QSR September 2022

SEPTEMBER 2022 / NO. 295 THOUGHT LEADERSHIPFOR25YEARS

®

Subway’s New Growth Plan P. 46 The ROI of ESG P. 51 PLUS:

CEOof Restaurant Brands International José Cil & Firehouse CEO Don Fox

LIGHTING THE FIRE How Firehouse Subs is catapulting forward after its $1 billion deal with Burger King parent company RBI. / P. 22

INSIDE:

14 BEST FRANCHISE DEALS

The experts make their picks coming out of COVID. / P. 30

BONUS: RESTAURANT FRANCHISING GUIDE || P.57

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D E P A R T M E N T S September 22 / BONUS: RESTAURANT FRANCHISING GUIDE || P.57 QSR / LIMITED-SERVICE , UNLIMITED POSSIBILITIES

T A B L E O F C O N T E N T S S E P T E M B E R

2 0 2 2 # 2 9 5

F E A T U R E S

N E W S 9 SHORT ORDER 18 FRANCHISE FORWARD Holding the Price Line As inflation rears, quick-serves guard their value proposition. BY BRYAN REESMAN 53 INNOVATE Seeing Ghosts, and Profits One company is o ering resources for operators to dive in. BY TREVOR GRINER It’s been a roller coaster for one of the sector’s top commodities. BY BARNEY WOLF 16 ONES TO WATCH Frios Gourmet Pops In light of the pandemic, the upstart took to the road. BY BEN COLEY 51 CL IMATE RESPONSIBI L ITY The ROI of ESG Data leaders weigh in on the relationship between customers and brand responsibility. BY RACHEL PITTMAN 56 START TO FINISH Charles Watson The CEO of Tropical Smoothie on where the fast-growing franchise heads next. I N S I G H T 13 FRESH IDEAS The Wild World of Wings

FIREHOUSE SUBS IS NOW PART OF THE RESTAURANT BRANDS INTERNATIONAL FAMILY. AND THE SKY’S THE LIMIT, EXECUTIVES SAY.

FIREHOUSE SUBS

22 Gas on the Fire BY DANNY KLEIN Burger King owner RBI shook up the franchise landscape when it spent $1 billion to acquire Firehouse Subs. What’s next? Growth, synergy, and plenty of both.

30 14 Best Franchise Deals BY DANNY KLEIN Experts make their picks in our yearly roundup of the industry’s top franchise bets. Also, a crystal ball into the sector’s future.

46 Subway’s New Delivery BY BEN COLEY The country’s largest restaurant chain is rethinking its approach to growth. And that begins with a look inside the system.

2 BRANDED CONTENT

6 EDITOR’S LETTER

88 ADVERTISER INDEX

O N T H E C O V E R Firehouse Subs CEO Don Fox and RBI head José Cil enjoy a shared history at Burger King. PHOTOGRAPHY: FIREHOUSE SUBS / MICHAEL MURPHY

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IN THIS ISSUE BRAND STORIES FROM QSR

4 3 Smart

20 How to

Strategies for Driving Incremental Sales with Co ee Boost check averages without making SEB PROFESSIONAL

Nail Takeout and Delivery Presentation and Safety Beat some of the most

GENPAK

operations more complex. SPONSORED BY SEB PROFESSIONAL

troublesome o -premises dining concerns. SPONSORED BY GENPAK

57 QSR ’s Restaurant Franchising 2022 These brands are looking for franchisees with which to grow their footprint in 2022 and beyond:

Restaurant Franchising 2022

THE LAST COUPLE OF YEARS have been a roller coaster for the franchising industry as a whole, even for brands that don’t necessarily fit within the quick-service restaurant space. As consumers gradually returned to dining out and enjoying more time away from home, brands have also had to con tend with supply chain issues and chronic labor shortages throughout the hospitality industry. And 2022 has brought even more challenges—as well as opportunities. Rising inflation rates have meant higher food and supply costs. On the consumer side, the public is increas ingly focused on finding the right mix of value and quality. Brands that can solve this equation for their customer base are well-positioned to thrive in this new world. Many con cepts are taking advantage of current conditions to expand their footprint with franchising plans. Franchisees are also embracing the moment, building out their portfolios with strong, savvy concepts. This year’s Restaurant Franchising spotlights 15 di†er ent brands—restaurants and otherwise—that are primed for growth. These brands are searching for franchisees who are ambitious and enthusiastic about taking their concept to the next level and beyond.

