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Top 40 Food and Beverage Franchises of 2017

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SPECIAL INDUSTRY REPORT<br />

FranchiseBusinessREVIEW<br />

Ratings <strong>and</strong> Reviews <strong>of</strong> the Best Franchise Opportunities by Franchisees<br />

www.FranchiseBusinessReview.com<br />

<strong>2017</strong><br />

TOP FOOD FRANCHISES<br />

Rated by the Franchisees Who Own Them<br />

Ranked #1 in overall franchisee satisfaction, Kona Ice has skyrocketed to nearly 1,000<br />

locations in 45 states since 2008.<br />

Pizza Factory’s<br />

Ernest Amorim shares<br />

tips for success<br />

PAGE 5<br />

A Look<br />

Inside the <strong>Top</strong><br />

<strong>Food</strong> <strong>Franchises</strong><br />

PAGE 8<br />

How Much Do<br />

<strong>Food</strong> & <strong>Beverage</strong><br />

Franchise Owners Make?<br />

PAGE 10


INGREDIENTS FOR SUCCESS<br />

TECH ADVANTAGE<br />

• One st<strong>and</strong>ardized POS system with mobile app <strong>and</strong> online ordering for all stores<br />

• Proprietary app to help you manage your business with “real time” sales figures, labor & more<br />

IMPRESSIVE SALES GROWTH<br />

• 7 years <strong>of</strong> consecutive same store sales growth*<br />

EXPERIENCED LEADERSHIP<br />

• Executives average 30 years <strong>of</strong> industry experience<br />

FIRST IN FLAVOR<br />

• The originators <strong>of</strong> Flavored Crust® Pizza with 8 customizable crust options<br />

• 100% mozzarella cheese<br />

• Dough made freshly daily right in-store<br />

ESTABLISHED BRAND WITH TERRITORIES AVAILABLE<br />

• Over 30 years <strong>of</strong> franchising<br />

INDUSTRY RECOGNITION<br />

• Technomic’s <strong>2017</strong> Consumers’ Choice Award Winner for “Overall Takeout Capabilities”<br />

• Entrepreneur Franchise 500 (2013-<strong>2017</strong>)<br />

• <strong>2017</strong> <strong>Top</strong> <strong>Franchises</strong> - Franchise Business Review<br />

To learn more go to<br />

franchising.hungryhowies.com<br />

or call us today at 248.414.3300<br />

*Results measure company-wide same store sales figures for each calendar year over the previous calendar year. The measuring period is January 1, 2010 through March 26, <strong>2017</strong>. Excludes store sales from the State <strong>of</strong> Florida, units which are not obligated to <strong>and</strong> do not report sales to Hungry Howie’s, <strong>and</strong> units which<br />

opened <strong>and</strong>/or closed during the measuring period. Not all individual stores experienced the same results. New franchisees may have results that differ. This advertisement is not an <strong>of</strong>fer <strong>of</strong> a franchise. <strong>Franchises</strong> are <strong>of</strong>fered <strong>and</strong> sold only through a Franchise Disclosure Document<br />

2016. STATE OF CALIFORNIA: THESE FRANCHISES HAVE BEEN REGISTERED UNDER THE FRANCHISE INVESTMENT LAW OF THE STATE OF CALIFORNIA. SUCH REGISTRATION DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION, OR ENDORSEMENT BY THE COMMISSIONER OF CORPORATIONS NOR A FINDING BY<br />

THE COMMISSIONER THAT THE INFORMATION PROVIDED HEREIN IS TRUE, COMPLETE, AND NOT MISLEADING.<br />

STATE OF NEW YORK: THIS ADVERTISEMENT IS NOT AN OFFERING. AN OFFERING CAN ONLY BE MADE BY A FRANCHISE DISCLOSURE DOCUMENT FILED WITH THE DEPARTMENT OF LAW OF THE STATE OF NEW YORK. SUCH FILING DOES NOT CONSTITUTE APPROVAL BY THE DEPARTMENT OF LAW OF THE STATE OF<br />

NEW YORK. MINNESOTA STATE REGISTRATION NUMBER F-2873.<br />

HUNGRY HOWIE’S PIZZA & SUBS INC., 30300 STEPHENSON HIGHWAY, SUITE 200, MADISON HEIGHTS, MI 48071, 248-414-3300


SPECIAL REPORT: <strong>Top</strong> <strong>Food</strong> <strong>Franchises</strong><br />

Features //<strong>2017</strong><br />

11<br />

4 13<br />

3 Letter from the Founder <strong>and</strong> CEO<br />

<strong>Top</strong> <strong>Food</strong> <strong>and</strong> <strong>Beverage</strong> <strong>Franchises</strong> Outpace Competition<br />

4 <strong>Food</strong> <strong>and</strong> <strong>Beverage</strong> <strong>Franchises</strong><br />

Businesses You Can Sink Your Teeth Into<br />

8 THE LIST<br />

Best <strong>of</strong> the Best: <strong>Top</strong> <strong>Food</strong> <strong>Franchises</strong><br />

14 Marketplace<br />

More on the award-winning<br />

franchise opportunities for <strong>2017</strong><br />

14 <strong>2017</strong>’s <strong>Top</strong> 200 ​<strong>Franchises</strong> Overall<br />

<strong>Franchises</strong> with high franchisee satisfaction​<br />

in every industry sector​<br />

Franchisee Pr<strong>of</strong>iles<br />

5 Ernest Amorim, Pizza Factory<br />

Get his tips for success.<br />

7 Dave Chantrell, The Melting Pot<br />

Providing guests with the Perfect Night Out.<br />

+<br />

Reviews, interviews, satisfaction awards,<br />

<strong>and</strong> more resources are available at:<br />

www.FranchiseBusinessReview.com<br />

LEARN WHAT FRANCHISING IS LIKE<br />

FROM REAL FRANCHISEES<br />

Access insightful franchisee Q&As, strategic advice <strong>and</strong> more.<br />

Visit FranchiseBusinessReview.com<br />

For more information on this report, visit: www.FranchiseBusinessReview.com | 1


YOU could be<br />

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THANK YOU Checkers & Rally’s Franchisees <strong>and</strong> Operators for<br />

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■ New Modular Building Design<br />

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Visit OwnCheckersFranchise.com/FBR<br />

or Call 888-913-9135<br />

© <strong>2017</strong> Checkers Drive-In Restaurants, Inc. 4300 W. Cypress St., Suite 600, Tampa, FL 33607. 1. Per Item 7 Checkers & Rally’s <strong>2017</strong> FDD. 2. Per Item 6 Checkers & Rally’s <strong>2017</strong> FDD. Written substantiation will be provided on request. This advertisement is not intended as an <strong>of</strong>fer to<br />

sell, or the solicitation <strong>of</strong> an <strong>of</strong>fer to buy, a franchise. It is for information purposes only. The franchisor, Checkers Drive-In Restaurants, Inc. is located at 4300 West Cypress Street, Suite 600, Tampa, Florida 33607, <strong>and</strong> is registered as file number F-4351 in the state <strong>of</strong> Minnesota.<br />

In New York, an <strong>of</strong>fering can only be made by a prospectus filed first with the Department <strong>of</strong> Law, <strong>and</strong> such filing does not constitute approval by that Department. <strong>2017</strong>1122


SPECIAL REPORT: <strong>Top</strong> <strong>Food</strong> <strong>Franchises</strong><br />

<strong>Top</strong> <strong>Food</strong> <strong>and</strong> <strong>Beverage</strong><br />

<strong>Franchises</strong> Outpace Competition<br />

High franchisee satisfaction <strong>and</strong> performance is driving double-digit<br />

growth at today’s top food <strong>and</strong> beverage franchise br<strong>and</strong>s<br />

Say the word “franchise” <strong>and</strong> most people immediately think food. “<strong>Food</strong>” is synonymous with<br />

franchising, <strong>and</strong> the food sector is one <strong>of</strong> the largest <strong>and</strong> most popular industries for people to<br />

consider when thinking about investing in a franchise.<br />

Despite the industry’s popularity, an investment in the food franchise is not a guaranteed<br />

slam-dunk. Franchise owners must overcome strong competition, fickle consumer tastes,<br />

fluctuating food costs, labor challenges, operational complexities, <strong>and</strong> many other business<br />

challenges. As one franchise operator put it, “A food franchise has more moving parts than<br />

almost any other business.” Yet for the right person who invests in the right franchise br<strong>and</strong>, the<br />

food industry can <strong>of</strong>fer an exciting, rewarding, <strong>and</strong> pr<strong>of</strong>itable opportunity.<br />

In this, our annual report on the <strong>Top</strong> <strong>Food</strong> <strong>and</strong> <strong>Beverage</strong>s <strong>Franchises</strong>, we’ll take a close look at<br />

the many opportunities within the food <strong>and</strong> beverage sector, <strong>and</strong> dramatically narrow down the<br />

list <strong>of</strong> potentials to just the highest rated br<strong>and</strong>s, based exclusively on our satisfaction research<br />

with franchisees. We will explore these award-winning opportunities <strong>and</strong> the outlook for the<br />

food <strong>and</strong> beverage industry, as well as discuss what it takes for a franchisee to be successful.<br />

