The Profit

Athletes playing for millions with a franchise business

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Scoring big on franchises

Source: Gary Miller; Wingstop

If there's one thing professional athletes know, it's how to represent a big brand. And that could be why so many pros buy into franchise business models, where huge payouts can come from executing on an existing image and concept.

Troy Aikman, the former Dallas Cowboys star, made millions after cashing out some of his shares in Wingstop, the Texas chicken wings chain that went public June 12. Aikman has been a Wingstop spokesperson since 2003.

"A lot of athletes have consumer branding experience with restaurants, and that may be partly why they are drawn to ownership," said Matt Haller, vice president of public affairs at the International Franchise Association.

While this type of windfall isn't likely to arrive overnight for those who own their own franchise shops, many make millions over time if they've chosen a brand with lasting power.

Read on for profiles of seven athletes scoring millions in franchising.

By Maggie Overfelt, special to CNBC.com
Posted 25 June 2015

Phil Mickelson—Five Guys Burgers and Fries

Source: Five Guys; Getty Images

Given that the quick-service restaurant sector holds the largest piece of the U.S. franchise pie, it's not unusual to see professional athletes align themselves with popular chains.

We're more apt to see professional golfer Phil Mickelson snacking from a bag of Five Guys fries than flipping burgers at the shop he owns in southern California, a state where the brand's presence has grown from six locations in 2010 to 97 today.

Five Guys, one of the first burger brands to embrace the concept of wholesome, sustainable ingredients, owns the largest piece of the fast-casual burger market, even though competition from Shake Shack is heating up.

Growth is ongoing: There are 1,276 Five Guys locations across North America, the U.K. and Dubai today—up from roughly 500 five years ago. The firm expects 80 new shops to open in either the U.S. or Canada this year.

According to spokesperson Molly Catalano, many celebrities have invested in one of the 100 or so groups that own and operate Five Guys shops. Mickelson is one of the few that, in partnership with his investment group, own the rights outright to his shop.

Venus Williams—Jamba Juice

Source: Jamba Juice; Getty Images

There's only one high-profile female athlete associated with a franchise (it's hard to count U.S. soccer idol Mia Hamm recently buying into an actual soccer team franchise). But the one female athlete who has aced the franchise business is from the nation's first family of tennis.

Picking up on the healthier snack trend bombarding American consumers, Venus Williams signed an agreement with smoothie maker Jamba Juice in 2011 to buy five Washington, D.C.-area shops. Four are open today, with the last one expected to open the end of the year, according to the Washington Business Journal.

Like most of her athlete-turned-business-owner peers, Williams doesn't oversee the day-to-day operations of her shops.

Still, the simplicity of Jamba Juice's business model lends itself well to rookie business owners, even if they're not behind the counter. It doesn't take much overhead to churn out the firm's core product—supplies arrive frozen, and equipment needs are mostly limited to blenders and freezers. The size for the shops is small, ranging from 1,200 square feet to 1,400.

Average sales for a Jamba Juice unit runs around $737,000 annually. In its most recent sales report, the company said that same-store sales for franchised locations increased 4.2 percent for the first quarter of 2015.

Peyton Manning—Papa John’s International

CEO and Founder of Papa John’s John Schnatter, right, with Peyton Manning.
Source: Papa John's

The NFL and pizza go together on Sundays—and in the world of franchise opportunities.

Denver Broncos quarterback Peyton Manning saw business opportunity rise from a pizza sponsorship deal. After appearing in Papa John's Super Bowl commercials in 2011 and 2012, Manning signed on to own 25 restaurants in Denver.

Papa John's is just one in a long list of big U.S. brands that Manning backs, but it's one of the most promising. As the country's fourth-largest pizza chain, Papa John's share of the market grew from 11.7 percent to 12.2 percent last year, according to research firm Technomic.

In its first-quarter 2015 sales report, the company—whose growth has lots to do with NFL sponsorships and targeting of group-order sales during NFL games—said its same-store sales for franchises were up 6 percent year-over-year. According to QSR Magazine, the typical Papa John's restaurant pulls in annual revenue of about $837,000.

