Krystal launches refranchising program as it targets 500-unit count

Dive Brief:

Krystal has launched a refranchising initiative to expand its brand presence, the company said in a press release Monday.
The chain will offer existing company-owned units in markets previously unavailable to franchising as a way to attract established multi-unit operators.
Krystal plans to grow from 300 restaurants to 500 within the next three to four years.

Dive Insight:

Krystal wants to work with operators with strong track records and a desire to grow in new markets, the company said. Krystal declined to share the specific numbers of corporate stores available for refranchising, as it is opening up new territories and plans to continue operating a fair amount of company stores.

“Our refranchising program represents an exciting opportunity for Krystal and both new and existing franchisees," Krystal Chief Development Officer Michael Casey said in a statement. "We are inviting proven multi-unit operators to join us in our mission to expand Krystal's footprint and bring our beloved brand and offerings to even more communities across the U.S."

Krystal has been aggressively franchising as it works to grow across the U.S. In 2021, the company added its first new franchisee for the first time in 15 years. In March, it launched a new franchise website to help attract partners. Krystal has successfully signed popular celebrities across the music, media and sports industries as franchisees, including hip hop artist 2Chainz and former NFL player Victor Cruz. Earlier this year, Krystal signed a deal with Argus Wiley, a restaurant professional, to buy 21 existing locations and develop 15 units.

In January, Krystal opened a company-owned unit with a 1,700-square-foot prototype, much smaller than the chain’s traditional 2,700-square-foot unit. The smaller design uses 20% less kitchen space, has no dining room and includes a double-drive-thru and digital order pickup area. Customers can also order via a walk-up window.

Krystal’s refranchising initiative falls within parent company SPB Hospitality’s broader expansion plan, which includes multiple franchised concepts like Old Chicago and Logan’s Steakhouse, according to the press release.