Fast & Serious: 11-20
Freshii makes its Fast & Serious debut at No. 11 following sales growth of 78.7 percent from 2016 to 2018 to go along with its nearly 60 percent unit growth during the same three-year span. As health and wellness brands in general continued to see “tremendous growth and momentum” in 2018, COO Adam Corrin said Freshii is “positioned as the category leader.” “We’re building a mass brand, not a niche brand,” said Corrin, one that’s rooted in the idea that “healthy means something different to everyone.” Corrin cited Freshii’s menu, which includes salads, grain bowls, wraps and smoothies, as having broad appeal, and the company is seeing success in smaller markets where its competitors don’t have a presence. “When there’s a population of 10,000 we can still have a very successful sales rate as well,” said Corrin. “And our competitor simply doesn’t want to open there.” Menu innovation is essential for the brand, continued Corrin, and Freshii introduces a limited-time offer or new menu item every 60 days. Keeping the menu manageable for franchisees requires a regimented SKU, or stock keeping unit, policy, and “it’s essentially one SKU in, one SKU out,” said Corrin. “We have to be very disciplined about how much we do and that we don’t throw too much down at our franchise partners.”
Scott Taylor, COO of Walk-On’s Bistreaux & Bar.
#12 Walk-On’s Bistreaux & Bar
Casual sports bars and restaurants
Cajun cuisine and a sports bar atmosphere continue to attract customers to Walk-On’s, which from 2016 to 2018 has grown sales by 223.5 percent to $110 million from 24 restaurants, pushing the brand up eight spots on this year’s Fast & Serious list. On the operational side, President and COO Scott Taylor said sustainable growth starts with bringing on franchisees who are not only strong business people but who also fit the brand’s culture. “We do several things on the front end, such as dinner, social outings, testing, all before they become a franchisee,” he said. “In addition, the entire team has a voice in deciding if we bring them on as a franchise partner.” Walk-On’s support team has expanded along with its footprint, noted Taylor, with an aim to “stay about 20-30 locations ahead of our pipeline.” Discipline in the growth of that pipeline is a challenge, he continued, especially with what he said is “a lot of energy and excitement” surrounding the brand. A constant focus on “growing the right way with the right partners” is important in moving the company forward, Taylor said.
Walk-On’s moves up eight spots to No. 12 as the Cajun food and sports bar concept grew sales by 223.5 percent from 2016 to 2018.
#13 Circle K
A test of delivery in Texas was one growth driver for the Circle K convenience store chain, with sales up a tidy 45 percent over three years and units up 35 percent. The chain’s goal is to make customers’ shopping experience, well, more convenient, with expansion of delivery to more of the system on the table.
#14 The Halal Guys
Halal street food
Starting as a food cart by three Egyptian immigrants in New York City on the corner of 53rd and 6th Avenue in 1990, The Halal Guys now has more than 90 restaurants. Its decision to partner with Fransmart in 2014, “has helped us grow and scale at such a rapid pace,” according to CEO Ahmed Abouelenein. “But it’s the right-fit franchisees that are passionate about The Halal Guys brand, history and food that really set us up for growth. Within the past year, we’ve also expanded our delivery footprint, working with multiple third-party providers and ghost kitchens to make sure we can put our food in the hands of as many hungry customers as possible,” he added. His philosophy toward growth—“focus on your customers and the quality of your food, and success will follow”—is also the brand’s biggest challenge. “Maintaining our food quality and ensuring our guests have the same quality experience at every location, especially through different regional halal food vendors, is the most important challenge for us to overcome as we continue to scale at this rate and as we enter many new regions of the world,” he said.
The Halal Guys started as a food cart by three Egyptian immigrants and now has 90 stores.
Nothing Bundt Cakes’ boss counts on discipline in choosing bakery owners as a key to sustainable growth.
#15 Nothing Bundt Cakes
Bundt cake bakeries
Staying disciplined in choosing bakery owners is job one for Kyle Smith, CEO of Nothing Bundt Cakes. “The founders of the company got that right; I’ve tried to stay really true to it, to stay disciplined. If you don’t compromise that we can reach our goals. This week we’ll cross 325 bakeries opened,” he said in a November interview. Easier said than done, of course, especially as the number of owners grows from the handful when starting franchising in 2007. He says word of mouth has fueled most of the growth, with existing owners adding a bakery or two accounting for at least 50 percent of the new openings. Now that about a dozen bakeries have come up for renewal, with more to follow in the years to come, Smith is thinking more about supporting the mature franchisees, mostly by adding people to the corporate support staff as well as with technology. Next year a new POS system with integrated online ordering should boost digital orders to 25 percent of the total; right now those orders make up 17 percent, up from just 7 percent a couple of years ago, when customers had to wait 24 hours before getting their bundt cakes. “Our bakery owners have gotten much more aggressive” in quickly turning around the orders, in large part because they’re the most profitable, with double the in-person check order. Smith’s goal “was to be better at 300 in support of our bakery owners than we were when we had 30 bakeries,” he said. “That’s a challenge. When you scale up how do you continue to provide the support and have folks still feel like they matter, and they have a voice in the brand?”