Shaquille O’Neal's—a 100-franchise-plus empire

Source: Scott Mlyn | CNBC; Getty Images

Shaquille O'Neal once had to follow what is considered the NBA's toughest playbook: Phil Jackson's triangle offense. That may help explain why Shaq has become so successful as a business person.

"There is a particularly unique synergy because athletes are accustomed to being part of a team where they follow a playbook," said Edith Wiseman, president of the client solutions team at industry tracker FRANdata. "They have to think outside on their own feet, and when the conditions of the game changes, they have to react. That's very similar to trying to adjust to market conditions."

O'Neal's investing style has evolved very slowly over the past few decades. According to the Wall Street Journal, he started with bonds in the mid-1990s before moving to stocks, selecting a few popular blue chips whose brands he felt a personal connection with.

While O'Neal is also known to invest in private tech firms, including Google, his stake in national pretzel chain Auntie Anne's is probably a bit less risky.

According to the Greater Baton Rouge Business Report, O'Neal owns 17 Auntie Anne's (most of them in Buffalo, N.Y., and Detroit), 55 Five Guys and 40 24-Hour Fitness clubs. O'Neal, in partnership with franchise group V&J Foods, rolled out his first Auntie Anne's in 2006.

Junior Bridgeman—Even taller than Shaq in franchising

Source: Getty Images

The IFA expects franchise businesses to generate a 5.4 percent increase in economic output this year over 2014, propelled in large part by the expanding reach of the country's biggest and best-known food brands.

That's good news for Ex-NBA player Junior Bridgeman, who, after a 12-year career in the NBA in the 1970s and '80s (mostly with the Milwaukee Bucks), oversees a franchise empire that includes 195 Wendy's locations, 125 Chili's restaurants and 45 Fannie May Chocolate shops, among other retail operations, according to Fortune.

Bridgeman started in 1978 by buying five Wendy's locations around Milwaukee, where he mopped floors, cooked burgers and worked the front counters to learn how to run his businesses better. Today his private company—Bridgeman Foods—is Wendy's second-largest franchisee. Estimates of Bridgeman's net worth range from $250 million to $400 million.

Drew Brees—Jimmy John’s Gourmet Sandwiches

Source: Getty Images; Jimmy John's

Drew Brees, Super Bowl MVP and the New Orleans Saints' record-setting quarterback, has been approached by many quick-service restaurants over the years to participate in all types of endorsement deals. According to a 2014 article in Franchise Times, none were places he ate, so he wasn't interested.

Then, a few years ago, Brees received a call from his former college backup quarterback, who had recently taken a job as director of operations at Jimmy John's Gourmet Sandwiches, a chain where Brees ate at regularly during his time at Purdue University. The firm was finally looking at opening up in New Orleans. Their connection helped Brees secure rights to his first Jimmy John's, which he opened in 2011.

As of last year, Brees was operating five Jimmy John's in New Orleans, one of them within delivery distance of his own house. He's expected to open 18 more as per his development agreement and, according to the article, hopes they keep performing within the firm's top 5 percent.

A Jimmy John's sandwich shop averages $878,800 in revenue each year, according to QSR Magazine.


Bryan Scott—Title Boxing Club

Source: Getty Images; Title Boxing Club

While much of the love athletes are giving to franchises falls into the food sector, fitness also pulls rank.

Bryan Scott, a former NFL linebacker and NFL Player of the Year who was drafted by the Atlanta Falcons in 2003, first heard of a franchising opportunity with Title Boxing Club during a networking event in 2013, the year he retired.

Riding the growth of niche fitness studios—in franchising, the health-and-fitness category saw the most new brands debut last year, according to FRANdata—Scott owns five units in and around Atlanta (only two are yet open). Scott spends much of his time teaching classes and running the day-to-day operations, according to John Rotche, president of Title Boxing and CEO of its parent company, the franchise development firm Franworth.

Rotche said that Title Boxing Club has seen 26 consecutive quarters of double-digit sales growth system-wide. The franchise has about 150 locations open across the U.S.; 450 are in development.