Which franchise system is growing fastest this year? Brent Greenwood of US-based Firehouse Subs put his hand up in a recent forum on Linked In. But the 19-year-old franchise system’s growth only really started to flare three years ago. In an exclusive interview, Brent told us this late bloomer’s secret.
The growth of the US-based fast casual sandwich outfit had been smouldering away since it began franchising in 1994, adding a steady but certainly unspectacular twenty to thirty franchises a year. Until 2011, that is. Then something happened and it started growing like wildfire – leaping by more than one hundred from 388 to 491 in 2012, then by 121 last year, being named Nation’s Restaurant News’ #1 growth chain. The goal for next year is 140 new locations.
In a world where most slow-building businesses get overtaken by faster-growing competitors and run out of steam, what happened to spark such explosive growth, nearly twenty years after start up? We talked to Brent Greenwood, Manager of Franchise Development at Firehouse Subs since 2008.
No Ordinary: Excuse the pun, Brent, but Firehouse Subs has been on fire for several years now. What are your long-term goals?
Brent Greenwood: Our growth plan has us reaching 2000 locations by the end of 2020 and we are on track to accomplish that.
No Ordinary: To what do you put down the sudden leap in growth?
Brent Greenwood: For many years running, the Firehouse Subs' brand has been getting a tremendous amount of national recognition for our strong operations, franchisee satisfaction, consumer rankings, and forward-thinking leadership team. It is this positive buzz being reinforced by prospective franchisees visits to our restaurants that has fuelled the interest in the brand. I am fortunate to be on the receiving end of 400 new inquiries a month.
No Ordinary: Four hundred! What kinds of franchise marketing do you find work best for you?
Brent Greenwood: We spend a considerable amount of money each year on franchise marketing, but I wouldn't suggest any one source was better than others. As a matter of fact, we get our biggest response from exposure we don't pay for. National PR pieces have been very successful for us at driving interest in markets where we don't have much brand recognition yet. We divide our advertising budget up between print ads in trade and franchising publications, digital ads on various portals, postings on job boards, social media (LinkedIn & Facebook), table tents and posters in all of our locations, and restaurant/franchising tradeshows. I think our ad campaigns are so successful not because of one source, but because we are everywhere a prospective franchisee looks for more information. I often hear from prospective franchisees that they see us everywhere.
No Ordinary: It’s one thing to achieve high growth but another to achieve it without leaving train wrecks in your wake. What is Firehouse Subs doing to ensure its growth remains sustainable and franchisees get the support they need?
Brent Greenwood: Our support structure is local to our franchise owners in all the markets that we operate in and we carefully select the Leaders for each area before we begin franchising there. These Leaders are seasoned, restaurant professionals that train/mentor franchisees and enforce the brand standards in their respective markets. From the top down, we are driven by growing our system AUV (Average Unit Volume) and do not make any decisions that would compromise that to include who we grant franchises to and what sites we approve for development. This approach leads to high volume restaurants being run by passionate and very satisfied franchisees!
No Ordinary: When is Firehouse Subs coming to New Zealand and Australia?
Brent Greenwood: We have not committed to a timetable yet for beginning development in your area. Our first two International markets will be Mexico and Canada and we expect to begin operations there by the end of 2014. Our model for developing out International markets may end up being a little different than the model that we use in the U.S.
Since this interview, we have discovered some of Firehouse Subs’ other secrets:
- Leadership: We doubt it is a coincidence that the franchise’s growth took off within a short time of Don Fox being promoted from Firehouse Subs’ COO to CEO in late 2009.
- Field Visits: With 39 years and a high profile in the industry, Fox is a very hands-on leader, balancing his strategic management with field visits to give him a better handle on brand performance and customer satisfaction, and insisting that his managers do the same.
- Culture: A big believer in building a strong organisational culture, Fox and his team run inspirational crew rallies designed to engage both franchisees and their employees
- Marketing: In what has to be one of the gutsiest turnarounds ever, Fox admitted he’d made a mistake by allowing franchisees to handle their own marketing in response to the sales slump brought on by the recession, and came back to ask them not only to start contributing to the marketing fund again, but to contribute more than before. As a result, Firehouse Subs was able to launch an $8 million campaign right into the teeth of the recession which was successful in lifting the franchise’s profile and firing up sales as well as franchise recruitment.
- Trends: It helps that Firehouse Subs has been able to ride on the back of the recent growth in fast casual restaurants in the United States.
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