Franchising | July 2012 | By Daniel P. Smith

2012’s Best Franchise Deals

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Popeyes Louisiana Kitchen

Total U.S. Unit Count: 2,035 / 1,587 franchised

Franchise Fee: $30,000

Total Start-Up Costs: $306,300–$371,100 for a freestanding unit

Royalty: 5% of gross sales

Renewal Fee: $15,000

Marketing Fee: 4% of gross sales

Celebrating its 40th anniversary, Atlanta-based Popeyes has plans for accelerated growth throughout 2012, both on and off U.S. soil.

Popeyes vice president of development Greg Vojnovic says the company’s strategic plan execution and highly franchised business model generate profitable results for system operators. Those include efficient advertising of relevant, traffic-driving new product innovations; effective tools to support and measure improved speed of service and guest experience; supply chain cost reductions, process improvements, and training that improve profitability; and site-selection tools that have resulted in a pipeline of qualified operators opening new restaurants with AUV above 2011’s system average of $1.1 million.

To further boost its appeal, Popeyes offers numerous current franchisee incentives, including a rapid-year development program for those who open their units within six to nine months of site approval, incentives for opening freestanding units in specific markets, and incentive programs for minorities, women, and military veterans.

An Outside View: Omholt credits the Popeyes franchise management team with cooking up impressive shareholder and franchisee value.

“All of their key metrics from the annual report—revenues, net income, [earnings per share], free cash flow, same-store sales, etc.—demonstrate an impressive trend line,” he says.

Saladworks

Total U.S. Unit Count: 99 / 96 franchised

Franchise Fee: $30,000–$35,000

Total Start-Up Costs: $375,628–$536,594

Royalty: 5% of gross sales

Renewal Fee: $17,500

Marketing Fee: 3% of gross sales

Driven by an on-trend menu that promotes 52 fresh ingredients and salads averaging less than 300 calories, Saladworks continues making headway as an alternative to traditional fast food fare.

With AUV over $1 million, Saladworks boasts a sales-to-investment ratio hovering near 2:1, a tally that continues to attract franchisees to the Pennsylvania-based system.

Saladworks chairman and CEO John Scardapane says the company’s franchise model has proved stable and scalable over 25 years. He points specifically to the fact that more than 70 percent of franchise partners own or have committed to own more than one location.

Scardapane adds that franchisees also benefit from protected search areas and store territories, as well as catering opportunities that produce a supplemental revenue stream. There are also various training and support measures, such as ongoing business consultation, targeted local and regional marketing plans, social media tool boxes, and continual menu development.

An Outside View: Jameson says Saladworks has a formula for success with its healthy, nutritious, and flavorful salads along with fresh soups and sandwiches served quickly in a colorful and fun environment. “Start-up costs are reasonable and sales at a level that can provide a reasonable ROI for franchisees,” he says.

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