Dive Brief:
- Jersey Mike's franchisee Dan Markel has partnered with The Hummus & Pita Co. to open up to 100 units throughout California, with the first location to launch in San Diego this year, according to Fast Casual.
- Markel plans to have 10 to 20 franchise partners with five to 10 locations each.
- Hummus & Pita has five locations in New York City, Connecticut and New Jersey. It also plans to open five locations in Denver (with the first to open Jan. 7) and several locations in Detroit and Los Angeles.
Dive Insight:
Markel seems to know what he’s doing when it comes to turning a profit for expanding franchises. He is one of Jersey Mike's top franchisees, owning one of the top five revenue-producing U.S. locations, according to QSR Magazine. He said in a statement that he plans to target lower price conversions and focus on franchises with the highest potential return on investment.
With upstart costs ranging from $400,000 to $700,000 and revenue at The Hummus and Pita Co.'s established New York locations ranging from $1.2 million to $2 million, according to the company's website, it may not be long before Markel's units turn a profit.
Mediterranean is also among the fastest growing opportunities for fast casual franchises, according to QSR Magazine. Middle Eastern cuisine on U.S. menus increased 32% from 2015 to 2017, according to Mintel's 2018 U.S. Flavor Trends report. Given the ongoing consumer demand for healthier food options, which include Middle Eastern and Mediterranean food, now seems to be the time for rapid expansion.
Mediterranean brands have become popular acquisition targets as well. Cava bought Zoe's Kitchen as part of its nationwide expansion, and FAT Brands added Yalla Mediterranean to its portfolio in 2018. Elite Restaurant Group also bought bankrupted Noon Mediterranean in California months after purchasing Daphne's, a 23-unit Mediterranean chain also based in the Golden State, with plans to transition the 12 remaining Noon restaurants into Daphne's.
The Hummus & Pita Co., which first opened in 2011 in New York, is actively franchising and looking for additional partners. The restaurant previously partnered with Fransmart as its exclusive franchise development partner to grow the brand. Fransmart has worked with Five Guys, The Halal Guys and Qdoba.
Franchisees must meet the minimum requirements of having at least $1 million in net worth, $500,000 in liquid capital for investment, be willing to develop at least five units and be ready to begin territory development within the next three months, according to the company’s website.
