Tech Talk: Location Intelligence Helps Franchise Expand

By Elizabeth Wasserman

A quick-service hot dog and hamburger restaurant expands with the help of intelligence software.

Johnny's Lunch, a quick-service hot dog and hamburger restaurant, had one location in Jamestown, N.Y., for 71 years until the business started a nationwide franchising initiative in 2006. Chief Development Officer and President George Goulson tells Inc. Technology Editor Elizabeth Wasserman in this Q&A how location intelligence software enabled Johnny's Lunch to create a profile of the target customer and determine where to expand.

Elizabeth Wasserman: How did software play a role in the expansion plans for Johnny's Lunch?

George Goulson: When we began franchising at the beginning of last year, our whole team -- we've been in the quick- service restaurant business for the last 25 years -- knew we had to do it the right way. The right way is to gather location intelligence.

This is extremely important so that we could guide our area representatives and out local multi area franchisees and our single unit franchisees in the right direction so we didn't just pick a location that might not be right. What we did originally began talking with Pitney Bowes MapInfo. They studied our demographics and they went to Jamestown and spent a week 12 hours a day, 606 samples. And then put us on a grid to see who our customer was and where they were coming from. Then they compared like concepts that were serving essentially the same type of products -- hot dogs, hamburgers, fries, malts, etc. Then, at 30,000 feet, we asked them to scour the country for locations that would be suitable for new Johnny's.

Wasserman: How did you use that data?

Goulson: At 30,000 feet, they looked at crossroads where they had the critical mass to consume Johnny's type products. They delineated about 4,570 locations with indexes. So when we sign an agreement with someone in Pittsburgh, which we just did a month or so ago, we are able to guide them by sending them the software package and the indexes of the locations to give them indication of where they should be looking. The concept has to be validated on the ground but at least we have a headstart.

Wasserman: What kind of results did you see?

Goulson: It helped us sell various DMAs -- or designated market areas. Within a year, we were able to sign 223 locations, which is almost unheard of for any company that is just out of the gate in franchising. We have approximately 300 more in negotiation as we speak, which will probably be signed by the end of this quarter. Plus we have possibly 500 stores in the pipeline. It looks like now that we'll have 40-50 new stores open by the end of this year. We believe that the mapping and the indexing and all the location intelligence that we have gathered and provided to perspective area representatives and franchisees is why we have so many stores at this stage.