A food franchise<br />

has more moving<br />

parts than almost<br />

any other business.<br />

Happy Franchising!<br />

Eric Stites, Founder <strong>and</strong> CEO<br />

Franchise Business Review is the leading national franchise market research firm<br />

that performs independent surveys <strong>of</strong> franchisee satisfaction <strong>and</strong> franchise buyer<br />

experiences. Before you invest in any franchise opportunity, read our reports to get<br />

the facts from those who know best—franchisees. We publish 13 annual research<br />

reports including <strong>Top</strong> <strong>Franchises</strong> Guide, <strong>Top</strong> Low-Cost <strong>Franchises</strong>, <strong>Top</strong> Multi-Unit<br />

<strong>Franchises</strong>, <strong>Top</strong> <strong>Food</strong> & <strong>Beverage</strong> <strong>Franchises</strong>, <strong>and</strong> <strong>Top</strong> <strong>Franchises</strong> for Veterans. All are<br />

available for free at FranchiseBusinessReview.com. To see our list <strong>of</strong> the top 200<br />

franchises according to the franchisees who own them, visit FBR50.com.<br />

Eric Stites, CEO & Managing Director<br />

Michelle Rowan, President & COO<br />

C.J. Fleck, Senior Web Developer<br />

Michael Kupfer, Online Marketing Manager<br />

Ali Forman, B2B Marketing Manager<br />

Nicole Kenney, Client Services Manager<br />

Linda Lorrey, Client Consultant<br />

Wes Graves, Client Consultant<br />

Amy LaLime, Office Manager<br />

Margot Doering, Accounting<br />

The Secret Agency, Design <strong>and</strong> Production<br />

Call us at 866-397-6680<br />

HOW WE IDENTIFY THE TOP FRANCHISES<br />

Participation in Franchise Business Review’s franchisee satisfaction<br />

research is free for all North American franchise systems with a<br />

minimum <strong>of</strong> 10 franchisees. For this report we looked at franchisee<br />

satisfaction from over 4,300 franchisees representing nearly 100 food<br />

br<strong>and</strong>s that we collected between February 2016 <strong>and</strong> July <strong>2017</strong>.<br />

We asked each franchisee to answer 33 benchmark questions ranking<br />

their franchise in the areas <strong>of</strong> financial opportunity, training <strong>and</strong> support,<br />

leadership, operations <strong>and</strong> product development, core values (e.g., honesty<br />

<strong>and</strong> integrity <strong>of</strong> franchisor), general satisfaction, <strong>and</strong> the franchisee<br />

community. We also asked them to answer an additional 16 questions<br />

about their market area, demographics, business lifestyle, overall<br />

enjoyment running their franchise, <strong>and</strong> role in the franchisee community.<br />

From this data, we identified our list <strong>of</strong> top food franchises with the<br />

highest franchisee satisfaction. More detailed information about our<br />

research methodology is available at FranchiseBusinessReview.com.<br />

Surveys to determine the <strong>Top</strong> <strong>Franchises</strong> for 2018 are underway.<br />

If you are a franchisor <strong>and</strong> would like to participate, please call 866-397-<br />

6680 or contact info@FranchiseBusinessReview.com.<br />

For more information on this report, visit: www.FranchiseBusinessReview.com | 3


SPECIAL REPORT: <strong>Top</strong> <strong>Food</strong> <strong>Franchises</strong><br />

Above: Pizza Factory franchisees<br />

serve up piping hot pizza goodness.<br />

Right: Fast-casual concept, Zoup!,<br />

<strong>of</strong>fers guests award-winning soups,<br />

salads, <strong>and</strong> s<strong>and</strong>wiches.<br />

<strong>Food</strong> <strong>and</strong> <strong>Beverage</strong> <strong>Franchises</strong>:<br />

Businesses You Can Sink Your Teeth Into<br />

BUSINESS MODELS AND CONCEPTS<br />

Although food <strong>and</strong> beverages are at the heart<br />

<strong>of</strong> every concept within this franchise category,<br />

there are countless investment options, business<br />

models, <strong>and</strong> types to choose from.<br />

A prospective franchisee can choose to run<br />

anything from a van-based, delivery business<br />

to a full-service restaurant—with dozens <strong>of</strong><br />

other business types in between.<br />

A food <strong>and</strong>/or beverage franchise can be<br />

a substantial moneymaker, <strong>and</strong> multi-unit<br />

operators in particular may realize a significant<br />

return on their investment once they are<br />

established. The wide range <strong>of</strong> business models<br />

within the food <strong>and</strong> beverage franchise sector<br />

makes the business a feasible endeavor at<br />

almost any investment level.<br />

Franchise Business Review surveyed over<br />

4,300 franchisees from nearly 100 different<br />

food <strong>and</strong> beverage br<strong>and</strong>s to name this year’s<br />

<strong>Top</strong> <strong>40</strong> <strong>Food</strong> <strong>and</strong> <strong>Beverage</strong> <strong>Franchises</strong>.<br />

In terms <strong>of</strong> food <strong>and</strong> beverage types, this<br />

year’s <strong>Top</strong> <strong>40</strong> <strong>Food</strong> <strong>and</strong> <strong>Beverage</strong> <strong>Franchises</strong><br />

list <strong>of</strong>fers a little bit <strong>of</strong> everything—pizza,<br />

burgers, wings, s<strong>and</strong>wiches, tacos, fish, ice<br />

4 | For more information on this report, visit: www.FranchiseBusinessReview.com


SPECIAL REPORT: <strong>Top</strong> <strong>Food</strong> <strong>Franchises</strong><br />

cream, c<strong>of</strong>fee, soup, <strong>and</strong> more. While Subway<br />

<strong>and</strong> McDonald’s may be among the biggest<br />

br<strong>and</strong>s in the industry, it’s <strong>of</strong>ten smaller<br />

regional players like Checkers & Rally’s, East<br />

Coast Wings & Grill, <strong>and</strong> Lenny’s Subs that<br />

dominate when it comes to franchisee satisfaction<br />

<strong>and</strong> long-term growth opportunities.<br />

“First <strong>and</strong> foremost, it’s our people <strong>and</strong><br />

the team that we have built—coupled with a<br />

rebuilding <strong>of</strong> our br<strong>and</strong>,” said Kevin Martin,<br />

President <strong>and</strong> CEO <strong>of</strong> Lenny’s Subs. “That<br />

combination has really made a difference in<br />

how we interact with our franchisees, <strong>and</strong> the<br />

confidence they have in our ability to carry the<br />

br<strong>and</strong> forward.”<br />

Martin, who grew up a Bobby Knight fan<br />

<strong>and</strong> dreamed <strong>of</strong> playing basketball for the<br />

Hoosiers, joined Lenny’s Subs in 2013 as an<br />

owner <strong>and</strong> CFO. Stepping into the CEO role<br />

last year, Martin takes a servant leadership<br />

approach, <strong>and</strong> he is committed to the growth<br />

<strong>of</strong> Lenny’s through serving their guests <strong>and</strong><br />

franchisees.<br />

That laser focus on people, br<strong>and</strong>, <strong>and</strong><br />

unit-level economics—helping drive bottom<br />

line pr<strong>of</strong>its for franchisees, not just top line<br />

sales—is a common thread with many <strong>of</strong><br />

the br<strong>and</strong>s on our <strong>2017</strong> <strong>Top</strong> <strong>40</strong> <strong>Food</strong> <strong>and</strong><br />

<strong>Beverage</strong> <strong>Franchises</strong> list.<br />

FRANCHISE RELATIONS KEY TO SUCCESS<br />

For anyone considering an investment in a<br />

franchise business, it’s so important to do your<br />

homework. Every franchise company has a<br />

different culture, <strong>and</strong> a different approach<br />

to training, support, <strong>and</strong> on-going franchise<br />

relations.<br />

“To be ranked as a top food franchise by<br />

FBR is a great validation for our continuous<br />

efforts to find ways to strengthen <strong>and</strong> enhance<br />

the relationships we have with our franchisees,”<br />

says Jennifer Durham, Vice President<br />

<strong>of</strong> Franchise Development for Checkers &<br />

Rally’s Restaurants, Inc. “As we grow to more<br />

than 850 locations, we will continue providing<br />

franchisees <strong>of</strong> varying backgrounds with personal<br />

support so they can continue building a<br />

successful restaurant business.”<br />

At the end <strong>of</strong> the day, successful franchising<br />

is all about relationships <strong>and</strong> treating<br />

franchisees like the business partners they<br />

truly are. At many companies, franchisee concerns<br />

can take a back seat to the vision <strong>and</strong><br />

direction senior management <strong>and</strong> investors<br />

have for the br<strong>and</strong>. Certainly, not all franchises<br />

have alignment when it comes to the key<br />

stakeholders. On the flip side, the companies<br />

on our <strong>Top</strong> <strong>40</strong> <strong>Food</strong> <strong>and</strong> <strong>Beverage</strong> <strong>Franchises</strong><br />

list go out <strong>of</strong> their way to make franchisee<br />

performance <strong>and</strong> success their top priority.<br />

“We’re honored to be recognized by<br />

Franchise Business Review, <strong>and</strong> we’re proud<br />

that our team <strong>and</strong> family <strong>of</strong> franchisees have<br />

achieved this award by working together,”<br />

continued Durham. “We look forward to<br />

providing one <strong>of</strong> the best franchising opportunities<br />

in the U.S. to the growing number<br />

<strong>of</strong> franchisees joining our br<strong>and</strong>, <strong>and</strong> as<br />

we open new locations, we are happy to <strong>of</strong>fer<br />

the famous Checkers & Rally’s experience to<br />

more guests.”<br />

Strong franchise relationships are just one<br />

<strong>of</strong> the keys fueling Golden Corral’s success.<br />

The full-service restaurant concept, famous for<br />

their comfort food buffets, generates average<br />

annual sales <strong>of</strong> over $3.5 million from many<br />

<strong>of</strong> its larger locations, <strong>and</strong> nearly $5 million on<br />

