After acquiring this college-town favorite, new ownership spent years taking it from a mom & pop to a franchisable concept.
College Station, Texas, is probably best known as the home of Texas A&M University. But it’s also the original home of Layne’s Chicken Fingers, a QSR brand that started as a mom-and-pop shop but just might be on its way to becoming the next great chicken chain.
“There’s so much white space out there,” says Garrett Reed, CEO and co-owner of Layne’s. “Could we be a thousand units? That may not happen in the time that I’m sitting in this chair, but yeah.”
Raising the distant but very real possibility of 1,000 stores is a major change in trajectory for Layne’s. This chicken-fingers-and-fries concept now sits at about 15 units, but for its first 23 years, it had just a couple of locations. And its previous owners liked it that way.
New owners, new goals
That changed when Reed and his partner, Matthew O’Reilly, acquired the company from long-time proprietor Mike Garratt in 2017.
The story of the acquisition starts a few years before, however, when Reed, a College Station native and Dallas-based real estate developer, set out to enter the restaurant industry as a franchisee. He didn’t like what he found.
Many franchisors, for example, would mark up items in the supply chain. In Reed’s view, this was nickel-and-diming the franchisees who were supposed to be their partners. What’s more, he encountered many chains that he believed underinvested in franchisee support and then couldn’t give them the marketing and operational help they needed.
When considering next steps, Reed thought about Layne’s and how beloved it was in his hometown. That food and that following, he believed, could be the basis of a successful franchise, so Reed approached Garratt about partnering.
While locations in other college towns use the local school colors, Layne’s default is reminiscent of it’s hometown school of Texas A&M. Images courtesy of Layne's Chicken Fingers
While Garratt was thriving by running two existing stores, he didn’t see significant growth as a real possibility for the company. The concept, he said, lacked the infrastructure to grow at scale. There were no standard operating procedures or operations manuals, and the branding wasn’t formalized. The restaurants didn’t even have a POS system. In short, it just wasn’t a concept built for franchising.
While Reed and O’Reilly agreed that Layne’s couldn’t be scaled as it existed, they believed they could transform the business. Eventually they struck a deal to buy Layne’s Chicken Fingers outright.
With Reed as CEO, the new leadership’s first move was to develop policies and operational procedures. This included nailing down kitchen design, including the number of fryers needed for a given sales volume and the size of the flattop and hood. They worked to formalize operations. The team developed procedures for inventory, prep work and much more.
To test these changes, the new owners then opened the concept’s first new location in years. After three years and a fair share of tweaks and changes, says Reed, the new Layne’s was an operational success, and a fourth unit was opened.
The next step, then, was to take the successful model for Layne’s restaurants and build a company that could support franchisees of the concept.
“We figured out how to run restaurants efficiently and profitably, but we didn’t know how to be a franchisor. So, we had to figure out how to be a service-based business,” says Reed.
To help Layne’s take this next step, the company brought on board Samir Wattar, a longtime veteran of the restaurant industry with significant experience in supply chain management and franchise development. Wattar helped turn Layne’s from a restaurant business to a service-oriented one focused on supporting franchisees.
“It’s my belief that when people franchise, they are franchising for services,” says Wattar. “If they don’t need those services, they can open their own concept and we’d be competing with them. But if someone is signing with you, they’re paying a price for the services you provide: leadership, financial, marketing.”
Under Wattar, Layne’s developed operations manuals and staffed up key franchise support teams, including its training group and construction team. In fact, Layne’s has intentionally over-staffed these departments and could easily support 50 stores at current levels, Reed says.
Layne’s uses sealed concrete floors and butcher block tables. This West Virginia location includes a spin on a line from a the John Denver song.
Prototype Array
Then there are the actual restaurants these teams do and will support. This has been another area Layne’s has put time and money into.
“One of the frustrating things about trying to become a franchisee was that a lot of brands had their prototypes, but they had no flexibility in them,” Reed says. “One of the things I wanted to do was offer up multiple different opportunities based on where the franchisee felt they could be successful.”
Layne’s, then, has developed four prototypes based on real estate opportunities:
A free-standing operation with a drive-thru, patio and a 50-seat dining room measuring approximately 2,400 square feet. Another iteration is under development that incorporates more natural light and no outdoor seating.
A free-standing drive-thru-only option with patio seating measuring 1,000 to 1,500 square feet.
An endcap drive-thru model clocking in at around 1,500 square feet. These are ideal for areas where pad sites are unavailable or not financially viable.
An in-line prototype measuring roughly 1,000 square feet with around 20 seats. This model is designed for densely populated areas with high foot traffic, like central business districts or college campuses.
Combined, these prototypes will let Layne’s move into most any market. No matter what real estate is available, “those four categories cover everything,” says Reed.
While the seat count and square footage for each prototypes varies, they’re more alike than different.
The clock wall on the far wall is one of Layne’s signature design elements.
