One of the most interesting parts of developing a franchise is the new perspective of new franchisees. As much as the industry mocks mega franchisees, it is demanding entrepreneurs with aggressive deals that drive the industry forward.
Shawn Danesh and Dean DeGood are two of those franchisees who are expanding their brands into new markets with new ideas and boundless energy.
Danesh is testing some of Rally’s Drive-In’s long-standing approaches with a 15-slot deal in Orange County, California. Rally generally targets low income areas and minority markets. It’s done well in these areas, so the target makes a lot of sense for the brand, but Danesh is looking to shake things up. It already has a location in southern Orange County where the glittering corporate headquarters dot the skyline and you can’t throw a stone without hitting a Porsche or Lamborghini (and therefore being sued). The median income is double that of the northern end of the county.
“I took it upon myself to say that this is not how it should be, it should be more open to different fields and to the general public,” Danesh said. “I opened one in southern Orange County, and it’s just a pleasure. It is doing much better than the locations we have in northern Orange County.
For him, good fries are good fries, whether you drive a 2009 Honda or a 2022 Porsche. He has seen the muddy demographic demographic of the California market for a long time. He worked in hotels, then moved to QSR, where he owned and operated restaurants and convenience stores for decades, including Subway, Quiznos, Circle K, Shells, and some chicken concepts. As Californian operators like him know, it is a single market.
“California is a different type of market. I have been in the market for 42 years. I think you must have experience in California, you must know your area. If you bring in someone from outside who doesn’t know the area, the crowd, or the demonstration in California, it can take a toll on the business, ”Danesh said.
According to his agreement, he has seven years to develop his locations, but he is looking to go faster. He’s seen how saturation of the market helps, and he said that with the digital switch-over it’s even more important to grow quickly as people search their phones for something “near me”. This is something that Sonic Drive-In has done successfully in the market; Danesh wants to replicate this strategy.
“What I’m trying to do is make sure that in every direction you turn you’re going to see a rally,” Danesh said. “Bring the rally name and signage all over town, I think it will make people think that there is another QSR you can count on with great food, and we are open when you need it. “
Paving the way for brand awareness is a common tactic for developing new markets. This keeps the brand in mind, as Danesh said, but it also brings scale gains faster than slow growth would. Even without great recognition, five one-concept sites that perform well in the first year or two will mean more advertising capacity in a market and push the business further faster. Of course, there’s a trick to this as well: New franchisees don’t always have the resources to go fast and execute the concept well. Danesh has the pipeline of people to run its other operations, but it’s not easy to scale and run well at the same time.
New territory, new concept, new ‘zee
For Dean DeGood, a new Scenthound franchisee who has signed an agreement at 20 locations in Virginia and Maryland, his approach is to introduce a new method of pet care to a new market. Scenthound has a retail dog care membership model with 13 open locations and 80 more locations in development.
“Two of the main things you buy with a franchise are systems and processes and name recognition. In this case, there is only one of the two. Part of our mission will be to spread the word and educate dog owners. This poses certain challenges to the growth of this brand. But above all because we are in this niche which does not exist, ”said DeGood.
It is also looking to grow quickly, opening two or three locations per year for the next five or six years. So far, he has two locations in lease negotiation. He builds on the network he built with a successful dog walking business that thrived until everyone started staying home with their dogs in 2020. He’s also bringing in a few key executives from his old company to accelerate expansion efforts.
He said unlike Rally’s, which needs to be within reach of hungry shoppers, it needs to communicate the value of the model locally and get people to extend their runs – it wants to co-locate with busy grocery stores.
“Some of the experience we have in the dog walking business will be using the same techniques. A lot of it is about building relationships, going to pet events and not having your brand and face in public. There’s traditional and social media marketing, but a lot of it is just talking to people, ”DeGood said. “I have about 40 dog walker teams that I’m about to retire to move to Scenthound. I know how to do things at the basics. “
It is an easy product to sell to animal lovers: preventive and routine care means more time with their animal. The hard work of framing the subscription model for these owners is also easy for DeGood. He said the love of animals turns what might sound like networking work into something engaging.
This passion is essential for developers of new markets like DeGood and Danesh. Whether it’s the love of Rally fries or the love of animals, a mega franchisee needs systems, but developers need to love challenges.
“I probably wasn’t going to do this in a concept that I wasn’t going to care about,” DeGood said. “In an emerging brand, you have to look for people who are looking for a lifestyle that is in an industry that they are passionate about.
FT Restaurants editor-in-chief Nicholas Upton brings his years of franchise reporting experience to The Pipeline, where he writes about interesting development deals and the people behind them. Send your franchise development agreements to [email protected] Former Pipeline columnist David Farkas has retired.