5 & Diner Franchise Corporation - Mid-1990s Bring a Return to Franchising
Mid-1990s Bring a Return to Franchising
Higginbotham put the franchising effort on hold while the program was refined. Franchising resumed in 1995, but Higginbotham now required franchisees to have at least five years of experience in the restaurant business. The second 5 & Diner franchise opened in Scottsdale, Arizona, with better results than Reno had experienced. Advertising efforts for the 5 & Diner conducted in 1996 led to increased interest from potential franchisees. Around this time 5 & Diner was also the beneficiary of a rebounding economy, which spurred tourism in Arizona and led to strong gains in the foodservice sector. According to Nation's Restaurant in a 1994 article, the Southwest along with the Mountain regions were "one of the last great frontiers for anyone looking for investment or career opportunities in foodservice.… Whether national chain or regional operator, independent restaurant or contract feeder, all are looking to ride the wave of strong local economics, above-average population growth, low unemployment, established tourism industries and low tax bases that made this region arguable the country's hottest restaurant market." In Arizona, the key market was Phoenix, which accounted for almost two-thirds of the state's population. Over the next decade, 5 & Diner built upon its base in Phoenix to open Arizona units in Tempe, Chandler, Mesa, Peoria, and Tucson. The company also franchised restaurants in Temecula, California; Orlando, Florida; Pleasant Hill and Johnston, Iowa; three units in Las Vegas; and single units in Franklin, Tennessee, and Fredericksburg, Virginia. Four of these restaurants were originally company-owned, but they were eventually all turned over to franchisees, in keeping with Higginbotham's belief that each restaurant needed a hands-on owner.
In the late 1990s Higginbotham prepared to take the 5 & Diner concept international, targeting Southeast Asia, where all things American held an appeal, but the collapse of the economy in the region forced him to shelve the plans. There had also been some thought to taking 5 & Diner public to fuel growth, but Higginbotham backed away from the idea, opting instead to add units domestically at a comfortable pace, typically one each year. While there was no rush to expand the chain, Higginbotham also set no limits in terms of size, his goal simply to open as many 5 & Diner as possible. He was also helped by his son, John, who joined the company and took over training and product research and development.
In the 2000s 5 & Diner made several changes to maintain momentum. From the start the chain had been active in local marketing, but now it hired a dedicated marketing person. The company also reinvented its hamburger, changing every aspect from bun to meat, and developing its line of a dozen signature burgers. As a result, burger sales doubled. Then in 2004 5 & Diner revamped its entire menu, leading to the Phoenix unit winning numerous local awards for its food. After 5 & Diner added no new restaurants in 2003, it geared up for a significant franchising push. The 20th unit opened its doors in 2004, and another four were set to debut in 2005, located in Tulsa, Oklahoma; Sheffield, Ohio; Madison, Wisconsin; and Idaho Falls, Idaho. In a way the Tulsa restaurant brought Higginbotham full circle in his career. Franchisees Larry and Pat Wofford were adding the restaurant to their Harley-Davidson dealership on Route 66, which was being transformed into an entertainment complex selling all things Harley, using the legendary highway as its theme. While Tulsa was experiencing a surge in restaurant starts, the new 5 & Diner was well located, not only adjacent to a growing tourist attraction but well away from Tulsa's 71st Street corridor, home to most of the new restaurants. Close by were more than 2,000 hotel rooms, a number of office complexes, and about 350,000 residents in surrounding neighborhoods, providing plenty of potential customers in addition to out-of-towners drawn to the Route 66 Harley-Davidson dealership.
Higginbotham had several other franchising deals in the works, including a ten-unit agreement in Cleveland, and restaurants in the works in Boston and central New Jersey. He was also looking overseas again, this time exploring the possibility of franchising 5 & Diner in the United Kingdom.
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