La Madeleine Starts Franchising



Operators eager to start selling Strawberries Romanoff may get your wish.

La Madeleine French Country Cafe, the French-style fast-casual concept operated by Bruegger's owner Le Duff America, has started franchising and sold its first units. The chain's first franchisee just signed his first lease for a location in Lubbock, Texas. "That's new for us," said Paul Carolan, chief development officer for Le Duff,  subsidiary of the French restaurant operator Groupe Le Duff. "All the stores you see on the street, save the airport, are all corporate."

The company launched franchising a year and a half ago and expects to sign agreements with 4-5 franchisees this year. Carolan said the company is attracting experienced operators to the brand, a key endorsement. Experienced operators are highly desireable franchisees, especially in the ultra-competitive restaurant business. And they only choose good, strong concepts. "We've got to be selective on who we partner with," Carolan said.

La Madeleine can attract these operators because it has good unit economics. Its restaurants are about 4,500 square feet, cost $1.2 million to build and generate more than $2 million in annual revenue, a strong sales-to-investment ratio. The chain has had positive comps dating back to 2010. It also genrates 42 percent of its sales after 2 p.m.--an unusually strong dinner business for a limited service concept.

The chain also generates 43 percent of revenues at lunch and 14 percent at dinner, givng it three good dayparts at a time when "every concept always has two really good dayparts and one they wish they could do something with," Carolan said.

And, apparently, some of those dayparts are quite busy--which is why the chain is now franchising. During a recent focus group of the chain's customers, one group member decided to bring up a complaint. "I thought, 'OK, here we go,'" Carolan said. "And then she says, 'It's so busy, nobody goes there.' That's like something Yogi Berra would say. 'Oh, nobody goes there, it's too busy.'

"We don't have enough locatons. They're not convenient enough, because they're too busy.we're trying to build them as fast as we can from a corporate perspective, and now we're franchising judiciously to build the brand."

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News, notes and commentary on franchise financing, including SBA lending, both the SBA 7(a) program and the SBA 504 program, franchise finance programs, development incentives, big deals and startup lending.

  Mary Jo Larson is the publisher of Franchise Times Magazine and its sister publication, the Restaurant Finance Monitor. She is a frequent speaker at meetings and conferences, and at the Restaurant Finance & Development Conference. You can find her on Twitter at @mlarson1011.
  Reporter Jonathan Maze covers restaurants and finance for Franchise Times. He also writes for our sister publication, The Restaurant Finance Monitor, and writes a daily blog on the restaurant industry at www.restfinance.com. You can also catch him on Twitter at @jonathanmaze.

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