Franchise Update Magazine Issue IV, 2012 | Page 20

Grow Market Lead

Part 1

By Hala Moddelmog

Arby’s Re-Ascendant
Step 1: Rebuilding the foundation
I
n July 2011, Atlanta-based private equity firm Roark Capital
Group purchased Arby’s Restaurant Group, Inc. The industry and media came abuzz about the
future of Arby’s—and if and how the
brand would bounce back from four
years of slumping sales and profits that
were compounded by the economic
downturn in 2008.
What wasn’t public knowledge
was the behind-the-scenes work that
had been taking place for more than
a year to restore the company’s profitability and growth. Not even the
second-largest quick service sandwich
chain in the U.S., with more than
3,600 restaurants, can expect to sign
franchise agreements based on brand
recognition alone.
We recognized that many stores
in the system, including corporate
stores, needed a facelift to keep up
with the competition. To bolster our
remodel strategy and put more capital
to work in the system, we developed

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Franchiseupdate Iss u e IV, 2 0 1 2

a refranchising strategy that includes
attracting multi-unit restaurant operators with access to capital to not
only acquire and operate a group of
restaurants but also to open new units
and complete a remodel program. But
before we could launch our refranchising efforts, we had to prove there
was a reason to invest in the Arby’s
of the future.
Upon joining Arby’s as president
in May 2010, I immediately got to
work on restoring the confidence of
the many employees and franchisees
who were affected by the downturn.
Together, we had to work to rebuild
consumer appeal before we could even
think about attracting new franchise
partners to grow our system.
Laying the foundation

To lead what essentially was a turnaround of the brand and make refranchising efforts feasible, we needed to
develop a strong, clear vision for the
Arby’s of the future. Once that was

established, effective communication
and collaboration, from the top down,
were essential to achieving our mission of a brand resurgence.
We first leveraged the expertise
of our franchisees and employees by
setting up informal “get to know you”
sessions. By traveling to visit with both
large franchisees and single-unit restaurant owners, I learned a wealth of
information about where we should
focus our energy and strategies. They
knew, from the ground level, what
resonated with consumers and what
didn’t.
Throughout the process, franchisees needed to understand what we
were doing to grow the business and
gain their buy-in and trust. Most important, we needed to instill confidence throughout the system about
our plans to grow Arby’s. Through
a weekly series of webinars, teleconferences, and email communications,
the executive team worked to firmly
convey the growth plan to our fran-