Zaxby's has a polished interior with wood accents, communal tables and cozy booths.
Consumers are searching for fresher, healthier quick-service restaurants and a growing number of chicken franchises are ready and waiting with their tenders, wings and three-piece meals. The segment is booming and operators have several concepts from which to choose, but it’s Zaxby’s that rose to the top of our list with its strong return on investment and low unit closures standing out.
Athens, Georgia-based Zaxby’s opened 189 restaurants from 2014 to 2016 and closed just five during that time frame. Average unit volume was $1.91 million in 2016; and because Zaxby’s franchise disclosure document separates by range of performance the sales of its operators, we learned those ‘zees in the top 25 percent averaged $1.15 million in gross profit.
That’s in contrast to an investment range of $367,700 to $727,500, which though not inexpensive is lower than the other franchises we examined in this category.
Success as a franchisee in a concept that puts a premium on culture and customer loyalty doesn’t come without dedication and, at least in the beginning, long hours in the restaurant. Charlotte Haigler Proctor likes to tell prospective franchisees, “I hope you’re not considering being an absentee owner.”
“We ran our first store ourselves for a little over a year,” says Haigler Proctor, who with her brother Ron opened a Zaxby’s in Alpharetta, Georgia, in 2004. “That first year, we were there all the time and a little bit at each other’s throats. Eventually we found our strengths and then it becomes about finding the right managers as you grow.”
The sibling duo now have three units in and around Alpharetta, plus five in Louisville, Kentucky, where, with a business partner, they have the rights for four more.
Haigler Proctor, who left a career in nursing to sign a franchise agreement with Zaxby’s, briefly considered a couple other restaurant brands but says after she checked out a half dozen Zaxby’s locations in different markets to further examine the food, atmosphere and diner experience she was sold.
“We watched what was going on for the guest,” she recalls, “and what really stood out was just how helpful everyone was when we visited. Of course it’s the food, but we really love the core values and the mission statement” which are focused on the guest experience, operational excellence and continuous improvement.
It’s now a requirement by Zaxby’s as part of what the company calls the “interview” stage that those interested in the brand visit at least three stores and complete a report of their experiences before they meet with the franchise sales team in Athens. That step in joining the Zaxby’s family, as Haigler Proctor calls it, not only helps candidates as they complete their own due diligence process but is also a key indicator that the company isn’t just out to make sales.
Sterling Coleman was a longtime Zaxby’s customer before he opened his first restaurant in 2003. Working in consumer sales for brands such as Frito-Lay and Sara Lee, Coleman traveled often throughout the Southeast, where most of Zaxby’s 800-plus units are located, and says, “I would always stop when I saw one. I really loved the atmosphere and the food.” When he decided to leave the corporate world, Coleman considered a number of franchises, from retail gifts to cleaning services, but decided on a restaurant “because it’s a need—we need nourishment for ourselves.
“I looked at some different health-focused brands, Fresh To Order, Subway, and came back to Zaxby’s because their chicken is on the healthy side, but still Southern.”
Like Haigler Proctor, Coleman visited and even worked in a few Zaxby’s restaurants before signing an agreement for his first store and, also like his fellow franchisee, says being an active owner-operator at the outset is crucial.
“When I opened my first location, I literally opened and closed the store for 90 days straight without taking a day off,” he says. “It took a lot of discipline and it was also much needed as someone with a lot of business experience but not restaurant experience.”
Since opening his first Zaxby’s in metro Atlanta, Coleman has steadily added locations and now is president and CEO of SJAC Food Groups with eight Atlanta area restaurants and another nine in Oklahoma City after signing a 28-unit agreement in 2014 to develop the 28-year-old brand in that market. One of Coleman’s Atlanta stores is No. 1 in sales across the entire Zaxby’s system, with $4 million last year.
“Even as we’ve grown—especially as we’ve grown—I’m engaged in the business,” notes Coleman. “My passion has always been to be an owner-operator, so I’m probably still more hands on than a lot of owners. We are always watching our bottom line.”
While Coleman’s experience with Zaxby’s is largely positive, there have been pain points, particularly early on when “franchisees were sort of building on top of each other, which could make it really difficult.” That’s been corrected, though, and development areas are now well defined.
The company’s marketing support could still use some work, Coleman acknowledges, especially as it expands west where brand awareness is low. Franchisees contribute 1 percent of weekly gross sales to a national marketing fund.
“I’ve had to take some resources from my Georgia stores” to help build the brand in Oklahoma, Coleman explains. “So I want to see Zaxby’s continue more support of new markets and invest some advertising dollars.”
Even in established markets such as Haigler Proctor’s in Georgia, it’s incumbent upon the franchisees to drive sales if they want to grow their business.
“I believe if you really want to see the sales grow in your local market, you can’t just rely on what comes from corporate,” says Haigler Proctor. “We do a lot of our own local marketing, we’re involved in our community. You have to get out into the schools, the churches and community groups, you can’t just rely on the TV commercials or billboards.”
Both Haigler Proctor and Coleman cite the support of their fellow franchisees as a major plus in the Zaxby’s system and say they share numbers along with operational insight.
“There’s healthy competition and that’s great, but when you need help, that’s what makes you want to be a part of the company—it’s a family,” says Haigler Proctor.
— Laura Michaels
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