average from its top performing restaurants.<br />

“What makes Golden Corral unique is that<br />

we concentrate on making sure our franchisees<br />

are engaged <strong>and</strong> involved in every decision—<br />

even the little ones,” says Bob McDevitt, who is<br />

SVP <strong>of</strong> Franchise Development for the company.<br />

While investing in a Golden Corral franchise<br />

would set you back something north <strong>of</strong><br />

$2 million <strong>and</strong> is only for seasoned restaurant<br />

operators, Kona Ice <strong>of</strong>fers franchise opportunities<br />

a little better suited for first-time<br />

business owners with more limited financial<br />

means.<br />

Kona Ice earned the #1 spot on the Franchise<br />

Business Review <strong>2017</strong> <strong>Top</strong> <strong>Franchises</strong><br />

list this year, beating out more than 350 other<br />

franchise br<strong>and</strong>s, <strong>and</strong> posting the highest<br />

franchisee satisfaction score in the history <strong>of</strong><br />

our 12 years <strong>of</strong> franchise research.<br />

Kentucky-based Kona Ice quietly appeared<br />

on the franchise scene back in 2008 with the<br />

goal to disrupt the ice cream truck business.<br />

With their flavorful shaved ice products, fun<br />

br<strong>and</strong>ing, <strong>and</strong> a core mission <strong>of</strong> giving back,<br />

Kona Ice has skyrocketed to nearly 1,000 franchises<br />

in 45 states (including nine in Hawaii)<br />

<strong>and</strong> raised over $<strong>40</strong> million dollars for local<br />

charities.<br />

Kona Ice founder <strong>and</strong> CEO Tony Lamb<br />

is humbled by their growth <strong>and</strong> success.<br />

“The ONLY metric we go by is franchisee<br />

FEATURED<br />

Franchisee<br />

Ernest Amorim<br />

Pizza Factory<br />

South Salinas, North Salinas,<br />

Gustine & Santa Nella, CA<br />

Franchisee since 2005<br />

What was it about the franchise model <strong>and</strong>/or<br />

leadership that led you to purchase it?<br />

What drew me to Pizza Factory was the amazing<br />

food <strong>and</strong> how the restaurant would be involved<br />

with the community <strong>and</strong> schools. At the time<br />

I purchased the franchise, it wasn’t growing as<br />

much as they are today. With the current new<br />

leadership in place, I feel really confident in the<br />

direction we’re headed.<br />

What type <strong>of</strong> business experience, education,<br />

<strong>and</strong>/or skills did you have prior to becoming<br />

a franchisee that you have found particularly<br />

helpful? I had just graduated with a degree in<br />

Business Administration from Cal State Stanislaus<br />

when I purchased my first store. I had also worked<br />

in restaurants <strong>and</strong> customer service. The skills<br />

I attained were good building blocks for starting<br />

my own franchise.<br />

What things do you like most about your job?<br />

What I like most is working with my managers<br />

<strong>and</strong> employees to always improve our stores <strong>and</strong><br />

customer experiences. I also like working with all<br />

the communities we are a part <strong>of</strong>.<br />

How did you fund your franchise? I purchased<br />

my first store with a loan from my parents. It was<br />

a big help not having to pay interest, especially<br />

when first starting out!<br />

What advice do you have for prospective<br />

franchise buyers? Make sure you want to be the<br />

face <strong>of</strong> your stores or have someone who cares<br />

as much as you do be that person. Don’t get into<br />

a franchise because other franchisees are making<br />

a lot <strong>of</strong> money—it doesn’t always translate to<br />

every store. Research the area you want to open,<br />

<strong>and</strong> ask existing franchisees a lot <strong>of</strong> questions.<br />

For more information about Pizza Factory<br />

opportunities, call (562) 3<strong>40</strong>-6925 or visit<br />

www.pizzafactoryfranchise.com.<br />

For more information on this report, visit: www.FranchiseBusinessReview.com | 5


SPECIAL REPORT: <strong>Top</strong> <strong>Food</strong> <strong>Franchises</strong><br />

A Look at <strong>Food</strong> Franchisees<br />

71%<br />

18%<br />

male/female<br />

11% partnerships<br />

Mutli-unit owners make<br />

up more than half <strong>of</strong> all<br />

food franchisees surveyed.<br />

51% own at least two units<br />

<strong>and</strong> 49% own one.<br />

64%<br />

have a Bachelor’s degree or higher.<br />

29%<br />

<strong>of</strong> <strong>Food</strong> franchises<br />

are minority-owned.<br />

Nearly a third<br />

<strong>of</strong> <strong>Food</strong> franchisees<br />

have been in business<br />

10 years or more.<br />

happiness. . .our FBR franchisee satisfaction<br />

score,” said Lamb.<br />

Last year, Lamb took his corporate team<br />

<strong>of</strong> 35 people to Orl<strong>and</strong>o, <strong>and</strong> put them all up<br />

for a few nights at a Four Seasons Hotel to<br />

help embed the feeling <strong>of</strong> “above <strong>and</strong> beyond<br />

customer service.”<br />

“They all came back so inspired to treat<br />

customers at an unbelievable degree,” continued<br />

Lamb. And his message to the team after<br />

the trip? “This is how we want to treat our<br />

franchisees each <strong>and</strong> every day! These are our<br />

customers. . . the people we know, <strong>and</strong> love.<br />

And they’re the ones that pay our salaries!”<br />

Lamb’s leadership <strong>and</strong> focus on franchisee<br />

satisfaction has created strong dem<strong>and</strong> for<br />

their franchise opportunity. If you want to<br />

invest in a Kona Ice franchise, you might have<br />

to get in line. In fact, Kona is selling their<br />

custom shaved ice trucks as fast as they can<br />

build them—as existing franchisees continue<br />

to exp<strong>and</strong> <strong>and</strong> dozens <strong>of</strong> new franchisees join<br />

their system.<br />

Kona’s total franchise investment ranges<br />

between $120,000–$1<strong>40</strong>,000, much <strong>of</strong> which<br />

is the cost <strong>of</strong> the truck itself—which can be<br />

financed. Actual startup capital required to<br />

get into the franchise starts at around $25,000.<br />

And Kona Ice has a unique fee structure compared<br />

to many other franchises—charging a<br />

flat royalty fee starting at just $3,000 per year,<br />

<strong>and</strong> a $500 per year marketing fee.<br />

31 % Nebraska-based Scooter’s C<strong>of</strong>fee focuses on quality beverages, speedy service, <strong>and</strong> big smiles.<br />

32% <strong>of</strong> <strong>Food</strong> franchisees make<br />

$100,000 or more in pre-tax<br />

income. That jumps to 37%<br />

for franchisees who have been<br />

in business longer than 2 years.<br />

INVESTMENT RANGES AND<br />

CAPITAL REQUIREMENTS<br />

The food <strong>and</strong> beverage services sector <strong>of</strong>fers a<br />

wide range <strong>of</strong> investment options for prospective<br />

franchisees. Some concepts require less<br />

than $100,000 to get started, while others can<br />

cost millions. The investment range <strong>of</strong> our<br />

<strong>2017</strong> <strong>Top</strong> <strong>40</strong> <strong>Food</strong> <strong>and</strong> <strong>Beverage</strong> <strong>Franchises</strong><br />

starts at $45,000 for a Happy <strong>and</strong> Healthy<br />

Products franchise (distributors <strong>of</strong> Fruitful<br />

ice pops) to upwards <strong>of</strong> several million dollars<br />

required to open a Golden Corral. The median<br />

initial investment <strong>of</strong> our <strong>Top</strong> <strong>40</strong> averages out<br />

at $450,000.<br />

6 | For more information on this report, visit: www.FranchiseBusinessReview.com


SPECIAL REPORT: <strong>Top</strong> <strong>Food</strong> <strong>Franchises</strong><br />

It’s critical that you go into a new business<br />

being properly capitalized. That being said, it’s<br />

important to emphasize that the figures listed<br />

above are the total initial investment, but with<br />

financing <strong>and</strong> lease options, the typical upfront<br />

cash requirements tend to be much lower.<br />

Using the example <strong>of</strong> buying a home, the<br />

total value <strong>of</strong> a house might be $300,000, but<br />

you’re only required to put down $30,000<br />

cash, or even less. Investing in a franchise<br />

business is similar. For example, a Marco’s<br />

Pizza franchise might cost $<strong>40</strong>0,000 “all in,”<br />

but the liquid capital requirements (the cash<br />

you need to have initially) starts at $100,000<br />

with the balance being financed through business<br />

loans.<br />

The size <strong>of</strong> the initial investment typically<br />

depends on the real estate <strong>and</strong> equipment<br />

needed to run the business. Businesses that are<br />

delivery-based <strong>and</strong> do not require a large<br />

physical footprint are obviously far less expensive.<br />

A business based in a retail strip center<br />

can cost less than $250,000, depending on<br />

square footage, build-out, <strong>and</strong> equipment<br />

needs. On the other h<strong>and</strong>, a full-service<br />

restaurant, which requires a large, st<strong>and</strong>-alone<br />

site (<strong>and</strong> more employees <strong>and</strong> overhead for<br />

day-to-day operation), typically starts at over<br />

a million dollars.<br />

The time investment for a food service<br />

franchisee varies as much as the monetary<br />

investment, depending on the size <strong>and</strong> capacity<br />

<strong>of</strong> the franchise concept, the number <strong>of</strong> locations,<br />

