As Kahala gained stability, it returned to acquisition mode, bringing in the likes of Maui Wowi, Planet Smoothie, Pinkberry, and Baja Fresh throughout 2015 and 2016.
All potential deals—then as now—follow a straightforward formula. Quality food is a non-negotiable, Wuycheck says. Thereafter, Kahala leadership assesses other key pieces of the operation, including concept ambiance, perceived value, and customer following. Brands with some experience franchising are also preferred.
“With the exception of the food, the brand doesn’t have to be perfect when we acquire it,” Wuycheck says. “We believe we can tweak things accordingly and get the brand where it needs to be.”
Whereas some Kahala-acquired concepts immediately add new stores or new products, others require more finesse before pulling the growth lever. There might be new leadership to incorporate, supply chain issues to untangle, or a go-to market strategy in need of refinement.
“Every acquisition is a bit different,” Wuycheck says.
What’s not different, however, is Kahala’s immediate post-acquisition focus with any newly inherited brand and crop of franchisees: communicate excitement, clearly articulate plans, and meet with each franchise partner face to face.
“That’s the starting point,” Wuycheck says, “but then it’s up to us to continue to show we’re making improvements. Over time, it’s those actions that are the most important.”
Kahala’s efforts have only intensified under a new ownership group.
In 2016, Quebec-based MTY Food Group, one of the largest restaurant franchisors in Canada, acquired Kahala. MTY chairman Stanley Ma called the deal, which created a combined entity with approximately 5,500 restaurant locations, “a turning point in MTY’s history,” celebrating it as a pathway for MTY to grow its U.S. and international footprint (the company also acquired Papa Murphy’s earlier this year).
From the Kahala side, MTY’s presence injects more franchising experience, strategic synergies, and quick-service brands into the Kahala orbit—all of it fuel to the company’s recent resurgence.
“We’re all learning from each other, whether that’s about the best vendors to use, best practices, or how to ensure healthy franchisee relations, and that’s made us more excited than ever about where we’re headed,” Wuycheck says.
Managing the enterprise
When Kahala acquired Baja Fresh in 2016, the 162-unit brand—once under Wendy’s charge—was well positioned for growth, yet lacked the important infrastructure to mature at scale.
“We had a reimaging project underway and had convenience factors like online ordering and third-party delivery in motion, but needed improved systems,” recalls brand leader Tim Koch. Koch began working with Baja Fresh 12 years ago and remained with the brand through the acquisitions.
He calls Kahala’s presence “immensely beneficial.” Kahala helped Baja Fresh research and then roll out a new point-of-sale solution across its system, introduced incentives to push the brand’s reimaging project with franchisees, and negotiated rates with third-party delivery agents.
“Since Kahala entered the picture, they’ve looked at our strategic initiatives and actively looked for ways to help support our execution,” Koch says. “With Kahala’s scale, we’re able to do a much stronger job identifying solutions and moving toward decisions that give us a solid foundation to build upon.”
Indeed, that’s Kahala’s typical, unflinching M.O. with its brands: Install an adept brand leader and offer ongoing support.
Whether it’s Cold Stone, the largest brand under the Kahala banner, or the one-unit Cereality concept, Kahala’s shared service support model provides brand leaders as well as individual franchisees access to performance-driving resources. There is, for example, a culinary R&D team featuring chefs dedicated to both sweet and savory menu items; a legal team prepared to help with Franchise Disclosure Documents, trademark, and intellectual property; a digital marketing team focused exclusively on social media; a creative team charged to help with advertisements, promotions, and coupons; and a full-service construction team.