66 Why Houston’s Hot Chicken Does Things Differently A concept with a unique spin on hot chicken is on the franchising fast track. SPONSORED BY HOUSTON’S HOT CHICKEN 68 The Human Bean Is People First The coffee franchise is laser-focused on growing its values alongside its brand. SPONSORED BY THE HUMAN BEAN 70

76 Slim Chickens Has Over 900 Units on the Way—and Counting QSR magazine’s Breakout Brand of 2021, the fan favorite is showing no signs of slowing down. SPONSORED BY SLIM CHICKENS 78 American Brand Steak ‘n Shake’s undeniable history and ongoing evolution bring a new modern twist to the brand customers know and love. SPONSORED BY STEAK ‘N SHAKE 80 Subway Rolls Out Guest-Centric Restaurant Redesign Iconic brand offers franchisee remodel support. SPONSORED BY SUBWAY 84 The Toasted Yolk Offers Unique Blend of Profit, Work-Life Balance Nobody loves the brunch brand more than its franchisees . SPONSORED BY THE TOASTED YOLK 86 Zunzibar Achieve the American Dream with the Classic

58 Abbott’s Frozen Custard 60 Altitude Trampoline Park 62 Bubbakoo’s Burritos 64 Focus Brands 66 Houston’s Hot Chicken 68 The Human Bean 70 Mici Italian

72 Roy Rogers 74 Russo’s New York Pizzeria 76 Slim Chickens 78 Steak ‘n Shake 80 Subway 84 The Toasted Yolk 86 Zunzibar + Zunzi’s

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58 Abbott’s Frozen Custard Is Heating Up The 120-year-old brand recently signed a franchise agreement for more than 100 new units. SPONSORED BY ABBOTT’S FROZEN CUSTARD 60 ‘Live the Jump Life’ with Altitude Trampoline Park Franchisees with restaurant industry experience could be the perfect fit for this growing franchise. SPONSORED BY ALTITUDE TRAMPOLINE PARK 62

MICI ITALIAN

Webb C. Howell MANAG E R , I T S E RV I C E S : Jason Purdy ACCOUN T I NG A S SOC I AT E : Carole Ogan

Now Is the Perfect Time to Grow with Mici Award-winning Italian brand provides a unique offering in the $47 billion pizza segment. SPONSORED BY MICI ITALIAN 72 Roy Rogers Restaurants Offers Timeless Value This chain is ready to share its one-of-a-kind broad appeal across multiple dayparts and generations. SPONSORED BY ROY ROGERS 74 Russo’s New York Pizzeria Brings Back Old School with Flair This authentic, ingredient-driven Italian brand is poised for growth. SPONSORED BY RUSSO’S NEW YORK PIZZERIA

A D M I N I S T R A T I O N 800.662.4834 , www.qsrmagazine.com/subscribe . QSR is provided without charge upon request to individuals residing in the U.S. meeting subscription criteria as set forth by the publisher.

BUBBAKOO’S BURRITOS

Ride the Bubbakoo’s Burritos Wave This brand’s top-tier service, innovative customization options, and exceptionally fresh ingredients set it up for massive growth. SPONSORED BY BUBBAKOO’S BURRITOS 64 Power in Numbers Focus Brands leverages its size to reap benefits for franchisees. SPONSORED BY FOCUS BRANDS

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Your Fans Will Actually Say 18-year-old award-winning brand now expanding as the “Franchise with Purpose.” SPONSORED BY ZUNZIBAR + ZUNZI’S

Sponsored content in this magazine is provided by the represented company for a fee. Such content is written to be informational and non-promotional. Comments welcomed. Direct to sponsoredcontent@foodnewsmedia.com

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S P ON S O R E D B Y S E B P R O F E S S I ONA L

3 Smart Strategies for Driving Incremental Sales with Coffee

restaurant leaders can capitalize on co ee’s popularity todrive incremental sales. First, Bowman says, operators should make their co ee programs standout. “Recently, the industryhas seen sub scription-based co ee programs take o ,” Bowman says. “This has beena bigwin for the chains that have adopted these programs. But for both these chains and smaller brands looking to competewith subscriptions, LTOs allowrestaurants to create buzz around their co ee programs, while driving tra c from co ee drinkerswhowant to try something new. Often, LTOs also allowrestaurants to charge a premium,meaning brands candrive evenhighermargins.” Second, AmyBrown,marketingmanager of commercial foodservice at SEBProfes sional, recommends restaurants o er cold co ee beverages.Mintel Foodservice’s 2021 Co ee andTea report notes thatGenZdiners are core consumers of cold co ee, andnearly half of GenZconsumers purchased iced cof fee away fromhome. “Cold co ee drinkswere trending before COVID, but cold co ee drink saleswill only growasGenZdiners gainmore spending power and consumers shift frombuying regu lar hot brewed co ee tobeverages that are harder to create at home,”Brown says. Bowmanagrees anddoesn’t see cold cof fee sales slowing anytime soon. “Coldbrew co ee and iced co ee continue to see double digit growtheachyear,” he says. “Cold co ees canalso command ahigher price point or an upchargewhenpairedwitha combomeal thatmight typically include ahot co ee.” Of course, no co ee programis complete— nor can it competewithother restaurant’s of ferings or co ees prepared at home—without ahigh-qualityproduct. “At SEBProfessional, we’ve seenfirsthand howimplementing a full-scale co eeprogram cannot only boost incremental sales, but an operator’s core foodservice o erings,”Brown says. “Withall three of our brands—WMF, Schaerer, andCurtis—wehave seen that operators o ering the freshest, high-quality co ees have the ability toquickly become a go-tobeverage destinationover their com petitors. Andwith the right equipment from SEBProfessional inplace, operators cano er top-quality and consistency, nomatterwhat their current labor situation looks like.” ◗

