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Fazoli's franchise growth signals next stage of brand's turnaround

October 17, 2013

Fazoli's recently signed a new development agreement, awarding Dan Markwell with Employer Consulting, the right to open restaurants in Morehead, Mt. Sterling and Maysville, Ky. So far this year, Fazoli's has secured commitments from new and existing franchisees calling for at least nine new locations, according to a company press release. Including Markwell's Kentucky development and previously announced locations near Indianapolis; Dubuque, Iowa, and Glenwood Springs, Colo., Fazoli's looks to sign agreements for the development of more than 15 additional restaurants within the coming months.

"Fazoli's is a reemerging fast casual brand that has positioned itself for growth, and we think the time is right to leverage this opportunity in our communities," said Markwell. "With its current momentum anchored by strong leadership, unique market position and a focus on being best in brand, the future Fazoli's looks very promising."

Markwell is a commercial real estate developer and owner of Trademark Insurance & Investments. He and his family live in Morehead, Ky.

The interest among potential franchisees is being driven by the brand's turnaround, especially the recent surge in same-store sales growth at franchised units, said Fazoli's president and CEO Carl Howard.

"The Fazoli's franchise system has enthusiastically embraced our strategy to rebuild the brand, and it is paying off," Howard said.

Franchisees reported positive sales growth for 40 of the last 42 months, and recent sales continue to be robust. In September, the Fazoli's franchise system reported a positive top line growth of 5.7 percent, which is a two-year growth of 8.2 percent. Rob Hearden, president of the Fazoli's Franchise Association, is seeing similar results in his locations.

"I strongly believe the Fazoli's brand is hitting on all cylinders, and we should see the size of the chain growing by 10 to15 percent in the short-term," Howard said. "These new agreements and our sales results are providing tremendous momentum."

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