NEWS

Restaurants caught between franchising trends

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It’s a tale of the haves and have nots. Many restaurant brands are finding themselves caught between two prevailing franchising trends — the availability of single-unit franchisees, which can be successful, but lead to slower growth, and the difficulty in reaching mega operators currently dominating the space, who promise speedy development.

“There doesn’t seem to be a middle class of franchisee anymore,” said Jennifer Durham, vice president of franchise development for Tampa, Fla.-based Checkers Drive-In Restaurants Inc.

“It seems like it’s either the biggest [franchisee companies] or the one-to-three-unit operators,” she said. “It gets hard for brands to compete when we’re going for the same folks, so it comes down to what your differentiation is.”
To stand out, many restaurant brands have had to get creative. Some have focused inward on unit economics of company-operated systems, to best entice partners, while others go on aggressive recruitment roadshows. Some even lower expectations on snagging that large franchisee, instead working together with smaller operators to grow the brand in a sensible dynamic.

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