Cornering Expansion in a New Market with a New Brand

Franchise Development

For the husband-and-wife team, Glenn and Tina Beattie, a step to broaden their 37 Denny’s restaurants in Western New York and Arizona includes a multi-unit, multi-year deal to open 22 Corner Bakery Cafe locations in New England. Glenn is president and Tina is vice president of Top Line Restaurants, Inc. The New England market isn’t new to Glenn, who was born and raised in Rhode Island. His passion for franchising began early: by age 20, he’d moved to Arizona and began working at a franchise company and later started working in the restaurant business. Ten years ago, Beattie purchased three of his first Denny’s restaurants. However, his goal was to get back into the New England region. In February of 2009, they acquired 28 Denny’s restaurants in Upstate New York. With an exclusive territorial development agreement for the Western New York market, “All of our growth in the last few years and continued growth will be in New York for us on the Denny’s side,” said Beattie. “The ability to get in with a new brand is something we’ve been focused on for quite some time and just trying to find the right fit.”  They found the right fit with Corner Bakery Cafe and the added plus of being able to expand the New England market. While the economy is still in recovery, franchisees--who are key players in the health of franchise systems--are moving forward.  The International Franchise Association’s updated economic outlook indicates that the number of franchise establishments in the United States will likely increase by 1.6 percent in 2012.  Employment in franchise establishments was revised up slightly from 2011 (a 2.0 percent gain) to a 2.1 percent gain in 2012. Beattie points to the strong leadership of their Denny’s stores in Arizona and expects “the growth and development up in the New England-New York region will be very easy for us to manage as well.”  The benefits of the new expansion plan are that it makes sense geographically, they love the fast-casual aspect of Corner Bakery Cafe and that the brand lends itself to the family-focused community, as well as the food, food quality and how it’s prepared. Beattie added that Top Line Restaurants and Corner Bakery Cafe’s cultures were aligned in how they go about doing things, which served as the “biggest and best thing for us.” As part of their homework before concluding the deal, Beattie said they made their rounds by visiting trade shows and studied concepts as they sought to diversify their businesses “and it was really to broaden us as a restaurant company.”    As with most franchise businesses, the lending environment was an important consideration as the Beatties sought to expand their franchises.  “We’re very happy that the lending environment is finally opening up a little bit to the franchise community again,” said Beattie. “It was pretty locked down with the recession and all the banking crises that occurred. So that definitely played into our decision that now was the right time to sign a development agreement of this size.”  He added that even through the recession, on the Denny’s side, they found tremendous opportunities for acquiring “Top-A type locations” and the franchise provided the leadership to help them weather the recession. In addition to the quality of the food and the way it is prepared at Corner Bakery Cafe, Beattie credited the guidance of the company’s Senior Vice President of Food and Beverage Ric Scicchitano and that he did an amazing job.  It turns out that Schicchitano is listed on the company’s website as its first employee.     Although new to multi-branding, Beattie provided some sage advice to others who might consider this path.  “Focus and narrow your search to something you’re really going to be passionate about and want to get 110 percent behind it.” Making the decision to open 16 Corner Bakery cafes in Connecticut and six in Rhode Island over the next eight years points to the Beatties’ passion and commitment to fast-casual franchise restaurants.  In addition, it is expected that the new businesses will create 800 more jobs in those markets.