With eco initiatives, franchises aim to reduce carbon footprint
McDonald’s built this flagship restaurant in Chicago’s River North neighborhood with renewable energy features such as solar panels, plus energy-efficient kitchen and HVAC equipment.
Franchise brands continue to expand their commitment to sustainability, shrinking their carbon footprints with steps ranging from using solar power and recycled building materials to energy-efficient lighting. But for many companies and franchisees, creating greener real estate spaces is still a careful balancing act between costs and ROI.
There are plenty of examples of companies that are pushing the envelope to go “greener” with new prototypes and a variety of sustainable initiatives. Dunkin’ offers a DD Green Achievement program designed to help franchisees build sustainable, energy-efficient restaurants. Since the launch in 2014 there are now 276 DD Green Achievement restaurants in the U.S., with a target goal to hit 500 by the end of 2020. Although the building program is optional for franchisees, elements of DD Green are being incorporated into the brand’s NextGen concept store design currently in the works.
McDonald’s also continues to expand its corporate commitment to sustainability. Last year the company addressed global climate change by setting a science-based target to significantly reduce its greenhouse gas emissions, notes Max Carmona, senior director of global restaurant design at McDonald’s Corp.
“Our ambition is to have the most resource-efficient restaurants possible, using the minimum amounts of energy and water, and maximizing the use of renewable energy,” says Carmona.
McDonald’s opened a new flagship restaurant in Chicago’s River North neighborhood last August that features an innovative environmentally friendly design. Some of the notable features include more than 1,000 solar panels that generate approximately 60 percent of the building’s electrical energy and more than 30,000 square feet of permeable pavers that contribute to storm water management.
Some of the push for green building is coming from franchisees, such as McDonald’s franchisee Ric Richardson, who built two Gold LEED-certified McDonald’s restaurants in Cary, North Carolina, in 2008 and 2014. Both restaurants utilize a variety of green technologies, products and practices. The restaurants were constructed from 100 percent recycled brick and use LED lighting throughout the exterior and interior. Solar tubes provide direct natural sunlight to illuminate the restaurant, while solar panels also harness energy that helps to reduce electricity use.
“We have franchisees that are passionate about energy efficiency. This gives us the ability to test innovation and ultimately determine scalability across other restaurant or in our new prototype designs,” adds Carmona.
Triple bottom line benefits
Green building continued to gain momentum over the past two decades as brands and franchise operators discover the triple bottom line benefit that includes positive environmental, social and financial impact.
Dunkin’s DD Green Achievement is a framework that franchisees can use to guide design and construction practices and help improve the energy efficiency and sustainability of restaurants. One of the big selling points for franchisees is that stores are approximately 25 percent more energy efficient than the previous restaurant model. The savings realized in terms of energy and water efficiency can have an impact on franchisees’ bottom lines, while the commitment to sustainability is something that resonates with customers and employees.
“So the value comes both from the positive reputational benefits, and also from the bottom line financial impact of utility cost savings,” says John Herth, senior director of global design and construction services at Dunkin’ Brands.
DD Green Achievement has three main themes: energy, water and health. Stores aim to reduce energy use by increasing the efficiency of the lighting and using high efficiency heating and cooling equipment to help lower energy use and emissions. Low-flow faucets and toilets are used to reduce water usage, while landscaping relies on more efficient irrigation and regionally friendly plants that need less water. The focus on health applies to indoor air quality, such as the use of zero VOC paint.
Eco-friendly concepts embrace green
For some franchisees, green building goes hand-in-hand with an eco-friendly business model. New Jersey-based Honor Yoga makes sustainable choices in how it designs, builds out and maintains its studios, from the bamboo floors and a “living wall” of plants to all-natural cleaning products and reusable cloth towels and water bottles.
“We’re thinking about the eco initiatives in the footprint of how we interact in the four walls,” says Maria Turco, founder and CEO of Honor Yoga, which has 10 locations open and another 15 in development in six states. In addition to working with sustainable vendors and suppliers on building materials and fixtures, studios rely on chalkboards or their digital app rather than paper brochures and flyers for class schedules. Turco hopes even those small changes encourage people to think about things differently in their everyday lives as it relates to reuse, reduce and recycle.
Zoom Room is a pet training concept that also embraces sustainability as part of its business model, ranging from the eco-friendly pet products it sells to green design features.
“Being environmentally responsible is really important to us, whether you are a business or a person, we want to be low impact and positive forces in the community,” says CEO Mark Van Wye.
Zoom Room uses sustainable materials, such as recycled tires to create its rubber gym floors, low or zero VOC paint, recycled glass tiles in the restrooms and retail fixtures that are made from recycled wheatboard. Van Wye did his own research on products to create that first store more than a decade ago, and it has been a continual learning process.
“As we grow, because it is something we care about, it’s great to talk with the contractors and have these conversations all over again,” says Van Wye.
Weighing cost vs ROI
A big hurdle for franchisees is juggling the up-front costs associated with green building. “It’s becoming more and more prevalent, but high initial costs are the biggest challenge to overcome,” says Adam Povlitz, president and CEO of Anago Cleaning Systems. “From green plumbing solutions that use less water to outfitting light ballasts to be LED compatible, everything is more expensive.”
Anago is working to obtain LEED certification of its new headquarters in Pompano Beach, Florida, based on its use of LED bulbs, reduction in water usage, blocking out heat via paints and tinting, high efficiency air conditioning, and using its own janitorial chemicals and equipment, which are Green Seal certified.
Many franchisees are still reluctant to spend that extra dollar on infrastructure amid other rising cost pressures, as well as other areas to invest, such as marketing, that can have a more direct impact on revenues, notes Patrick O’Neil, chief operating officer at JouleSmart, a company that provides intelligent building solutions.
“Most of our customers are certainly interested in sustainability and the green aspect of their operations, but few are willing to pay just for that,” he says.
Energy efficiency is one of the key focal points of green building, because the ROI on energy savings is usually an easy sell for operators. The common approach for franchisees is to cobble together different initiatives, such as working with one vendor to update lighting and others to add smart thermostats or upgrade HVAC equipment, notes O’Neil.
JouleSmart encourages franchisees to take a more holistic view and upgrade lighting, along with other aspects such as HVAC and equipment to create a bundled approach so that the ROI is blended with short and longer-term paybacks. This helps companies see immediate results on their bottom line. JouleSmart worked with a McDonald’s franchisee in New York that has seen about a 30 percent reduction in its energy costs.
“That is a big number for a franchise that is working off very tight margins,” says O’Neil.