<strong>and</strong> how long the franchisee has been<br />

in business. Obviously, the more employees<br />

a business has, the more management is<br />

required on the part <strong>of</strong> the franchisee. Distributor-type<br />

concepts can sometimes be run on a<br />

part-time basis, <strong>and</strong> some <strong>of</strong> the snack/pizza/<br />

ice cream concepts <strong>of</strong>fer more flexibility. Fullservice<br />

<strong>and</strong> breakfast-to-dinner QSR concepts,<br />

on the other h<strong>and</strong>, require considerable night<br />

<strong>and</strong> weekend involvement. Even franchisees<br />

with onsite managers to h<strong>and</strong>le day-to-day<br />

operations must invest a lot <strong>of</strong> time promoting<br />

<strong>and</strong> marketing their businesses.<br />

PROFITABILITY AND INCOME<br />

The number one question any potential franchisee<br />

wants to know is “How much money<br />

can I make?” The quick answer is if you’re<br />

lucky, you might get rich. Alternatively, you<br />

might lose your entire investment. The reality<br />

for most franchisees is somewhere in between.<br />

Exactly how much money YOU will make<br />

as a food franchise owner is a difficult question<br />

to answer. There are many factors that will<br />

influence your potential earnings, the biggest<br />

<strong>of</strong> which include the br<strong>and</strong> you invest in, <strong>and</strong><br />

your own personal performance as a business<br />

owner.<br />

It’s true that some people in franchising—<br />

we’ll call them the top performers—have<br />

done very well for themselves. These are most<br />

<strong>of</strong>ten the people that end up owning multiple<br />

franchise locations, <strong>and</strong> have built a successful<br />

team <strong>of</strong> people around them. This group<br />

represents only about 20% <strong>of</strong> the franchisee<br />

universe, yet it is their success stories that<br />

attract thous<strong>and</strong>s <strong>of</strong> people to invest in a franchise<br />

every year.<br />

So what about the other 80% you ask?<br />

From our survey research for this report,<br />

the average annual income (defined as any<br />

income, salary, or pr<strong>of</strong>it the owner takes out <strong>of</strong><br />

the business) for the “average food franchisee”<br />

that had been in business at least two years,<br />

is $117,000. Additionally, franchisees from<br />

our <strong>Top</strong> <strong>40</strong> br<strong>and</strong>s report even higher annual<br />

incomes—roughly 15% to 20% higher.<br />

While aggregate income data like this can be<br />

an interesting starting point, it is important to<br />

note that average numbers can be misleading.<br />

Average income data includes all franchisees<br />

together—both single <strong>and</strong> multi-unit owners—<br />

as well as franchisees that have been operating<br />

for many years. Those “top performers” in every<br />

br<strong>and</strong> can dramatically inflate the averages.<br />

In most cases, median income data can be<br />

much more useful, <strong>and</strong> more accurately predict<br />

what you or the typical franchisee might<br />

earn. In the case <strong>of</strong> our food <strong>and</strong> beverage<br />

franchisee data, the median annual income<br />

is around $70,000, <strong>and</strong> if we include startup<br />

franchisees (those in business for less than<br />

two years) the median falls to around $50,000.<br />

Only 34% <strong>of</strong> all food franchise owners earned<br />

more than $100,000 last year—<strong>and</strong> many<br />

earned much less.<br />

When doing your research <strong>and</strong> business<br />

planning, it is also important to distinguish<br />

between “business pr<strong>of</strong>it” <strong>and</strong> “owner<br />

income.” Prospective franchisees <strong>of</strong>ten confuse<br />

a business’s pr<strong>of</strong>its with their potential<br />

annual income/salary, which is a big mistake.<br />

Continued on page 10.<br />

FEATURED<br />

Franchisee<br />

Dave Chantrell<br />

The Melting Pot<br />

Richmond, VA<br />

<strong>and</strong> Louisville, KY<br />

Franchisee since 2016<br />

What type <strong>of</strong> business experience, education,<br />

<strong>and</strong>/or skills did you have prior to becoming a<br />

franchisee that you found particularly helpful?<br />

Having joined the Melting Pot as a server while<br />

attending the University <strong>of</strong> Virginia, allowed me<br />

to fully underst<strong>and</strong> the culture <strong>of</strong> the Melting Pot<br />

<strong>and</strong> the importance <strong>of</strong> providing each guest with<br />

the Perfect Night Out.<br />

What do you like most about your job? The best<br />

part <strong>of</strong> my job is seeing someone experience<br />

fondue for the first time. They leave really<br />

enjoying the dining style <strong>and</strong> the conversational<br />

environment it provides. The connection with the<br />

guests <strong>and</strong> building those relationships is what<br />

has made me successful in this company.<br />

How did you fund your franchise? When the<br />

opportunity arose to purchase the Richmond<br />

Melting Pot, my partner, Brian Tunney, <strong>and</strong><br />

I contacted the bank for a Small Business<br />

Association loan. This was a longer than expected<br />

process, but it was worth all the effort.<br />

What do you wish you had known prior to going<br />

into franchising? I wish I would have had more<br />

experience marketing <strong>and</strong> some general<br />

bookkeeping s<strong>of</strong>tware knowledge. Learning<br />

those two things have been the biggest<br />

challenges but have helped me meet others<br />

within the company <strong>and</strong> many local business<br />

partners.<br />

What advice do you have for prospective<br />

franchise buyers? Spreading the love <strong>and</strong><br />

tradition <strong>of</strong> fondue has become a long-term goal<br />

for me. Locally, we target younger audiences to<br />

invite them to celebrate straight A’s, perfect<br />

attendance, <strong>and</strong> even first dates or prom dinner<br />

with us. Remember, buying a restaurant is a<br />

long-term investment, so I start by investing<br />

in the younger guests.<br />

For more information about Melting Pot<br />

opportunities, call (813) 425-6209 or visit<br />

www.meltingpotfranchise.com.<br />

For more information on this report, visit: www.FranchiseBusinessReview.com | 7


SPECIAL REPORT: <strong>Top</strong> <strong>Food</strong> <strong>Franchises</strong><br />

THE LIST<br />

Best <strong>of</strong> the Best:<br />

Today’s <strong>Top</strong> <strong>40</strong><br />

<strong>Food</strong> <strong>Franchises</strong><br />

Bahama Buck’s<br />

Ice cream/Yogurt/Frozen treats<br />

Biggby C<strong>of</strong>fee<br />

<strong>Beverage</strong>s<br />

Survey<br />

Date<br />

Sep.<br />

2016<br />

Oct.<br />

2016<br />

Startup<br />

Investment<br />

$223,346 –<br />

$720,825<br />

Cash<br />

Requirement<br />

Total<br />

Units<br />

$90,000 89<br />

$220,000 $70,000 254<br />

Billy Sims Barbecue<br />

Fast casual<br />

Jan.<br />

<strong>2017</strong><br />

$169,000 –<br />

$433,000<br />

$60,000 59<br />

Buffalo Wings & Rings<br />

Fast casual<br />

Jan.<br />

<strong>2017</strong><br />

$1,224,000 –<br />

$3,085,000<br />

$300,000 57<br />

“[Franchisee Training<br />

<strong>and</strong> Support] is as<br />

good as it has ever<br />

been in my 39 years<br />

being in the business<br />

with Captain D's.”<br />

– Captain D's Franchisee<br />

* Captain D’s — more on p. 13<br />

Fast casual<br />

* Checkers & Rally’s — more on p. 2<br />

Quick-service<br />

Dick’s Wings & Grill/<br />

American Restaurant Concepts<br />

Casual dining<br />

Donatos Pizza<br />

Quick-service<br />

* East Coast Wings & Grill — more on p. 12<br />

Casual dining<br />

June<br />

<strong>2017</strong><br />

May<br />

<strong>2017</strong><br />

Jan.<br />

2016<br />

July<br />

<strong>2017</strong><br />

April<br />

<strong>2017</strong><br />

$771,000 –<br />

$1,003,000<br />

$96,414 –<br />

$1,501,265<br />

$237,500 –<br />

$772,500<br />

$449,000 –<br />

$667,000<br />

$658,875 –<br />

$1,133,502<br />

$350,000 844<br />

$250,000 855<br />

$100,000 23<br />

$449,000 –<br />

$667,000<br />

152<br />

$250,000 35<br />

Fazoli’s Restaurants<br />

Fast casual<br />

May<br />

<strong>2017</strong><br />

$883,000 –<br />

$1,399,000<br />

$250,000 334<br />

Fuzzy’s Taco Shop<br />

Fast casual<br />

Oct.<br />

2016<br />

$335,000 –<br />

$1,035,000<br />

$250,000 112<br />

Golden Corral Buffet & Grill — more on p. 15<br />

Casual dining<br />

Nov.<br />

2016<br />

$2,120,644 –<br />

$6,170,713<br />

$500,000 482<br />

Ground Round Grill & Bar<br />

Casual dining<br />

April<br />

2016<br />

$450,000 –<br />

$2,200,000<br />

$350,000 27<br />

* Happy & Healthy Products, Inc.<br />

Ice cream/Yogurt/Frozen treats<br />

April<br />

<strong>2017</strong><br />

$45,000 –<br />

$90,000<br />

$45,000 –<br />

$90,000<br />

65<br />

* Hungry Howie’s Pizza —<br />

Quick-service<br />

more on inside front cover<br />

Nov.<br />

2016<br />

$251,375 –<br />

$495,850<br />

$100,000 548<br />

Hwy 55 Burgers Shakes & Fries<br />

Casual dining<br />

Oct.<br />

2016<br />

$191,255 –<br />

$385,155<br />

$125,000 137<br />

Jamba Juice<br />

Fast casual<br />

Dec.<br />

2015<br />

$201,000 –<br />

$619,300<br />

$350,000 953<br />

Jason’s Deli<br />

Fast casual<br />

April<br />

<strong>2017</strong><br />

$905,891 $905,891 261<br />

*This br<strong>and</strong>’s Franchisee<br />

Satisfaction Report is available at<br />

www.FranchiseBusinessReview.com<br />

* Kona Ice<br />

Ice cream/Yogurt/Frozen treats<br />

LaRosa’s Pizzeria<br />

Fast casual<br />

July<br />

<strong>2017</strong><br />

April<br />

2016<br />

$120,225 –<br />

$143,025<br />

$800,000 –<br />

$1,000,000<br />

$20,000 941<br />

$500,000 66<br />

8 | For more information on the companies in this report, visit www.FBR50.com


SPECIAL REPORT: <strong>Top</strong> <strong>Food</strong> <strong>Franchises</strong><br />

