Unlocking Growth Potential in the Restaurant Industry through Franchising
Explore how Twin Hospitality leveraged the franchise model to enhance performance and unlock growth potential for its restaurant brand.
Photo by Abdul Hakim on Unsplash
Photo by Abdul Hakim on Unsplash
Transforming Smokey Bones into Twin Peaks
Twin Hospitality's decision to convert Smokey Bones units into Twin Peaks restaurants marks a strategic shift in the restaurant industry. By identifying 19 Smokey Bones locations for conversion, Twin Hospitality aimed to revitalize these spaces and enhance their performance. The successful completion of two conversions has already demonstrated significant results, with average unit volumes skyrocketing from $3.5 million to $7.8 million. This substantial increase showcases the effectiveness of the conversion strategy in generating impressive financial returns.
Franchising as a Growth Catalyst
Utilizing FAT Brands' established franchise model, Twin Hospitality plans to leverage franchising as a tool for unlocking growth potential within its brand. By starting to franchise a portion of the remaining Smokey Bones locations, Twin Hospitality aims to create a more balanced corporate-to-franchise mix. This shift not only diversifies the company's operational structure but also paves the way for expanded market presence and revenue streams. The strategic use of franchising can open up new avenues for brand expansion and profitability.
Optimizing Financial Performance
The closure of 15 unprofitable Smokey Bones locations, coupled with the reduction of $1.5 million in corporate overhead, underscores Twin Hospitality's commitment to enhancing EBITDA performance. By focusing on the positive cash flow generated by the remaining 26 Smokey Bones restaurants, which contribute around $3 million to EBITDA on a trailing 12-month basis, the company aims to streamline operations and drive financial growth. These measures are designed to create a more robust financial framework for sustained success.
Leadership Reinforcement
With the appointment of Ken Brendemihl as president of Smokey Bones, Twin Hospitality reinforces its commitment to operational excellence and leadership. Ken's extensive experience in the restaurant industry, including roles at Alamo Drafthouse, Velvet Taco, and Texas Roadhouse, brings a wealth of operational expertise to steer Smokey Bones into a new era. His proven track record and deep industry knowledge position him as a catalyst for driving growth and innovation within the brand.
Twin Peaks Brand Expansion
While focusing on revitalizing Smokey Bones, Twin Hospitality remains dedicated to growing its Twin Peaks brand. With 114 units spread across 27 states and Mexico, and backed by 100 signed franchise agreements, Twin Peaks has laid a solid foundation for expansion. Despite recent operational losses and a decline in same-store sales, Twin Hospitality's strategic initiatives, including the closure of underperforming Smokey Bones locations, are aimed at strengthening the overall financial performance and growth trajectory of the Twin Peaks brand.