Boost check averages without making operations more complex . / BY PEGGY CAROUTHERS

T hough restaurant tra c has improved since the onset of theCOVID-19pandem ic, anNPDGroup study reports restaurant tra c is still down4percent compared to 2019 levels.While that number is recover ing, a decrease of even just a fewpercentage points can still createfinancial strain for restaurants. As a result, brandsmust focus on making eachvisit count by increasing check size anddriving incremental sales. One of the simplest andmost e ectiveways for restau rants todo so is serving a strong beverage menu. “Beverage programs have always helped restaurants drive incremental revenue,” says ChadBowman, vice president of commercial foodservice sales at SEBProfessional. “The

margins for beverages are good for opera tors, and adding a co ee or iced co ee to the menu canhelp restaurants realize large sales increases.” Co ee is a particularly strong driver for restaurants. Not only is co ee one of thehigh estmargin items ona restaurantmenu, but it alsohas a strong built-in consumer base. In its 2022 report, “National Co eeDrinking Trends,”TheNational Co eeAssociation noted66percent of Americans drank co ee in the past day, andAmericans choose co ee more often thanother beverages, including tapwater. Byusing a fewsmart strategies,

To learnmore about driving incremental sales with coffee, visit wilburcurtis.com.

SEB PROFESSIONAL

4

SEPTEMBER 2022 | QSR | www.qsrmagazine.com

COMPETE WITH COFFEE AND TEA In today's environment, foodservice operators are facing ongoing challenges like inflation, labor shortages, and supply chain issues - just to name a few. According to Cleveland Research Company in their recent “State of the Foodservice Industry" webinar, research shows that despite inflation, consumer demand for restaurants looks to remain strong and the outlook for dining out is optimistic. However, with growing competition to win consumer loyalty, how do you ensure you're standing out? By providing a full-scale, top-quality coffee and tea program, you are laying the foundation to greatly enhance your food offerings! By upgrading your coffee and tea programs, your establishment can become a destination for hot and iced coffee and tea all day long!

wmf-coffeemachines.com • schaererusa.com • wilburcurtis.com

E D I T O R ’ S L E T T E R

Chasing a New Generation (Again)

I ’m one of those millennials people call an “old soul.” Is that a badge to wear with honor? Or do I belong on one of those Progressive ads where I can’t pronounce quinoa and I’m more worried about the parking lot than the football game? But I will say this: In my time covering restaurants, early on, mil lennials were perhaps the A1 concern of every marketer in America. And it was a dicey slope. In hindsight, I think we can agree chasing “the next big thing” led to a lot of brand drift, especially in casual dining. We think of this today as the “all-things-to-all-people” trap. Or trying to be good at everything and end ing up great at nothing. So many brands sought that golden egg only to end up at a place where core guests couldn’t rec ognize them anymore. And so began a multi-year stretch ( again, this is particu larly true of casual dining ) where brands recommitted to equities. Put differently, they remembered what got them to the dance in the first place. Either way, we find ourselves today talking far less about millennials. COVID-19 is one reason why. The other is Gen Z. Generally speaking, this group includes anyone born after 1997. Yet, from the restaurant perspective, what’s critical to note is this is the first digitally native generation. Even myself, a griz zled millennial, didn’t discover Facebook until I was in college. Twitter wasn’t on my newspaper’s radar until about three years into my professional career. Gen Z consumers are often described as social and environmental idealists, with mobile phones as ubiquitous as water, and, notably, with estimated buying power of some $150 billion. Research company Knit, which empowers Gen Z to share

Gen Z guests aren’t millennials. But we can learn from past mistakes to meet them where they want to be.

thoughts via video, recently released a restaurant and dining report to dive into preferences. Here were some key points: Among the most inf luential decision criteria for Gen Z ( in order ) was: price, deliciousness of the food, convenience of location, quality and freshness of food, and cleanliness of the establish ment. Of the surveyed Gen Z consumers, nearly 80 percent recognized price as an impactful criterion. That instant gratification rumor you hear of Gen Z? Accurate. For the group of consumers who have become accus tomed to getting almost anything at their fingertips with the click of a button, nearly 48 percent of respondents cited the speed of ordering and receiving their food as highly important, and another 24 percent marked ease of ordering via digital channels as an important con sideration. Now, let’s look at their eating habits. Within the surveyed population of Gen Z consumers, 44 percent identi fied as healthy or “clean” eaters, while only 20 percent acknowledged they were overeaters. In addition, a sizable portion self-identified with one of the following restrictive dietary habits: low-carb (13.2 percent ) , vegetarian (13.2 percent), vegan ( 5 percent ) , and keto (4.3 percent ). The last point I’ll surface goes back. Gen Z demands stronger voices and social stances from restaurant compa nies. Roughly 15 percent noted the social impact and view of a company is some thing they factor into their decision when deciding where to eat out. The overall thread here is Gen Z is paying attention. It’s on us to prove we’re listening.

DANNY@QSRMAGAZINE.COM QSR MAGAZINE

Danny Klein, Editorial Director

ROSIE ROSENBROCK

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SEPTEMBER 2022 | QSR | www.qsrmagazine.com

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SHORT ORDER

Panera Bread found a creative way to highlight a new product line amid the summer rush.