Survey<br />

Date<br />

Startup<br />

Investment<br />

Cash<br />

Requirement<br />

Total<br />

Units<br />

Lenny’s Sub Shop — more on p. 14<br />

Quick-service<br />

July<br />

2016<br />

$188,216 –<br />

$396,146<br />

$75,000 96<br />

Marco’s Pizza<br />

Quick-service<br />

July<br />

2016<br />

$221,592 –<br />

$546,592<br />

$221,592 –<br />

$546,592<br />

682<br />

Mooyah Burgers & Fries<br />

Quick-service<br />

July<br />

<strong>2017</strong><br />

$412,750 –<br />

$620,000<br />

$250,000 98<br />

Nothing Bundt Cakes<br />

Snack retailer<br />

May<br />

<strong>2017</strong><br />

$392,875 –<br />

$545,475<br />

$150,000 168<br />

Penn Station<br />

Quick-service<br />

March<br />

2016<br />

$293,102 –<br />

$593,027<br />

$300,000 310<br />

Pizza Factory — more on p. 5<br />

Quick-service<br />

Planet Sub<br />

Quick-service<br />

Scooter’s C<strong>of</strong>fee<br />

Fast casual<br />

* Smoothie King — more on p. 16<br />

Fast casual<br />

Oct.<br />

2016<br />

Jan.<br />

2016<br />

Sep.<br />

2016<br />

April<br />

<strong>2017</strong><br />

$156,000 –<br />

$643,500<br />

$182,500 –<br />

$<strong>40</strong>2,000<br />

$334,000 –<br />

$514,000<br />

$225,650 –<br />

$426,185<br />

$90,000 109<br />

$100,000 58<br />

$100,000 167<br />

$100,000 907<br />

“Their core values reflect<br />

what is truly important<br />

to them as an<br />

organization... They are<br />

what holds the company<br />

culture together.”<br />

– Lenny's Sub Shop Franchisee<br />

The Haagen-Dazs Shoppe Company<br />

Ice cream/Yogurt/Frozen treats<br />

July<br />

<strong>2017</strong><br />

$154,158 –<br />

$542,<strong>40</strong>8<br />

$154,158 –<br />

$542,<strong>40</strong>8<br />

206<br />

The Honeybaked Ham Co. And Cafe<br />

Fast casual<br />

July<br />

2016<br />

$299,200 –<br />

$468,200<br />

$100,000 <strong>40</strong>5<br />

The Melting Pot Restaurants Inc. — more on p. 7<br />

Casual dining<br />

June<br />

<strong>2017</strong><br />

$969,227 –<br />

$1,441,089<br />

$325,000 125<br />

The Wendy’s Company<br />

Quick-service<br />

<strong>Top</strong>pers Pizza<br />

Quick-service<br />

Tropical Smoothie Cafe<br />

Fast casual<br />

Uno Chicago Grill<br />

Fast casual<br />

Wings Etc.<br />

Fast casual<br />

June<br />

<strong>2017</strong><br />

Aug.<br />

2016<br />

Nov.<br />

2016<br />

April<br />

2016<br />

June<br />

<strong>2017</strong><br />

$300,000 –<br />

$3,000,000<br />

$291,666 –<br />

$527,152<br />

$198,050 –<br />

$478,550<br />

$736,000 –<br />

$1,850,500<br />

$300,000 –<br />

$780,000<br />

$2,000,000 6,564<br />

$150,000 99<br />

$125,000 541<br />

$750,000 196<br />

$300,000 –<br />

$780,000<br />

<strong>40</strong><br />

“World class organization!<br />

Everybody in our Support<br />

center cares a great<br />

deal about the franchise<br />

system <strong>and</strong> are there<br />

to help in any way<br />

they can.”<br />

– The Wendy's Company Franchisee<br />

Wingstop<br />

Quick-service<br />

April<br />

<strong>2017</strong><br />

$227,888 –<br />

$650,790<br />

$200,000 725<br />

Zaxby’s<br />

Fast casual<br />

Nov.<br />

2016<br />

$352,000 –<br />

$664,300<br />

$300,000 946<br />

Zoup! — more on p. 17<br />

Quick-service<br />

June<br />

2016<br />

$321,<strong>40</strong>0 –<br />

$609,<strong>40</strong>0<br />

$321,<strong>40</strong>0 –<br />

$609,<strong>40</strong>0<br />

87<br />

For more information on the companies in this report, visit www.FBR50.com | 9


SPECIAL REPORT: <strong>Top</strong> <strong>Food</strong> <strong>Franchises</strong><br />

Continued from page 7.<br />

As a business owner, before you can “pay<br />

yourself,” you <strong>of</strong>ten have to pay business taxes,<br />

debt repayments on loans, <strong>and</strong> reinvest in<br />

your business (that new piece <strong>of</strong> equipment<br />

you need, or the new signage you’re required<br />

to buy, for example). While your business may<br />

grow to be quite pr<strong>of</strong>itable, your actual take<br />

home income could be substantially lower.<br />

Talk with as many franchisees as you can,<br />

<strong>and</strong> confirm that your business projections<br />

<strong>and</strong> income expectations are realistic. Underst<strong>and</strong><br />

that most business owners can’t take<br />

any money out <strong>of</strong> the business for the first few<br />

years during the startup phase, <strong>and</strong> it may take<br />

you even longer to start paying yourself a salary<br />

from your new business. Plan accordingly<br />

<strong>and</strong> try to have alternative sources <strong>of</strong> income<br />

(i.e. a spouse’s salary) to live <strong>of</strong>f <strong>of</strong> while your<br />

new business is getting <strong>of</strong>f the ground.<br />

Finally, on the topic <strong>of</strong> income <strong>and</strong> pr<strong>of</strong>itability,<br />

while many food franchises report<br />

relatively high unit-level sales, <strong>and</strong>/or pr<strong>of</strong>itability,<br />

it is important to look at the whole<br />

picture when considering a franchise investment.<br />

For example, a food franchise may <strong>of</strong>fer<br />

slightly higher pr<strong>of</strong>itability compared to other<br />

businesses, but if the initial investment is three<br />

times higher, your overall return on investment<br />

is potentially going to be significantly<br />

lower. Work through your long-term financial<br />

projections with a good accountant, <strong>and</strong><br />

compare your potential franchise investment<br />

to other businesses, as well as other investment<br />

opportunities (i.e. real estate, stocks,<br />

etc.) to see how they compare.<br />

The importance <strong>of</strong> a new franchisee being<br />

well-capitalized cannot be overstated. Prospective<br />

franchisees should carefully review<br />

a br<strong>and</strong>’s Franchise Disclosure Document<br />

(F.D.D.) <strong>and</strong> ask current franchisees how<br />

much they recommend a new franchisee have<br />

in the bank before opening.<br />

<strong>Food</strong> <strong>and</strong> beverage franchise operators<br />

<strong>of</strong>ten tell us that one <strong>of</strong> the biggest issues<br />

new franchisees run into is managing the<br />

wild cash flow swings associated with operating<br />

a new business. Many franchisors have<br />

started including an Item 19—the “financial<br />

performance representation”—as part <strong>of</strong> their<br />

F.D.D. The latest trend in Item 19s is providing<br />

both gross <strong>and</strong> net numbers in order to<br />

really give c<strong>and</strong>idates <strong>and</strong> franchisees a better<br />

idea <strong>of</strong> potential pr<strong>of</strong>itability, not just top-line<br />

revenue. Franchisors told us they have become<br />

much more frank in their discussions with<br />

franchisees about what exactly they’ll need for<br />

capital in order to be successful.<br />

Reported Pre-Tax Income <strong>of</strong> <strong>Food</strong> & <strong>Beverage</strong> Franchise Owners<br />

$50,000 or less $50,000–$100,000 $100,000–$200,000 $200,000+<br />

7% 7% 17% 29%<br />

9%<br />

15%<br />

19%<br />

26%<br />

23%<br />

26%<br />

65%<br />

29%<br />

52%<br />

28%<br />

31%<br />

17%<br />

Less than 2 years 3 – 5 years 6 – 9 years 10+ years<br />

Years Owning Franchise Business<br />

10 | For more information on this report, visit: www.FranchiseBusinessReview.com


SPECIAL REPORT: <strong>Top</strong> <strong>Food</strong> <strong>Franchises</strong><br />

