#6 on the Franchise 500: Culver's Succeeds By Investing In Managers At the #6 company on our Franchise 500 list, a mentorship program focuses on turning store managers into franchisees -- and it's fueling growth.
By Hayden Field
This story appears in the January 2019 issue of Entrepreneur. Subscribe »
Started franchising: 1988
Total units: 680
Cost to open: $2M–$4.7M
The menu at Culver's hasn't changed much since the fast-food company's inception in 1984. It still offers frozen custard, a childhood favorite of cofounder Craig Culver, as well as ButterBurgers, which are made using his mother's original recipe. But something is new at Culver's -- because it's here, ranked in the top 10 of the Franchise 500 for the first time, after bringing in $1.43 billion in revenue in 2017, according to Technomic, a food-industry research and consulting firm. (Last year, Culver's ranked #13.)
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So what's new? Truly nothing much, president and CEO Joe Koss maintains. "It was just more of the same that we've been doing for 34-plus years," he says. That includes growth. It had 667 restaurants in 24 states as of mid-2018 and opened another 13 and spread to one more state by the end of last year.
But that growth isn't just happening on its own. Lately, it's being fueled in part by an investment in its next generation of owners. Culver's launched a 16-week mentorship and training program for franchisees to mentor store managers, with the goal of turning those managers into eventual Culver's franchisees. In a positive sign, the number of store managers graduating from the program has grown steadily since 2016.
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The company is also testing guest-experience improvements, including in-app mobile ordering and tablets that could streamline drive-through ordering. Depending on results, Koss says, the company may even roll out the new technologies over this year. "We understand that our guests' tastes, and our guests' expectations, continue to evolve," says Koss. "We're going to continue to evolve with them." So, not everything remains the same.
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