Franchise restaurants make a comeback

According to a recent article in the The Wall Street Journal, franchise restaurants are beginning to make a comeback and lenders are returning to business once again.  But many of the iconic brands that we are used to are freshening up their image, menus, and expanding into new territories.

Fast-casual dining is becoming more popular and restaurant chains “are now less likely to resemble their brand’s current image,” according to Wally Butkus, partner in Restaurant Research LLC.  McDonald’s in the Oakbrook Ill. area has transformed their stores from the red and white playgrounds into more adult-friendly seating, FOCUS Brands hired an architect to design new buildings with a smaller footprint and while Papa John’s was reluctant to spend the money necessary for a remodel, Don Graham vice president of development says, “once we heard feedback from their customers, they all came on board.”

During the recession, franchisors were less likely to spend the money to conduct remodels, but tired looking restaurants generate lower sales and companies now are getting more sophisticated. Major brands like Dunkin’ and Wendy’s have since launched major remodeling programs.   EVP for Techtnomic Darren Tristano knows, “fast-casual concepts are incredibly appealing because they generate high sales compared to investment.” 

As customers continue to become more value-conscious, companies across the board are making adjustments to a fast causal concept and increasing their emphasis on franchise growth. 

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