An updated report from foodservice consultants Technomic found that many top restaurant franchisors reduced corporate ownership of retail units in 2008 by converting them to franchisee locations. Top chains doing so included DineEquity, owner of Applebee’s, and Yum! Brands, owner of Pizza Hut and KFC.
Franchisors also offered their franchisees enhanced credit support and easier terms. Some chains reduced or waived franchise, marketing and store-opening fees, offered small loans and payment deferrals, and temporarily reduced royalty rates as incentives to encourage successful franchisees to purchase additional locations during the credit crunch.
“The shift toward a heavily franchised business model presents new opportunities for suppliers,” says Darren Tristano, EVP at Technomic. “Strong, successful franchisees will be expanding their market presence and growing sales by acquiring formerly corporate-owned units. Suppliers who focus on building and strengthening their relationships with these franchisors can participate in that growth.” Carry on reading.