in sales, and $2 million average unit volume (auv).

Want to join these exclusive clubs? Here’s what the companies who have been there and done that have to say about crossing these achievements off your brand’s bucket list.

Milestone No. 1: 1,000 Units

Atlanta-based Church’s Chicken is certainly no stranger to operating 1,000-plus units. That’s because the chicken concept crossed that threshold nearly 40 years ago when it opened its 1,000th unit in Phoenix. But even though the company now has 1,200 restaurants domestically and more than 500 abroad, executive vice president of international business and global development Tony Moralejo says the milestone continues to feel like validation for Church’s Chicken.

 

“To get to 1,000 restaurants, it means that you’ve arrived. You become this national player, and in many cases, you become a global brand,” he says. “It means essentially that you’ve established a brand presence that’s appealing to a wider consumer base, and that’s something to celebrate.”

Though Church’s reached this milestone long before Moralejo’s time with the brand, he says he continues to rely on four “Ps” to maintain unit growth: people, product, passion, and patience. “You don’t get to 1,000 restaurants overnight,” he says, noting that it can take decades for a brand to build the momentum it takes to reach 1,000 units. “You’ve got to have patience, especially when it comes to profit. There’s a difference between growth and profitable growth, and what both the franchisor and the franchisee should strive for is profitable growth.”

That’s why Moralejo says one of Church’s key growth priorities is to protect its franchisees at all costs—even from themselves when they want to expand in a risky way. “Sometimes as a franchisor, you have to learn to say no and protect the franchisees that operationally aren’t ready to expand,” he says. 

It was this emphasis on selecting the right franchisees, approving the best sites, and approaching growth cautiously that helped Firehouse Subs open its 1,000th location in 2016. “I can have the greatest brand in the world, but if I put it in the hands of a poor operator—or even put a great operator on a very bad site—it’s not going to be successful,” says CEO Don Fox. 

Though these factors ultimately helped Firehouse reach the 1,000-unit milestone, the company spent 22 years taking a slow-and-steady-wins-the-race approach that Fox says other brands should replicate when trying to grow unit count. “Be more focused on being the tortoise and not the hare,” he says. “If the lug nuts are starting to feel loose and the wheels are wobbling a little bit, don’t hesitate to slow down from time to time and recalibrate.”

While taking it one unit at a time is critical to Firehouse’s growth strategy, restaurant consultant Aaron Allen says advance preparation is also imperative if a brand hopes to reach the 1,000-unit mark and beyond. This includes putting a plan in place for infrastructure, market expansion, and a pipeline of talent that comes years and even decades ahead of achieving the desired unit count. 

Having a driving force aside from just unit growth is also helpful for keeping a brand on the right trajectory. For Firehouse Subs, what motivated growth was the opportunity to increase charitable donations through its Public Safety Foundation. 

“By virtue of our success and the generosity of our customers—which only happens because we have 1,000 restaurants for them to come to—we’ve donated over $25 million in equipment to police and fire departments,” Fox says. “We take the greatest satisfaction of our growth knowing that beyond the jobs and the careers and the profits we’ve made, we’ve made a real difference in saving people’s lives.”

Milestone No. 2: $1 Billion in Sales

Even within an $800 billion restaurant industry with more than 1 million locations operating in the U.S., only 29 limited-service brands reached the $1 billion sales milestone this year.

One of these was Culver’s, which first crossed the billion-dollar threshold in 2014, when it had 500 units and 30 years of business under its belt. (The company did $1.3 billion in sales at just over 600 locations in 2016.) The decades of experience allowed Culver’s to build and reinforce one of the primary factors in its success: the company’s culture.

“As we grow, maintaining that culture is so important to us,” president and CEO Joe Koss says. The company is built on six core values—doing the right thing for its guests, franchisees, restaurant team members, the industry as a whole, and the communities it operates in, as well as conducting business in an ethically and socially responsible way—and Koss says getting the culture right before anything else helped set the stage for its strong sales growth over the years. 

