Fast & Serious: 11-20
11. Restoration 1
Property damage restoration
At No. 11 on this year’s Fast & Serious ranking, sales and unit growth at Restoration 1 is rising faster than smoke from a celebratory bonfire. Based in Waco, Texas, the property damage restoration franchise has worked for years to build the corporate infrastructure that is now fueling its across-the-board growth. Todd Bingham, vice president of franchise development, said CEO Gary Findley’s previous experience with Curves and Snap Fitness is serving the company well as its growth story unfolds. “Gary’s always been of the mindset that we don’t grow and then hire, we hire and then grow,” he said. “We’re not selling 100 locations and trying to play catch-up later with personnel.” Looking forward, Bingham added the company is “really close to acquiring a few additional brands” to build a wider service-based portfolio in the mold of ServiceMaster or cross-town rivals Neighborly, formerly called The Dwyer Group, which is also headquartered in Waco. Supporting the brand’s expanding roster of franchisees has meant hiring field consultants who, in some cases, are past franchisees or have experience working for other restoration companies so they can hit the ground running. “Each of the new franchisees are coming out of the gate so much faster than what our previous franchisees were doing,” he said. “We have really put those types of things into play with our experienced operations people to help franchisees, and that has really jump-started the growth of our new franchisees.”
12. Planet Fitness
While Planet Fitness is now ranked 12th, down from four from last year’s Fast & Serious, the hyper-affordable big-box gym remains one of the strongest, most enduring fitness brands after years of high-energy expansion. CEO Chris Rondeau said the brand’s unorthodox business model is what’s kept him happily employed for 25 years as the system has grown dramatically. Planet is “as inexpensive as you can get” in his eyes, which has continued to be one of the brand’s key differentiators. “Today, with more than 1,600 stores in all 50 states, we’re in every major metropolis in the country,” he said. Asked for the thinking behind his sustainable growth plan, Rondeau said it’s easy to become infatuated with the competition, which is something he actively works to avoid. “We have two customers, our members, naturally, but we also have our franchisees that are customers just the same,” he said. “We need to also think of their best interest and their profitability in all decisions, and if we keep that in mind, we’ll win.” In recent years, that has meant shooting for approximately 200 new store openings each year, while being careful not to cannibalize territories from neighboring franchisees. Because the company has detailed customer data, it knows where every customer lives, their exact drive times and neighborhood profiles, so it can add new units without reducing nearby sales or upsetting existing franchisees. The brand has bolstered its in-house real estate team and begun using more analytics as it seeks to land “Main and Main” locations for new gyms. Planet also committed to investing $10 million to improve its technology and, as an example, help connect exercise machines with guests who wear fitness tracking devices, which can help members track their progress through the company’s app. This investment is intended to benefit members and help them connect visits for a more comprehensive workout. “What you do tomorrow is the missing link of getting your fitness journey started,” he said.
Skincare is a fast-growing part of Hand & Stone’s offerings, growing from 0 to 30 percent of gross revenue, said CEO Todd Leff.
13. Hand & Stone
Massage and facial spas
Ten spots below last year’s ranking, Hand & Stone Massage and Facial Spa has grown its company-wide sales by more than 63 percent over the last three years, putting it at No. 13 this year. How’s that for relaxing? CEO Todd Leff has been with the brand since 2009, following many years in the auto aftermarket and a brief retirement where he “played golf for 90 days straight.” Happily back in action, Leff said he doesn’t have an easy motto behind his company’s sustainably healthy growth, but said whatever he and his team do is intended to boost franchisee profitability. “We won’t open unless we’re convinced it’s sustainable growth,” he said, adding the brand hasn’t closed a location in more than two years. Now with more than 400 locations, Hand & Stone follows a so-called clustered market approach that means building in established hubs, rather than boldly striking out into new territories. “We like to fill in markets and become the dominant brand in those markets before we move on to the next market,” he said. Its latest targets have been the Mid-Atlantic states, the Southeast, and Florida, North Carolina and Texas in particular. Beyond real estate, Leff’s team invested heavily in the skincare side of the business, which is partially due to the difficulty in finding massage therapists in many markets. “That went from 0 percent of our business a few years ago to now more than 30 percent of our gross revenues,” he said. “Getting skincare at the top of our service menu was important, and our stated goal is we want to drive this to be 40 percent of our business, so we’re headed in that direction.” To help recruit spa employees, the company has developed an in-house recruit team to help franchisees find new leads, and has also worked with training schools that give the brand the first shot at graduating students in return for tuition reimbursement. On the marketing side, like most beauty brands, Hand & Stone has worked to cultivate online influencers, and is now spending 15 percent of its ad budget solely on Facebook.
