One recipe for success in the franchise industry is to start small and grow larger. That seems simple and obvious, but there’s more to it than that: innovation is key, and the product or service has to be new and different. If it is, then franchisees can expect their investments to pay off handsomely, as the systems here show.
If you want to eat fresh deli food in Toronto, go to Druxy’s. The 34-store landmark covers the Greater Toronto Area and then some, from Explorer Driver near Pearson International Airport in the west to Ajax in the east and north to Barrie. Peter Druxerman, Vice-President of Marketing for Druxy’s Famous Deli and the brother of Bruce Druxerman, who started the business in 1976 in Toronto, describes the eateries as “old fashioned Jewish-style delis” that serve sandwiches, bagels, soups, and salads. “Everything is prepared fresh,” says Druxerman, “and you design your own food.” And the emphasis is on the quality of the food served rather than cost, he continues. As a result, there’s neither filler nor gluten in the meat Druxy’s serves.
Druxy’s began franchising in 1990, and Druxerman says five new franchise locations a year seems ideal, with the growth coming in Toronto, southwestern Ontario, and university towns. “It would make sense,” he explains, to use a master franchise to expand to British Columbia and Alberta. The cost of a Druxy’s franchise is about $225,000. Training takes four weeks and then the franchisee works with a trainer who comes in for two more weeks.
Clearly the franchise model works for the Druxerman brothers, Bruce, Harold, and Peter. Two-and-a-half years ago they bought Williams Fresh Cafe, and there are now 23 locations in the system. The chain serves a wide selection of espresso-based hot and cold beverages, supported by soups, sandwiches, salads, hot meals, and desserts with locations throughout southwestern Ontario, including Kitchener-Waterloo, London, and Guelph. A Williams Fresh Cafe franchise costs about $625,000.
Of course, a Druxy’s customer could be anyone, but Druxerman says “impulse” was the way to go when the system started to think about its target clientele. As a result, a Druxy’s or Williams can be found where people work or shop, and in hospitals and universities where visitors will be looking for a quality bite to eat. “Customers are looking for something a bit better,” says Druxerman. “Our prices are higher but we serve larger sizes and fresher, more nutritious food.”
As for the qualities he’s looking for in a potential franchisee, Druxerman says a passion for the business is a must. What’s more, a Druxy’s or Williams franchisee should have a passion for delivering great customer service and a commitment to serving the best food possible. The benefits of a Druxy’s or Williams franchise, he goes on to say, include self-employment, strong support from headquarters, and a culture that truly cares about its franchisees.
Nimrod Oren remembers how he and his business partner, Boaz Mestbaum, checked out every retail mall they could, both in the U.S. and Canada, in search of the right concept. “We were always on the lookout for something new,” says Oren.
And they found it: the pretzel. The staple of American ball parks has been around forever, but the time was right, Oren continues, to serve the simple piece of twisted, baked dough to Canadians from kiosks and stores coast-to-coast.
Toronto-based Oren calls the pretzel an “in-between snack” for people on the go. It’s a relatively simple concept, he says, and franchisees don’t need to know much about food, since they aren’t investing in a restaurant. In fact, “The trickiest part of running a Mo’s franchise may be rolling and shaping the dough the right way,” says Oren with a laugh.
Mo’s Golden Pretzels are freshly made in batches on-site every day using Canadian and locally-sourced ingredients. Its target market is just about everyone, from families to seniors. “We cast a wide net,” says Oren. A kiosk costs between $110,000 and $120,000, and a store from $90,000 to $200,000 (depending on size), and both are turnkey operations. Training takes three weeks, with continued support available after that.
Oren, who has just started franchising, began Mo’s Golden Pretzel in 2015. There are two corporate kiosks in Brampton and North York, Ontario, and a corporate store in Hamilton, Ontario. This year, a new franchise location will open in Toronto, with a couple more units scheduled to open early next year. Many of the potential investors he’s talked to are married couples or entire families, says Oren.
He emphasizes that Mo’s Golden Pretzel is mall-based, but not a food court business, and as for expansion, Oren says at this point, he and Mestbaum will check out any location. “All we need is traffic. That’s it.” Although these are early days, the system will eventually be rolled out nationally and internationally.
Oren is looking for highly motivated investors with strong people skills, and a business background would be useful, but isn’t necessary. “We are very comfortable with talking to anyone with or without franchise experience, as we are confident we can guide them through the process,” he says.
As for the benefits of investing with Mo’s Golden Pretzel, Oren explains that the system offers a great-tasting product, and an all-Canadian brand. In addition, there’s the low investment involved, and the extensive retail experience provided by the Co-owners. Oren and Mestbaum are hard-driving business executives, and franchisees can take advantage of that, Oren says.
Seventeen years ago, The Works Gourmet Burger Bistro opened for business in Ottawa. The restaurant had just 27 seats, but, says President of The Works, Bruce Miller, “We opened to lineups.” There are now 28 franchises in the system, all in Ontario, and Miller says there are more great opportunities in that province with four more restaurants due in Sudbury, Windsor, Mississauga, and North York. Elsewhere, Miller explains he’s looking at expansion in Alberta, Manitoba and Quebec. The Works needs a community of about 100,000 to support a successful franchise.
Miller is looking for owners and owner/operators. “Industry experience is a bonus, but not necessary if you [the investor] choose to be an owner,” he says. Training takes 10 weeks, both on-site and in class, at The Works’ headquarters in Oakville, Ontario. The total cost of a franchise is $800,000 for the largest-sized unit. The system has a flexible build model, Miller explains, with a “bull’s eye” space of about 3,000 sq. feet including a patio. All restaurants in the system serve alcohol, and each of them have the same unique Works décor.
As its name implies, The Works offers gourmet burgers with an astonishing 14-million combinations of burger for guests to choose from. The menu is in a constant state of innovation, with offerings such as the Kobe Ragout-style burger. The Works also has gourmet salads, sandwiches, and a full children’s menu. Its clientele is broadly based, says Miller, and its prices are mid-range.
As for the benefits of investing in The Works, Miller points out that for a full service restaurant, startup costs are low. Investors will need actual capital of $350,000 to $400,000 and there are financing arrangements for the balance. Further, he says, there is The Works’ undisputed product innovation, and its leadership in the dining-out sector.
By David Chilton Saggers