As part of a companywide effort, Jacksonville’s 11 company-owned Krystal locations will be refranchised and remodeled within the next three years.
The franchisee, not yet identified, also will add five or more Krystal locations in Jacksonville within three to five years, a Krystal spokesperson said.
The company will refranchise 100 to 150 stores in Alabama, Florida, Georgia, Mississippi and Tennessee to “well-capitalized multi-unit operators.” The Jacksonville franchise owner has yet to be announced. All of its Florida company-owned stores will be refranchised and remodeled, as well.
Krystal announced last year that its locations at 5707 University Blvd. W. and 2023 N. Main St. would be the first to be demolished and rebuilt.
Each “scrape and build” project is estimated at $1 million. Those demolitions have yet to take place. They were initially planned to be complete by the third quarter of 2019, and would take 120 days.
Earlier this month, two Jacksonville stores – at 9840 San Jose Blvd. and 3515 St. Johns Bluff Road – closed permanently as part of a nationwide corporate strategy.
The remodeled stores will take on the look of a prototype the company first tested in Jackson, Mississippi, last year.
They are smaller than the existing restaurants, have expanded work zones and double drive-through lanes. The company calls the design “contemporary and nostalgic,” with full-glass fronts, wood-framed ceilings and community tables.
The menu will remain the same.
“We’re ready for the next step in the brand transformation that began when I came on board in 2018,” Krystal President and CEO Paul Macaluso said in a statement. “We’ve seen great success with the new restaurant prototype, remodels and operational upgrades. It’s time to accelerate the redevelopment of the fleet and expand our footprint through strategic refranchising.”
Macaluso said the nine upgraded stores have generated a 29.8% to 107.5% increase in year-over-year comparable sales. The renovated locations also required additional staffing, employing an average 30 to 50 staff per store, according to a January news release.
Krystal hired The Cypress Group, a Denver-based restaurant investment banking firm, to manage the refranchising efforts. It recently completed similar projects for Fazoli’s, Noodles & Company and Buffalo Wild Wings.
In January, the company said Jacksonville was one of its top five markets. Krystal was founded in 1932 in Chattanooga, Tennessee. It operates 320 restaurants in nine states.