Family dining chain
Freddy’s Frozen Custard & Steakburgers CEO and President Randy Simon is careful to credit his corporate team and the brand’s franchisees as he shared excellent metrics behind the burger chain’s recent growth spurt, including reaching close to half a billion dollars in systemwide sales by the end of 2018 and north of 281 units. Referencing its 24th company-owned location, he said a “we’re-in-this-together mindset” is a key part of the brand’s ability to help its franchise partners. “Since we have skin in the game, we feel what they feel on a daily basis and we run into the same issues they encounter,” he said. “We don’t quite as easily say let’s open 24 hours or throw breakfast at them, because it’s something we have to digest at the same time.” Citing the efforts from the Wichita-based headquarters and its Colorado-based marketing firm, Simon said building brand awareness is vital as Freddy’s expands into new markets. The main message, including a TV spot starring three business guys in suits, is that when you’ve decided to treat yourself, it better be worth the calories compared to the competition. Freddy’s has also hired 22 full-time franchise business coaches, who are mostly on the road and help franchisees prepare for new store openings, among other duties. As it adds units, maintaining the hospitality and small-town charm at the center of the brand’s image is underscored during a five-week training process that “indoctrinates” new employees into the culture. “It’s about hospitality and character and treating your guest as you would want to be treated, that’s the message to us for sustainable growth,” Simon added. “That’s what grew McDonald’s; they made sure the experience was the same.”
Goldfish Swim School co-founder and CEO Chris McCuiston banks on existing franchisees to open new locations, with units up by 32 and systemwide sales growing 137 percent over the last three years.
15. Goldfish Swim School
Swimming lessons schools
One newly mastered doggy paddle at a time, Michigan-based Goldfish Swim School has swelled to nearly 60 U.S. locations and is the 15th most sustainably grown franchise corporation. Co-founder and CEO Chris McCuiston said the brand’s growth rate has accelerated because existing franchisees are opening more locations, which is the company’s focus in selecting new franchisees. “They realize that this is a true partnership, and that we have their best interest in mind,” he said. Finding such franchisees is Goldfish’s biggest challenge, which is a contrast to retail and restaurant franchises that compete for high-dollar real estate. “While we appreciate and seek out risk takers, we have a tried and true model that must be adhered to, as we have to protect our brand and our current franchisees,” he added. Over the last three years, Goldfish added 32 new locations in the U.S. and grew its systemwide sales by 137.5 percent—not bad for a brand that’s still a wee one in the wider franchise world.
16. Chicken Salad Chick
Fast-casual chicken restaurants
What Chicken Salad Chick President and CEO Scott Deviney described as a “nice little run” in last year’s Fast & Serious has morphed into an impressive flying V as the fast-casual franchise crosses the 100-unit threshold. Maintaining that positive trajectory is no accident, Deviney said, given his focus on growing carefully, rather than spreading the brand’s wings too far into new markets. “I am a big believer in the concentric circles model of growth—I don’t jump to states to open new stores,” he said. “Typically we have found there’s a little bit of consumer demand before we enter that new state, and that has helped us tremendously grow the business.” In the last three years, 35 new locations have joined the formation. Because its customer base skews heavily female, its real estate strategy relies on demographics and analytics, as well as basic logic that suggests being next to a Kroger or a TJ Maxx is a reliable indicator of future success. “If there’s a market that has 55,000 people in a $55,000-plus household income with heavy skewed female” population, “then that works very well for us,” he added. Chicken Salad Chick’s growth rate has increased in recent years, and its marketing team focuses on harnessing the power of social media in new markets. That includes encouraging guests to post photos of their food with a goal of letting fans recruit new customers through their own networks. Another strategy is sending a marketing team out with samples to hook new people on the taste—sometimes visiting as many as 100 businesses in a given day.
“By the time we have the grand opening, most people have visited the Facebook page, they’ve shared it with their friends, and that’s what drives that heavy business,” Deviney said.
