DEEP DIVE

Celebrities 🤝 Franchising

Franchising is a business model that generates scale.

And when you get it right, you can go from a single location to a billion dollar brand in a matter of 7-10 years. Don’t believe me? Here’s some of the biggest winners of the last 10+ years:

• OrangeTheory: Founded in 2010, has ~1,400+ locations and is privately worth $1B+

• F45: Founded in 2011, went public on the NYSE in 2021 at a ~$1.4 billion market cap

• Crumbl Cookies: Founded in 2017, has 537 stores open today and will do $1 billion in system revenue this year

Clearly, when a concept resonates with franchise owners AND consumers, magic happens. Customers rave about the business, and franchise operators can’t open more locations fast enough.

But there’s a trend we’re in the early innings of that I believe is going to pick up steam in the next 10+ years. 

It’s celebrities launching franchises. 

Why? To cash in on their likeness and popularity in a way that goes well beyond endorsement deals. 

If you have a stellar athletic career you’re likely very wealthy, but founding a massive franchise can earn you far more than any pro sports salary.

Here’s who’s already franchising:

Mark Wahlberg → Wahlburgers

The Hollywood star and his brothers founded their burger business back in 2010, and started franchising it in 2014.

As of today, they have 75+ locations open, with the large majority of them being in the New England area (no surprise given it’s Marky Mark).

Floyd Mayweather → Mayweather Boxing + Fitness

Since 2018 boxing legend has lended his name to help build a boutique fitness concept that uses boxing as the core of the workout. 

To state the obvious, this fits in perfectly with Mayweather’s brand, given that he’s considered one of the greatest boxers of all time. 

The fitness franchise already has 61+ locations open – I spoke to the very first franchise owner on my podcast about why he’s so excited to be apart of it. 

Shaq → Big Chicken

The NBA legend is known for his franchise success. His portfolio includes:

• 9 Papa John’s
• 17 Auntie Anne’s
• 155 Five Guys (sold)

But he’s now focused on building his own brand, dubbed ‘Big Chicken’, which has sold 50+ units via some impressive multi-unit operators. 

While an NBA champion selling chicken sandwiches doesn’t have the same brand continuity as a boxing champion selling workout classes, Shaq still has a massive audience he can promote his business to.

Conor McGregor → McGregor Fast

Conor McGregor is one of the most electric personalities on the planet.

The irishman holds UFC belts in 2 separate weight classes, talked so much sh*t to Floyd Mayweather that he agreed to a boxing match (which McGregor made $30M+ from), AND he started his own whiskey brand that got acquired for $600M.

McGregor Fast is not a franchise yet, but I have word from inside sources I trust that they will be franchising in the next year or so.

And why not? McGregor is a big name who knows how to market himself and drum up publicity. 

Why Is This Happening Now?

Because in the era of the internet, these celebrities have more reach than many media companies in their own right. Conor McGregor can reach 46 million people from his instagram count alone!

Not only can these channels serve as competitive advantages to drive customers to their franchise locations, it can also help them find franchisees.

If you’re a major McGregor fan who happens to already own franchises. Why would you not be interested in a McGregor franchise?

This trend will extend beyond celebrities to include internet stars. Again, we’re already seeing it happen to an extent:

• Famous YouTuber Mr. Beast launched Beast Burger via 1,000 ghost kitchens, and is now building brick & mortar locations
  
• The Nelk Boy’s (also a famous YouTube group) are launching Full Send Gym’s, and plan for them “to be everywhere” in 3 years

Who’s to say they both won’t eventually franchise when they realize they can grow quicker by:

• Outsourcing capital and operations to franchisees
• Use their massive reach to find new franchise operators

I don’t know about you, but to me it’s only a matter of time until there are full-service companies that will solely exist to help influencers and celebrities create franchises.

The Catch..

While celebrities can get the word out quick about their concept, there’s 2 things that will always remain, regardless of who is selling the franchise:

• The product has to be good for customers to keep coming back
• The business has to be profitable for franchisees to keep buying in

If Mark Wahlberg’s burgers taste like garbage, even the most loyal Bostonian’s will stop going there. And if the economics go south, franchise operators will move on to the next concept. 

Like any business, these franchises need more than their brand to make them successful. But having a Global superstars reputation – or a YouTuber with 100 million subscribers – embedded into your business, is an undoubted benefit.

If you’re keen to be an operator, stay on the lookout for celebrities launching franchises (looking at you, TB12 👀).

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FRANCHISE HEADLINES

KFC Is Massive In China 🇨🇳

KFC has 8,500+ locations in China – far more than brands like Burger King (1,300) or McDonald’s (3,800). It does more revenue than any other fast food brand, and is so beloved by the Chinese people that it even has upscale versions called K-Pro and Grandpa’s Comfy Teas. Read my summary on twitter here.

CMG Company Finding Success With Little Caesars 🍕

The massive multi-unit operator finished 2021 with $354M in sales from its 196 KFC’s & Taco Bells, 103 Sonics, and 30 Genghis Grill units. They’ve recently acquired 20 Little Caesars restaurants, noting “it’s a fragmented system, they’ve got a lot of 5 unit owners”. If you’re a food operator, that means Little Caesar’s could use some consolidation!

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