QSR April 2023

FRANCHISE FORWARD / CONTINUED FROM PAGE 20

ONES TO WATCH / CONTINUED FROM PAGE 18

OPERATIONS / CONTINUED FROM PAGE 67

with experience in designing and develop ing restaurants across the country. More importantly, everyone—company and franchisees—is using the same architect. As Dikos explains, this allows the concept to evolve the prototype in the same direc tion with every store it builds. This makes it easier to perform follow-ups and work with the ops excellence team to explore what could’ve been done differently. Time and motion studies are completed to ensure employees aren’t taking too many steps. “What can we do to make the next prototype a little bit better? We’re all chas ing the same footprint in fast casual these days,” Dikos says. “We’ve got a lot that we’re learning from, and I think the goal is making sure we know exactly how to take our approach to real estate portfolio development and test and learn a little bit … We’ve got a lot of exposure in the port folio today to learn from so that when we build these next six to eight restaurants we have really nailed the best unit economics and guest experience.” Dikos describes Killer Burger’s atmo sphere as “a little bit more of a party vibe.” Employees and the menu have a rebellious streak, like the company’s name suggests. The motif, whether it’s the color, fixtures, or furniture, is reminiscent of a watering hole. Dikos wants to be clear, it’s still a fast-casual restaurant and family-friendly. But as a result of its approach, some stores have bars and alcohol mixes 4 percent. The brand has a campaign that refers to its food as “the burger your momma warned you about.” The menu was engineered to create burgers that don’t fall apart when you eat. And while other concepts have build-your own options, Killer Burger has 10 crafted signature creations. One of its best sellers is the Peanut Butter Pickle Bacon Burger. Killer Burger has become more PG lately, but historically, the operations manual said if a guest asks to turn the music down, the instruction was to turn it up. And when a customer ordered a salad, employees responded with an over-the-top burger. “Maybe we go back and find some of our roots and get a little bit more edgy that way, but that’s a little bit about how we’re different,” Dikos says.

land and what’s possible.” The deal, which closed in November 2022, also included a development agree ment to build five additional locations in the Baltimore area. As of press time, Ful ton had two locations in development in Eldersburg, Maryland, and Lancaster, Pennsylvania, with eight more in the pipe line. “The main selling point was having delivery in-house instead of using Door Dash and Uber Eats, which is a significant advantage on competition from a financial standpoint,” he says. “While most compe tition is challenged by high delivery fees, with an in-house program, we have the advantage to push that and still have a decent EBITDA line on it, as well.” Plus, there’s also the potential to expand outside of Jimmy John’s and become a franchisee of other concepts, Fulton adds; Inspire Brands’ portfolio also includes Arby’s, Buffalo Wild Wings, Sonic, Dunkin’, and Baskin-Robbins. When entering the Jimmy John’s system, Fulton noticed a plethora of fran chisees with one or two units wanting to exit—so Fulton plans to continue acquir ing more Jimmy John’s in the Mid-Atlantic region under Fulton Holdings. “Like any concept, COVID has been very challenging on the smallest opera tors, which has allowed us to expand and buy out these one-to-two unit franchisees,” he says. And buying seven units at one time enabled Fulton the bandwidth to pay workers a higher base salary, compared to starting with one or two units. In a unique move, Fulton eliminated the tipped wage and pays delivery drivers a $15 minimum wage, the same as all his other employees—which has resulted in their res taurants being 107 percent staffed recently, he says. The higher cost of labor to keep drivers in-house is preferable and is still feasible from a financial standpoint versus paying third-party delivery app fees. It also allows them to be an employer of choice. As for the future, Fulton plans on open ing two units a year through 2026, starting in 2023. Unsurprisingly, Fulton’s ambitious nature means he entered into the system with the goal of quickly becoming a fran chisee with more than 20 locations. q

as a means to lower rental costs. Others, however, decided to go small: Creating compact restaurants that have less of a foot print than typical limited-service boxes. Thanks to changes in customer behav ior, operators are developing units that feature smaller dining areas, less parking, better use of kitchen space and technol ogy, and additional drive-thru lanes. The moves reduce land and construction costs, and also lessen rental space needed by fran chisees who lease. Many of the nation’s big chains already have begun experimenting with this con cept. Captain D’s started looking in that direction several years ago because “we found where the industry was headed,” says Phil Russo, vice president of real estate for the Nashville, Tennessee-based chain, which has about 540 restaurants in 23 states. More expensive materials and con struction, plus fewer customers dining in, “all painted a picture” of the future, a direction accelerated by COVID, he points out. The chain developed a smaller restau rant that omits dining in and instead opts for walkup windows, drive-thru, a stream lined kitchen, and a limited menu that “still delivers our world-famous product.” The result: Captain D’s Express, a 960 square-foot prototype. These units are among several store builds offering differ ent seating sizes and features like double drive-thrus, all suited for competitive and expensive real estate markets, Russo states. Real estate is important at Captain D’s because it buys all its company-operated restaurants, and “the cost of real estate, depending on where you are in the coun try, is bordering on crazy,” he adds. Express units can be constructed on tiny parcels. One new unit, in Whitehall, Ohio, is on about a quarter acre at the edge of a shopping center. Roll-Em-Up Taqutos is also going small. Rather than using 2,800 square feet, as it did when the upstart began, it is now eyeing 1,200- to 1,400-square-foot sites. Dining rooms are smaller in newer units and kitchen space has become more efficient. So far, all of the chain’s franchise sites are leased, and higher interest and rental rates are a con tinuing concern. “We are trying to be a little bit patient,” Fonseca says. q

Ben Coley is the editor of QSR . He can be reached at bcoley@wt whmedia.com.

Callie Evergreen is the editor of FSR . She can be reached at cever green@wtwhmedia.com.

Barry Wolfe is a regular contributor to QSR and is based in Ohio.

70

APRIL 2023 | QSR | www.qsrmagazine.com