QSR September 2022

BEST FRANCHI SE DEALS

SIZINGUPFROMTHESIDELINES: “Another brand built for the post-COVID world that predates that need by a great many years. Today, Wing Zone has an average sales-to-investment ratio of at least 2:1. Highly skilled restaurant management team. Major investments in technology, operating efficiencies, small footprint, with a streamlined menu that puts the focus on its best-selling wings and tenders to in-shop curated music and a revolutionary scent strategy. Wing Zone has transformed the way customers experience the brand. Trimmed down cook times, cubbies designed for quick, grab-and-go pickup and delivery options, the fast-casual brand offers an efficient, modern take on chicken wing consumption.” “While only 31 units strong, Wing Zone fits a quick-service model poised for success with high AUV of more than a million on a low-price tag to build. The small footprint will make real estate metrics more desirable and their embrace of technology ranging from robotics on the operations side and innovation on the delivery side makes this brand one to watch.” THESKINNY: Wing Zone made headlines in May when it announced a partnership with Miso Robotics to make “Flippy 2” a part of its standard build for all future locations. It claimed to be the first fast casual to spec food robotics into its operations at this level. The partnership arrived in parallel with the company’s recently announced Wing Zone Labs— a franchisee that plans to support the chain’s overall corporate innovation efforts. Wing Zone Labs will deploy Flippy at its 20 forthcoming Southern California locations to handle the frying station for chicken wings and other items. Wing Zone, created in 1993, was acquired by Capriotti’s Sandwich Shop in early 2021. And growth has followed. In Q1 of this year, the combined entities signed deals for 42 shops. A new store design— Wing Zone 2.0—arrived earlier in the year as well. Wing Zone bolstered support with a new VP of operations, three franchise business coaches, two new members of its real estate management team, and appoint ments to senior director of training and quality assurance. For all of 2021, Wing Zone signed agreements for 91 shops. The chain announced its forthcoming flagship in North Las Vegas in late June. Wing Zone plans to open several locations in the Las Vegas metropolitan area in 2022 and touts more than 100 commitments nationwide. Fatburger NUMBER OF U.S. FRANCHISE UNITS: 102 NUMBER OF U.S. TOTAL UNITS: 102 TOTAL SYSTEM-WIDE SALES: $139,200,000 FRANCHISE AVERAGE-UNIT VOLUME: $1,051,353 TOTAL AVERAGE-UNIT VOLUME: $1,051,353 FRANCHISE FEE: $50,000 ROYALTY: 6 percent RENEWAL FEE: 40 percent of franchise fee, $20,000 MARKETING FEE: 2 percent TOTAL START-UP COSTS: $504,600–$1,522,800 SIZINGUPFROMTHESIDELINES: “Fast comfort food at an affordable price from a brand with a history back to the 1950s will have a consumer base in any economy. Well-served by keeping the menu simple, yet taking a cue from sister brand Hurricane Grill to add popular wings as a menu option [as Yum! did with Pizza Hut and Wing Street] may be a good play. Franchisees have the opportunity to own other FAT Brands as a portfolio play to lock down more favor able real estate and anchor locations.”

THESKINNY: Fatburger franchisees have the ability bump revenue streams via co branding with Buffalo’s Express. They can also opt to have a virtual wing chain with another concept in FAT Brands’ portfolio, Hurricane Grill & Wings. It gives operators flexibility to increase menu mix at a minimal cost, with the brand operating out of the back of the house. Also, to the Council’s note, FAT Brands’ fast-scaling and diverse portfolio create whitespace for owners to fill multiple voids within markets. Franchisees don’t have to start with a single brand or loca tion—they can come into the system and choose multiple options, the company says. In terms of how that breaks down, FAT Brands spent nearly $900 million across five months in 2021 to spread its base to 17 concepts at the time, 2,300 franchised and company-run units, and systemwide sales of roughly $2.3 billion. It operated in 40 countries and 48 states with a group of 900 franchisees, half of which are multi-unit operators. Earlier in the year, FAT Brands said it had a pipeline of roughly 800 restaurants set to open in the next four or five calendars. This includes all corners of the industry, from Johnny Rockets to Fazoli’s, Native Grill & Wings, Twin Peaks, and Round Table Pizza (among others). In May, FAT Brands announced its latest deal, bringing Nestlé Toll House Café by Chip into the fold for an undisclosed figure. Arguably the bigger point, however, was FAT Brands’ move to rebrand stores to Great American Cookies, which would tack about 85 stores onto a 370-unit dessert chain. FAT Brands acquired Great American Cookies, along with Round Table Pizza, Marble Slab Creamery, Pretzelmaker, and Hot Dog on a Stick in summer 2021 for $442.5 million when it purchased Global Franchise Group. SoBol NUMBER OF U.S. FRANCHISE UNITS: 55 NUMBER OF U.S. TOTAL UNITS: 57

“ THEIR EMBRACE OF TECHNOLOGY RANGING FROM ROBOTICS ON THE OPERATIONS SIDE AND INNOVATION ON THE DELIVERY SIDE MAKES THIS BRAND ONE TO WATCH.”

TOTAL SYSTEM-WIDE SALES: $28,776,728.06 FRANCHISE AVERAGE-UNIT VOLUME: $571,932 TOTAL AVERAGE-UNIT VOLUME: $504,854.88 FRANCHISE FEE: $30,000 ROYALTY: 5 percent RENEWAL FEE: $7,500 MARKETING FEE: Minimum $500 TOTAL START-UP COSTS: $240,800–$450,600

SIZINGUPFROMTHESIDELINES: “Like Zaxby’s, commitment to cultural values is a huge plus. Phenom enal emerging brand that’s eclipsed 50 locations largely because of the industry leading product—Grade A açaí made fresh in store every day and homemade granola that truly is the secret sauce.” THESKINNY: The granola referenced by the Council can’t be overstated. It’s only available for purchase at SoBol locations. Founder Jason Maz zarone hails from a culinary school background and came up with the idea for the brand after visiting an açaí bowl stand after surf ing in San Diego. The chain has relied on a franchise-heavy model since 2016. It’s supported the effort with franchising develop ment managers, operations specialists, marketing managers, and others. Last year, Mazzarone, who grew up around his family’s business, an Italian ice shack founded by his grandfather (where he first began selling the purple bowls), said 2022 was shaping up to be the company’s largest development run yet, with plans to open nearly 20 more venues. The simple menu helps cut back waste and improve profitability.

GUILLOCHE BORDER: ADOBE STOCK / SAIFUL, FATBURGER

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SEPTEMBER 2022 | QSR | www.qsrmagazine.com