Colo. Firms Hope To Overcome Slowdown Through Franchising

CNNMoney:

2 Colorado-based fast-casual restaurant groups are betting that aggressive franchising will accelerate their growth beyond what their own capital allows at a time when tight credit and food inflation has many customers curtailing spending.

Einstein Noah Restaurant Group Inc., based in Lakewood, launched a new franchise program for its Einstein Bros. Bagels stores in December 2006. It had 337 Einstein Bros. Bagels stores at the end of its last fiscal year, and the first franchised Einstein Bros. store opened this month in Florida.

Good Times Restaurants Inc., based in Golden, wants to hasten its growth outside Colorado by franchising. About half its 52 stores are franchised, but CEO Boyd Hoback hopes to boost that percentage to 70% in 5 years. The chain hopes to have 100 restaurants overall by 2010.

‘We couldn’t grow at the rate we felt the company deserved just by adding company-owned stores,’ Einstein Noah CEO Paul Murphy said. ‘Having franchisees, they bring new ideas to the table that can improve the business.’

Franchising has led to quick growth for Denver-based Quiznos, Denver-based Spicy Pickle and Qdoba Mexican Grill, which has business offices in suburban Wheat Ridge. Cash-rich Chipotle Mexican Grill Inc., also based in Denver, is sticking to expanding with company-owned stores. Read more.