The company is currently testing a new digital platform that will be implemented across all seven chains, which will not only increase consistency and spread costs, but also makes it easier to onboard additional restaurants in the future.
“I think increasingly, we're starting to look at Focus as more of a platform company,” Holthouser says. “You can take a brand, especially a brand without scale, and start plugging them into what we call value engines. Now that we've collapsed all of our guests into one database, start making some of those 14 million available to another brand.”
“We can hook you up into this best-in-class app and website,” he adds. “We can now sell your brands with, I will argue, one of the best development organizations in the restaurant industry. We can hook you up into our licensing. We've made huge investments in supply chain. We can start creating value like this from day one.”
The eighth concept, whenever that day may come, will round out what Holthouser calls “the flavors of Focus.” In other words, the company is not directing its attention toward any brand that would cause redundancy in terms of cuisine. Instead, M&A exploration will potentially center around chicken, burgers, pizza, salads, or maybe even Mediterranean.
Ideally, the brand would be between 150 to 900 stores systemwide. Focus wants concepts that are proven in the marketplace, but at the same time, Holthouser says there is such a thing as being too big. He believes anything over 1,000 units would take the company off task and create issues with integration.
The candidate doesn’t have to be already franchised—just franchisable.
“We're looking for the right size, right category, and price,” Holthouser says.
Dixon says there were a number of bidders for every brand that went up for sale in the past year, and he estimates Focus was heavily involved in four to six of them. For half of those potential transactions, the company backed out after doing its due diligence. As for the remainder, the price just became too high.
Focus isn’t looking for a certain number of brands to add either. Holthouser views it as more of a wait-and-see approach. If a brand comes in and doesn’t require much surgery, then Focus could possibly handle two chains, but the ultimate preference is to handle one at a time because of the integration work, which requires about 12-18 months.
“It's just not mashing the balance sheets together,” the CEO says. “Smart guys, they can do that in a week. But it's trying to meld two companies together right here. That takes time. Because they all have franchise advisory councils and they have systems that either need to be evaluated or decommissioned and put on the Focus system. It just takes time. It's not impossible. It's just it's a lot of work and time.”