Editorial note: This article is part of an ongoing franchise series, which highlights brands that are new to or aggressively expanding via franchising. Is your restaurant starting to franchise? Email us at [email protected]
Franchising has been part of Modern Market Eatery’s growth plan since it was founded in Boulder, Colorado, in 2009. But the healthy fast casual restaurant’s leadership had never worked in a restaurant before, and there was much they needed to learn, Modern Restaurant Concepts CEO and co-founder Robert McColgan said. Modern Restaurant Concepts owns fast casual brands Lemonade and Qdoba in addition to Modern Market.
During its first several years, Modern Market refined its concept by optimizing kitchen processes to be more efficient and “franchise ready,” McColgan said. The restaurant’s menu was too big and complex, and the company realized that it needed to use ingredients that could be incorporated in several dishes, he said. Modern Market also worked on creating consistency with labor to produce better unit economics and refine food production. Instead of teaching staff one station at a time, management trained employees on multiple stations so they could be more flexible during a shift. This led to higher productivity and improved employee experience since staff wasn’t performing the same tasks every day, McColgan said.
In the early days of the COVID-19 pandemic, when delivery and digital orders comprised a much higher percentage of sales, Modern Market changed the layout of its restaurants and equipment to better cater to this demand, McColgan said. The company modified its pickup areas to accommodate more of these orders. Modern Market built a double-sided production line prototype in a high-volume restaurant. That prototype was so successful that Modern Market is planning to build it in future restaurants, McColgan said.
The company has also developed an in-house tech stack and works with Brink POS for its point-of-sales system, which franchisees are required to use, McColgan said. Brink can provide integrations from accounting systems to third-party partners and other vendors, he said.
Modern Market began filing paperwork to start franchising in 2019, but COVID-19 slowed the process down, McColgan said. The restaurant launched a franchising program in 2021, and has since signed its first franchise agreement with Thrive Restaurant Group for 41 units, over a course of five to six years, in 11 new markets. Modern Market has already sold three Austin units to Thrive, but its first newly built unit is expected to open next year, McColgan said.
Development plans: Modern Market, which has 30 units, expects to have a substantially higher unit count than 71 units in six years by signing more franchise agreements in new markets. The company believes it could become a nationwide brand, and has a model that has been tested not just in metropolitan areas, but also in multiple areas of Colorado, Texas and around Phoenix, McColgan said. The company will help franchisees with all stages of restaurant development, from site selection to design and build out, McColgan said.
Ideal franchisees: Modern Market Eatery is looking for operators with experience running successful restaurants. These owners don’t need to have experience with a specific brand, nor do they have to be as large as Thrive, which operates 100 restaurants. Modern Market expects to use franchisee learnings to drive better sales, improve the guest experience and boost frequency, McColgan said.
Franchise quick facts
- Minimum investment required: $735,500 to $1.4 million per site depending on build-out costs and location
- Franchisee fee: $40,000
- Royalty fee: 5%
- Marketing co-op fee: 1% to Modern Market’s systemwide brand fund and 1% to local brand building