Before the days of GPS, drivers could tell they were entering the business district of any Arkansas small town by the number of franchises on either side of the road. Today, there are more franchising opportunities than ever, and Arkansas is a fertile place for them to take root and grow.
Franchising allows entrepreneur-minded Arkansans an opportunity to own and operate their own businesses without having to start from scratch. The franchise business model is established, proven, and comes with a brand that works and the resources to support the franchise owner.
According to Statista.com, the franchising industry in the United States works by having a franchise company like McDonald’s — the king of franchises — license the use of its brand, products and processes to a franchisee as a separate business. In 2022, there were roughly 792,000 franchise establishments in the United States, generating an economic output of $827 billion and employing 8.5 million, according to Statista’s data.
The largest segment of the franchising industry has consistently been quick-service restaurants, which comprise more than $276 billion of the industry’s total economic output. Business services had the second-largest output, but it accounts for less than 50 percent of the total output from quick-service restaurants. Rounding out the top franchise industries are full-service restaurants and real-estate services.
Arkansas is strong franchise territory because of its diverse, growing economy and relatively low operating costs, including low rent and labor costs, compared to many other states. This can be advantageous for franchisees looking to control expenses.
Plus, Arkansas has a reputation for being business-friendly, with relatively low taxes and a simplified regulatory environment, which maker it fairly easy to start and run a franchise. The state has a supportive business community made up of a strong network of business organizations, chambers of commerce and other resources that provide guidance and support for franchise owners.
Being centrally located in the nation also has its advantages for franchises, which rely on transportation and logistics to receive products they need. The state’s railways, interstate highways and the Port of Little Rock support solid connectivity throughout the country.
Another advantage for business owners looking to franchise in Arkansas is the state’s diversity in terms of demographics and consumer preferences, which provides opportunities for a wide range of franchise concepts.
Two franchises established in Arkansas are growing beyond the state’s borders: 7 Brew Drive Thru Coffee, which was established in Rogers and now has 130 locations, and Rock N Roll Sushi, which launched in Alabama and now has locations throughout central Arkansas. AMP visited with Brandon Sebald, 7 Brew founding franchisee, and Jason Alley, area developer and co-owner of the Arkansas Rock N Roll Sushi franchise, about their experiences franchising in Arkansas and their plans for the future.
Jason Alley
AMP: There seems to be an influx of national franchises in Arkansas. How did you establish your first location in Arkansas?
Alley: My business partner, Chris Kramolis, brought Rock N Roll Sushi to my attention in 2019. We were both looking for another franchise to bring to the state. I thought he was crazy — we did not know anything about sushi. The more I researched the brand, the more I fell in love with the concept. We began looking at real estate in central Arkansas and secured our first location in west Little Rock in late 2019. Our original plan from the beginning was to grow multiple locations across the state.
Sebald: 7 Brew was born from a desire to change drive-thru coffee into a fun, mind-blowing experience for everyone, with the first stand in Rogers opened in 2017. We were so eager to bring this new drive-thru option to the region. Our first stands found a great deal of receptiveness in the communities around them, thanks to our menu, energy and quality of service. Expansion became inevitable.
AMP: How many locations do you plan to open within a year and in the next five years?
Alley: Our goal for 2024 is to open three new locations across the state. Lakewood Village in North Little Rock will be in last quarter of 2023, which will be our fifth location in the state. We are also looking to open a location in Fayetteville in the first quarter of next year, and we really like the Hot Springs and Jonesboro markets for future growth. In the next five years, we hope to have more than 15 locations across the state.
Brandon Sebald
Sebald: Currently, 24 stands are open in Arkansas, seven of which our group franchised. Our franchise group plans to open six to eight within the next year and 12 or more in the next five years.
AMP: What makes Arkansas a solid place to establish a franchise?