PaneraTakes aCharge The fast casual o ered guests a way to get through their summer slump.

INHONOROFTHELONGESTDAYOFTHEYEAR —June 21—Panera launched “Charged Up Cups,” which gave customers a way to stay activated during the summer solstice. Also, the cups served as a branded vessel for Panera’s new Charged Lemonades, and, most notably, doubled as a portable phone charger. The base of the 17-ounce bottle pops off to act as a charging base for somebody’s phone to rest and get some juice. No outlet needed. Earlier this spring, Panera introduced Charged Lemonades with plant-based caffeine. Fueled by Clean caffeine fromGuarana and green coffee extract, Charged Lemonades arrived in three flavor combinations: Strawberry Lemon Mint, Fuji Apple Cranberry, and Mango Yuzu Citrus. The drinks were part of Panera’s recently unveiled Unlimited Sip Club, the first nationwide unlimited beverage subscription for all self-serve beverages, available nationwide for $10.99 per month.

PANERA Got timelyandnewsworthyphotos?Submit themtoShortOrder@qsrmagazine.com.

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SHORT ORDER

The market share jostle between quick-service restaurants and C-stores is nothing new.

Yet like many arenas in the COVID-19 era, technology has reset the wheel. Namely, can technology bring the segments’ o erings closer together? Customer arrival platform Bluedot released its first Convenience Experience Report, which explored consumer sentiment and the guest experience at gas stations and C-stores across America. It was based on survey data frommore than 1,500 U.S. consumers. Here were some of the findings:

• One in four visit C-stores for lunch. Of that, 29 percent do so for fast food (brands inside the location or proprietary setups) .

Can C-stores steal share? 27 %

A shift in convenience? • 61 percent of consumers in the report said they would visit a C-store more often if mobile ordering, drive-thru, and curbside pickup were available.

1 IN 4

61 %

25 %

at grab-and-go refrigerated items made-to-order food.

hot food (like pizza or hot dogs, etc.)

• Also, 51 percent drop in for snacks , 20 percent for grocery items , and 16 percent for alcoholic beverages .

21 %

• Nearly half would walk out of a C-store if one or two people were in line at the register (30 percent for two people and 16 percent if there’s one person in line) . • 54 percent said they’d turn away if they noticed three people waiting to check out.

How do customers pick one C-store over another?

54 %

56 %

52 %

37 %

25 %

25 %

CHEAP GAS

LOCATION

EASE OF ENTERING & EXITING

CLEANLINESS HIGH-QUALITY GAS

1 IN 3

• One in three would drive away if there was a single car ahead of them at the pump.

Some other points: • Twenty-five percent of people said they were ordering C-store items from third-party apps . If given the choice, however, two out of three preferred to use the C-store’s own app. 25 %

• Three in four consumers believed gas

6 IN 10

stations should start including charging stations for EVs, too.

The kicker:

• 59 percent of

59 %

• Six in 10 were more likely to visit a C-store

respondents said they’d consider purchasing a meal

3 IN 4

if its mobile app automatically unlocked the pump and allowed in-app payments.

from a C-store when stopping for fast food.

C-STORE:ADOBE STOCK / GLOWONCONCEPT. PEOPLE STANDING IN LINE: ADOBE STOCK / ANDREY POPOV. MOBILE ORDER, CURSIDE PICKUP, DRIVE-UP: ADOBE STOCK / ENOTMAKS. CAR AT GAS PUMP: ADOBE STOCK / BARRY BARNES. DRINKS AND FOOD: ADOBE STOCK / BSD STUDIO. LUNCH ICON: ADOBE STOCK / JAN. GAS PUMP & OIL VALUE: ADOBE STOCK / HANDIES PEAK, LOCATION ICON: ADOBE STOCK / DARIACHEKMAN, ROAD ICON: ADOBE STOCK / ANDRE, CLEANING ICON: ADOBE STOCK / ALIYEV84. APP ORDERING & APP PAYMENT ICONS: ADOBE STOCK / SKELLEN, CAR CHARGE: ADOBE STOCK / NEXUSBY

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SEPTEMBER 2022 | QSR | www.qsrmagazine.com

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| C H I C K E N W I N G S | fresh ideas It’s been an up-and-down year, as usual, for one of the sector’s hottest commodities. B Y B A R N E Y W O L F rr

The Wild World of Wings

Wing it On! began serving chicken

and veggie dumplings in May.

A lot of quick-service restaurants have been “winging” it over the past couple years. As the price of bone-in chicken wings soared in 2021, wing-centric eateries had to adjust quickly. And though bone-in wing costs have dropped this year to pre-pandemic levels, oper ators had to switch gears again, as the price for chicken breasts, which provide the meat for boneless wings and tenders, soared— as have the costs for many other commodities as well as labor. The past two years “have been a constant juggling act” in terms of pricing, supply, staffing, menu development, andmore, says Gus

Malliaras, founder and owner of Detroit Wing Company, based in Eastpointe, Michigan. Most wings restaurants took at least one price hike this year or in 2021, but stress on margins remain. In addition, rising gas prices and other inflationary pressures on consumers left little price elas ticity. “Right now, there’s not a whole lot of room tomove,” he says. Dan Leyva, chief wing officer at Wings Over, sums up the sup ply price picture succinctly: “Everything that can go up at this point is going up.” Like many restaurants, “we’ve absorbed the majority of their costs,” he adds.

