The CFA Guide to Food Service Franchise Models

We break down the subtle, but important differences between quick service, fast casual, casual, and full-service restaurants

Some franchise models are very easy to define. Quick Service Restaurants (QSRs), for example, and, on the other end of the spectrum, fine dining. But then there are those in between, like fast casual, that sit somewhere in the middle. Below, Franchise Canada takes a look at four thriving restaurant franchises that occupy four separate categories in the food service sector. Franchise Canada provides an in-depth look at the QSR, Fast Casual, Casual, and Full-Service franchise models to disseminate what makes each one unique.

Quick Service:

With their classic burgers and pig­tailed namesake redhead, Wendy’s is one of the most recognizable brands in the Quick Service Restaurant (QSR) category. A sector populated by restaurants that offer up exactly what the name implies: fast service.

Lisa Deletroz, Wendy’s Market­ing Director, says that in the popular QSR market, it’s important to focus on what the customer wants. “Our customers want that quick service and they expect high quality, so we provide that all in a comfortable space,” she explains. “The QSR sector is growing and Wendy’s always wants to be part of a sector that’s growing.”

As for the benefits and chal­lenges associated with operating a QSR franchise, Deletroz points to the competitive nature of the sector, which leads to an ongoing commit­ment to innovation.

“The challenges are the same as the benefits, really,” assesses Dele­troz. “QSR is a very competitive industry in Canada, and as a result of that competition we have to inno­vate and constantly be coming up with new ways to continue growing.” She goes on to say that as a result of this fact, it’s a very exciting industry to be in and there are always new ways to improve.

Wendy’s franchisees are, above all, passionate according to Dele­troz. “Our ideal franchisee is very passionate about what they do and shares our vision,” she says. “Often they have business or retail back­grounds, but that’s not necessary, as long as they share our vision and have that passion.” As with any food service franchise, that kind of back­ground is always an asset, but in no way is it an obstacle to becoming a successful Wendy’s franchisee. With extensive support in every area, from training and market­ing to restaurant development and ongoing operations, franchisees are guided throughout each stage of the process.

Fast Casual:

After an impressive 90 years of operating in West­ern Canada, White Spot is a household name. Their fast casual restaurant chain, Triple O’s, is an exten­sion of that brand, with the same level of quality available in a quicker environment. President of Triple O’s, Warren Erhart says that he would place the restaurant in the “fast casual” category. “It starts with unique, fresh, made-for-you products, and while we do have counter service, we also bring the product to the table as well,” he explains. “It’s beyond just transactional service—the guest experience is everything.”

A big benefit to being part of a franchise system like Triple O’s is that head office performs marketing research to stay ahead of current trends. “We spend a lot of time and energy researching both our guests and our staff to make sure that we have a good pulse on what the market is like,” relates Erhart.

One of the challenges to overcome is staffing, and to ensure that Triple O’s is always delivering an excellent guest experience at every restaurant. “We simplify systems for staff, train them well and use technology when appropriate. These are all obstacles, but also solutions and opportunities to those obstacles in themselves as well,” he says.

When asked what an ideal Triple O’s franchisee looks like, Erhart says a passion for the brand is a must-have.

“Anybody that loves the brand as much as we do,” says Erhart when describing an ideal franchisee. “We can teach you the skills and we can teach you the business, but it’s really the attitude and passion of the person.”

In terms of training and support, franchisees have access to a learning management system and a manage­ment development program. What’s more, they receive support from the Home Office in the restaurant opening as well. “We are only as strong as our weakest restau­rant, so we have to provide a great training program. It’s our responsibility to provide them with those tools,” Erhart says.

Casual:

MR MIKES® SteakhouseCasual started in Western Can­ada back in 1960. The chain fits into a category Vice President of Business Development Rick Villalpando calls “Midscale casual.” While the restaurant provides full table service, the price point is such that the target demographic can afford to go every week. “If you have a chart with inexpensive value to the left and fine dining to the right, we would just be a little bit right of centre,” explains Villalpando.

In 2010, RAMMP Hospitality Brands Inc. purchased MR. MIKES®, which was at that time called Mike’s Steak­house and Bar. “We did a lot of research to find out who our customer was and what they want and we re-eval­uated based on that,” recalls Villalpando. “The name steakhouse implied something a lot more expensive and formal than we are.”

In order to make everyone understand what cate­gory the steakhouse fit into, they rebranded to become MR MIKES® SteakhouseCasual. “In the process of doing that we invented a new category within casual dining: casual dining steakhouse,” explains Villalpando. “We are the only casual dining full service steakhouse chain in Canada.” According to Villalpando, for potential franchisees the biggest benefit is that there is no direct competition. “We are so different because of the category that we are in, there’s no one else like us. On the other hand, the challenge is that we are new in some of our markets, but once it’s up and running and people experience us the restaurant takes off,” asserts Villalpando.

The new franchisees themselves need to have cer­tain characteristics. “I want someone who is passion­ate about the restaurant business, and someone who shares our same business values.” The ideal franchisee has business experience, and food experience is not a requirement. “Many of our franchisees have partner­ships, with an investing partner and an operating part­ner. If they are lacking on the restaurant side of things, we can help them hire that expertise,” says Villalpando.

Besides the initial eight weeks of onsite training, MR. MIKES® has a bevy of programs to help franchisees get up and running and stay on track; from assisting with the hiring, to ongoing online training programs to an annual convention, plus store visits, which ensure that each franchisee has the best possible shot at success.

Full Service:

At a full-service restaurant, guests are seated at a table with a server, often spending an hour or more enjoying their meal. Boston Pizza fits neatly into that category, with sit-down restaurants and a full menu.

“We use the terms ‘casual dining’ and ‘full service’ interchangeably,” explains Joanne Forrester, Senior Vice President of Operations. She adds how the real oppor­tunity to differentiate a franchise brand from the pack is by being laser focused on your target guest, deliver­ing remarkable hospitality, and by coaching your staff around situational service at the table to empower them to identify those moments that can make the dining occasion special.

While many full-service dining brands have shifted to be more adult-focused by elevating their bar offerings, Boston Pizza is focused on young millennial families. They have undergone an extensive modernization of the restaurant’s guest experience, which includes upgraded menu offerings, and a new pay-at-table experience that allows guests to review, pay, and even split their bills via smartphone.

In addition to putting a sharp focus on hospitality, Bos­ton Pizza is constantly updating and improving its menu. In addition to new options such as thin crust pizza, they have also added “more shareable” items to the menu.

Another way the franchise stays competitive is by being adaptable, Forrester explains.

“Our concept is really flexible. Our restaurant designs can suit everything from urban and rural areas to airports, hotels and hockey arenas,” she says. “We’ve adjusted our offering inclusive of menu and design, so our franchisees can deliver that same great Boston Pizza guest experi­ence, regardless of physical location.”

While Boston Pizza restaurant locations don’t all look the same, they have one thing in common: a passion for the brand.

“We have a real variety of franchisees, ranging from people who worked in the oil and gas industry, farming and agriculture, to people who have grown up around the restaurant business,” she explains, adding how fran­chisees can also follow the investor/owner-operator model. “We pair someone who doesn’t have a restaurant background with a restaurant partner who is passionate about the business.”

To ensure they’re delivering the excellent hospitality that the brand demands, all new franchisees go through a six-week, hands-on guest experience training pro­gram. Corporate trainers also spend four-to-six weeks at each new location to help train staff. This ongoing support includes online learning, while every store is paired with a regional manager.


By Karen Stevens