When Tom Ferguson opened Rise Biscuits and Donuts in 2012, he did it with the idea that he would eventually expand the brand.
He just needed to find the right team to help him.
With five new Rise restaurants opening in the Triangle this year and many more coming next year, Ferguson believes he’s found what he’s looking for to make the leap to franchising.
Ferguson, 50, Rise’s CEO, sought a corporate team and franchise owners who believed in both his product – handmade biscuits and doughnuts made with local ingredients – and the concept he’d established at the first quick-serve restaurant in Durham.
“They need to buy into the culture we set, the food, the vibe,” Ferguson said of his franchisees. “And ... bring enthusiasm with that.”
His corporate team includes Andy Seamans, chief financial officer, and Brian Wiles, chief operating officer and longtime Rise manager. He’s also selected seven people to operate the announced franchises.
Along with putting the right people in place, one key to creating a successful franchise is to have documented processes and procedures that can be duplicated, said Daniel Prendergast, owner of The Entrepreneur’s Source, a Mebane company that helps connect people with franchising and other business opportunities.
“You have to have a viable business model that has been proven to be successful,” he said.
Here are three important factors in Rise’s recipe for success:
1. Finding the best ingredients for a franchise.
Those interested in becoming a Rise franchisee go through a systematic process that involves supplying an application and financial statements and meeting one-on-one with the Rise team.
Potential owners must first apply to Fransmart, a Virginia-based franchise development company responsible for the launch of franchises such as Five Guys and Qdoba. Fransmart, in turn, vets those people and sends those who make the cut to Ferguson and his team.
“Then the tables turn,” Ferguson said. “At that point, we are saying ‘Are they a good fit? Do we like the location they want to go to?’”
Ferguson says about four to eight people apply each week, and a lot of them don’t follow through on the process.
After those people have been selected, they go through “Discovery Day,” which is when potential franchisees and Rise owners spend time together figuring out if they are a good fit for one another. So far, Ferguson said, 10 people have gone through Discovery Day at Rise.
Franchisees pay $30,000 to buy in to Rise. As a franchise, they also will pay Rise 6 percent of sales and another 2 percent for marketing.
They are responsible for securing their own leases and covering their own construction costs, and can’t locate within a five-mile radius of another Rise restaurant.
2. Maintaining consistency.
To maintain consistency between the restaurants, each member of the corporate team has his own set of responsibilities when it comes to working with franchisees.
Seamans is in charge of finance, accounting and negotiations; Ferguson deals with directions, branding and development; and Wiles works with the franchises on culture, training and products.
The three have been “very involved” with the Rise franchising process so far, and Ferguson says they have control over what franchise owners can and can’t do with the food they serve.
Rise doesn’t have its own brand of things like dough mix and coffee. However, franchisees must use local purveyors for certain ingredients such as fruits, vegetables and meats, which come from Firsthand Foods in Durham. Coffee comes from Bean Traders in Durham.
Menus will be the same at every location, but owners have the freedom to create one unique biscuit and doughnut each month.
“The underlying theme is to keep it similar,” said Shashin Desai, co-owner of Rise at Sutton Square in Raleigh. “But we will have our own flavor. We are from India and want to add some flavors and our own spices.”
Before launching specials, restaurants have to submit recipes, a list of ingredients and the cost to make the products. The information gets put into an accounting system so the company can see if the products are successful. But Ferguson says he trusts the ideas of his franchisees.
“There are a lot of kooky ideas out there,” Ferguson said. “There have been ones that I've thought would have been a dud and others that have been hits – macaroni and cheese biscuit, who would have thought?”
Food prices are the same at each restaurant and range from about 95 cents for a glazed doughnut to about $6 for a specialty biscuit.
Branding and marketing materials come from Rise corporate, and Ferguson and his team guide owners through the process of buying equipment such as pots, pans and doughnut friers.
Each restaurant is open from 7 a.m. until 2 p.m. daily, which Ferguson said will allow staffs to have a strong work-life balance.
3. Rolling it out.
So far, four ownership groups have been awarded Rise franchises in the Triangle. One opened last month and four more restaurants, including one that’s corporate-owned, are expected to open this year.
▪ Ty Gwennap and his father Tim opened the first Rise franchise at 1100 Market Center Drive in Morrisville’s Park West Village in August. It’s 1,550 square feet.
▪ David Dowdy’s 1,500-square-foot Cameron Village restaurant should open in early fall, he says. It will have about five or six tables outside and be at the corner of Smallwood Drive and Daniels Street, behind Harris Teeter.
▪ Shashin Desai and friend Mehul Desai own other franchises in the Triangle, including Goddard School locations in Durham and Chapel Hill. Their 1,600-square-foot Rise is expected to open in October at 6325-33 Falls of Neuse Road, in Raleigh’s Sutton Square shopping center.
▪ Longtime restauranteurs Rick Robinson and Ken Priest plan to open their 1,693-square-foot Rise at 310 E. Main St., Suite 100 in Carrboro in November. It’s on the Libba Cotten Bikeway, which Robinson said will help attract customers. “Cyclists love doughnuts,” he said.
▪ Ferguson’s opening his second corporate-owned Rise in downtown Durham this winter, he said. “We’re officially the franchise owners,” he said.
The 1,000-square-foot place will be at 401-A Foster St., in the former DaisyCakes space.