WING IT ON!

www.qsrmagazine.com | QSR | SEPTEMBER 2022

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fresh ideas

| C H I C K E N W I N G S |

While some industry veterans have dealt with inflation in the past, it’s a new phenomenon to younger ones, who may have experienced price increases on only a couple of items at a time. “I have franchisees who have never seen inflation,” says Sam Ballas, chief executive and managing director for East Coast Wings + Grill, based inWin ston-Salem, North Carolina. “[At the company’s brand conference] I took 45 minutes telling themwhat it is and how we got here.”

investing in or even acquiring a poultry production plant, which could provide about 20 percent of its wings buy while alsomaking costs more stable and pre dictable. “It’s innovative and disruptive,” Skip worth says of the idea. Some operators added wing-style thighs as a lower-cost option during the chicken crunch, and thighs have remained on some menus. Eateries also innovated around new sauces and items like chicken sandwiches and nuggets— all unique due to each chain’s many proprietary flavorings. “The question is how do we make the pie bigger versus just raising prices,” Leyva says, notingWings Over! added a price-sensitive tender sandwich, using only one new item, a split-top bun, with guests choosing one of the chain’s more than two-dozen flavors for the tender.

Inflation is something brands are having to negotiate and continue bat tling, adds Michael Skipworth, chief executive of Addison, Texas-based Wingstop, the sector’s leader with some 1,858 units, including about 1,639 in the U.S. And with consumers facing higher food and gas prices, it is incumbent on restaurants to “provide value.” Overall, however, experts believe the condition of the wings sector is strong. “I would say wings are as popular as ever,” says Matt Ensero, chief executive of Wing It On!, a Raleigh, North Carolina-based brand. “If the past 12 months have taught us anything, wings are here to stay,” adding they have become a part of American food culture. Operators adapted to the pandemic and its aftermath by rely ing on stable and sometimes additional suppliers, adding menu items, taking advantage of takeout and delivery options and enhancements, and offering profitable meal deals providing cus tomer value. Helping is the drop in bone-in wing prices, which stood at more than $3 a pound a year ago, compared to less than $1.75 a pound pre-pandemic, according to the U.S. Department of Agriculture. Prices have been declining this year to below $1.75 a pound by July. Bone-in wing cost deflation is providing better margins— experts say for perhaps the first time—than for boneless wings and tenders, which have seen prices rise sharply over the past year in part due to higher demand for white-meat chicken. “We can lean in and give some of that deflation back to main taining the experience,” Skipworth says in the wake of the cost of boneless, skinless chicken breasts doubling during the first half of the 2022 and the cost of tenders jumping 28 percent. Maintaining an adequate supply of wings and other items, from spices to carryout boxes, also became important in the wake of the pandemic’s chicken crunch and other supply chain issues. “I know more about logistics now than I ever did in my life,” Malliaras says. In addition to using established suppliers, for instance, East Coast Wings “went to sources we never used before,” Ballas says, including buying 3,500 pounds of wings from a Chile supplier at a very good price. “You get a great win from that.” Wingstop is contemplating going even further by potentially

WINGS OVER’S TENDERS & WAFFLES.

Although consumers have been fairly accepting of price hikes, it only goes so far, Ballas notes. One East Coast Wings location in the Southeast was allowed to take price increases equal to where they should have been, and “the store lost 35 percent of its sales in the four-week run.” To battle some higher costs, several wing-centric operators are using meal deals and bundles to balance the higher cost of bone less wings or tenders with better margin side items. Others have eliminated non-essential items that didn’t sell well. “We look at the menu every month,” Detroit Wings’ Malliaras states. That is likely to continue not only as inflation continues but as the specter of a recession looms on the horizon. Restaurants have extended their menus by adding new sauce varieties to their already lengthy list—literally dozens—of sauce offerings. A few opted for a bit of out-of-the-box thinking. Wing It On!, for instance, sought out a menu item not directly tied to protein. “We jumped into the test kitchen and considered factors like popularity, cost, and impact on operations,” Ensero says. The result: vegetable and chicken dumplings, sauced like a wing. “We think we hit a home run,” he says of the high-mar gin addition. Alongside new ideas that revolve around the menu, many of the changes operators made during the pandemic, including cus tomer dining habits, will go on into the future. “We are optimizing our business model—how do we improve pickup and delivery to provide fresh food,” Leyva says. As a result, the company, with units across the Northeast and Midwest, switched to waffle fries that travel better and focuses on better packaging and improved delivery. After all, he adds, “The guest behavior of ordering online and pickup is here to stay.” q

BarneyWolf is a regular contributor to Food News Media and is based in Ohio.

