The Best of 2009
Expansion 
Most Creative Growth
By Daniel P. Smith
Red Mango’s Buy Back Program
Dallas-based Red Mango used development deals with new and existing franchisees to secure some 40 signings for almost 200 new stores across the country in 2009.
To support the two-year-old frozen yogurt company’s franchisees, Red Mango unleashed its Store Buy Back Program
in the spring. An unprecedented move,
the Buy Back program allows partners
to resell their store to Red Mango corporate if they’re not satisfied within the first six months. While no operators have taken the offer to date, the initiative certainly helps quell operator’s financial fears and signals the corporate office’s confidence in the brand.
Moe’s Original Bar B Que’s
Low Budget
During 2009, Moe’s Original
Bar B Que, a one-time junkyard pit, opened three new locations in
Alabama. Others may have expanded more, but few expanded with more economic sensibility
and “design on a dime” gusto.
Moe’s expansion efforts are calculated and simple: Find closing restaurants, open on a small budget for $50,000–$150,000, and invest in upgrades once a steady cash flow is established. Within nine months, Moe’s restaurants cover their notes individually and live debt-free, the surest path to promoting additional expansion.
Photo: Moe’s Orginal Bar B Que
Straw Hat Pizza’s Bargain Power
In the midst of 2009’s economic tumult, California-based Straw Hat Pizza forged ahead, absorbing the economy’s hardest punches with an unrelenting focus on expansion. In one six-month span covering spring to fall, Straw Hat increased its physical presence from 38 outlets to 52 storefronts, a 30 percent climb. Additional units opened as the year closed.
Straw Hat leveraged 50 years of history and hype to compel landlords to finance a number of the deals with extensive TI allocations covering the build-out and even some equipment costs. As a result, opportunity-seeking franchisees seized lower start-up costs and a more financially sound shot at success.
OhCal Foods and Subway’s
Big Loan
As summer closed, OhCal Foods LLC and CEO Hardy Grewal, a veteran Subway franchisee, received a $12.4 million loan from California Bank & Trust to continue the operation’s expansion efforts with the popular sandwich brand.
In the previous two years, Grewal opened an average of one Subway store each week. The loan, secured in large part by Grewal’s successful track record in opening and operating Subway outlets, allows OhCal to continue its aggressive efforts in Orange County and secure its spot as the area’s most dominant Subway franchisee.
Dixie Picnic’s Store Scavenge
As the economy tumbled, loan
opportunities withered, and Ocean City, New Jersey’s Dixie Picnic
struggled to survive as a seasonal operation, owner Tracey Deschaine seized control.
Selling her car and approaching faltering coffee shops, Deschaine landed a year-round location in Malvern, Pennsylvania, that kept Dixie Picnic standing. Within eight months, Dixie Picnic was back in the black, a reality that has the acclaimed independent operation positioned and poised to open additional units.
