The Big Sell-off

Sometimes you need to look at whether you are operator of franchises or a franchisor.

The Big Sell-off

TGI Fridays, a popular casual-dining brand in the US, is about to make a massive move by effectively exiting the business of running restaurants and having franchisees do it for them.

The chain is owned by private-equity firms and plans to sell most of its 247 company-owned restaurants in the US and 63 in the UK.

Bold move

“We had to decide: Are we a franchisor or an operator of restaurants?” asked TGI Fridays chief executive, Nick Shepherd.

“When you do both, the franchisees worry that the parent company is focusing on its restaurants first.”

As such, besides a fundamental shift in the model, the brand will also be remodelling the look and feel of restaurants and boost bar offerings and overhauling the menu to make it more relevant and attractive to customers and prospective franchisees.

It’s not the only brand to be making such a move. Burger King and Applebee’s have also been working towards a franchisee model in an effort to reduce the chains’ capital expenditures and maintain more stable revenue streams through franchise fees.

Tracy Lee Nicol
About the Author
Tracy-Lee Nicol is the managing editor of Franchise Zone Magazine and deputy editor of Entrepreneur Magazine. She studied her Masters degree in Art History and Visual Culture at Rhodes University and spent the next two years working and travelling in Asia. Her love of people, business and teaching is reflected in telling the stories of entrepreneurs, franchisees and franchisors, inspiring others to take the leap to being their own boss and bringing about positive change in South Africa.

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