WINGS OVER

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DEPARTMENT ONES TO WATCH

FriosGourmet Pops In light of the pandemic, the upstart took to the road, and found plenty of runway to chase. B Y B E N C O L E Y

nearly as much as other businesses trying to find people to work our trucks and help our franchisees at events.” Among frios’ roughly 50 units, there are still a few physical stores, but most of the franchisees who remain in storefronts have favorable deals with landlords in which the overhead makes sense. And many use the space as their commissary to store popsicles and keep their carts. The current franchise opportunity doesn’t include retail locations. The primary focus is now mobile vans, or as frios fondly calls them, “Sweet Rides.” The vehicles are tie-dye and feature a slide-top storage freezer, internal and external remote-con trol LED neon lights, Bluetooth speakers, a built-in service window, power inverter, and a customizable menuboard. Vans operate mostly around events, like an Employee Appreciation Day, or for schools, f irst responders, hospitals, festi vals, fairs, farmers markets, and sporting events. On slower days, some franchisees drive through neighborhoods. As of July, frios vans stretch from the East Coast to Arizona, and by the end of 2022, the concept hopes to be closer to 100 units. The company established a predictable pipeline after being challenged by a short age of Ford Transit vans. At the beginning of the year, frios held off on signing new operators to provide a more sophisticated system of support to existing partners, and because that’s now settled, franchise sales are ramping up. The concept sells territories the same way it would actual stores. It targets areas of 200,000 people—although that figure is still a work in progress—and contiguous zip codes. In addition to vans, franchisees can use carts and join wholesale partnerships with local businesses, sports complexes, and schools and universities. Historically, frios has sold single units, but CONTINUED ON PAGE 54

About f ive operators participated in the f irst test, and it wasn’t too long afterward frios recognized how perfectly positioned its product is. The company sells prepack aged frozen popsicles in a variety of f lavors, making it sanitary and safer to approach customers outside as opposed to them walk ing into a store. The P&L potential is “drastically differ ent,” as well, president Patti Rother says. “The f lexibility it gave in terms of labor was a game-changer,” she explains. “In a storefront, obviously you’re paying someone regardless if you’re selling popsicles. And then the food truck, if you’re at an event, you only just work the event and hand out popsicles and then you stop paying for labor as soon as the event is over. We’re a really labor light model. We haven’t struggled

FOUNDERS: CEO Cliff Kennedy and president Patti Rother HEADQUARTERS: Mobile, Alabama

YEAR STARTED: 2015 ANNUAL SALES: N/A TOTAL UNITS: 50 FRANCHISED UNITS: 50

ASAFRANCHISEDBUSINESS,FRIOSGOURMETPOPS had to get creative with its support once the initial wave of COVID-19 temporarily shut down storefronts nationwide. CEO Cliff Kennedy felt it was time to go mobile, which wasn’t out of left f ield. Franchisees had already done iterations of this, with ice cream pushcarts and trailers.

FRIOS GOURMET POPS

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©2022 Checkers Drive-In Restaurants, Inc. 4300 W. Cypress St., Suite 710, Tampa, FL 33607. 1. Checkers & Rally’s 2020 Franchise Disclosure Document (FDD). Written substantiation will be provided on request. This advertisement is not intended as an offer to sell, or the solicitation of an offer to buy, a franchise. It is for information purposes only. The franchisor, Checkers Drive-In Restaurants, Inc. is located at 4300 West Cypress Street, Suite 600, Tampa, Florida 33607, and is registered as file number F-4351 in the state of Minnesota. In New York, an offering can only be made by a prospectus filed first with the Department of Law, and such filing does not constitute approval by that Department. 20220300

DEPARTMENT FRANCHISE FORWARD

Holding thePrice Line As inflation rears, quick-serves are working to guard their value proposition. B Y B R Y A N R E E S M A N

started looking at managing prime costs ver sus just managing food costs and labor costs. That’s at the heart of the P&L. [And] other lines in the P&L that you can manage and get one-tenth here, one-tenth there, and you try to survive.” For Layne’s franchisees, the No. 1 priority is to have available product. The company sells one protein ( chicken tenders ), one side ( French fries ), and the packaging. With over 70 percent of the chain’s business being drive-thru, it is important essentials be available. “We took a price increase earlier this year,” Wattir says, noting cross-country shipping costs have gone up as much as three or four times. “But we started managing more of prime costs, food and labor together, and implemented a labor management system based on productiv ity versus percentages. We’re able to control it that way, instead of saying, ‘I want X percent for food costs, and I want X percent for labor costs.’ Let’s combine them and manage them together. Then look at below the prime costs, see what’s on the P&L, and manage that— linen supplies, janitorial supplies, chemicals. Try to get some savings there so you don’t cheat

Supply is the top priority for Layne’s Chicken Fingers franchisees.

