Posted on January 19, 2006

Organic restaurant chain seeks more exposure

O'Naturals set to franchise

With a name like O’Naturals and a goal of serving food that is fresh and organic, the company’s restaurants may conjure up images of sprouts and wheat germ, and having to chew three times longer than usual.

But that’s not the case nowadays, when almost anything is available in regular and organic. And not just food, but franchising opportunities as well.

Five years after launching the privately held O’Naturals, Gary Hirshberg and Mac McCabe have decided to offer franchising opportunities. But both men say they will be picky not only in choosing franchisees, but also in deciding how many restaurants will open in 2006.

Hirshberg, who is president and self-described ”CE-yo" of organic yogurt maker Stonyfield Farm Inc., admitted that he was not in favor of franchising until 18 months ago, and that it took some changes in the market for him to hop on board the franchise express.

The first, he said, was that the environment for organic/natural food has expanded in so many ways. ”You can find organic in most stores across the country," he said in a telephone interview.

The second was fad diets. He spoke about the fading of the once-popular low-carb diet and how, unlike other fads, the organic industry has continued to grow.

Hirshberg and McCabe said they are looking for franchisees with an extensive restaurant background, as well as knowledge of the community where the restaurant will open and a commitment to socially responsible business practices.

”We are all about the community. And it’s very important for us to know the area," McCabe said in a telephone interview. ”We are confident that our venture can work in a variety of settings, which is why we chose to move forward and allow for franchising."

McCabe said the company has a list of 200 people who are interested in franchising from all regions of the United States, but would not offer any names.

”We are seeking franchisees who are committed to customer service," said McCabe, ”people who recognize that ‘fresh’ and ‘delicious’ are more than buzzwords. O’Naturals represents a real commitment to serving natural and organic food in convenient, innovative ways."

The franchise fee will be $25,000, with 5 percent ongoing royalties, according to Hirshberg. According to the website entrepreneur.com, this is typical of many franchises, including Panera Bread, which has a $35,000 franchise fee and 5 percent royalties. The Quiznos Sub franchise fee is $10,000 to $25,000, with an ongoing royalty fee of 7 percent. Dunkin’ Donuts charges a $40,000 to $80,000 fee and its royalties are 5.9 percent.

The website also said the cost of real estate, construction, and equipment for these types of establishments ranges from $750,000 to $1.5 million. McCabe and Hirshberg declined to estimate what it would cost to launch an O’Naturals restaurant.

O’Naturals has restaurants in Portland and Falmouth in Maine, and Somerville and Acton in Massachusetts. The restaurant had a brief stint in Portsmouth, N.H., but was closed because of a poor location and lack of foot traffic, said Carmelle Druchniak, senior communications manager for Stonyfield, based in Londonderry, N.H.

Both McCabe and Hirshberg said the goal in 2006 is to find franchisees who will open one or two restaurants in a particular area. For example, if someone is to open a store in Boulder, Colo., that franchisee could also manage a store in Fort Collins or Denver.

McCabe said he hopes to move aggressively, but cautiously, and does not want to grow too quickly, like Boston Market or Krispy Kreme. ”Both grew dramatically and rapidly and are now struggling," he said.

O’Naturals offers a menu that includes hormone-free, antibiotic-free meats, including organic, slow-roasted beef, all-natural chicken, wild bison, and wild Alaskan salmon sandwiches served on warm organic flatbread, as well as a variety of vegetarian options, including stir-fried Asian noodles, and individually tossed salads. Drinks are all organic, including wine, and microbrewed beers are available.

According to McCabe, the average customer spends $6 to $8 per meal.

Hirshberg admits that having a burger-and-fries option on the menu was more of a requirement, at first. ”We moved away from serving hamburgers — our consumers did not want them. Instead, we found our top seller to be the steak sandwich," he said.

”Many restaurant concepts think that all-natural and organic food has to taste like an old Birkenstock," Hirshberg said. ”O’Naturals is out to show the world that the goal of delivering pure healthy food need not result in any compromise on taste."

© Copyright 2006 Globe Newspaper Company

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