Success Story

Franchising Expands Growth Opportunities for Bout Time Pub & Grub

Tim Ryan and Joe Fraser, co-owners of the Bout Time Pub & Grub sports bar concept, are growing their successful restaurant business through franchising.

"Many growth opportunities exist, but expansion through franchising is working for us," Ryan explains. "It resolves capital needs, eases the need to find labor and shifts practices to top-line sales."

Indeed, in a move toward expansion via franchising, the partners sold six units to a qualified franchisee to reach a total of nine franchised units. Going the franchising route, Ryan points out, has brought additional ownership/management talent, relieved day-to-day operations pressures, freed up capital to allow additional expansion without banks or investors, and created a very constant revenue stream from top line.

"For us, this was not a 'problem' but a strategy," Ryan reflects, "one chosen amongst several as the best way to meet our growth plans and vision of the type of operation we want to be."

The strategy is paying off. Thus far, the move to begin franchising "is playing out exactly as we thought," Ryan says. "We are receiving an added bonus in that our franchisee group also brings years of operations experience and a steady stream of insights and ideas we may not have thought of. They benefit from our support, in return."

He reports that his company's franchise division financials were instantly boosted with the addition of six units that already had a history of success. In fact, the opportunity for failure in a given location was small given that all were previously profitable. "We jumped from three to nine franchise units overnight, which is a far more appealing picture as we attract future franchisees."

The transaction took about a year, finally closing last June. Ryan recalls that there were 90 days of "intense effort" to transition following the close, followed by 90 days of "dialing the groove, so to speak. Now we are fully able to focus on growth in 2018."

Operationally, the new franchisee came in "with much gusto, which as an operator will tell you, is an opportunity to reset, refresh and roll up to the next level," Ryan continues. Most staff members were nervous but excited, he reports, and a great majority have been retained. "Once the dust settled, we all were able to refocus on growth and expansion with solid existing operations as a foundation."

'Take-Aways, Knowledge Bits'

A good deal of the credit, Ryan admits, must go to RestaurantOwner.com

"RO creates a steady stream of take-aways and small knowledge bits that continually make us look in the mirror," he notes. "Sometimes the information saves us from having to build a mousetrap, and sometimes it helps us build a better mousetrap. Sometimes it's just food for thought provided by an article or email, but it's healthy to have those informational moments."

In looking across the industry, Ryan says he sees that "a lot of the 'senior' concepts are winding down. Alternatives to capital and labor-intensive big-box concepts are coming about with leaner, meaner business models that appeal to a very fast-moving customer base."

At the same time, what Ryan refers to as "DC tax reform" is already being felt positively in paychecks. "State increases in minimum wage are forcing owners/operators to work even harder to find the best-performing employees. We have to get maximum effort, as well as trim labor to the lowest acceptable level." The adoption of legal marijuana in Colorado has proven "a huge issue for us, as entry-level pay to 'work the weed' is about $21 an hour."

The partners' goal for the months to come is to execute one or two multi-unit franchise deals and assist current franchisees in expansion plans for one or two additional units. Changes in store include upgrades to the company's loyalty rewards program, staff uniforms and "to keep aware and compliant with the hot topics du jour," Ryan says, "such as sexual harassment in the workplace, health concerns like Hepatitis A and the flu, social media trends and feedback - all while increasing sales, dialing in profitability and improving the guest experience."