E ven though we have emerged though the thick of the pan demic, life has not quite gotten back to “normal.” Given supply chain logjams, labor shortages, and the rising cost of fuel, which is affecting shipping costs for all goods, restaurant chains and independents alike are coping with price surges at the counter and worrying about passing along those costs to customers. It is, as Garrett Reed, CEO of Layne’s Chicken Fingers, calls it: “A perfect storm of everything at once.” Reed and Layne’s COO, Samir Wattar, recall this climate started brewing mid-2021 as many supplies lagged and demand was high, and it has not stopped since. “I wake up every week to letters from manufacturers—‘We’re taking an increase in 30 days or in 15 days, or your next deal is going to be increased by X,’” Wattir says. For example, the company used to pay $2 per pound for chicken tenders. That cost at the start of the summer was up to $3.70. Fries and soft drinks cost more, too. “It’s been a struggle to manage,” Wattir adds. “We take price increases, but how much can we pass on to the consumer? When is the point that you’re going to price yourself out of the market? We

your customer and you don’t overprice yourself out of the market.” Layne’s took an approach where it will not reduce portion sizes ( “shrinkf lation” ) or make the customer feel cheated. It wants to stay fair to loyal users. Layne’s also notes it’s received little nega tive feedback from consumers, far less than normal even, which the brand sees as a sign people are adjusting to the overall price increases surfacing in post-lockdown life. “It’s been refreshing because we’re f ighting so many battles, and you really don’t want to fight the battle with your customer,” Reed says. Another company working to sustain customer satisfaction amid the surge is Atomic Wings. During lockdown, some of the brand’s locations saw business double, CEO Zak Omar says. Then a shift came. “I’m a Dunkin’ Donuts franchisee as well, and it seems like across [quick-service restaurants] transaction counts have [recently] gone down,” he says. “It’s a culmination of a couple things. Inf lation, and a lot more people have less disposable income. Quick-serves also had to announce about a 20 to 30 percent CONTINUED ON PAGE 54

LAYNE’S CHICKEN FINGERS

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©2022 WNW Franchising, LLC. All Rights Reserved. *The discounted initial franchise fee applies only to franchise agreements executed on or before December 31, 2022; no other discounts apply. This communication does not constitute an o er to sell a franchise. This communication is not specifically directed by us to the residents of any of state in which WNW is not registered to o er and sell franchises. WNWwill not o er or sell a franchise until we deliver a Franchise Disclosure Document to the prospective franchisee in compliance with applicable law.

**This information can be found in Item 19 of the 2022 Franchise Disclosure Document issued byWNW Franchising, LLC. The data reflects the calendar year beginning January 1, 2021, and ending December 31, 2021, and shows information for reporting stores which were open and operating for at least 12 months as of December 31, 2021. There is no assurance will do as well. If you rely upon our figures, you must accept the risk of not doing as well. This is not an o er to sell you a franchise. The o er of a franchise can only be made through the delivery of a Franchise Disclosure Document. Certain states require that we register the Franchise Disclosure Document in those states. This communication is not specifically directed by us to the residents of any of those states. Moreover, we will not o er or sell franchises in those states until we have registered the franchise (or obtained an applicable exemption from registration) and delivered the Franchise Disclosure Document to the prospective franchisee in compliance with applicable law.

S P ON S O R E D B Y G E N PA K

How to Nail Takeout and Delivery Presentation and Safety Beat some of the most troublesome problems in off-premises dining: food migration and order accuracy. / BY JOCELYN WINN

well. That’s all behind our engineering.”With a segmented base and lid, Genpak’s hinged ProView Close-Off containers provide com pletemeal component separation, preventing foodmigrationbysecuringeachcompartment. Genpak’s Clover line has a secure closure sys temthat stackswell without blocking vents. Genpak products solve presentation and safety needs across market segments with both its reliability and durability, whichhelps enhance off-premises customer experiences. Choosing the right product is a balance be tweenformandfunction. “At theendof theday, it’s really based on functionality and what’s trending in the currentmarket,” Bowser says. Thesame is true forchoosingacontainer for its insulationpropertieswhileseekingrecyclable or compostable properties across markets. “We receive feedback that the operatormeals are arrivingwarminour containers. Our goal is to hit those top performance values for the businesses.” Genpak’spolypropylenecontainers,which Bowser reports are happily being repurposed

N o one wants their specialty barbecue sauce to drip into their house-made pickles, or worse, hot and cold items to compro mise eachother—or the paying customer. Food packaging manufacturer Genpak—headquartered in Char lotte, North Carolina with 17 facilities across North America—helps maintain consistent presentation and safety of takeout and delivery items toprotect restaurants’ products andbrand integrity. Avarietyof to-gocontainer shapes, sizes, andcolors insustainable, microwave-safe, hinged, two-piece, and vented options abound in theirHarvest Fiber, Clover, ProView, andProViewClose-Off lines, for instance, tohelpalleviatethekeyproblems including foodpresentation, safety, and foodmigration. These containers allow restaurants to offer high-quality food to their customers the same way, every time. “Whether it’s a salad or a steak or chicken tenders, we really pride ourselves on the fact that the waythe food leaves thekitchenis theway it’s receivedwhenthecustom er goes home,” saysMonicaBowser, corporatemarketingmanager for Genpak. “Our containersaredesignedandtestedtoperformandtravel

byconsumers, seemtohit that sweet spot. “Theyarecurbsiderecyclable in somemunicipalities and canhelpmerge that branding for business owners,”Bowser says. “What’s important is retainingpresentationand keeping preparedmeals at the optimal temperature.” Containers designedwith clear lids provide another presentation and safety benefit to help the back of the house visually double-check orders to ensure accuracy, which equates to safety, presentation, and customer satisfaction. “The venting is a very small but powerful feature because it has humidity control that helps prevent moisture within the products,” Bowser says. “We’re trying to bridge being safe and secure while pre senting the orders accurately.” Evolvingwithinthe industryand forging long-termcustomer rela tionships is aGenpakpriority. “Overall,Genpakprides itselfonhavingtherightexpertstocontinue that legacy, andprovidegreat solutions for themarket,”Bowser says. ◗

