Peter Ortiz said, “No way” on the phone when he was first approached about becoming the chief development officer for Perkins and Huddle House more than two years ago. He’d spent most of his franchise development career in QSRs, not family dining. 

But the brands’ private equity owners, Elysium, were persistent in trying to change his mind. The owners shared future plans for the brands, which included the creation of a platform later called Ascent Hospitality that would acquire future brands. Ortiz was impressed and took a chance at a career change. But it wasn’t easy. 

“I lost all of my QSR customers, all of my fast casual customers because they don’t do family dining,” Ortiz said. “We were basically starting from scratch.” 

Ortiz hit the ground running, with the goal of revitalizing the brands’ development through franchising, real estate and other areas of growth. Franchising had been at a virtual standstill .In 2019, Perkins declared bankruptcy when it was under Marie Callender's, and it was bought by Huddle House later that same year. 

Perkins and Huddle House aren’t the only casual chains re-focusing on growth via franchising. Established brands like Applebee’s and California Pizza Kitchen, and emergent brands like Jinya Ramen Bar and Walk-On’s are building up pipelines of units with new and existing franchises. 

Within the last two years, Ascent has signed over 70 franchise agreements for both Huddle House and Perkins, Ortiz said. The deals include existing franchisees as well as new operators. 

“The brands never changed,” he said. “They just have a person now that promotes [them] in a way [they] should be promoted. We’re heavily on social media. We’re heavy on digital marketing. Anything that is new, from a prototype refresh to ghost kitchens to any technology innovations, we are pushing it out there.” 

To help support growth, Ortiz prioritized bringing on various marketing, development and brand experts to support the chains’ growth and update their systems, including the website. Huddle House and Perkins have also been expanding their menus, as well as offering virtual brands, both of which can help revenue growth and traffic. 

“We’ve been very successful,” Ortiz said. “I truly believe this next [fiscal] year will be the biggest in company history.” 

How Ascent is attracting franchisees

To stoke Ascent’s growth trajectory, the company put together a robust marketing campaign targeting successful multi-units restaurateurs, said Michael Ackley, Ascent Hospitality’s director of franchise marketing. Ascent offers an incentive program to support franchisees, with 0% royalties for the first year of operations if the location open within the timeframe specified in the contractual agreement. 

Ascent has between 100 and 200 franchisee prospects, but about 30 are considered qualified.  Half of the qualified candidates would likely become multi-unit operators. The company’s goal is to sign 75 units annually between both brands, Ortiz said.

“We are aggressively going after our current franchisees,” he said. “We’re aggressively going after great prospects that contact us.” 

During a five-month period from December 2022 to April 2023, the company sold multi-unit deals to five franchisees, all of which purchased three units, Ortiz said. 

Generally, family dining isn’t a multi-unit investment like QSRs where operators buy 10-15 units at a time. But at Perkins and Huddle House, franchisees are building their own brand portfolios. Perkins’ largest franchisee has 50 units, while the largest Huddle House owner has over 20 units.

“We are getting more quality buyers coming in — someone who is either already in the restaurant business or is a successful business person in some other way,” he said. “We’re going to continue to market it that way … to get the type of groups that we’re looking for, that are not just coming in to do one, but they’re coming in to do multiple. They're looking to create a legacy of their own.”

Ensuring franchisees are successful

Franchisees have different development options depending on the size of the market, which has been helpful in finding the right fit for operators. Perkins tends to be a “big city” brand, at 4,600 square feet. Huddle House units tend to be 2,000 square feet and are located in smaller cities with populations between 15,000 and 20,000, Ortiz said. A Perkins restaurant might be in Louisville, Kentucky, but 40 miles outside of the city, there would be a Huddle House, he said. 

Ascent added more flexibility to its real estate site selections as well, given the ongoing difficulties with finding ground up sites. The company has been looking at endcaps, conversions and even inline locations in some markets. Last summer, Ascent debuted a Perkins’ prototype that had a modern look, pickup window, a refreshed interior design and smaller footprint that can help decrease costs. 

Most of the time, franchisees come to Ascent with a site already in mind, but it may be a ground up development. Management also provides feedback on locations that may be more financially feasible, since ground up development can be expensive as well as help with lease, construction, training, among other services.  

“We are hand-in-hand with our franchisees,” Ortiz said. “This is soup-to-nuts complete service.” 

Ascent has a real estate committee that approves all sites. The panel, which includes the CEO, president, chief development officer and vice president of real estate and construction, looks at the real estate. The committee must reach a unanimous decision before anything moves forward, Ortiz said. 

“If [franchisees] fail, who do you think they’re going to call? They’re going to call us,” Ortiz said. “So let’s make sure that we sell them the right brand. Let’s make sure they’re the right buyer. And let’s make sure we pick the best possible real estate.” 

These tactics are working.

“We’re opening new locations all the time,” Ortiz said. “It seems like every location that we open breaks another sales record.” 

A Decatur, Illinois, Huddle House that opened in February had over $53,000 in first-week sales, while another location in Hazard, Kentucky, that opened in May broke three records: the brand’s first week sales, highest opening day sales and all-time single day sales across the brand, according to a press release emailed to Restaurant Dive.

“Our franchisees believe that they’re doing a service to their community by bringing us there,” Ortiz said. “The things that built that brand early on are still intact. We’re just innovating the brand and making it better just to be competitive in this market today.” 

Bolstering restaurant-level profitability

The parent company has been looking into technologies such as tableside ordering and loyalty, and testing new menu items, all of which can help boost revenue. Franchisees also have the opportunity to add the virtual brands MrBeast Burger and Papa Corazon’s Quesadillas.

Additionally, the chain launched its own virtual brand Bakery By Perkins in 2021 that offers signature items from Perkins like pies, cookies, Mammoth Muffins, brownies and cinnamon rolls, alongside an expanded lineup of cakes and desserts. The virtual brands have been strong sales drivers and the company continues to add participating restaurants, Ortiz said. 

“We are continuing to add things to make sure that those [in-store] revenue streams are coming in and making the franchisee more profitable,” Ortiz said. 

Bakery by Perkins has become a great way for consumers, especially those that like to come to the restaurant for its robust baked goods, to access the brand and its food at home, said Diana Garcia-Lorenzana, Perkins’ vice president of marketing. 

“You can expect that we will be focused on making sure we do a good job at [online ordering], and that we continue to be there when the customer wants it,” Garcia-Lorenzana said. 

To bolster the guest experience, Perkins is currently testing a loyalty program. As it expands, Garcia-Lorenzana said the brand is looking at how it can reward guests and incentivize repeat visits. 

At Huddle House, the chain is testing different items to boost trial in its stores, the company said in an email to Restaurant Dive. It is expanding its chicken and burger categories with new flavors and ingredients that should encourage customers to come during all dayparts.

Burger flavors in the test include a Green Hatch Chile Burger, Sweet Vidalia Southern Burger, Nacho Momma Burger and Prime Rib Tips Burger. Under its chicken category, it is testing flavors like Southern Fried Chicken Coleslaw Sandwich and a Hot Honey Fried Chicken Biscuit.

The test began in early summer at over 30 locations. Once the tests are complete, the company will review the results and determine the next steps for these extensions. 

For Ortiz, the franchising growth, technology and real estate opportunities are just the beginning for these revitalized brands.

“I knew this was going to be tough, and we still have a long way to go,” he said. “But what we've done thus far is biblical. We have literally made these two brands new again. And it's just really exciting to watch.”