Sponsored Section: A Feast of Franchises

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Asian fare also has been a strong and steady performer in franchising. Genghis Grill, based in Dallas, has built a 37-unit chain using the Mongolian barbeque format. CEO Al Bhakta says the format may not have any connection to Mongolia, but consumers do connect with the idea of a build-your-own Asian stir-fry."We're a growing concept despite the economy,"Bhakta says. "Our same store sales are up double digits."

Consumers like the exhibition aspect --food is cooked on a large grill in full view of diners --the moderate prices and guests' ability to design dishes that fit any taste or diet, including vegetarian, Bhakta says. "We provide a real niche dining experience,"he says."It's high quality and it's not very expensive."

Franchisee requirements are also welcoming. "It's an easy concept to operate,"Bhakta says."Our training program is only a three-week format and our unit economies makes a lot of sense. We build the stores for less than $500,000 including franchises fees and working capital. And our average unit volume is $1.4 million."

Every now and then a whole new niche opens up in food franchising. One of those is Buffalo chicken wings. Jim Flynn, president and CEO of Wingstop, based in Richardson, Texas, says the 425-location franchise has maintained relatively robust growth in 2009, with approximately 60 new locations scheduled to open by year-end.

The simplicity of the menu is one of the major appeals, he says. "If you take wings, fries, and beverages, you've got 92 percent of oursales,"hesays."Sowe'reabletosellfranchisestopeople with no restaurant experience." Eighty percent of a typical Wingstop's meals are takeout, which means a small store footprint and low occupancy costs. And that adds up to attractive unit economics.

Wingstop's appeal to consumers is based on the taste of the wings. Flynn notes that Wingstop has won top honors at the National Buffalo Wing Festival held each year in Buffalo, N.Y. "In the cities that we're in, it's continuously named the best wings around," he says. Currently, Wingstop has only a couple of eateries in the Northeast, but Flynn plans to crank up expansion to about 100 units a year, and the region where Buffalo wings were born is high on his target list.

Another regional food item that has plenty of appeal to people in other places supports Philly Pretzel Factory. Marty Ferrill, vice president of operations for the 120-location Philadelphia-based franchise company, says the concept is uncomplicated. "We've taken a product that people grew up with in Philadelphia getting from a corner store or street vendor and put that into a retail environment," he says.

Philly Pretzel Factory has sought to improve on the time-tested regional snack by ensuring its pretzels are always fresh-made --still warm from the oven, in fact. The pretzels are also economical --three sizable, fragrant pretzels for $1.50.

Many of Philly Pretzel's franchisees are former customers, and they have a tendency to be new to franchising and food, because the business involves little complexity. "We don't have a hundred-item menu and we don't do a lot of prep," Ferrill says. "Our niche is Philly soft pretzels and we focus on that." Over the next few years, Ferrill says the company hopes to open another 50 or 60 locations, sticking mainly to the East Coast.

Every now and then, a concept comes along that can make a claim to true uniqueness. Edible Arrangements, which sells fresh fruit attractively arranged in a manner reminiscent of floral bouquets, can do that. Founder Tariq Farid owned three flower shops before opening the first Edible Arrangements in 1999. Today, the Wallingford, Conn., franchiser has approximately 900 locations, and there are plans to open another 400 in the next couple of years.

The product may be a little unusual, but Farid says franchisees have no trouble getting their arms around the fact that Edible Arrangements locations are run similarly to quick-serve restaurants, but the average ticket is far higher, hovering around $75. Farid also has plunged into online ordering. "It's really paying off," he says. "We're delivering 50 to 60 percent of the orders to franchises through our website. That makes it easy for franchisees."

Edible Arrangements may represent a possible future direction for food franchising, one that finds ways to bridge with other industries. That combo is part of the franchise's lure for franchisees,Farid says."We have the appeal of flowers,the look of flowers, and the feeling you get when you get flowers. At the same time, the consumer knows it's food and you can eat it. That is a big advantage we have when it comes to selling franchises. Someone who's been in the gift industry can see the opportunity and someone who's been in the food industry can see the advantage of getting into the gift industry."

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