Left: Pizza Factory empowers franchisees to be their neighborhood’s “hometown pizzeria”.<br />

Right: Fuzzy’s Taco guests enjoying the Fuzzy’s vibe.<br />

“We’ve had an Item 19 for over 20 years,”<br />

said Ken Switzer, Treasurer <strong>of</strong> Marco’s Pizza.<br />

“We try to go overboard in providing useful<br />

information for people to make an informed<br />

decision. We encourage prospective franchisees<br />

to check with other franchisees about<br />

any problems they have—we don’t want any<br />

surprises.”<br />

PROS AND CONS OF OWNING<br />

A FOOD AND BEVERAGE FRANCHISE<br />

Ask a franchisor or a franchisee to talk about<br />

the benefits <strong>of</strong> the food industry, <strong>and</strong> you’ll<br />

undoubtedly hear “exciting, people-filled,<br />

<strong>and</strong> food-loving.” It’s an industry that <strong>of</strong>fers<br />

franchisees <strong>and</strong> their customers immediate<br />

gratification. At the same time, it’s ever-changing,<br />

never boring, <strong>and</strong> impossible to outsource<br />

(everyone needs to eat!).<br />

“Our franchisees have this huge passion for<br />

what they’re selling,” said Adam Hanson,<br />

President <strong>of</strong> The Häagen-Dazs Shoppe Company.<br />

Hanson started with Häagen-Dazs in<br />

1996, scooping ice cream as an assistant shop<br />

manager in Minneapolis <strong>and</strong> working his way<br />

up through the ranks over the last 20 years to<br />

now lead the franchise division.<br />

Passion for a premium ice cream br<strong>and</strong> by<br />

both customers <strong>and</strong> franchisees, along with<br />

national marketing support from Swiss-based<br />

parent company Nestlé, help drive average<br />

Shoppe revenues <strong>of</strong> $519,427 according to the<br />

Häagen-Dazs F.D.D.<br />

Perhaps more than in any other franchise<br />

sector, operators <strong>of</strong> food <strong>and</strong> beverage<br />

franchises may reap significant benefits<br />

from being part <strong>of</strong> a large franchise system<br />

rather than operating alone. The food <strong>and</strong><br />

beverage industry is highly competitive <strong>and</strong><br />

trend-driven, <strong>and</strong> operators in this space<br />

must constantly be marketing themselves <strong>and</strong><br />

developing new products. Franchisees benefit<br />

from having a recognized br<strong>and</strong> <strong>and</strong> the support<br />

<strong>and</strong> resources <strong>of</strong> a corporate <strong>of</strong>fice to help<br />

with these tasks.<br />

The food <strong>and</strong> beverage sector is not for the<br />

faint <strong>of</strong> heart in terms <strong>of</strong> what it takes to run<br />

<strong>and</strong> operate a successful business. Rising food<br />

costs, soaring competition, high employee<br />

turnover, <strong>and</strong> long hours are just a h<strong>and</strong>ful <strong>of</strong><br />

the sector’s drawbacks.<br />

The expenses—both initial <strong>and</strong> ongoing—<br />

are much higher than in other sectors <strong>and</strong> can<br />

fluctuate greatly based on what’s going on in<br />

the world. A nationwide drought in 2012<br />

forced restaurants <strong>of</strong> all kinds to deal with<br />

considerable cost increases in chicken, beef,<br />

<strong>and</strong> corn. Although franchisors obviously<br />

hope this was a rare event, climate-related<br />

price increases have become more common in<br />

the past few years, <strong>and</strong> fuel prices can also<br />

have a significant impact on commodities.<br />

Prospective franchisees should ask franchisors<br />

what safeguards (supply contracts, cost-cutting<br />

efforts, increased menu prices) they’ve<br />

put in place on an ongoing basis to help <strong>of</strong>fset<br />

high supply costs.<br />

Getting started in the food sector <strong>of</strong>ten<br />

requires a large investment, <strong>and</strong> early pr<strong>of</strong>it<br />

margins can be much lower than some other<br />

service industries—especially for operators <strong>of</strong><br />

high-cost, single-unit operations. Therefore,<br />

it can take a long time for a new operator<br />

to recoup start-up costs. Many franchisees<br />

choose to operate several locations because<br />

this typically helps them turn a higher pr<strong>of</strong>it<br />

<strong>and</strong> lowers their overall costs.<br />

The food sector is probably the most competitive<br />

space in franchising (<strong>and</strong> in business<br />

in general). There are millions <strong>of</strong> options for<br />

consumers, both franchised <strong>and</strong> not, <strong>and</strong><br />

the market is strongly driven by what’s hot<br />

now, which can change overnight. Franchise<br />

companies must constantly be researching<br />

<strong>and</strong> developing new products to keep up with<br />

the latest food trends. At the same time, they<br />

must be careful not to act too quickly. Every<br />

menu addition or concept change requires<br />

an additional investment from franchisees<br />

to re-vamp equipment <strong>and</strong> train staff, so if a<br />

seemingly hot trend is actually a short-lived<br />

fad, franchisees lose out. Good franchisors<br />

watch trends carefully <strong>and</strong> know when to act<br />

<strong>and</strong> when not to.<br />

There is also significant pressure in the food<br />

space in terms <strong>of</strong> pricing. Franchisors must<br />

constantly keep an eye on their prices, adjusting<br />

them to compete with other concepts. In<br />

recent years, a number <strong>of</strong> QSR concepts have<br />

introduced value-menu pricing as a means<br />

to out-price competition <strong>and</strong> keep customers<br />

coming in the door. Franchisees ended<br />

up losing money as they were forced to <strong>of</strong>fer<br />

more food for less money (while at the same<br />

time paying more for basic food supplies like<br />

For more information on this report, visit: www.FranchiseBusinessReview.com | 11


SPECIAL REPORT: <strong>Top</strong> <strong>Food</strong> <strong>Franchises</strong><br />

corn <strong>and</strong> flour). In many concepts, even when<br />

sales were up, unit-level pr<strong>of</strong>itability suffered<br />

considerably.<br />

To <strong>of</strong>fset this, some br<strong>and</strong>s have created<br />

new value product lines that cost less to<br />

produce. Marco’s, for example, created a new<br />

pizza that takes less time to make (because it<br />

isn’t h<strong>and</strong>-tossed), requires fewer ingredients,<br />

<strong>and</strong> is slightly smaller than their traditional<br />

pie. With this product, franchisees can <strong>of</strong>fer<br />

customers a cheaper alternative without losing<br />

money themselves. And because the pizzas are<br />

smaller <strong>and</strong> cost less, customers <strong>of</strong>ten buy two,<br />

so franchisees end up actually making money<br />

on the deal.<br />

Hiring <strong>and</strong> retaining quality staff is probably<br />

the biggest challenge facing most food<br />

operators. Many concepts require a large<br />

numbers <strong>of</strong> employees to operate <strong>and</strong> deliver<br />

the high-level guest experience that customers<br />

have come to expect.<br />

“Staffing is definitely the number one<br />

challenge facing the food industry today,”<br />

said Michelle Rowan, President <strong>of</strong> Franchise<br />

Business Review. Business owners can’t find<br />

enough quality help, <strong>and</strong> many in the industry<br />

have resorted to using temporary workers<br />

from overseas. Couple this with minimum<br />

wage increases, health care requirements, <strong>and</strong><br />

other employee regulation issues, <strong>and</strong> you<br />

can quickly underst<strong>and</strong> why business owners<br />

everywhere are looking for ways to make their<br />

businesses more efficient through technology,<br />

<strong>and</strong> less people-dependent.<br />

MARKET ANALYSIS<br />

The business outlook for the food sector<br />

continues to look strong. Despite some in<br />

the industry pointing to signs <strong>of</strong> a potential<br />

downturn due to commodity price increases<br />

from rising fuel costs, most business owners<br />

remain cautiously optimistic.<br />

The National Restaurant Association’s<br />

<strong>2017</strong> Restaurant Industry Forecast predicts<br />

that total restaurant industry sales will reach<br />

a record high <strong>of</strong> $799 billion this year—up<br />

26% in the past five years. All franchisors we<br />

spoke with for this report were equally bullish<br />

on continued steady sales growth for the next<br />

few years.<br />

FRANCHISEE SATISFACTION<br />

In the last few years, we’ve seen a marked<br />

improvement in franchisee satisfaction within<br />

the food <strong>and</strong> beverage sector. Over 70% <strong>of</strong><br />

food <strong>and</strong> beverage franchisees surveyed said<br />

they would recommend their br<strong>and</strong> to other<br />

franchisee c<strong>and</strong>idates—a strong indicator <strong>of</strong><br />

business owner satisfaction.<br />

Forty br<strong>and</strong>s make up our list <strong>of</strong> the top<br />

food <strong>and</strong> beverage franchises for <strong>2017</strong>. These<br />

are the companies that received the highest<br />

ratings from their franchisees in our independent<br />

satisfaction survey, which covers<br />

financial opportunity, training <strong>and</strong> support,<br />

leadership, operations <strong>and</strong> product development,<br />

core values, general satisfaction, <strong>and</strong> the<br />

franchisee community.<br />

Most food <strong>and</strong> beverage franchisors<br />

underst<strong>and</strong> that satisfied franchisees are more<br />

successful, more engaged, <strong>and</strong> only improve<br />

their corporate bottom line. All <strong>of</strong> the franchisors<br />

we spoke with (all from companies with<br />

high franchisee satisfaction) said they spend<br />

a considerable amount <strong>of</strong> time focusing on<br />

unit-level economics <strong>and</strong> working with their<br />

franchisees.<br />

It’s All About the EBITDA<br />

Our Franchisees Averaged<br />

$369,217 EBITDA* (Owner/Operated)<br />

$184,700 EBITDA* (Portfolio Operators)<br />

Celebrating 11 years <strong>of</strong> same store<br />

sales growth<br />

Unparalleled Franchisee Support includes:<br />

- an entire division dedicated to Unit Economics<br />

- data-driven pr<strong>of</strong>itability analysis<br />

- assistance with local store marketing<br />

-<strong>and</strong> much more...<br />

Contact Lee S. Easley, CFE<br />

1-800-381-3802 or<br />

vls@eastcoastwings.com<br />

Full Service Restaurants - 2014<br />

listed as <strong>Top</strong> Franchise Value<br />

“Future 50” in growth for<br />

small chains in America<br />

www.eastcoastwingsfranchise.com<br />

*This advertisement is not an <strong>of</strong>fering <strong>of</strong> a franchise. An <strong>of</strong>fering can be made only by prospectus. We only<br />

sell franchisees in states where our <strong>of</strong>fering is registered. “EBITDA as submitted by our full service franchised<br />

restaurants operating in 2014 as published in item 19 <strong>of</strong> our April 2015 Franchise Disclosure Document.<br />

