FranDawgs

It's St. Patricks Day - Throwback to 2010 when McDonald's built a 24 foot Shamrock Shake in Chicago. The shake eventually went nationwide for the 1st time in 2012, and hasn't looked back since.

We will be at Main Street Summit later this year. This is a killer conference for all things franchising & SMB. See you there ??

7-Brew recently signed a whopping 70-unit deal. The drive-thru coffee chain has grown to ~350 locations in just 8 years. The most recent data (from 2023) shows an average unit volume of ~$2.1M at ~ 16% margins for franchised stores. 7-Brew plans to double their store count over the next 5 years. We'll be monitoring for the release of their next FDD, will be interesting to get an update on 2024 performance ??

Greg Flynn just acquired more Pizza Hut's. His total portfolio now does more system-wide sales than brands like: ? Wingstop ? Jersey Mike's ? Crumbl Cookies It generates an astounding $5 billion+, which makes him the largest franchisee in the US and likely the world. This recent Pizza Hut purchase means he now owns about 20% of Pizza Hut's US locations (he also has 300 or so in Australia)

Handel's Ice Cream is a brand to watch ?? Founded way back in 1945, they've steadily grown via franchising to 142+ locations. Aside from being voted #1 ice cream on the planet by National Geographic, they have a lot of qualities we look for in franchise concepts: ?? Intense focus on product + customer experience via 100+ home-made flavors ?? Responsible growth: they started franchising in 1989, and have strategically expanded since ?? Healthy unit economics: average unit volumes over $1M at a ~19% profit margin after royalty, per their FDD We've also been in touch with above-average performing franchisees who have margins north of 25%! If you're interested in hearing more franchise opportunities, get in touch with us via our website!

The 1st Friday of Lent means it's Filet-O-Fish szn at McDonald's. The sandwich was invented by a franchisee, who used to be homeless: Lou Groen went from a homeless teenager, to a McDonald's franchisee in Cincinnati in the 1960's. He wanted to maintain foot traffic at his stores during Lent, so he convinced Ray Kroc to let him trial it. Before approving it on the menu, Kroc tested the Filet-O-Fish versus his own meatless option: the Hula Burger. It was a slice of pineapple on a bun. Whichever sandwich sold the most, would win. Wasn't much of a contest, and McDonald's now sells ~300 million Filet-O-Fish sandwiches every year.

Crumbl's 2024 data is about a month away from being released. With the brand reportedly exploring a ~$2B acquisition, 2024 is a key year: From 2019 - 2023, Crumbl grew from 16 locations to 970. Today, they have over 1,000 locations and the country has been sold out for franchising for quite some time. 2023 in particular was a down year for the brand, with median net profit dropping over 50%, and store closures occurring for the 1st time in their short history. We'll be keeping an eye out for the new numbers! If you're interested in the franchise world, sign up to our 1x/week newsletter (link in the comments)!

Taco Bell announced same store sales are up 8%. Targeting $3M AUV by 2030. Already one of the highest margin QSR's...here's a live look at their franchisees: On a serious note, Taco Bell currently accounts for ~80% of Yum! Brands U.S. profit. Per Jonathan Maze, the brand has had just one quarter of negative same store sales since 2011!

The fast-food chain with the most locations in the world? Not McDonald's. It's Mixue, a Chinese tea & ice cream franchise that just IPO'd today ? ?? The brand has ~45k locations primarily in Asia and Australia. Like a few franchises in the US, their biggest revenue stream isn't royalties from franchisees, it's actually from selling goods to franchisees. Per the WSJ: 90% of Mixue's 2024 revenue came from selling items like milk, coffee, and equipment to their franchisees. They also have a hilarious mascot that looks like a mix of frosty the snowman and the pillsbury doughboy. And who are we kidding....that jingle is hard to forget The stock is already up 43% via their Hong Kong trading debut! Bullish on funny mascots for brick & mortar brands ??

In the early 2000s, fast food giants were betting BIG on fast-casual. A forgotten era, where Wendy's should've owned the next Chipotle: By 2003, it was a battle for mexican fast-casual: ?? Jack in the Box owned Qdoba ?? McDonald's owned 90% of Chiptole ?? Carl's Jr. bought La Salsa, & Green Burrito And Wendy's? They bought the crown jewel, Baja Fresh for $275M the year prior. Baja had 169 locations, $200M+ in system-wide sales, and a $1.5M AUV (higher than Chipotle's at the time). Wall Street loved the deal, as Baja was considered "the best in the Mexican category". But things wouldn't pan out. Despite growing to ~300 locations, within 2 years: ?? Same store sales dropped 7.5% ??Franchisees were losing money ??Baja Fresh lost $5M Wendy's was picking poor markets for Baja Fresh locations, and the backlash from franchisees was leading to lawsuits. Meanwhile, McDonald's at this time helped Chipotle: ? Scale efficiently ? Keep high-quality food & service ? Maintain high store-level profits Chipotle was thriving while Baja Fresh was losing their lead - fast. By 2005, an activist investor - Trian Partners - pressured Wendy's to cut all non-core businesses. So in 2006, Wendy's sold Baja Fresh for just $30M, a 90% loss in just 4 years. That same year, McDonald's spun off Chipotle in a $1.5B IPO. And Jack in the Box would eventually sell Qdoba for 7x what they paid A brutal contrast for Wendy's, and a tale of what could have been...