Fellow burger brand Five Guys joined the $1 billion club five years ago, which founder Jerry Murrell says has been a boon for both recruiting franchisees and gaining access to additional capital. However, while many concepts look to menu innovation and headline-grabbing marketing tactics to help them surpass the $1 billion mark, Murrell says it was Five Guys’ dedication to sameness that pushed the brand beyond the finish line.
“Every day, people are coming at us with, ‘Why don’t you advertise? Why don’t you add a new item? Why don’t you wear a chicken suit? Why don’t you toot your own horn?’” Murrell says. “There are all kinds of things that come at you all the time, and you think maybe you’re doing something wrong. But we’ve been fortunate in the fact that we didn’t fall for any of that and stuck to our guns.” 

Allen says speed, convenience, replication, and ease of service are also crucial to helping drive sales over $1 billion, as is a brand’s measured approach to growth. “Plan like a $1 billion company, but expand and spend like an entrepreneurial company—a little bit more conservatively and cautiously,” he says. This means investing in innovative technology, up-to-date restaurant designs and prototypes, well-researched menu developments, and—as Five Guys can attest—hiring and investing in the right people at all levels of the company.

“I’ve been criticized by banks so much for paying our people too much money. But [employees] go home at night, and they have to worry about the business doing well, too,” Murrell says, adding that empowering franchisees and team members is also crucial for growth. “Whether it’s a district manager or just an hourly worker, give them some kind of ownership so that they feel like they’re part of the company.”

However, even with a strong culture, secure operations, and a dedication to supporting the team, some brands may struggle to reach the upper sales stratosphere—at least domestically.

“If the brand grows solidly, then eventually it may very well reach the $1 billion mark, but it might not all be in the United States,” says John Gordon, principal and founder of Pacific Management Consulting Group. “You may very well have to have international units in order to make it to that big number.”

Milestone No. 3: $2 Million AUV

Only six companies in this year’s QSR 50 managed an AUV of $2 million or higher. While this milestone is not exclusive to national companies—unlike 1,000 locations or $1 billion in sales, the $2 million AUV threshold is attainable to small-scale operations—it is coveted by major companies as a sign that the system is efficient, healthy, and thriving.

Culver’s hit $2 million AUV in 2014, the same year it reached the 500-unit mark and $1 billion in sales. “The most important for us, of any of those numbers, was hitting that $2 million AUV and growing restaurants’ average sales throughout the system,” Koss says. He adds that the brand was able to reach the milestone by focusing on a number of strategic priorities, including honing and evolving the menu, enhancing the quality of products, launching cause-marketing initiatives that helped Culver’s connect with the agricultural community, and going through a reimaging effort to keep facilities in like-new condition. 

El Pollo Loco is one brand that is oh-so-close to finally hitting $2 million in AUV. The company has implemented a number of strategies since 2011 that have helped the brand boost its AUV from $1.5 million to $1.988 million last year. From conducting in-depth consumer research and hiring fresh faces—including a new CMO, CFO, chief development officer, and executive chef—to refinancing its $300 million in debt, undergoing an IPO, re-engineering its menu, and developing two new store prototypes, the company’s comprehensive plan to spur growth and unit-level economics has quickly paid off.

In fact, many of El Pollo Loco’s 460 stores already bring in more than $2 million—and even $3 million—in sales each year, says president and CEO Steve Sather. Perhaps that’s because the brand isn’t what he calls “capacity constrained.” That means it does a robust, evenly split lunch and dinner business—thanks to family meal deals—while also offering drive-thru, takeout, and dining-room options.

Gordon says multiple sales platforms, both inside and outside of the store, are crucial for brands that hope to hit $2 million in AUV. Whether it’s breakfast, delivery, mobile ordering, or another approach altogether, “the brands that can adapt and find one or two additional things that they can be known for will succeed,” Gordon says.

Once El Pollo Loco does hit that mark, Sather doesn’t expect the company to stop or slow down. “The minute we average $2 million,” he says, “there’s no reason we shouldn’t be doing $2.5 million. So let’s keep moving on.”

Original article from QSRMagazine.com

By Mary Avant, August 2017