Alley: The diversity of the state is the first thing that comes to mind. Depending on the franchise, there is ample room for growth in different parts of the state. The northwest area offers great opportunities for locations, as does northeast and central Arkansas. Real estate is another reason Arkansas makes sense. Compared to other states, the Arkansas market is a great value.
Sebald: 7 Brew specifically meshes well with Southern culture, meaning we pride ourselves on providing a one-of-a-kind drive-thru experience that will put a smile on customers’ faces while giving them the delicious jolt of energy they’re looking for — morning, noon and night.
AMP: What makes your franchises unique in the swirl of coffee and food offerings today?
Alley: We are a concept built on approachable sushi and a dining experience that is fun, family friendly and nostalgic. We like to play our music a little louder and show the videos on giant television walls. There is nothing in the market like us.
Sebald: 7 Brew is unique in how we prioritize positive experiences, offer hand-crafted beverages and provide exceptional speed of service. Our drive-thru wait times are typically less than five minutes. These are the three pillars of success that separate us from our competitors.
In addition, we offer an array of hot and cold coffee beverages, including our fan-favorite Blondie, chillers, teas, energy drinks, infused sparkling water and more. There’s a drink for everyone at 7 Brew, with over 20,000 flavor combinations and alternative milk options.
As a company, we are also highly tuned into coffee trends and roll out new products based on our customers’ requests. Cold brew, for instance, was highly requested and something we were eager to launch this month.
AMP: Are there plans to expand your offerings, or do you plan to keep it as is for now?
Alley: Our menu is always evolving. In fact, we are currently testing some new menu items at our Conway location. You can expect Rock N Roll Sushi to introduce new menu items every three to four months. New offerings will follow seasonal trends.
Sebald: 7 Brew continues to explore new drink offerings, but in the short term, we just launched cold brew and cold foam within the last month, which has been a hit so far. It is a great, fully customizable product, like all our other drinks. You can do a straight cold brew, create any flavor combo you enjoy, or try one of our limited-time offers, like this month’s Pumpkin Blondie Cold Brew with cold foam, which is a favorite of mine.
AMP: What do potential franchisees planning to open in Arkansas need to know? What should they be doing?
Sebald: Building and maintaining relationships with the community — with both regular customers and local organizations. You will stand out as a corporation by showing a vested interest in the neighborhoods in which you operate.
AMP: If you had it to do all over again, what would you do differently when establishing your franchise in Arkansas?
Alley: Nothing so far. We opened our first location during the pandemic and then our second two months later. Again, I thought we were crazy for jumping all in so quickly, but it has proven to be successful, and I wouldn’t change a thing.
Sebald: To be honest, we wouldn’t do much differently. 7 Brew has a phenomenal blueprint for success; we simply followed their playbook. Entrepreneurs like me invest so heavily in franchises because they have a great brand and systems in place that allow you to scale the model quickly.
I have been part of several other successful franchises, like Planet Fitness, and I can tell you that 7 Brew has as strong of a model for success and dominance. I am excited about the future growth of the brand and our team being part of that journey.
AMP: What advice would you give to someone wanting to open a franchise in Arkansas?
Alley: Do your research. Know the market you want to establish your brand in. If you plan on growing multiple locations, be strategic on how you divide locations across the state.
Sebald: I have opened businesses in almost 10 states. I can tell you Arkansas has been one of the most pro-business states to open a business, and that helps incentivize entrepreneurs to continue to invest in a state.
On the other hand, I have opened businesses in other states that were quite the opposite, and I will never do business there again. With that said, within each state, you will always have to coordinate with the local municipality to get permits and your business license, so I strongly advise creating a great relationship with each city you enter.
I moved to Arkansas with a short-term plan to develop Planet Fitness locations in northwest Arkansas over five years and eventually move. Now, 12 years later, I call it home and will never leave, as the state has such great people and is a pleasure to do business in. Over those 12-plus years, my wife and I have fallen in love with the Arkansas outdoors lifestyle, community and the high volume of opportunity as a business owner.
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