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QSR Feature
Out of the Gate
Why new brands are franchising at break-neck speed.
New restaurant brands tend to franchise quickly.

Franchised restaurants have scores of ways to measure speed.

One tally might be how many seconds—or, gasp, minutes—a car spends in the drive-thru loop. Another benchmark might be the time it takes a new-fangled fryer to get potatoes from freezer to front counter. Or how long it takes a pot of coffee to lose its freshness.

As the first quarter of 2007 draws to a close, a new measurement of speed is how fast and aggressive a new brand goes from a handful of stores, or even a single store, to a franchise agreement.

“In the 2007 marketplace, what’s driving concepts into franchising is the speed of the market,” says Darrell Johnson of FRANDATA, a company specializing in compiling and analyzing information about the franchising market.

In the restaurant industry, which sees the public’s reliance on it grow exponentially each year, the speedy marketplace increases the opportunity for emerging and even infant restaurant ideas to go immediately to franchising as a growth model.

“As the market becomes more developed, becomes more crowded, it’s all about getting there first,” says Darren Tristano, executive vice president of Technomic, which tracks the foodservice industry and its trends.

The ripe environment for franchising—not just in foodservice—has been cultivated by the franchising industry’s investment in an ever-expanding cadre of professional franchisees, Tristano and others familiar with franchising say. Those veteran franchisee networks might be saturated in the concentration of established units they can have, but the new brands offer more economic diversity and opportunity.

There were 99 new overall franchise concepts identified during the fourth quarter of 2006, making it the most robust quarter of last year, according to the New Concept Report from FRANDATA. That brings the annual total of new systems to 306 in 2006.

Broad-Spectrum Brands

Professional franchisees are often embarking on second careers, and they’re setting up their own corporations built around franchising in as many different industries and service segments as their infrastructures will allow.

In restaurant circles, that growth was driven mostly by smaller, start-up brands or by spin-offs from established franchisors looking to diversify.

“There’s a bigger pool of professional franchise companies,” says Johnson. That pool allows the marketplace and its players to be more aggressive in growing new brands.

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