After COVID and lockdowns thwarted the full launch of Modern Market Eatery’s franchising strategy, the fast-casual restaurant is looking to expand its footprint across the U.S. via multiple-unit franchise agreements. The 16-year-old company — which offers made-from-scratch bowls, salads, sandwiches and pizza — is on a mission to “nurture happiness by making it easy to eat clean, nurturing and delicious food.”

Like any franchise business, its goal is to expand market share more quickly than would be possible by financing company-owned stores, said Chris Cheek, chief development officer of Modern Market’s parent company, Modern Restaurant Concepts. But the brand also wants to ensure that it chooses partners that fit its culture. “We’re looking for franchisees who have a passion for the hospitality part of our business, as well as the culinary part of the business,” said Cheek, who joined MRC in 2022. “We’re being very selective because we want to do the best that we can to protect the health of the brand from a customer and operational-excellence perspective.”

Its Origins and Its Growth Plans

Modern Market was founded in 2008 by Anthony Pigliacampo and Rob McColgan, high school friends from Harrisburg, Pennsylvania. Though their early careers diverged — Pigliacampo went into product design at Ideo and traveled while McColgan joined Goldman Sachs in New York — they both experienced a dearth of healthy fast-casual choices for busy but athletically active people like themselves, Cheek related. “They wanted to start a business together and gravitated toward the restaurant industry to develop a brand where people could feel good about what they were eating, and it had to be a place where you could eat something different every day,” he continued.” It couldn’t be all sandwiches or all salads.”

Modern Market’s first location, originally dubbed Modmarket, opened in Boulder, Colorado, where Pigliacampo attended college. It reignited its franchising effort in earnest in early 2022 and midway through that year signed a 41-unit agreement with Thrive Restaurant Group, which operates Applebee’s Grill + Bar, Carlos O’Kelly’s, HomeGrown and Bakesale Treat Parlor restaurants. It now has 32 locations across multiple states, including company-owned stores in Colorado, Dallas and Scottsdale, Arizona, Cheek said. While Modern Market is focused on expanding its company-owned footprint in Colorado, Thrive Restaurant Group so far owns and operates five Modern Markets and plans to expand or continue to grow in the Kansas City area and Wichita, Kansas, as well as in Texas, Iowa, North Carolina and Northwest Arkansas.

Additionally, the University of Notre Dame in Indiana, McColgan’s alma mater, operates a Modern Market in the Duncan Student Center, and the chain is close to announcing a similar agreement with a university in the Northeast, Cheek revealed. Meanwhile, Denver International Airport operates two units, and Modern Market is working on a location at Hartsfield-Jackson Atlanta International Airport.

It anticipates it will have 36 locations open by the end of this year and an additional 16 by the end of 2025, though Cheek suggested that openings next year could surpass projections. He also estimated that the number of units could quadruple over the next four to five years. “We’re focusing on finding franchisees wherever they might be,” Cheek declared. “If there’s a great multi-unit franchise with a demonstrated track record in bringing a new brand to the market in Columbus, Ohio, we’ll go there.”

Franchise Nuts and Bolts

Currently, Modern Market asks for a franchise fee of around $40,000 and estimates the initial investment to be between $928,500 and nearly $1.5 million for a single restaurant, depending on buildout costs, location and other factors, according to its current franchise document. The document also noted that, based on 18 mature, company-owned stores, average sales volume totaled a little more than $2.2 million per unit over the 12 month period that ended Oct. 1, 2023.

Ideally, franchisees must commit to opening a minimum of three units, Cheek said. “We’ll work with a candidate on the size of their territories and will help determine how big they want to build their enterprise over time,” he stated. “Franchisees don’t have to have a 40-, 50-, 100- or a 200-restaurant portfolio, but they have to have some level of experience and knowledge.”

Modern Market generally targets strip centers, as well as power centers and lifestyle centers. It also will consider urban locations. It operates in downtown Austin and Denver, for example.

And Modern Market has begun to consider drive-thrus. In November, its first drive-thru location, pictured at top, opened on a multitenant pad site at in Colorado Springs, Colorado’s First & Main Town Center. But the chain doesn’t plan on including them at all future restaurants.

When entering a market for the first time, however, Cheek seeks locations that can reduce marketing efforts. “My philosophy is that the first site ought to be a big billboard location with high visibility and easy access to promote brand awareness,” Cheek said. “Then you can take more secondary locations as people begin to seek you out.”

Qdoba Synergy

Modern Market’s expansion push started when Butterfly Equity, a food-oriented private investment firm, purchased the company in 2018. A year later, McColgan and Pigliacampo formed MRC to house Modern Market and Lemonade, a cafeteria concept owned by Butterfly and KKR.

At the time, Modern Market and Lemonade had 58 locations and shared operational platforms while remaining separate brands. Lemonade intended to focus on its California market share while Modern Market set its sights on the rest of the country. As the economy reopened from COVID in 2022, Butterfly acquired Qdoba from Apollo and added it to MRC. In spring 2023, MRC sold the Lemonade group to Elite Restaurant Group, according to an MRC spokesperson.

The Qdoba acquisition added 750 Qdoba units to the group, about 450 of which were franchises at the time. The deal also brought efficiencies to Modern Market, because the pair of restaurants buy similar ingredients and share the philosophy of preparing fresh, “better-for-you” meals in their kitchens daily, Cheek said. The efficiencies extend to restaurant equipment, too, he added. “Qdoba’s buying power is across almost 800 restaurants,” Cheek observed, “so that provides significant economies of scale when it comes to cost of goods.”

Data points on markets where Qdoba operates also could benefit Modern Market’s site selection, Cheek said. Moreover, the recent uptick in restaurant closings may provide the opportunity for the brands to operate side by side in newly available locations like Red Lobsters that would be too big for either alone. Modern Market, for example, typically ranges from 2,200 to 3,000 square feet, Cheek said.

“You don’t get a lot of freestanding buildings at that square footage, but there are some attractive outparcels, ground leases or even some second-generation spaces that are larger than that,” he explained. “We could join forces with Qdoba and get economies of scale from the standpoint of occupancy costs, which is an exciting prospect.”