NewHavenBIZ

n e w h a v e n b i z . c o m | M a r c h 2 0 2 3 | n e w h a v e n B I Z 13 The company that builds and installs the critical systems in virtually every type of facility is the same company you can rely on to maintain them. For over 50 years, our clients have trusted us to provide sustainable, more effi cient, greener facilities. Experts in: Design/Build, Pre-Construction Service LEED Capabilities SINGLE SOURCE DESIGN/BUILD EFFICIENT. QUALITY. COST-EFFECIVE. 860.871.1111 Toll Free: 800.741.6367 nemsi.com MECHANICAL | ELECTRICAL | PLUMBING | SHEET METAL | BUILDING AUTOMATION | FACILITIES SERVICES License #'s: E1-197483 S1-406020 P1-290301 SM1-975 MC-1134 on Audubon Street offering poke — a Hawaiian combination of raw fish, rice and toppings. Entrepreneurs omas Nguyen and Gladys Longwa opened the first Pokémoto in 2017 and expanded to 13 locations by 2021, when the company was bought by Texas-based Muscle Maker Inc. e company dropped the accent from the name and moved to a hybrid corporate/franchise model, reporting 29 open locations in 16 states and another 60 franchise locations in the pipeline as of January. Pokemoto CEO Michael Roper ex- plained the hybrid model in a statement: "While our growth strategy is focused on franchising, we also are building cor- porately owned and operated locations in key markets. ese 'seed' locations are used to help the franchise sales pro- cess as most franchise partners want to visit a location and taste the food prior to becoming a Pokemoto franchisee." Another restaurant chain innovator is just down the road from the Haven Hot Chicken Orange location: Subway. Fred DeLuca opened his first sandwich shop in Bridgeport in 1965, creating his innovative franchise system in 1974 aer hitting the 16-location mark. At its peak in 2016, the Subway chain boasted more than 27,000 U.S. locations, its explosive growth credited to DeLuca's standardized menu and legacy of strong corporate oversight and quality control. Competition from newer sandwich chains and shis in customer tastes have since culled the ranks of Subway franchises to around 20,000; the chain formally announced in February that it was exploring a sale that could value the company at more than $10 billion. Expansion plans hold steady Despite recent economic uncertainty, entrepreneurs are still seeking to ex- pand their concepts, especially in sec- tors like restaurants, fitness, car washes and medical services, said attorney John Doroghazi, a partner in the litiga- tion department at New Haven-based law firm Wiggin and Dana. "Small businesses are always looking to expand once they have a good idea and a customer base," Doroghazi said. What has changed is the legal outlook for franchising, in which a business sells the rights to its name and idea to another individual or company. Recent legislation set for a 2024 vote in California would set up a state council to establish minimum wage, working hours and working conditions for all franchises, an effort seen as a major threat by the industry even as other progressive states may seek to emulate the measure. "If that passes and stays in effect it will fundamentally alter franchising, … and that's a really, really, really big deal," Doroghazi said. For the time being, sectors such as canna- bis products are increasingly looking to fran- chises to expand their businesses beyond state lines. Entrepreneurs oen opt for a franchise model when they hit the 10- to 15-loca- tion mark, when the cost and logistics of setting up a corporate structure overseeing multiple locations may outweigh the benefits of direct control, Doroghazi said. "If you've proved yourself — you can have more than one place where someone wants (your product) — then it's really, do you want to make the investment to start building out a franchise system, or do you want to do it yourself?" Doroghazi said. If Haven Hot Chicken ever decides to move to a franchise model, the general category of chicken sandwiches is hot for 2023, according to industry news site Franchise Wire. "Franchise chicken brands are grow- ing at an amazing rate," according to the site, which name-checks national players like Al's Hot Chicken, Nashville Chicken Coop and Shaq's Big Chicken. Haven Hot Chicken's differentiator is its focus on top-quality sandwiches at a higher price point than fast food, putting it into the same category as chains like Shake Shack, Tekin said. e company employs 60 people across locations and is always hiring, he added. Haven Hot Chicken's neighbors at its North Haven location, in a newly built plaza at 146 Washington Ave., reflect its branding and perhaps its aspira- tions: It's between a Starbucks (the cof- fee giant doesn't franchise but operates more than 15,000 U.S. locations) and a Five Guys, a premium burger chain with 1,700 franchises nationally. Tekin said he thinks the timing of Haven Hot Chicken's debut — during the worst of the pandemic — has pre- pared the company to forge ahead in a tough market. "at was the first challenge that we faced, and frankly, that made us a lot stronger," he said. "As we look at that mission and core values, it's important to us that we retain control over how locations operate, what culture they build, so that we can continue delivering on the expectations that we have." n New Haven-born Pokemoto had 60 new locations in development as of earlier this year.

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