Lima includes many locally owned franchises of national restaurant companies.
Photo illustration by David Trinko | The Lima News
LIMA — There’s a petition on Change.org calling for a Chick-fil-A restaurant to open inside the Lima Mall.
More than 2,000 people signed the petition with the heading, “The community demands it!”
Despite the community support, Chick-fil-A has not announced plans to expand into Lima yet. It takes a lot more than an Internet petition to bring a national chain to the region.
“For a franchise to really work, there are a few ingredients that have to come into play,” said Allan Pohlman, a marketing professor at the University of Northwestern Ohio. “One, for the franchiser, the location needs to be right. The person interested in purchasing those rights to the franchise has to be the correct fit. If you don’t have either of those, you’re not probably going to have a successful business endeavor.”
To really understand why a particular brand might move into the local market or not, you really must understand the relationship between the national chains and the local franchisees who’ve put their money where your mouth wants to be.
How franchises work
McDonald’s famously revolutionized the fast food business by transitioning from opening many company-owned restaurants to selling franchises to investors.
Now, many major restaurant brands offer franchises to investors in a particular location. For instance, 19 McDonald’s restaurants locally are owned by Lima-based Lewis Family McDonald’s.
“Because McDonald’s does not really have full knowledge of the market in that particular location, they usually have some form of licensing agreement with a franchisee,” said Nadia Shuayto, a marketing professor at Ohio Northern University in Ada. “That’s the person that they sign an agreement with to follow the rules and to get access to the trademark, the opportunity to use the McDonald’s operations, product strategy, market know-how and obviously recipes and other experiences that McDonald’s has under its belt.”
Shuayto had her own experiences in the franchise world, owning a Little Caesar’s franchise in Lebanon, where finding company-approved cheese and flour became quite costly.
Franchisees often pay an up-front franchise fee, along with ongoing royalty fees as a percentage of sales. Depending on the arrangement, the local owner may also have to buy or rent the location or pay construction costs. You may also be locked into buying ingredients from particular suppliers to keep the quality of the food consistent nationally.
Many companies have franchisee information clearly spelled out on their websites. For instance, Fricker’s requires investors to have a net worth of $1.25 million, not including a personal residence, including $250,000 in cash, according to its website.
“You obviously can’t guarantee any success, just like ours here in Lima,” said Scott Neth, who co-owns the new Fricker’s on Allentown Road with Travis Lawson. “We can’t guarantee it. But we’re hopeful with local ownership and a really good product, we’ll have some good success here.”
Labor of love
The reason many franchisees get involved is a deep appreciation for the product.
That’s what got Neth and Lawson interested in opening their wings restaurant, the 23rd site for the Miamisburg-based chain.
“We traveled a lot, doing a lot of different things through youth sports, and we always found ourselves at Fricker’s, in between the games and different things like that,” Neth said. “We just kind of fell in love with the franchise.”
The same held true for Ryan Hoehn, a Bath graduate who now owns Lee’s Famous Recipe Chicken restaurants in Delphos, St. Marys and Wapakoneta with his wife, Wanda. Lee’s started out of Lima in 1966, when Lee Cummings and Harold Omer opened “Harold’s Take Home.” The chain now has 128 locations, including 40 in Ohio, according to LeesFamousRecipe.com.
“We lived in Columbus for about eight or nine years, and some of the biggest things we missed were what we had in Lima,” Hoehn said. “You hear it often. There’s no Lee’s in Columbus, no Kewpee, no Fat Jack’s.”
They investigated several different types of restaurant franchises before deciding on Lee’s, taking over the Wapakoneta store in July 2020, opening a Delphos store in April 2022 and taking over a new store in St. Marys this year.
“We just felt the franchise of Lee’s model was more in line with our philosophies where we wanted to be,” Hoehn said. “It’s a very family-oriented business. … They had a lot of community involvement in areas where they operated, and that all appealed to us.”
They’ve already thrived, receiving the “Rising Star Award” from Lee’s during last year’s national brand conference. They also set sales records and received the small business of the year award from the Wapakoneta Chamber of Commerce in 2021.
“The Hoehns are solid operators, employers and community partners, and the success of their current locations is a testament to that,” Lee’s CEO Ryan Weaver said in a press release.
Opportunities
There’s continued demand in the Lima region for more and more variety with restaurants, and franchisees are making it happen.
For instance, a restaurant for Raising Cane’s is in the works near the intersection of Elida and Eastown roads, with job listings posted for it on Raising Cane’s website. It’s expected to open in the winter of 2023.
The Lima region is appealing once people understand the numbers, said Dave Stratton, president of Allen Economic Development Group. While the city of Lima has a population under 36,000, the adjoining townships push the number to nearly 75,000, and there are more than 100,000 people in Allen County, according to the U.S. Census. Within 30 miles of the city center of Lima are 327,399 potential customers.
“That population is critical as far as them determining if there’s enough of a client base to come here,” Stratton said.
For instance, the intersection of Interstate 75 and U.S. 30 in Beaverdam has 35,000 vehicles a day driving by it.
AEDG has gotten more involved in finding and attracting those kinds of businesses in recent years, Stratton said, as a way of improving the quality of life. It’s paying off, with nearly $2 billion in new investments in Allen County over the past four years.
Stratton said the key considerations to attracting national franchises include the size of the business, distance to other locations, competition, client base, general population, site and building readiness, community support and incentives to attract an employer.
With franchise fees ranging from $10,000 up to nearly $1 million depending on the restaurant, it’s important to find a business relationship that works for all sides, Pohlman said.
“It’s kind of like applying for a business loan at a bank, applying for a job at a company you would want to work for and combine that with a rental application for real estate,” Pohlman said. “Can you maintain and pay your bills? … It’s difficult to find a job that you want to work at, and it’s sometimes difficult to secure good housing. Combine all three of those, and it makes getting a franchise into a location a pretty large task to get done.”
Those roadblocks ultimately protect both the national restaurant chain and the local franchisee, said Pohlman, who’d previously considered owning a business franchise once but ultimately backed away from the opportunity.
“You both should be doing your due diligence,” he said. “It’s definitely not as easy as what I think some people make it out to be.”
Reach David Trinko at 567-242-0467 or on Twitter @Lima_Trinko.
