Since the beginning of franchising, one of the big questions facing every leadership team involves company-owned locations. Should we have them or shouldn't we? What percentage of the system should be company operated vs. franchise operated? Where should we operate them? And on and on.
Of course it's not unusual for franchise concepts to start with corporate-owned locations. Typically, a new system will open several corporate stores or restaurants in order to prove the concept, develop operating systems and create a working prototype. Just as typically, it often then turns its focus to selling franchises.
There is certainly nothing wrong with this strategy. It has worked well for hundreds of concepts over time, especially those concepts focused on rapid expansion.
As a former franchisee turned corporate CEO, however, I am a strong advocate that having a portfolio of corporate-owned locations is as important for veteran brands as it is for start-up concepts.
In my experience, one of the key elements to the long-term success of a franchise system is having a base of corporate-owned and managed locations. And the reasons go well beyond revenue potential.
TRUE VALUE WILL COME
That's why more than 50 years since the first Huddle House restaurant opened and nearly 400 locations later, we recently opened our 13th corporate location and will continue to grow our company store portfolio through acquisitions and new builds. And although the new company restaurant celebrated the most successful grand opening of a corporate-owned location in our history, we realize that the true value will come in many more ways over the long-term.
First, and perhaps most importantly, it creates an opportunity for us to stay in direct touch with our customers and their wants, their needs and their preferences. This is especially important for a concept such as Huddle House, which targets smaller markets that many other chains mistakenly overlook and features traditional. Southern-inspired comfort food.
This traditional menu has been at the heart of our success for over five decades and our ability to provide these items on a consistent basis has resulted in the creation of a very faithful and a loyal customer base.
Still, for a mature brand, it can be very tempting to follow the latest trends, especially when trying to expand the market and appeal to
new guests. By operating corporate owned restaurants in a variety of markets and locations, we have the flexibility to...