Huey Magoo's Draws Up Record-Breaking Franchising Strategy

Huey Magoo’s, founded in 2004, had just a couple of stores when it was purchased by former Wingstop executives Andy Howard, Michael Sutter, Wes Jablonski, and Bill Knight in 2016.

The past five years have painted a much different picture.

Under new leadership, the chicken chain has grown to 18 units across its home state of Florida, Georgia, and Mississippi. All but one of those units are run by franchisees. That footprint is quickly changing as Huey Magoo’s expects to reach roughly 25 stores by the end of 2021 and open a record-breaking 15–20 locations in 2022. In the years thereafter, the brand thinks it can realistically open 25–30 stores annually, putting it on pace to triple its unit count by the close of 2023.

“The South and Southeast is ‘chicken country’ not only from the supply side, but from the consumer side,” says Howard, who serves as president and CEO. "It's very competitive. Lots of our friendly competitors are very, very strong in the South and Southeast, but we like those markets and maybe most importantly, the franchisees that we've selected have been phenomenal.”

Huey Magoo’s prides itself on chicken tenders, and offers a host of dipping sauces, such as Magoo’s, Spicy Magoo’s, Homemade Ranch, Bleu Cheese, Honey Mustard, Buffalo, Barbeque, Garlic Parmesan, and Sweet Heat. The brand also features a variety of sandwiches, wraps, and fresh-made salads.

The chain’s growth will be fueled by a pipeline of 200 stores covering Florida, Georgia, Mississippi, Tennessee, South Carolina, Alabama, North Carolina, and Ohio. Recent franchise signings include 20 locations in Nashville, 20 in Columbus and Dayton, Ohio, 23 across Florida, and three in Asheville, North Carolina.

Howard says infrastructure is being built to handle that pace of development. To him, it’s a balance of bringing on key people at the right time, and Huey Magoo’s has done that in a “fairly aggressive way” throughout 2021. The chain sends at least five people to every store opening to ensure everything goes well.

“Not only do we have one opening in a particular month, we're going to have two and more, so you need sets of teams to be able to handle these openings to make sure the store is opened properly,” Howard says. “So the infrastructure is definitely a key piece, and we're building that up and we'll be ready for the growth.”

There are five different ways to open a Huey Magoo’s. The original concept was in-line as part of a strip mall, which Howard says is still attractive to franchisees and a definite way to grow the brand. The second is endcap with a drive-thru, and the third is second-generation spaces that can be converted to a freestanding drive-thru. The fourth is “finding a piece of dirt and building from the ground up,” Howard explains. The final option is Huey Magoo’s express unit—a roughly 800- to 900-square-foot space run by Aramark in the student union of the University of Central Florida.

Huey Magoo's

Of all those avenues, the future appears to be drive-thru. Huey Magoo’s tested the channel a couple of years ago, and Howard says it’s taken sales to levels “I was only dreaming of that this brand could go to.” Five of the 18 open units have drive-thru, and those stores boast the highest volumes in the system. Even though it’s not a requirement for new locations, Howard estimates roughly 80 percent of future development will contain a drive-thru.

The CEO says drive-thru does add complexity to operations, which is why Huey Magoo’s is making sure it signs franchisees who can handle the undertaking.

“Most of our operators have had prior restaurant experience. Some that have not have actually been enormously successful, but I would say 90 percent come from other organizations,” Howard says. “We want good quality, passionate, honest, hardworking franchisees that just absolutely love this Huey Magoo’s brand.”

“I, Andy Howard, personally am involved in franchise sales,” he continues. “I am the first contact that somebody would make. If they call me on a Sunday afternoon, I'm going to pick up the phone. ... I feel it’s that important that I am the first communication, the first line of contact, and it’s gone a long way. It really is an important piece of our business to partner up with great people. We're taking their hard-earned money, and we take that very seriously and we want them of course to be successful, and so far it’s working.”

As Huey Magoo’s footprint continues to expand, so do sales. Howard says the chain experienced quite the storm at the beginning of COVID, but those tribulations only lasted a couple of months since off-premises was already a major part of how the chain served guests. Year-to-date, Huey Magoo’s comps are growing 21 percent year-over-year, and sales outside the four walls are mixing 80 percent.

To improve digital offerings, the company recently hired its first IT director and launched a new mobile app in the fall of 2020.

“We're trying to stay up with technology,” Howard says. “It's a very, very critical, important piece of our operations. The app is off and running. We're promoting it more and more all the time and doing some more marketing with the app to get more folks to sign up and use it. We're excited about what that will mean for us today and in the future.”

Huey Magoo’s is moving forward with openings despite headwinds from labor and the supply chain. Some franchisees have experienced more challenges than others and have increased pay and benefits. But for the most part, there are enough employees to run the restaurants. Howard also makes the point that most franchisees are multi-unit operators, so they know how to get ahead when it comes to hiring and training workers prior to the next store opening.

Huey Magoo's

“Certainly with the big boys, everybody wants to compare you against them, but we'll put our chicken tender up against anybody. Our product is amazing,” says Huey Magoo's CEO and President Andy Howard.

Regarding the supply chain, Huey Magoo’s was able to negotiate a contract at the end of 2020 to keep itself on good footing throughout 2021 and the latest inflationary environment. The brand is already working on next year’s agreement to make sure it has enough supply to support the rapid growth. That’s not to say there haven’t been issues. From time to time Huey Magoo’s has experienced shortages, such as the time when cups didn’t arrive on time and the chain had to used non-logo cups for a short period.

“So things like that have occurred with some supply side of things just based on the whole industry and shortages and materials and labor,” Howard says. “But overall, we're getting through it fairly nicely. I would say with minimal pain.”

The chicken business in particular has been plagued by shortages and inflation due to a variety of factors, including labor issues and the influx of virtual concepts. It’s been so troublesome that larger national brands like Wingstop and KFC have been affected in a meaningful way. Huey Magoo’s has had to take some price increases because of it, a strategy that no one at the company takes lightly, the CEO says.

With a growing, emerging brand, Howard is well aware that he's operating in a tough category alongside the likes of Zaxby’s, Raising Cane’s, Popeyes, and others. But Huey Magoo’s is up for the challenge, and the CEO believes the chain’s prized chicken tenders speak for themselves. The food has already created raving fans across the country.

“Certainly with the big boys, everybody wants to compare you against them, but we'll put our chicken tender up against anybody. Our product is amazing,” Howard says. “Our building design we think it's spectacular and stands out in the street as people drive by and see this great looking building. It says, ‘Wow, what is that new place Huey Magoo’s? I want to try it.’ So when you put all those things together, we think we've got a pretty strong formula for success, and we're moving forward based on that.”