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Friday Franchising News - May 13

Friday Franchising Fast Food

It’s the midpoint of the month and franchises are evaluating their first quarter sales figures. Thanks to new strategies, many franchises see the fruits of their labor paying off. This week in Friday Franchising News, we take a look at how franchises are working hard to take a bite out of the competition in a market that is more competitive than ever. Read on to find out what changes the franchising sector has seen this week!

McDonald’s Tests Locally Flavored Fries

Mcdonald’s has reported that it is testing Gilroy Garlic Fries at four locations in the San Francisco Bay Area. The garlic is locally-sourced from Gilroy, California. Gilroy is known as “The Garlic Capital of the World”. This case is noteworthy due to the fact Mcdonald’s does not typically report on local product tests and it demonstrates Mcdonald’s increasing willingness to alter preexisting products and use locally sourced products. If the product is a hit, it will be expanded to nearly 250 locations in the San Francisco Bay Area in August and open the doors to more locally sourced fare.

Tim Horton’s US Market Expansion Surpassing Expectations

Tim Horton’s 2014 merger with Burger King, owned by Brazilian private equity firm 3G Capital left the future of the franchise up in the air. Two years later, this merger has proven to be a smoother transition than expected. Burger King’s leadership has provided a fresh approach to US expansion. Taking a cue from the burger chain’s introduction of novelty items like chicken fries and the A1 Halloween Whopper, the coffee chain has served up Nutella-filled pastries and improved the meat and bread used to produce breakfast sandwiches. The King has led by example and worked with partners who understand the US market. Tim Horton’s has plans to open locations in Indiana and Ohio with a regional flair thanks to a partnership with Luke, a firm that operates 60 gas stations and convenience stores.

JAB Holding Company Plans Krispy Kreme Purchase

Nothing compliments coffee like doughnuts. JAB Holding Company has made a name for itself, purchasing coffee heavy hitters including Caribou Coffee, Peet’s Coffee & Tea and Einstein Noah Restaurant Group. Now JAB has reached an agreement to acquire iconic doughnut chain Krispy Kreme for $1.35 billion. Krispy Kreme will remain independently operated in Winston-Salem. The company believes aligning with JAB is an ideal partnership that will allow Krispy Kreme to grow throughout the world by utilizing JAB’s experience and industry knowledge.

Grilled Dogs Boost Burger King Sales

We reported in February Burger King’s plan to debut grilled hot dogs. The introduction of this new menu item has helped raise domestic same-store sales by 4.4% in the first quarter and global same-store sales are up 4.6%. Various factors can play into increased earnings, but Burger King suggests the boost can be attributed to the company’s marketing and menu initiatives taking hold. The hot dogs brought new traffic and customers added the product to existing orders. The success of this launch will encourage Burger King and other quick service franchises to continue developing fresh menu offerings.

Burger Battles: Combo Meal Competition

A growing trend among quick service burger chains is a need to one-up each other by providing the “best” combo value meals. Customers are welcoming this trend; for the first time in years, combo meals ordered at fast food chains are on the rise, according to data from global research firm NPD Group. Wendy’s initiated, with a 4 for 4$ deal, McDonald’s followed with McPick 2 for $2 (now 2 for $5) and Burger King joined with a 5 for $4 deal. Other franchises including Carl’s Jr. and Hardee’s have responded to the pressure with a successful $4 Real Deal, while Checkers and Sonic Drive-In are declining to join the value battle, citing an already strong menu value proposition and existing strategies.  
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