QSR May 2022

ONES TO WATCH / CONTINUED FROM PAGE 22

FRANCHISE FORWARD / CONTINUED FROM PAGE 26

Alabama, Kentucky, Maryland, and Mis sissippi. In anticipation of this expansion, Southern Grounds established direct trade relationships with farmers and arranged for their produce to be delivered through Sysco. “Quality becomes the new frontier. We believe the coffeemarket is far from saturated, but is actually evolving into something dif ferent, something more focused, something better,” Janasik says. “And the consumer base is now demanding higher quality offerings, food or beverage, in our opinion.” In Febru ary, the coffeehouse announced the signing of its first franchise agreement with SOGRO St. Pete Hospitality Group. The company, run by Jordan Hooten, Zach Presti, and Nick Presti, plans to open nine stores in the next three years throughout Tampa Bay and St. Petersburg. Southern Grounds also aims to continue its multi-unit relationship with HMSHost as opportunities arise at other air ports. After opening one outlet in Jacksonville International Airport Terminal A, the brand subsequently signed on for a second unit that’s pre-TSA. In addition to franchise and licens ing deals, the brand will grow its corporate footprint in North Florida (downtown Jack sonville, St. Augustine, Fernandina Beach/ Amelia Island ) and further south in Palm Beach. The fast casual has four store designs ranging from 2,500 to 6,000 square feet, the latter including an outdoor landscaped patio. Janasik prefers walkable trade areas and dense neighborhoods. Among the three traditional stores, the Neptune Beach unit is located in a boutique shopping mall a few blocks away from the ocean, another is based in a strip in a historic part of Avondale, and the third location is a standalone in a historic part of San Marco. As SOGRO St. Pete Hospitality Group grows, Southern Grounds will look to do more franchising concentrically from Jack sonville, such as Orlando and Naples in Florida, and then Atlanta and Nashville. The company recognizes that some of its decisions aren’t typical to the coffee industry, says Lindsay Blakeslee, director of franchise sales. But it’s not as if the group is intention ally trying to go against the grain—it’s just transforming into a restaurant segment that doesn’t exist at scale. q Ben Coley is Food News Media’s Content Editor. He can be reached at ben@QSRmagazine.com.

fee chains in the U.S., of f-premises has become king, especially since COVID swept through the country. In Starbucks’ first quarter, mobile order and pay, drive thru, and delivery comprised more than 70 percent of sales, and drive-thru experienced its fourth consecutive period of double-digit comps growth. The same is true for the roughly 540-unit Dutch Bros, which saw digital mix more than 60 percent in the first quarter. The same isn’t true for Southern Grounds, and Janasik doesn’t want it to be. The concept doesn’t have any relationship with third-party delivery providers; some times they sneak into the system, which he is still unhappy about. As for customers who may be on their way to work and opt for to-go, he estimated that to be about 10 percent and rising. However, he doesn’t attribute the increase in takeout to a change in consumer prefer ence. Instead, Janasik believes it’s a condition of space. “I mean our Neptune beach cafe has 200 seats, Avondale has 60 and the other one 190, and we’re full all the time,” he says. “…One of our slogans or taglines is ‘gather together,’ and the whole purpose is to steer away from the quick, fast-food inability to sit down and enjoy.” “We want to have a comfortable, very strong culture in our environment where people do feel comfortable gather ing together, whether it be personal, profes sional business, whatever the scenario event is, we just want it to be a very comfortable third place,” he adds. From the beginning, franchising was part of the overall vision, but Janasik and his self-described conservative leadership team wanted to ensure all resources and processes were in place to support potential operators. Southern Grounds built a train ing program in which individuals spend a certain number of weeks working on each station, and those internal hires lead train ing programs for everyone else. The brand also simplif ied its menu. “Our stores are really high volume, obviously a proven sys tem with great profitability, but we needed those processes written down,” Janasik says. “That’s two, three years to understand what we do and why it works.” The emerging fast casual is targeting 12 Southeastern states for growth—Florida, Georgia, North Carolina, South Carolina, Louisiana, Tennessee, Virginia, Texas,

service restaurant is: you’re doing the same thing over and over again. But you have to be very efficient in your movements. You have to really stick to the plan if you want to push out 500 sandwiches in two hours. You have to help people stick to that plan because if people start just doing their own thing, it’s a nightmare.” Graham says Miller’s wants to focus on a strong chain of quality franchisees and emphasize the presence of local owners to their respective communities. The brand digitized its operations manual with a sys tem called Jolt to stay current. For more than 30 years, Caribou Coffee, which is also now getting into franchis ing, thrived in the Midwest with growing national recognition and expansion, includ ing the 2019 rollout of the “Caribou Cabin” prototype, a smaller, 600-square foot walk up/drive thru model, which Caribou president and CEO John Butcher says is “designed to offer speed and convenience without sacrificing quality and service.” Like H&H and Miller’s, Caribou is focusing on quality over quantity. Unlike the others, though, it has international franchising experience with 261 Caribou Coffees in nine countries as of December 28, 2021. While Caribou will expand with both its Coffee and Cabin locations, the lat ter will play a big role in growth. “Over the past two decades, Caribou Cof fee has invested in our digital and omnichannel leadership and established robust CPG and non-traditional license businesses,” Butcher says. “As a result, despite our company-owned stores being largely based in the Midwest, our CPG and omnichannel operations have trans lated to Caribou’s presence throughout all 50 states.” Additionally, Caribou has sup port with “Panera Breads,” a conglomerate formed in August that includes Panera Bread and Einstein Bros. “Panera Brands has an incredible franchisee program,” Butcher says. Caribou closed its first multi unit deal in Ohio in March 2021. “Developing a franchise business is a whole separate business,” Graham adds. “You can be a good restaurant operator but have no idea what to do when you develop a franchise brand. They’re two separate businesses.” q

Bryan Reesman is a regular contributor to Food News Media and is based in New York.

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MAY 2022 | QSR | www.qsrmagazine.com