Raving Brands CEO plans new concepts

ATLANTA — Atlanta-based Raving Brands sold two of its brands in the past year, announced an agreement to sell a third and has several lawsuits pending from disgruntled franchisees.

In an interview this week, though, Raving Chief Executive Officer Martin Sprock said his company is undeterred in its efforts to build new franchise concepts.

Raving, former owner of Moe's Southwest Grill, has six brands left — Planet Smoothie, Doc Green's, Shane's Rib Shack, Flying Biscuit, Boneheads and Monkey Joe's.

One or more of those could be sold in the next 12 to 18 months, Sprock said. But Raving likely will launch a new brand, too, he said.

The company also is considering changing its name for a fresh start from the negative press attracted by the lawsuits, he said.

"It doesn't make you happy and it doesn't make you feel good," Sprock said about the lawsuits. "It's disappointing. But we're not going to allow a small group of people to get in the way of doing something great."

The company made its name in fast-casual dining, a growing segment that fits somewhere between fast-food and full-service. Fast casual restaurants typically price meals between $7 and $10, turn around food orders in a matter of minutes and don't have a full-fledged wait staff.

Raving's biggest hit has been Moe's, known for its quirky menu names, like the Homewrecker Burrito, and colorful decor. The first Moe's opened in late 2000 in Atlanta. Within seven years, Moe's grew to more than 350 locations.

In 2005, Fast Casual magazine listed Raving atop its "Movers and Shakers" list, putting it ahead of Panera Bread and Chipotle.

But in April of last year, Raving announced it was selling Moe's to Focus Brands, another Atlanta-based restaurant group.

In March, Raving sold a second brand, Mama Fu's Asian House, to the largest Mama Fu's franchisee. It had 17 outlets at the time.

A deal is pending to sell PJ's Coffee, which has about 50 outlets, to a PJ's franchisee.

Raving could sell other brands, but it's also in the early stages of a new concept, Sprock said.

"We probably will sell another couple of brands over the next 12 to 18 months," Sprock said, sitting down for an interview at Boneheads, a grilled fish and spicy chicken restaurant.

"And we may bring one on," he said. "We may develop a new one. It depends on what kind of space we want to be in and what the market is missing."

The new brand could be announced in the next three to six months, Sprock said. He would not say which existing brands could be on the table, but he said Raving is looking to keep brands backed by enthusiastic franchisees.

"We have three brands right now that I don't think you can pry away from us and any of the partners anytime soon," Sprock said. "And we've discussed that. We would like, maybe next time, to not sell our lead dog as early."

Raving still has brands with strong potential, Darren Tristano, executive vice president of Technomic, a Chicago-based restaurant research and consulting firm. Shane's Rib Shack, which has 87 outlets, has promise, he said.

Selling off brands might not be a bad idea, Tristano said. A few years ago, some questioned if Raving had too many, he said.

"Sometimes, you have to streamline and divest from some of these and really focus on areas where you feel you can grow the concepts," Tristano said.

As Raving sorts out its brands, the company also is working through legal issues. Moe's, Mama Fu's and Doc Green's franchisees have sued Raving or the companies it created for the individual brands.

The lawsuits allege that Raving set up improper kickbacks from suppliers. In the Mama Fu's and Doc Green's cases, franchisees also say Raving misled them about its experience in running the operations and the support it would provide.

Robert Casey, a lawyer with Atlanta-based Casey Gilson, is working on five lawsuits against Raving involving franchises in California, Georgia, North Carolina, Tennessee, Florida, Alabama, Kansas and Wisconsin.

The franchisees understood the restaurant industry could be risky, but they feel Raving failed to provide the right backing and groundwork for the brands, Casey said.

With Mama Fu's and Doc Green's, Raving may have gotten ahead of itself, rolling out the concept before it was ready, he said.

"Sprock tried to do Moe's all over again without doing all the requisite development and perfection of the system that he should have done," Casey said.

Sprock, though, said Raving has lived up to its end of the franchise agreements. A small group of franchisees is blaming Raving for their own mistakes, he said.

"We know that we over-support people and we do a fantastic job," Sprock said.

He said he prefers to focus on the majority of franchisees who are happy with the Raving concepts, but he said he's prepared for more lawsuits. He fears Raving has become a target for them.

"Oh, there'll be more," Sprock said. "There will always be more. My lawyer just says to plug in a certain amount of money each year to defend lawsuits."

Joe Guy Collier writes for The Atlanta Journal-Constitution.