Individual financial performance will vary.”<br />

©2015 East Coast Wings & Grill All Rights Reserved<br />

12.11.15 Lead Generation Ad 7.5" x 4.625".indd 1 12/11/15 11:52 AM<br />

12 | For more information on this report, visit: www.FranchiseBusinessReview.com


SPECIAL REPORT: <strong>Top</strong> <strong>Food</strong> <strong>Franchises</strong><br />

Melting Pot franchisee Mark Conway<br />

(left) is joined by his General Manager<br />

Tom Ford (far right) <strong>and</strong> their team.<br />

SUMMARY<br />

<strong>Food</strong> <strong>and</strong> beverage franchises <strong>of</strong>fer an exciting<br />

environment to business owners who don’t<br />

mind making a bigger financial investment,<br />

working long hours, <strong>and</strong> managing a large<br />

<strong>and</strong> diverse workforce. <strong>Food</strong> operators remain<br />

some <strong>of</strong> the most passionate in all <strong>of</strong> franchising,<br />

<strong>and</strong> while the investment is higher, so is<br />

the potential for return.<br />

Potential business owners may be initially<br />

attracted to the hype around a particular br<strong>and</strong><br />

or the overall idea <strong>of</strong> running a restaurant;<br />

but this should come second behind thorough<br />

due diligence. Prospective franchisees must<br />

do their homework <strong>and</strong> compare opportunities<br />

side-by-side—looking at both well-known<br />

br<strong>and</strong>s, as well as smaller, lesser-known<br />

companies. Every food franchise has its own<br />

culture, <strong>and</strong> franchisees should carefully<br />

consider how that culture fits with their own<br />

business goals before committing to a br<strong>and</strong>.<br />

For more detailed research on specific food<br />

<strong>and</strong> beverage franchises, as well as our Franchise<br />

Buyer’s Toolkit, which includes information<br />

on funding a franchise, F.D.D.s, a franchise<br />

comparison tool, <strong>and</strong> more, please visit us<br />

online at www.FranchiseBusinessReview.com.<br />

“ I believe what makes<br />

Captain D’s successful today<br />

is the revamped br<strong>and</strong>, from<br />

its signature high quality<br />

seafood <strong>and</strong> ongoing menu<br />

innovation to its modern<br />

restaurant design. Captain<br />

D’s clicked with me from day<br />

one, <strong>and</strong> I’m proud to be the<br />

owner <strong>of</strong> a great restaurant.”<br />

Ben Patel<br />

Multi-unit franchisee<br />

1.866.956.3501 | CaptainDsFranchising.com<br />

©<strong>2017</strong> Captain D’s, LLC. This is not an <strong>of</strong>fer to sell a franchise, which may occur only in applicable states <strong>and</strong> through<br />

a Franchise Document or prospectus.<br />

For more information on this report, visit: www.FranchiseBusinessReview.com | 13


SPECIAL REPORT: <strong>Top</strong> <strong>Food</strong> <strong>Franchises</strong> // MARKETPLACE<br />

<strong>2017</strong><br />

TOP 200<br />

FRANCHISES<br />

Today’s leading br<strong>and</strong>s based<br />

on FBR’s owner satisfaction data.<br />

*Full Satisfaction Report Available<br />

at FranchiseBusinessReview.com<br />

BUSINESS SERVICES<br />

ADVERTISING & SALES<br />

* Our Town America<br />

Pr<strong>of</strong>orma<br />

Welcomemat Services<br />

Natural Awakenings<br />

Town Money Saver<br />

AUTOMOTIVE<br />

* Christian Brothers Automotive<br />

* Snap-on Tools<br />

Mighty Distributing System<br />

Auto Appraisal Network<br />

Tint World<br />

Honest-1 Auto Care<br />

Carstar<br />

Priceless Rent-A-Car<br />

BUSINESS SERVICES<br />

Sanford Rose Associates<br />

* FASTSIGNS — more on right<br />

* S<strong>and</strong>ler Training<br />

* Minuteman Press<br />

* Murphy Business & Financial<br />

* ActionCOACH<br />

YESCO<br />

* Supporting Strategies<br />

Sir Speedy<br />

Brightway Insurance<br />

The @WORK Group<br />

Speedpro Imaging<br />

CHILD SERVICES<br />

* Soccer Shots<br />

JumpBunch<br />

* Amazing Athletes<br />

Great Play<br />

Young Rembr<strong>and</strong>ts<br />

Goldfish Swim School<br />

Drama Kids<br />

College + Nannies + Tutors<br />

CompuChild<br />

TGA Premier Golf & Tennis<br />

The Little Gym<br />

* TSS Photography<br />

KidsPark<br />

CLEANING & MAINTENANCE<br />

* MaidPro<br />

* Office Pride<br />

Aire-Master <strong>of</strong> America<br />

Rooterman<br />

Oxi Fresh Carpet Cleaning<br />

You’ve Got MAIDS<br />

Two Maids & A Mop<br />

Jan-Pro (Master Franchisors)<br />

Anago Cleaning Systems (Master Franchisors)<br />

* Image One<br />

EDUCATION<br />

* Mathnasium<br />

* The Goddard School<br />

The Tutoring Center<br />

Huntington Learning Center<br />

The Learning Experience<br />

Creative World School<br />

FINANCIAL SERVICES<br />

Estrella Insurance<br />

Padgett Business Services<br />

* Payroll Vault<br />

FITNESS<br />

Planet Fitness<br />

Orangetheory Fitness<br />

Fit4Mom<br />

9Round<br />

The Exercise Coach<br />

ILOVEKICKBOXING.COM<br />

Baby Boot Camp<br />

* Crunch Fitness<br />

The MAX Challenge<br />

Iron Tribe<br />

World Gym<br />

FOOD & BEVERAGE<br />

* Kona Ice<br />

Zaxby’s<br />

Culver’s<br />

Hwy 55 Burgers Shakes & Fries<br />

* Captain D’s — more on p. 13<br />

See page 16 for additional top franchises.<br />

Visit FBR50.com for br<strong>and</strong> details.<br />

FASTSIGNS<br />

Startup Investment: $82,239 – $267,520<br />

Cash Requirement: $80,000<br />

Total Units: 650+<br />

Signage has never been more important.<br />

Businesses are looking for new <strong>and</strong> better ways<br />

to compete. Industries must meet compliance<br />

st<strong>and</strong>ards. And advertisers are exp<strong>and</strong>ing into<br />

new media. Join the franchise that’s leading<br />

business communication. Our high st<strong>and</strong>ards<br />

for quality <strong>and</strong> customer service have made<br />

FASTSIGNS the most recognized br<strong>and</strong> in the<br />

industry, driving significantly more traffic to the<br />

Web than any other sign company. Recently,<br />

FASTSIGNS was named a 2016 Department <strong>of</strong><br />

Defense Employer Support Freedom Award<br />

winner. The Award is the highest recognition<br />

<strong>of</strong> employers for their exemplary support <strong>of</strong><br />

National Guard <strong>and</strong> Reserve members.<br />

For more information on FASTSIGNS<br />

opportunities, call (800) 827-7446<br />

or visit www.fastsigns.com.<br />

FOOD & BEVERAGE<br />

Lenny’s Sub Shop<br />

Startup Investment: $188,216 – $396,000<br />

Cash Requirement: $75,000<br />

Total Units: 96<br />

At Lennys Grill & Subs our vision is simple—<br />

consistently make <strong>and</strong> serve great food. Known<br />

for its fan favorites like “World Class Philly<br />

Cheesesteaks,” grilled <strong>and</strong> deli s<strong>and</strong>wiches as<br />

well as wraps <strong>and</strong> salads, Lennys Grill & Subs<br />

<strong>of</strong>fers breads baked fresh daily, premium meats<br />

sliced to order <strong>and</strong> freshly prepared toppings.<br />

Since launching a reimaging effort in 2016, the<br />

br<strong>and</strong> has provided guests with a new look, feel<br />

<strong>and</strong> an exp<strong>and</strong>ed menu at its restaurants to<br />

enhance the dining experience. With more than<br />

95 locations today, Lennys Grill & Subs continues<br />

to exp<strong>and</strong> throughout the Southeast by <strong>of</strong>fering<br />

single <strong>and</strong> multi-unit franchise opportunities.<br />

For more information on Lenny’s Sub Shop<br />

opportunities, call (877) 705-7827<br />

or visit www.lennysfranchise.com.<br />

14 | For more information on the companies in this report, visit www.FBR50.com


WARNING:<br />

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investment. Learn the ins <strong>and</strong> outs <strong>of</strong> buying a franchise, get tips from the pros, <strong>and</strong> access insider<br />

