Grill’d is ramping up its franchise growth with its three-part internal recruitment program. In its 20th year it is also boosting its external franchise recruitment after a period of corporate store growth.
The burger chain of 170 stores has 10 franchisees and a goal of franchising 30 per cent of the restaurants.
Grill’d founder and CEO Simon Crowe tells Franchise Executives “We have a genuine desire to build our own internal pathway, and we are excited to bring new franchisees in to the nest.”
Grill’d has shifted its property strategy to include more standalone restaurants. It will also add to the single company-owned drive-thru – two more set to open soon.
The costs associated with substantial restaurant footprints can be prohibitive for franchisees, says Crowe. A Grill’d strip or shopping centre site costs between $700,000 and $1.2m; a standalone restaurant needs a $1m to $1.6m investment; a drive-thru costs from $2m to $4.5m.
“We are excited about our ownership partnership model. This hybrid is ideal where capital is an issue for proven capable, brand aligned, leaders,” says Crowe. “We think this is a great way to introduce new people, and to create a future where we grow internal franchise partners.”
Grill’d internal franchise recruitment program
The first stage of the recruitment program is a Grill’d Partner Program. This enables employees to invest $15000 to own a 5 per cent stake in the restaurant. They also have the opportunity to earn an annual $50,000 on top of their salary and incentives.
These employees can then become Joint Venture Partners, buying in to the business with between $30,000 and $50,000. This gives them a 10 per cent stakehold. JV partners may earn an additional $80,000 per year.
The final stage, Ownership Partner, requires an investment of $100,000 to $150,000 to gain a 20 per cent share. It comes with a prospective $150,000 per year earnings opportunity.
Reward for profit growth
At each stage the program recruits have a six-month dividend equivalent to their stake. If they push the business they are able to step into the next stage after 24 months of their three-year term.
“They are rewarded for driving growth and profit and the five-time buyback multiple is an incentive, it accentuates the benefit,” says Crowe.
Grill’d debt facility
He is confident the new approach will help overcome the current funding challenges. The Grill’d debt facility will fund most of the ownership models, Crowe explains.
“This gives them the appropriate rigour, the passion is the same, and for good operators it is a stepping stone to pure franchising. We are prepared to fund them and act as a bank if and as required,” he says.
Pathway to independence
“This is all based on a growth pathway from 170 to over 300 restaurants. If we want to do well, the ownership practice is integral to business. We can achieve this with people who care about our business, and reward and recognise them with a pathway to financial independence.”
Currently, Grill’d has nine employees in the first stage, 11 undergoing the interview process, and 20 in the pipeline.
Sam Holt has been working under the GP Program in Everton Park, Queensland. Holt says “I wouldn’t have realised my potential as an owner operator without the opportunity to be involved in this program.
“The goal from the very beginning has always been to finish the partnership exceeding the initial targets set from that start but also leave behind a legacy for the next generation of GPs.
“The next step in the ownership journey of JV is a great opportunity for me to continue the work I have done at Grill’d through my GP program but with a higher stake in ownership. I’ve learned how to run a successful and profitable business and seen first hand the success this program can have.
“The JV for me is the next stepping stone in the journey towards becoming a franchisee with Grill’d.”
Shaping the franchise portfolio
Crowe says “We see 30 per cent of the franchise portfolio as partners, 15 per cent as JVs, and up to 10 per cent as ownership partners, which makes up 55 per cent in that space. Over time, and as the programs work, we will have more in pure franchising and increase our franchises from 20 per cent to 30 per cent of the overall business.”
Crowe believes this pathway also helps staff recruitment. He points to a number of incentivised restaurant managers already growing their careers.
“This is a long-standing viable business and a sought-after brand. We’ve comfortably said restaurant managers are our heroes. They need be grown, we want to bring in talent greater than the business opportunities and they should be incentivised.”
He likens the approach of hiring for advanced skills to building an A-league team to win a championship.
