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Developing a successful independent concept is different from expanding that concept into a franchise. A discussion at the Restaurant Franchising and Innovation Summit explored the journey of restaurants as they transition from startup to full growth mode.
Transitioning from a successful concept to a franchise can be challenging. At the Restaurant Franchising and Innovation Summit in Kansas City, Missouri held from March 24 to 26, industry experts delved into the process of scaling up restaurants.
Rachael Nemeth, the CEO and co-founder of Opus Training, facilitated the discussion featuring Craig Haley, the president of Smokey Mo’s TX BBQ, Josh Halpern, the CEO of Big Chicken, Andrew Pudalov, the founder and CEO of Rush Bowls, and Ryan Weaver, the CEO of Lee’s Famous Recipe Chicken.
Geographical Expansion
Determining growth strategies depends on the restaurant’s current position. For instance, Haley highlighted the transformative impact of the founder’s vision at Smokey Mo’s TX BBQ. However, they had to reevaluate their foundation to facilitate growth effectively.
In contrast, Big Chicken, linked to NBA player Shaquille O’Neal, witnessed rapid expansion which required meticulous management.
Halpern emphasized the importance of streamlining growth efforts to maintain coherence. He mentioned rejecting 4,200 franchisee applications to ensure alignment with their brand.
Pudalov stressed the significance of selecting compatible franchise partners, highlighting the role of a suitable partner in driving success.
Growth Management
One of the critical challenges in franchising or expansion is identifying the appropriate pace for growth, especially in challenging economic conditions.
Haley noted the escalating building and financial costs, posing difficulties for franchisees, particularly smaller operators with limited locations.
To address uncertainties, Smokey Mo’s TX BBQ opted to slow down its expansion pace. Pudaluv echoed this sentiment, emphasizing adherence to established formulas for projecting returns and future developments up to 2029.
Weaver advocated for cautious initial growth to pave the way for accelerated expansion later, creating a “flywheel effect” through meticulous planning.
In contrast, Halpern faced challenges in controlling growth pace due to external influences, focusing on ensuring strong leadership and operational readiness.
Technological Integration
Technology plays a crucial role in supporting restaurant growth. However, selecting the right technology solutions to address specific challenges remains a significant obstacle.
Halpern emphasized the importance of identifying the problem before implementing technology. Big Chicken leveraged technology for cost analysis and training purposes.
Haley emphasized the necessity for technology to provide value rather than imposing standardized solutions on franchisees.
Pudaluv warned against being swayed by superficial tech trends, advocating for careful consideration before adopting transformative technologies like AI.
Weaver shared a success story of implementing AI in their drive-thru operations, demonstrating tangible benefits based on data from experienced franchisees.
Training and Consistency
Effective training is vital for ensuring consistency in brand standards and customer experience, a core component of any growth strategy.
Halpern highlighted the importance of tailoring communication to employees’ preferences to ensure effective training outcomes.
Haley emphasized moving away from scripted training towards outcome-based approaches, focusing on the desired customer experience and food quality.
Weaver underscored the need for franchisees to diligently implement the training received during the comprehensive ‘Chicken School’ program.
Consistency is key to success in the restaurant industry. “Restaurants don’t fail due to bad ideas,” Haley noted. “Consistency is incredibly challenging.”
To maintain consistency, Haley suggested starting with a clear plan and regularly reassessing progress to ensure alignment with the initial vision.
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