To build a successful franchise, a business must first prove its model is profitable and repeatable. This requires operating three to five corporate-owned stores to perfect unit economics, training systems, brand voice, and operational simplicity before licensing the model to others.
For a food business with a successful B2B wholesale or catering model, the immediate growth path is expanding that existing channel (e.g., from 45 to 90 partners). A brick-and-mortar location is a different business with high costs that can distract from the core strength.
For founders unable to get traditional loans, a viable alternative is offering high-interest (e.g., 15%) subordinated debt to angel investors. The best source for these investors can be existing, passionate B2B customers who believe in the product and want to be part of the success story.
Contrary to industry trends, Todd Graves views LTOs as a net negative. He argues they create operational drag, forcing managers to focus on temporary training and marketing instead of core operations. This leads to frustrated crews and a subsequent decline in everyday customer service quality.
When demand from a large customer outstrips your production capacity, propose a strategic financing arrangement. Ask them to help fund your expansion in exchange for a guaranteed volume contract, such as by pre-paying for a large future order or co-investing in a specific equipment line.
Todd Graves reflects that his early desire for perfection was a mistake. Delaying a new training program's rollout until it was "perfect" lost valuable progress. He now advocates for releasing "Version 1" of any internal process and improving it over time, prioritizing progress over perfection.
Before entering the Middle East, founder Todd Graves and his potential partner, Mohamed Al-Shia, spent two years in due diligence. This unique "courting" process involved mystery shopping each other's brands to ensure a deep alignment on values like customer service, brand standards, and employee happiness.
Todd Graves resists adding trendy items like spicy chicken because it would break his operational model. Increased complexity would force a shift from a fresh, cook-to-order system to using holding bins, which would degrade both food quality and service speed—the brand's core differentiators.
Todd Graves explains that while his franchisees were exceptional (rated 85/100), they couldn't match the meticulous quality of corporate-run stores (95/100). This gap, plus the inefficiency of implementing changes across a franchise system, drove his preference for corporate ownership to maintain ultimate brand integrity.