#16 Mosquito Joe
Mosquito, flea and tick control
The big news for Mosquito Joe in 2018, the last year evaluated in our three-year Fast & Serious ranking, was its acquisition by Neighborly, formerly the Dwyer Group. Mosquito Joe joined a stable of 22 franchise service brands that Neighborly cross-promotes to its consumer base, all backed by Harvest Partners, the private equity firm that purchased Neighborly earlier in 2018. CEO Mike Bidwell at the time said Harvest Partners has plenty of capital to fuel much bigger transactions. “Some acquisitions have been in the tens of millions of dollars and some have been north of that. If we wanted to do something in the hundreds of millions of dollars range,” Harvest would be on board. “We’ve got big ambitions here.” Mosquito Joe’s systemwide sales grew 111 percent from 2016 through 2018, with units up nearly 68 percent.
It’s “total transparency” for Planet Fitness CEO Chris Rondeau.
#17 Planet Fitness
Big-box, low-cost gyms
Total transparency and “accelerated collaboration” with increasingly sophisticated franchisees is Planet Fitness CEO Chris Rondeau’s answer when asked for his “motto” in driving sustainable growth. “We are at this point locked at the hip on making decisions that drive the business, more so now than ever. It seems like we are more and more close, more and more collaborative, and more and more trusting.” Nearly all of the growth is coming from existing multi-unit franchisees who “want more dirt.” Rondeau has been with Planet Fitness for more than 25 years, and used to sell franchises for the then-fledgling brand. “They came on board … and thought they’d own two gyms,” he recalls about early operators. “Now they’re making $20 million of EBIDTA” or cash flow “and they have sophisticated chief marketing officers and chief development officers.” Planet Fitness hasn’t always been so open. “We were not that transparent in the early days and most franchisors really aren’t,” Rondeau said. Now, “we are so open book on everything we do: where we make money, how it flows through, how our royalties work, how our national ad fund works. Because we show them why and how, it breaks down the tension.” Even a decision to raise royalties a couple of years ago met with approval from franchisees. “We had 12 years of positive comps, and the average had been over 12 percent. They said you’re right; you deserve it. They endorsed it,” he said. “It’s how I like to run the business.”
Homemade chicken salad takes center stage at Chicken Salad Chick, which has a new equity investor, Brentwood Associates.
#18 Chicken Salad Chick
Chicken salad restaurants
“We’ve been committed to concentric circle growth. We’re not jumping state to state,” says CEO Scott Deviney of Chicken Salad Chick, the restaurant chain featuring a craveable recipe for chicken salad that’s been closed on Sundays since the beginning, with an intense focus on being local. Now in 16 states and opening about 50 stores per year, Deviney said it’s a manageable growth plan backed by Eagle Merchant Partners, Chicken Salad Chick’s equity investor for the past four-and-a-half years. “We’ve been very committed to it and it helps to have an investor that will let us do it that way. Private equity businesses can sometimes want you to grow fast,” he said. Fifty stores a year is “the right number, it doesn’t stress the supply chain. We’ve been happy with it, they’ve been happy with it.” The much larger Brentwood Associates bought a majority stake in November 2019, with Eagle Merchant Partners exiting, but Deviney believes the new partner will let him stay the course. “Brentwood didn’t come in and say, here’s 15 things we need you to change. Brentwood came in and said, keep doing what you’re doing,” he said.
Home buyers & sellers
Development agents in every local market are helping to drive growth at HomeVestors, the franchise known as the “We Buy Ugly Houses” people. Paid by the franchisor, each agent is “a local coach, a local mentor,” said CEO David Hicks, who gets “paid on how well the franchise does.” Most development agents are also franchisees themselves, typically the cream of the crop, but some do that work full time after selling their franchises. The agent structure began around 2012, Hicks recalled, noting HomeVestors had 65 franchises in 2009 and today has more than 1,100. “We attribute most of that growth to that concept,” he said. Another weapon is a $2-million-plus investment over the past two years to upgrade technology, including a second-generation iPad app called ValueCheck. It helps the franchise know the repair costs and the recommended offer price on the house—two pieces of info that can make or break the HomeVestors business.
Todd Leff is CEO of Hand & Stone.
#20 Hand & Stone
Massage & facial spas
“Our biggest tactical shift in the last three to five years has been a focus on our skincare business,” said Todd Leff, CEO of what started as a massage-only concept. Skincare now makes up more than 30 percent of an average unit’s business, up from “basically zero” seven years ago. “Our skincare comps are running over 30 percent year over year. Our overall comps are running 16 percent year over year,” he added. “Device technology has been the explosive growth in the skincare market,” and Hand & Stone has been adding devices to provide new services, most recently hydrodermabrasion. “Traditional hydrodermabrasion machines in a dermatologist’s office cost $18,000. But us adjusting the technology and using purchasing power, we’ve been able to cut that cost in half,” he said, and in turn offering the service at an affordable price to Hand & Stone’s “middle market” customers. The franchise’s biggest challenge by far is finding technicians, so last year Leff started a centralized internal recruiting department to assist franchisees, and began spending some of its ad fund on campaigns directed at recruiting employees. “For this year we’ll spend over $500,000 on just those two items,” he said, meaning the recruiting initiatives. Leff was CEO of AAMCO before retiring in 2009, “and then about three months later got bored and invested in Hand & Stone,” he said, noting there’s “not like one phrase or one motto” that describes his philosophy toward growth. “I’ve been in franchising for a long time, and to me it’s about sustainable growth. I tell our team that if you open 50 or 60 new franchises a year and you don’t close any, you will be in the hall of fame of franchising,” he said. “We have not closed a location in the last three years and we’ve opened 50 or 60 new locations for the last five years. They’ve bought into the philosophy.”