🍟 1/9/2023 – Franchisees That Became Franchise Founders

DEEP DIVE 

Franchisees That Became Franchise Founders

The story behind the founder(s) of any company is usually an interesting one, and franchises are no different.

Ray Kroc, the “founder” of McDonald’s is exhibit A for why founding stories can be so fascinating. 

And after doing a little research into various other brands, I realized that some of the biggest franchises today were founded by entrepreneurs who were originally franchisees of other brands.

Read on for the top 5 coolest ones, with some bonuses at the end of it!

Popeyes

Al Copeland founded Popeyes in Baton Rouge, Louisiana in 1972. 

But prior to that, at the age of 18, along with his brother Gil he purchased a Tastee Donut franchise. It was there that he learned how to manage a food service business, and it wasn’t until he noticed how busy a local KFC was that he considered opening up a competitor. 

His brother Gil, said this: 

There was a chicken place [KFC] down the street doing twice the volume in half the hours. And he said ‘I’m in the wrong business, I have to get in the chicken business”.

It’s unclear if Tastee Donut has any locations open today, but clearly Copeland made the right call founding Popeyes!

Marriott

In 1927, newlyweds J. Willard Marriott and his wife, Alice opened an A&W root beer franchise in Washington D.C.

They expanded to multiple locations, and remained A&W operators for multiple decades, but eventually shifted to the hotel business in 1957.

It was ultimately J. Willard Marriott’s son, Bill, who’d manage the first hotel. Today, Marriott is a franchisor of 30 hotel brands that add up to 8,000+ properties across 139 countries!

Bojangles

Jack Fulk opened the first Bojangles in Charlotte, North Carolina in 1977, and began franchising within a year.

But prior to that, back in 1971, he got his start in fast-food as a franchisee of Hardee’s.

Fulk had a reputation within Hardee’s as a troublemaker. He’d introduce new food items at his stores without permission of Hardee’s corporate, such as the breakfast biscuit and roast beef sandwich. 

A friend of Jack said “They (Hardee’s) would complain, but after realizing what his sales were, they’d reluctantly add his products to the system”.

Ultimately, he left the system so he could do things his way. Today, Bojangles has 773 locations open across the United States. 

Wendy’s

Wendy’s was founded by Dave Thomas in 1969, 2 decades after McDonald’s and Burger King got their start.

But prior to Wendy’s, Dave was a fry cook at a chicken restaurant in Indiana. It was there where he met Colonel Sanders, who was touring the country convincing restaurant owners to convert their locations to KFC.

Sanders became a mentor to Thomas, and gave him equity in a struggling group of 4 KFC locations in Columbus, Ohio.

Thomas turned the locations around, and would sell his equity stake back to Sanders for $1.5M. He used that money to launch Wendy’s, and the rest, as they say – is history.

SweatHouz

This franchise is newer, but casual fans of this newsletter, my twitter, and/or podcast are likely familiar with it. 

Founded by Jamie Weeks, who built 140+ OrangeTheory’s, SweatHouz was founded in the last year and has already caught the attention of numerous multi-unit franchise owners. 

Bonus:

The below franchises were not started by former franchisees, but I still found them interesting.

Domino’s

Founded by Tom Monaghan, in 1960 he took over the operations of an existing pizza business while in college called “DomiNick’s”. 

He ultimately changed the name to Domino’s, which today is the largest pizza business in the world. The below quote from him describes how he got stuck in the pizza biz:

​​”I started out in architecture school, and got into the pizza business to pay my way through school,” he has said. “The pizza business was losing so much money I never got back into architecture.”

Taco Bell

Founded by Glen Bell in 1962 in Downey, California, he was previously the owner of a hot dog stand and miniature golf course before striking gold with Taco Bell.


FRANCHISE HEADLINES

Convenience Stores Could Be The New Fast Food

Outside of Chick-Fil-A, the top ranked brand in foodservice was none other than…Wawa. That’s just the tip of the iceberg though, as convenience stores in general ranked higher on average in food quality and customer service. 

Time will tell if regional convenience stores – from the likes of Wawa, Buc-ee’s, Sheetz, Maverik, etc. – will be able to compete nationally, but there’s no doubt that on a regional basis they are eating market share from QSR’s!

As a former Manhattanite, I’ve had DO and am a huge fan of their edible cookie dough. While it must be noted that the owner of 16 Handles acquired DO (i.e. as an individual, not via the franchise), part of the deal includes DO will exclusively be sold in 16 Handles franchise locations.

I love this move because cookie dough is a high margin product that helps 16 Handles diversify revenue. It also gives them something unique, that another dessert brand can’t simply replicate. It makes you think – perhaps growing franchises should consider DTC/CPG acquisitions to boost their revenue streams and bring in more customers!

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