Dive Brief:

• Zaxbys has signed its first non-traditional agreement with a franchisee to open a restaurant at a military base, Scott Temme, the brand’s director of franchise development, said in an interview.
• The opening date and location of the restaurant have yet to be determined. 
• This agreement marks the start of the QSR chicken chain building potential high-volume, high-traffic franchised units at locations like universities, travel centers and airports. These units will help complement the chain’s growing international footprint, Temme said.

Dive Insight:

Zaxbys has been actively growing its development pipeline and has a significant number of franchise commitments to open through 2030, Temme said. The company is expanding into six new states outside of its Southeast core as it evolves “from a regional favorite to a national staple,” Temme said. The company plans to open its 1,000th unit this year. 

Zaxbys opened its first Phoenix restaurant in August as it expands further into the Southwest. It also opened its first Nevada restaurant earlier this year. The brand has signed multi-unit deals to open in Maryland, New Jersey and Pennsylvania. 

The company, which has long relied on a traditional drive-thru format of about 3,000 square feet, now offers a handful of other prototypes, including a drive-thru-only format that is roughly 1,100 square feet. The first off-premise-only unit owned by a franchisee opened in 2023. Zaxby’s also offers a format that is about 1,650 square feet and has a small dining room. It opened its first inline unit earlier this year, Temme said. Zaxbys franchisees are also increasingly interested in conversion opportunities, he said. 

“As we approach our 1,000th restaurant, flexible formats allow us to scale smarter, faster and more strategically,” Temme said. “We are seeing record-breaking franchise interest and strong unit economics that give us the confidence to innovate.” 

The chicken QSR segment has been growing quickly, especially as challengers to KFC gain momentum relative to the former segment leader. Layne’s Chicken Fingers has signed deals with franchisees to open 68 units. Bojangles has signed several multi-unit deals to expand into markets like New York City, Phoenix, New Jersey and Los Angeles. Dave’s Hot Chicken has been rapidly expanding not only in the U.S., but internationally.