The kitchens for each are almost identical, for instance. The only differences involve the number of fryers and the creation of a second expo line for restaurants with both a drive-thru dine-in and seating.
When creating a restaurant for any of these real estate types, says Wattar, the team starts by placing the kitchen first. Next comes working out the flow for the front of the house. Many of these questions are standard for QSRs. How will customers make their way to the POS station? What’s the path to the soda machine? How will guests move to their seats?
For Layne’s there’s an additional question about flow. In an unusual move for fast food, the chain has runners that deliver orders to dine-in guests. Restaurant designers, then, also must account for staff moving to and from the kitchen to the dining area.
Once all that work is done, says Reed, “We take whatever walls we have left and use it for design.”
Nailing down this design was another key aspect of Layne’s prototype development work.
This task, though, didn’t require creating many design elements from scratch. As a college-town mom-and-pop shop, says Reed, Layne’s had plenty of personality in its DNA. Instead, the chain sought to elevate the rougher elements and make the design repeatable.
The original Layne’s in College Station includes murals painted directly on walls. In the prototype, those murals have been replaced with vinyl wall coverings, which are cheaper and easier to create and install.
The look of the newer Layne’s stores is also more polished. The original Layne’s has laminated booths in multiple colors and some very rough exposed ductwork. New stores have butcher block tables with navy chairs. While the ductwork is still exposed, it has a clean, crisp look.
While the look of Layne’s has been elevated, the design team worked to keep the personality — lighthearted, funny, slightly irreverent — shining through.
The wall decor, for instance, includes cartoon drawings of figures such as Joseph Stalin and Kim Jong Il next to a note saying that “to our knowledge, no foreign dictators have eaten at Layne’s.” Another key interior element is the clock wall. This piece has multiple clocks showing times from locations ranging from the parking lot to Uranus to “two hours ago.”
Then there’s the wall graphic of Astrochicken, the chain’s intentionally ridiculous chicken-in-a-spacesuit mascot. Astrochicken has a dual meaning, Wattar says. It represents the silliness of the brand, and how Layne’s wants its employees to feel at work, “carefree like a chicken. Have fun. Enjoy yourself in the restaurant.” At the same time the piece’s space theme represents the precision of space travel. That’s the level of operational precision Layne’s restaurants need to succeed, he says.
A stand-alone Layne’s in Roanoke, Va.
Franchising Hurdles
Layne’s flexible approach to real estate not only helps it move into multiple markets. It also aligns with how the chain thinks about franchising. In short, Layne’s is very picky about who it partners with, then strives to meet the needs of whoever qualifies.
At the most basic level, potential franchisees must commit to opening multiple units. Layne’s has signed contracts for dozens of stores, but the smallest deal to date is for six. Potential franchisees also need business chops. The Layne’s team, says Reed, must believe franchisees can run financially successful restaurants.
The final requirement is just as important as the others: Franchisees must be passionate about the concept. If Layne’s leaders aren’t convinced a prospect will be a good steward of the brand, they won’t sign on the dotted line.
“I know this is going to sound weird, but it is the truth: It is hard for us to accept a franchisee. We had someone come in with a $400,000 check one time and we told them no. It’s like sending your kids off for school. We are really particular. This really is a passion project,” says Reed.
When Layne’s finds a franchisee that they believe in, the company wants to help that partner open in whatever space makes sense.
“We want our franchisees to have the option to get into certain markets at a price that makes sense for their return on investment. A lot of other quick-serve restaurants would have said you’ll have to wait until a pad opens up so you can get a typical restaurant. We view it as ‘let’s get into this trade area,’” says Reed.
This approach to franchising appears to be paying off. Given the number of deals it has signed, Layne’s expects to hit 100 units within the next four years. The chain’s focus is on Texas and nearby states, but it has the infrastructure and playbook to open anywhere in the U.S., Reed says.
While 100 is still a long way from 1,000, it’s evidence that the “passion project” of transforming Layne’s from a college town favorite to a thriving franchise is beginning to pay off.
“We built this brand from a mom-and-pop in College Station to where it can be 50, 70, 100 restaurants,” says Wattar. “I had a great job before this one, but the chance to build something and leave our stamp on this industry brought me to Layne’s."
Snapshot
Headquarters: Frisco, Tex.
Concept owner: Garrett Reed & Matthew O’Reilly
Concept: Chicken finger QSR
New prototype summary: Layne’s has developed four separate prototypes for different real estate options. All have been rolled out in the past three years in the company’s home state of Texas.
Size: From 2,450 square feet for a free-standing location with drive-thru and 50-seat dining room to 1,000 square feet for an in-line location with limited seating.
Real estate: In-line, endcap, free standing drive-thru-only, free standing with dining room and drive-thru.
Design highlights: Streamlined kitchen for higher throughput with low labor costs; Clock wall showing times in various places, such as “The parking lot” and “Two hours ago;” Astrochicken mascot.
Build-out time: Eight to 10 weeks for in-line and endcap units. Up to 12 months for ground-up free-standing restaurants.