Franchise Incentive Programs On The Rise

Fazoli's and Denny's are just two brands that are working to make operations easier for franchisees during the difficult times brought on by the Covid-19 pandemic. Last week, Fazoli's announced a conversion program featuring zero down payment, zero franchise fees, and zero royalty fees for the first year. Under the plan, franchisees can sign a short five-year term, versus the typical 15-year commitment.

The move is meant to encourage challenged QSR or fast-casual restaurant operators to convert their existing shells into a Fazoli's. The QSR brand has relaxed many of its conversion requirements so operators can get a 2,000- to 3,500-square-foot restaurant open for less than $350,000. "This is the first time in our brand's history that we have ever launched a program this aggressive," said Fazoli's CEO Carl Howard.

"With this program, we are providing a low-risk, fast-track path to become part of the Fazoli's Franchise Family." Meanwhile, Denny's has announced it is waiving $3 million in royalty fees this quarter in an effort to help franchisees make it through the pandemic. The brand has also negotiated rent abatements and deferrals for 77% of its locations, passing along the benefits where its sites are sub-leased to franchisees.

The family dining brand says 99% of its franchisees have received federal assistance loans through the Paycheck Protection Program. More than 1,200 locations have resumed dine-in service but most of those are operating at 60% or less of their pre-Covid-19 seating capacities.