At first glance breakfast, mini dumpsters, and specialty ice cream don’t seem to have a lot in common. But all three drove small, single location businesses forward and provided the basis for established franchise systems that enjoy success here in Canada and abroad.
Husband and wife team Don and Jan Koenig bought a small 50-seat restaurant in 1974 in Blackie, Alberta, a dot on the map about 70 kilometres from Calgary. By 1976 their business had grown into the Calgary market itself where they ran three soup and sandwich shops as well as a catering company. And after their research showed the all-day breakfast market was underserved, they decided to covert one of those shops into what they called Humpty’s Egg Place in 1977.
It was an immediate success and the Koenigs have never looked back. By 1980 they started to get franchise enquiries about the now simpler-sounding Humpty’s – named after the classic nursery rhyme about an egg that fell off a wall – and two years later they began franchising, but took another four years to award their first franchise. Yet just 45 days later they had sold another three and now Humpty’s has 45 franchises across Western Canada, the majority of them in Alberta.
“Our strength is in small town Canada,” says Humpty’s President and CEO Don Koenig. “Some Humpty’s locations are in towns as small as 2,500 people.” And that small town focus remains very much a part of his expansion plans for Ontario and the Atlantic provinces, as does the system’s continuing emphasis on the breakfast segment, although Humpty’s serves lunch and dinner as well. The system targets families with parents aged 25 to 45, although Humpty’s has a large seniors customer base and is increasingly attracting millennials thanks to its rewards program.
The turnkey cost of a Humpty’s franchise is $750,000. In smaller communities of about 10,000 people the restaurants are located on the main street; in towns of about 20,000, breakfast, lunch, and dinner are served in a shopping centre location. Training takes seven weeks, four of them in Calgary and the other three on-site.
As for the qualities Koenig looks for in a potential investor, he says, “Attitude has a lot to do with it. You’ve certainly got to have drive.” Financial ability is another positive as is management experience, and franchisees must be prepared to follow Humpty’s system. Plenty of energy will help them too. A typical day can run to 15 hours, says Koenig, pointing out that a number of his franchisees are aged 50 and above, but get the job done very well.
The benefits of investing with Humpty’s are numerous, Koenig continues, adding the system’s top benefit is unfailing support for its franchisees: “If you get into business with us we can’t let you fail.”
Mexican Taqueria La Carnita began as a pop-up in the Evergreen Brickworks, once the location of Toronto’s Don Valley Brickworks, a former quarry and industrial site that provided the bricks that built much of the city’s housing. But when the founders of the restaurant opened a permanent location on John Street in the heart of the Entertainment District, the first Sweet Jesus opened up there as an experiment that shared the premises. The experiment turned out to be wildly successful, and Sweet Jesus grew and continues to grow offering many kinds of ice cream treats. “We take ice cream to a whole new level, says Jeff Young, President of Sweet Jesus. “We’re handcrafted, chef-inspired, pimped-out soft serve.”
Young says by the end of 2018 Sweet Jesus will have opened 20 franchises in enclosed malls throughout Canada and is looking at expansion in Western Canada, Quebec, Atlantic Canada, Ontario, and outside the Greater Toronto Area. “We’ve got a very strong presence in the GTA already,” he explains. Sweet Jesus locations are flourishing in Toronto, Ottawa, Hamilton, and elsewhere in Ontario, and also in Edmonton and Vancouver. Young identifies the U.S. as a prime market for expansion, as well as other international countries. License Agreements have been signed in India, Bangladesh, and Dubai – where the brand is called Sweet Salvation.
Sweet Jesus began franchising in 2015 with the opening of its flagship store in downtown Toronto. In November 2018, Sweet Jesus was acquired by an affiliate of International Franchising Inc. (IFI), which owns some of the world’s most iconic frozen dessert brands, including Yogen Früz, Pinkberry, and Yogurty’s.
The system’s prime target audience is a youthful consumer and anyone who enjoys really good ice cream. Most people have an emotional connection to ice cream and it reaches across all demographics, says Young. “Millennials are social media savvy and foodies at heart and as a result, really gravitate to the brand.” According to Young, Sweet Jesus has become one of Canada’s most “Instagrammed” foods and has amassed a social media following in excess of 120,000 followers.
The cost of a turnkey franchise ranges from $300,000 to $500,000 depending on the store’s size and type of location. Store sizes run from about 200 square feet to 400-500 square feet in a mall and 500 to 1,000 square feet for a street front unit. Sweet Jesus’s price point tends to be at the upper end of the spectrum. Training is in Toronto on-site and lasts about seven days, with further on-site support before and after the opening of a franchisee’s store.
Young says he wants franchise partners who are passionate about hospitality, passionate about the brand, and who have good management skills, although a background in the food industry is not required. At present, he continues, his franchisees tend to skew younger, but Sweet Jesus is not gender-centric: men and women are both represented among his franchisees.
Among the system’s many benefits are “a very robust business model and a really cool concept that is on trend,” says Young. However, he says the real key benefit is the opportunity for organic expansion. Because it’s still comparatively new Sweet Jesus has prime locations available outside the GTA, and investors can own multiple franchise units.
By David Chilton Saggers