Strategy for Multi-Branded Franchise Locations Gains Momentum in 2023
Fast-food franchise brands have found strength in numbers: Franchisors that place two – or more – brands under one roof have learned it’s a recipe for success. So the strategy of dual-branded, or multi-branded, franchise locations shows tremendous momentum in 2023.
Jeff Crivello, CEO of BBQ Holdings, told Restaurant Dive that “parent companies have always looked for synergies at the corporate level by marrying multiple brands, and it now makes sense to do the same at the restaurant level.” In support of his assertion, Crivello said BBQ Holdings’ co-branded Granite City-Village Inn restaurant in Maple Grove, Minn., has reached all of its goals since opening last May.
Benefits of Dual Branding
Many advantages of multi- and dual-branding franchises are straightforward, especially for fast-food restaurants. First and foremost, franchisees who want to place a second brand within their location can do so without spending as much as they would for a standalone unit. That means savings on real estate as well as a faster signing-to-opening-day process.
Other resources and expenses also may be shared: furnishings, possibly some equipment, utilities and additional overhead costs, and employees. In the pairing of Focus Brands’ Schlotzsky’s and Cinnabon franchises, for instance, the same set of employees will take orders, assemble a sandwich, serve up a cinnamon roll and process payments.
Another huge bonus of dual-branded franchises is that multiple menus can attract a broader customer base, which of course appeals to franchisor and franchisees alike. Say Mom and Dad want a cup of coffee but the kids want ice cream – they’ll find one-stop convenience in Inspire Brands’ dual-branded Dunkin’ and Baskin-Robbins sites.
Expanded food options have been a huge winner for FAT Brands, a franchisor of 17 brands that will develop 1,000 new units within the next five years, up to 500 co-branded. FAT Brands has combined Fatburger and Buffalo’s Express for nearly a decade at 100-plus locations. FAT Brands CEO Andy Wiederhorn said those sites enjoy average unit volumes about 20% higher than singletons. “When people decide where to eat, you don’t want to get a no vote from someone who doesn’t want to eat that burger or chicken,” Wiederhorn told Nation’s Restaurant News.
And now FAT Brands is wedding Hurricane Wings and Johnny Rockets. In the Nation’s Restaurant News article, Jake Berchtold, chief operating officer of FAT Brands’ fast-casual division, expressed great expectations for the marriage, saying, “Burgers and wings pair perfectly together, which we have witnessed firsthand at FAT Brands with the co-branding of FATburger and Buffalo’s Express.”
What Franchisees Should Know
With dual-brand franchises, investors still must do their due diligence for assurance their market will support particular brands. And owners of an existing fast-food franchise must comply with contractual obligations and restrictions of both current and new brands.
Kristen Hartman, president of specialty brands for Focus Brands, told QSR that franchisees also face the challenge of ensuring high-quality customer experiences when kitchen resources are shared. “It’s not a matter of just simply saying you’ve got two brands. You’re going to put them in one space,” she said. “It takes a great deal of effort on the part of the teams to ensure that you’re setting your franchisees up for success when you bring two brands together in the same space.”
Umbrella Franchisors and Dual Branding
Many umbrella franchisors have refined dual-branding processes so franchisees can more easily add a brand within the family of brands. For instance, the Inspire Brands franchise has co-branded among its Arby’s, Baskin-Robbins, Buffalo Wild Wings, Dunkin’, Jimmy John’s, Rusty Taco and Sonic Drive-In franchises.
Saladworks has found a soulmate in Frutta Bowls; both health-oriented restaurants are owned by the WOWorks franchisor. WOWorks CEO Kelly Roddy knew the two would match up well, according to QSRmagazine.com. Roddy said Saladworks locations, after adding a Frutta Bowls, posted sales increases of 50%.
Compatibility is key, and umbrella franchisors do considerable market research to ensure that teamed franchises coexist harmoniously. Focus Brands Chief Development Officer Brian Krause says Focus Brands has done its homework on brand blending to “reduce the friction that sometimes can be created when establishing a co-brand or multi-brand.”
Looking Ahead: 2023 and Beyond
With bottom lines reflecting a rosy picture for dual-branded franchises, the trend is expected to stay strong. In a recent news release from Focus Brands, Krause predicted it’s “the future of our brands, especially on the specialty side of the business.” Focus Brands already has more than 175 units that feature two or three brands under one roof – many of them team Auntie Anne’s, Cinnabon and/or Jamba. Focus Brands will open more than 50 double- and triple-branded locations this year.
“Keeping brands and their unique identities intact as you merge them together with all the efficiencies that we’re looking for is key in the market,” Krause said. He added that having the right franchisees with the right passion is vital for Focus Brands’ success with multi-branding.
Dual Branding Outside Franchising
Dual branding isn’t limited to franchises, of course. Many types of companies have co-branded for short- and long-term benefits to both brands. Here are a few:
- Apple / Nike: Apple’s musical offerings accompany Nike’s workout-tracking accessories.
- CoverGirl / Lucasfilm: A special line of makeup piqued customers’ curiosity about Star Wars, boosting sales of movie tickets; CoverGirl enjoyed the vast exposure of a blockbuster film series.
- Dr Pepper / Bonne Bell: The distinctive soft-drink flavor debuts in the cosmetics manufacturer’s lip gloss.
- GoPro / Red Bull: Adventurous lifestyle companies – an action-capturing camera brand and a high-profile energy drink – engage in cross-promotion.
- Mastercard / Apple: This was a crucial collaboration for the Apple Pay app.
- Starbucks / Spotify: The coffee-shop chain streams customer-pleasing music.
- West Elm / Caspar: A furniture retailer that didn’t sell mattresses teams with an industry-disrupting mattress seller.