17. Tropical Smoothie Café
Smoothie and food chain
Interim CEO Charles Watson is holding two posts at Tropical Smoothie Café while the company conducts a formal CEO search, but he emphatically asserts he loves every moment at the helm of a steadily growing system. Also, he added his hat is “absolutely in the ring” so he’s interviewing like everybody else. By the numbers, the company is in good shape with 629 U.S. locations at year-end 2017, which equates to a healthy three-year unit growth rate of 35 percent. Sales growth remains an equally bright spot for the smoothie concept with a big focus on food. “We’re outpacing the industry from both a comp perspective and a transaction perspective,” Watson said. “We’ve been able to drive transactions more so than check, so we’re very happy about that.” At this point, 60 percent of the brand’s sales remain in smoothies, while 40 percent is food. The corporate office closely monitors the “attach rate” for food, which is key to boosting average unit volumes north of $700,000. Looking at its geographic presence, Watson said Atlanta and Dallas are two markets that will loom large in the coming year. The brand is also working with a third-party provider to help franchisees monitor their daily profitability, part of its effort to provide hands-on help on the regular. “In 2019 we’re investing a lot in our operations team to be able to get the touches we need with our franchisees, both from a training and organizational services perspective,” he said. “Our goal is to be a great franchisor and that’s the way that our business is set up.”
18. Kona Ice
Shaved ice franchise
Down from its No. 11 spot in last year’s Fast & Serious, Kona Ice remains one of the smartest growing franchises as the frozen treat purveyor closes in on 950 locations. Zooming out to the last three years, Kona’s sales grew 65.3 percent and its unit count grew 39.9 percent—red hot or perfectly icy by any measure. Sales and unit growth both chilled slightly compared to the previous year.
19. Realty One Group
Real estate brokerage
The tide is high in American real estate, and California-based Realty One Group is riding the wave with enough growth to debut on the Fast & Serious list at No. 19. Compared to three years ago, when real estate was only somewhat red hot, Realty One grew its systemwide sales by more than 44 percent. At 109 operating locations, its unit growth was 94.6 percent during the same period. Founded in 2005, Realty One seeks to empower its brokers with technology and operational support. Its locations are evenly distributed throughout the country, with most in large urban centers or adjacent markets where home prices have increased dramatically in recent years. By unit count, San Francisco, Los Angeles, Seattle and Charlotte, North Carolina are its most saturated markets. Beyond home buying and selling, Realty One has partnerships with home inspection, title, bug remediation, home warranty and mortgage services that are part of its offering for brokers.
Brandon Landry, Walk-On’s CEO and founder, says he prefers to stay in a “sweet spot” of 20 to 25 new locations a year.
Casual sports bars and restaurants
Big things keep happening for Walk-On’s Bistreaux & Bar, the Louisiana-based casual sports bar and restaurant with Cajun cuisine and big-name backing from Saints quarterback Drew Brees, who owns a portion of the fast-growing concept. Founder and CEO Brandon Landry said the company’s pipeline is fuller than it’s ever been, but stressed that staying in a “sweet spot” of 20 to 25 new locations a year will remain a key part of the strategy. That pace is swift enough that the company expects to double in size during 2019, with new locations spreading beyond its home in the heart of the Gulf Coast. “We’re selling more duck and Andouille gumbo and blackened and fried alligator outside of Louisiana than we are in our home state now,” Landry said. “Being from here, you’d think everybody’s got etouffee and gumbo, but as you start expanding that’s not the case—at least not with any quality from what we can see.” From the beginning, Walk-On’s had big dreams, and the corporation has worked for years to build infrastructure that’s equipped for the next stage, rather than where the company is now or will be in the coming months. New markets coming soon include Florida, the Carolinas, Tennessee, Arkansas and Georgia. With mega restaurants in the 7,000- to 8,000-square-foot range, the brand has worked to cut the building size down about 20 percent for future locations—which Landry asserted would not impact the large-format feel, ambiance or kitchen capabilities. “We’re in this for the long run, it’s not a sprint for us,” Landry added. “We’re not trying to sell, sell, sell, open, open, open and then exit. I’m 39 years old, Drew’s the same age I am, we enjoy the business and want to do it the right way.”