Franchising | June 2011 | By Daniel P. Smith

The 10 Best Franchise Deals

Back by popular demand. QSR reveals the industry's best franchise deals.

For some, it’s an average sales-to-investment ratio nearing 2:1, dedicated corporate support that helps franchisees succeed, or a distinctive niche that carries marketplace allures.

For others, a good franchise deal boasts recent growth despite the nation’s economic woes, stable leadership that ensures consistent strategy, or consumer satisfaction ratings highlighting consumer interest.

Truth be told, however, a good franchise deal is often a mix of all these elements. Much like a tasty recipe claims a pinch of this and a dash of that, some of the nation’s most compelling quick-service franchise deals carry a variety of features that distinguish them and attract entrepreneurial interest. These 10 brands lead the charge.

Wingstop

U.S. Unit Count:

468 (444 franchised)

Franchise Fee:

$25,000

Total Start-Up Costs:

$332,500–$550,000

Royalty:

5% gross sales

Renewal Fee:

None

Marketing Fee:

2% of gross sales

Since its 1994 debut, Wingstop has only elevated its stature, capturing seven consecutive years of same-store sales growth and AUV approaching $750,000.

 

“We’re a fun, unique concept featuring a product that people crave,” says Dave Vernon, Wingstop’s vice president of franchising.

 

Roark Capital Group purchased Wingstop in April 2010 and has committed to opening about 50 stores each year. Roark’s weighty presence affords Wingstop the capital to advance the brand via independent research and a comprehensive real estate market model.

 

“We’re no longer a start-up and our focus is on fully capitalizing on our strengths,” says Vernon, noting that limited-time incentives for new market franchisees include franchise- and royalty-fee reductions.

 

An Outside View: Wingstop holds appeal for two reasons, Fran-Systems CEO Karen Spencer says. “First, the chicken wing category no longer poses the threat of just being defined as an additional menu item,” she says. “Second, there are no longer questions regarding the future strength of capitalization.”

Papa Murphy’s

U.S. Unit Count:

1,250 (1,233 franchised)

Franchise Fee:

$25,000

Total Start-Up Costs:

$195,000–$380,000

Royalty:

5% of net sales

Renewal Fee:

$7,500

Marketing Fee:

1.5% of net sales

Papa Murphy’s Take ‘N’ Bake is one of the few pizza chains to report significant growth in the 21st century, doubling both its unit count and sales since 1999 with a concept many feel matches today’s lifestyles.

 

With no delivery, no commercial ovens, and no sit-down dining, Papa Murphy’s franchisees forgo the hassles and expenses that plague many pizzerias. The simple operations scheme, however, doesn’t dampen its product’s zeal. Zagat’s named Papa Murphy’s the nation’s top pizza chain in 2010.

 

“The consumer appeal, the ease of operation, the brand strength, and the low entry costs all combine to make Papa Murphy’s an appealing franchise opportunity,” says Steve Figliola, Papa Murphy’s vice president of development.

 

An Outside View: National Restaurant Consultants president David Kincheloe calls Papa Murphy’s “a great concept to get into with a lower total investment for start up. Plus, the franchise can go almost anywhere due to limited kitchen requirements.”

Stevi B’s Pizza Buffet

U.S. Unit Count:

42 (37 franchised)

Franchise Fee:

$28,500

Total Start-Up Costs:

$500,000–$650,000

Royalty:

5% of weekly net sales

Renewal Fee:

50% of current franchise fee

Marketing Fee:

4.5% of net sales

With an eclectic array of pizza options (including hot-wing and mac-and-cheese options) as well as a buffet operation that captures the lunch crowd and value-conscious diners with its $5.79 average price, Stevi B’s hits on today’s trends. In addition, Stevi B’s outfits its stores with other profit centers, including a game room with redemption center and party room, which attracts families and community groups. As a result, AUV sits near $950,000.

 

With operations visits from Stevi B’s franchise advisory council every 90 days and ongoing Operations Boot Camps, the Atlanta-based company trains its franchisees to work on the restaurant and not solely in the restaurant.

 

“Our focus is on helping our operators be orderly and organized so they’re maximizing their investment,” says Melissa McFarlin, Stevi B’s director of franchise sales.

 

An Outside View: Spencer says that Stevi B’s implementation of support programs and additional services, particularly in operations, “will help them grow with the right partners into a mature brand.”