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ACQU I S I T IONS

Restaurant Brands International shook up the GAS ON THE FIRE B Y D A N N Y K L E I N franchise landscape when it spent $1 billion to acquire Firehouse Subs. What’s next? Growth, synergy, and plenty of both.

FIREHOUSE SUBS / MICHAEL MURPHY, FLAMES: ADOBE STOCK / OLGA MOONLIGHT

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ACQU I S I T IONS

FOR RBI’S JOSÉ CIL (LEFT) AND FIREHOUSE SUBS’ DON FOX, A SHARED HISTORY AT BURGER KING GOES A LONG WAY. 

JOSÉ CIL’S GREAT AUNTWAS A SEAMSTRESS. One of her well-worn lines was, “measure twice so you only have to cut once.” The CEO of Restaurant Brands International shared this anecdote recently with franchisees. Calls had started to pour in to Cil and the company’s president of international, David Shear. Operators wanted a piece of Firehouse Subs. In mid-November, the Burger King, TimHortons, and Popeyes owner announced it agreed to acquire the 1,200-unit sandwich chain for $1 billion in an all-cash deal. On its surface, the move, which closed December, added a jigsaw piece so often coveted by restaurant conglomerates. It gave RBI an emerging, growth-ready player in America’s $30 billion quick-service sandwich category to join chicken, burger, and beverage strongholds. For its part, Firehouse approached the M&A table having tripled its unit count since 2010. Founded by brothers and former firefighters Chris and Robin Sorensen, it was a privately held company since unit one in Jacksonville, Florida, to the moment it joined RBI.

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ACQU I S I T IONS

The brand’s history wasn’t pitted by setbacks and leadership shakeups over the decades; it was merely ready for its next act. And RBI franchisees were eager to add a chain that’s domestic same-store sales rocketed 21 percent in 2021 and 20.6 percent across two years. Firehouse’s record-high $900,000 average unit volumes drove systemwide sales north of $1.1 billion, which sailed 2020’s $872 million. Twenty-seven percent of the busi ness f lowed through digital channels. AUVs in Q1 2022 inched even higher to $920,000 on a trailing 12-month basis. But Cil’s message was clear. While Firehouse’s runway is undeniable, there’s more opportunity than a f irst look-over might uncover. “We’re spending time doing the measuring and making sure we have the right place so we only have to cut once,” Cil says. The deal between RBI and Firehouse began on common ground. Firehouse CEODon Fox spent 23 years at Burger King, from 1980–2003. Three of those—2000–2003—overlapped with Cil. Although they didn’t cross paths ( Fox was in field ops and Cil in legal ) their shared history offered a starting point. About six weeks before the deal was announced, Fox and Cil met. Fox says there was “instant chemistry and energy” that, frankly, wouldn’t have been possible with anybody else. Cil, to that point, knew Firehouse best as a consumer. In the years he traveled Florida visiting Burger King pads, and the 10 months he worked as a regional general manager for Walmart, he often found himself eating at the inline locations that sparked Firehouse’s growth. “And that’s how I got to know the brand and fall in love with

it,” Cil says, “because the product was great and the service was great, and it resonated with me.” Cil and Fox simply had a lot to talk about.

BUT BACK TO THAT WHITESPACE One of RBI’s defining traits since forming in the wake of a 2014, $11 billion takeover of Tim Hortons, has been net-unit expan sion. Burger King was growing by roughly 170 units per year when 3G Capital spent $1.56 billion and grabbed control 11 years ago. Ahead of COVID, Burger King pushed about 1,000 locations each calendar turn. Popeyes opened 216 restaurants the year before RBI jumped in and there were 2,725 stores on December 31, 2016. Today, there are about 3,851 globally and Popeyes, in 2021, experienced the highest number of openings since RBI bought it in 2017—unit growth of 7.4 percent, or a net of 254 stores. The chain, which RBI forked up $1.8 billion for, expects to eclipse the 200 figure again this year. Firehouse presently operates in three countries and territo ries. Burger King is in more than 120, Tim Hortons over 10, and Popeyes clear of 30. There are 47 Firehouse Subs in Canada—the first opened 2015 in Ontario—and AUVs, generally, perform above the company’s system average. Just for context, Subway boasts close to 3,000 stores in that market. RBI? More than 4,500 across its three brands. Cil says 80 percent of Canadians visit Tim Hortons’ 3,900 or so ven ues every month.

FIREHOUSE SUBS IS COMING OFF RECORD RESULTS, BOTH IN TERMS OF SYSTEMWIDE SALES AND AVERAGE-UNIT VOLUMES.

FIREHOUSE SUBS (3)

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