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Our concept is a proven winner — a high-value, family-oriented lunch<br />

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Contact: Annette Bagwell | abagwell@goldencorral.net | 800-284-5673 ext. 4479 | goldencorralfranchise.com/fbr<br />

For more information on the companies in this report, visit www.FBR50.com | 15


SPECIAL REPORT: <strong>Top</strong> <strong>Food</strong> <strong>Franchises</strong> // MARKETPLACE<br />

<strong>2017</strong> TOP 200<br />

FRANCHISES<br />

FOOD & BEVERAGE<br />

<strong>Food</strong> <strong>and</strong> <strong>Beverage</strong> continued<br />

Home Services continued<br />

* Hungry Howie’s Pizza & Subs —<br />

LaRosa’s Pizzeria<br />

* Checkers & Rally’s — more on p. 2<br />

more on inside<br />

front cover<br />

Fazoli’s Restaurants<br />

The Wendy’s Company<br />

Billy Sims Barbecue<br />

Ground Round<br />

Tropical Smoothie Cafe<br />

Penn Station<br />

* East Coast Wings & Grill — more on p. 12<br />

Nothing Bundt Cakes<br />

Wingstop<br />

Planet Sub<br />

* Marco’s Pizza<br />

* Firehouse Subs — more on back cover<br />

Lenny’s Sub Shop — more on p. 14<br />

Fuzzy’s Taco Shop<br />

Smoothie King — more on right<br />

Pizza Factory — more on right<br />

Donatos Pizza<br />

Taziki’s Mediterranean Cafe<br />

Dick’s Wings & Grill<br />

Pizza 9<br />

Jason’s Deli<br />

Jamba Juice<br />

Scooter’s C<strong>of</strong>fee<br />

* Happy & Healthy Products<br />

Biggby C<strong>of</strong>fee<br />

<strong>Top</strong>pers Pizza<br />

Bahama Buck’s<br />

Zoup! — more on p. 17<br />

* PJ’s C<strong>of</strong>fee<br />

Uno Chicago Grill<br />

Repicci’s Italian Ice<br />

Buffalo Wings & Rings<br />

HEALTH & BEAUTY<br />

Palm Beach Tan<br />

Sport Clips<br />

MY SALON Suite<br />

LaVida Massage<br />

HOME SERVICES<br />

* CertaPro Painters<br />

Budget Blinds<br />

* HouseMaster<br />

See page 17 for additional top franchises.<br />

Visit FBR50.com for br<strong>and</strong> details.<br />

Miracle Method Bath & Kitchen Restoration<br />

Surface Specialists Systems<br />

WOW 1 DAY PAINTING<br />

* DreamMaker Bath & Kitchen<br />

ASP – America’s Swimming Pool Co.<br />

Tailored Living<br />

California Closets<br />

ShelfGenie<br />

Five Star Painting<br />

AdvantaClean<br />

The Grout Doctor<br />

* Kitchen Solvers<br />

MarbleLife<br />

Go Mini’s<br />

PET SERVICES<br />

The Dog Wizard<br />

In Home Pet Services<br />

Pet Supplies ‘PLUS’<br />

Sit Means Sit Dog Training<br />

Dogtopia<br />

REAL ESTATE<br />

Keller Williams<br />

Sotheby’s International Realty<br />

Better Homes & Gardens Real Estate<br />

Weichert Real Estate<br />

* HomeVestors <strong>of</strong> America<br />

Coldwell Banker<br />

ERA<br />

Help-U-Sell Real Estate<br />

PropertyGuys.com<br />

United Country Real Estate<br />

Coldwell Banker Commercial<br />

Showhomes Home Staging<br />

RETAIL<br />

* Wild Birds Unlimited<br />

Pinch A Penny<br />

Rhea Lana’s<br />

Just Between Friends<br />

Family Fare<br />

* Big Frog Custom T-Shirts<br />

* Vapor Shark<br />

Color Me Mine<br />

Learning Express<br />

Good Feet Worldwide<br />

Pizza Factory<br />

Startup Investment: $156,000 – $643,500<br />

Cash Requirement: $90,000<br />

Total Units: 109<br />

Founded 30 years ago, Pizza Factory has become<br />

well known for serving fresh, high-quality pizza,<br />

s<strong>and</strong>wiches, salads <strong>and</strong> more. The br<strong>and</strong> is<br />

also widely recognized for its close community<br />

connection, which includes its iconic “No Bully<br />

Zone” program <strong>and</strong> impactful fundraising<br />

partnerships. Currently, there are more than 100<br />

locations based in five states throughout the<br />

West Coast. Pizza Factory looks to add additional<br />

franchise locations in key markets throughout the<br />

country, with a special focus on Texas, Colorado,<br />

New Mexico, Wyoming <strong>and</strong> Montana.<br />

For more information on Pizza Factory<br />

opportunities, call (562) 3<strong>40</strong>-6925<br />

or visit www.pizzafactoryfranchises.com.<br />

FOOD & BEVERAGE<br />

Smoothie King<br />

Startup Investment: $255,650 – $426,185<br />

Cash Requirement: $100,000<br />

Total Units: 907<br />

Smoothie King <strong>Franchises</strong>, Inc. is a privately held,<br />

New Orleans-area-based franchise company with<br />

more than 900 stores worldwide. By creating<br />

each smoothie with a purpose, Smoothie King<br />

makes it simple <strong>and</strong> pleasurable for guests to<br />

achieve their individual health <strong>and</strong> fitness goals<br />

as part <strong>of</strong> a low-calorie diet <strong>and</strong> regular exercise<br />

routine. The franchise also <strong>of</strong>fers a number <strong>of</strong><br />

better-for-you retail products, including sports<br />

beverages, energy bars, vitamin supplements<br />

<strong>and</strong> more. In 2016, Smoothie King was ranked<br />

No. 1 by Entrepreneur magazine in the juice bar<br />

category for the 24th year <strong>and</strong> No. 123 overall on<br />

the 2016 Franchise 500 list.<br />

For more information on Smoothie King<br />

opportunities, call (985) 635-6984<br />

or visit www.smoothiekingfranchise.com.<br />

16 | For more information on the companies in this report, visit www.FBR50.com


Join the Leading<br />

Soup Differentiated<br />

Restaurant Franchise<br />

• Lower cost <strong>of</strong> entry &<br />

shorter hours than other<br />

restaurant concepts<br />

• Strategic & authentic<br />

culture<br />

• Structure committed to<br />

relationships & support<br />

LOOKING FOR<br />

SOMETHING<br />

DIFFERENT?<br />

SENIOR CARE<br />

* Visiting Angels<br />

* Home Instead Senior Care<br />

Home Care Assistance<br />

* FirstLight Home Care<br />

Right at Home<br />

Assisting H<strong>and</strong>s<br />

Interim HealthCare<br />

* CarePatrol<br />

* Senior Care Authority<br />

Assisted Living Locators<br />

SERVICES<br />

* Weed Man<br />

* Two Men <strong>and</strong> A Truck<br />

* Window Genie<br />

Truly Nolen <strong>of</strong> America<br />

Men In Kilts<br />

FRSTeam<br />

Fibrenew<br />

Leather Medic<br />

* Fish Window Cleaning Services<br />

College Hunks Hauling Junk<br />

Complete Weddings <strong>and</strong> Events<br />

Precision Door Service<br />

A All Animal Control<br />

* Mosquito Joe<br />

PortraitEFX<br />

Real Property Management<br />

Creative Colors International<br />

101 Mobility<br />

Fastest Labs<br />

Paul Davis<br />

Glass Doctor<br />

SPORTS & REC<br />

* Pinot’s Palette<br />

American Poolplayers Association<br />

Painting with a Twist<br />

Kampgrounds <strong>of</strong> America/ KOA<br />

APEX Fun Run<br />

Sky Zone<br />

Wine <strong>and</strong> Design<br />

TECHNOLOGY<br />

TeamLogic IT<br />

TRAVEL & HOSPITALITY<br />

* Cruise Planners<br />

* CruiseOne<br />

Expedia CruiseShipCenters<br />

Learn more about our growing<br />

fast-casual concept at:<br />

zoupfranchise.com | 800.9<strong>40</strong>.9687 Ex 2<br />

LOCATIONS<br />

Visit FBR50.com for br<strong>and</strong> details.<br />

For more information on the companies in this report, visit www.FBR50.com | 17


©<strong>2017</strong> Firehouse Subs<br />

#1 America’s Favorite Chain<br />

for “<strong>Top</strong> 5 Br<strong>and</strong>s Overall”<br />

Restaurant Business<br />

#1 America’s Most Loved<br />

Fast <strong>Food</strong> Restaurant<br />

Business Insider<br />

#1 America’s Favorite<br />

S<strong>and</strong>wich Chain<br />

Market Force<br />

To own a franchise, visit FirehouseSubs.com/Franchising or call 877.887.8330.<br />

A STRATEGIC INITIATIVE OF THE INTERNATIONAL FRANCHISE ASSOCIATION SINCE 1991

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