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The Denver-based chain promises to bring 32 Seattle-style teriyaki shops to Oregon.

COURTESY: TERIYAKI MADNESS - Michael Haith, CEO of Teriyaki Madness (left) is a big fan of franchising, simple food and cheeky media campaigns.

Every so often a popular retail brand shows up treating Portland like virgin territory.

It happened with Cracker Barrell, which builds its own barn-style buildings and make you exit through the gift shop, replete with grits, meat and sugar. It happened with In-N-Out Burger, which is creeping up Interstate 5 from California to wow us with 1950s décor and 2020s meat discs.

The latest is Teriyaki Madness.

The Denver-based chain sells what its CEO calls Seattle-style teriyaki. The basics: a bowl of rice with chicken or beef on top, plus sauces, although salmon and veggies-only are also popular. They see themselves as the opposite of Panda Express, the non-franchise chain that does well in strip malls across the state.

Michael Haith, CEO of Teriyaki Madness, told the Business Tribune the company has about 50 locations nationwide and is planning to expand with 32 locations to the top 10 markets in the state, 12 of them in Portland.

There's one in Eugene now and the next will open in Bend.

"We use all fresh ingredients, no frozen chicken, and make our own sauces. The food is not sitting in steam tables all day," said Haith, throwing shade at Panda Express and also the mom-and-pop Asian eateries he says are their main competitor. Oregon is seen as a growth opportunity because Oregonians get the concept of teriyaki.

$45,000 buy-in (plus $200,000)

They won't stick to the suburbs.

"We don't have a franchise yet in Portland, but we'll open anywhere, wherever anyone wants a healthy meal. There's teriyaki on every street corner in Seattle: it's affordable and delicious, we're surprised it hasn't caught it everywhere."

Acquiring a franchise is competitive, he says. "We accept one out of every hundred applicants. It's pretty hard to get into Teriyaki Madness. We have to make sure folks are successful."

The franchise fee is $45,000.

"That includes all the training, oversight, support and operations manuals. Then it typically costs a couple of hundred thousand dollars to build out the property. But we help them find the location, we do the real estate transaction and we do the construction. Or we help them oversee the construction. We have deals with contractors around the country. Whenever possible we use local contractors."

(The company website says "Teriyaki Madness' initial investment range is $273,699 – $616,760. With the average initial investment in the fast casual industry at $764,395."

The franchisee's other expenses include paying six percent on pretax revenue in royalties Teriyaki Madness. He or she has to use the approved food distributors, Cisco and Pepsi.

"Simple is our cornerstone. We don't use the word easy, we use simple. The real challenge is getting into a rhythm, with the staff all working together."

Haith says Teriyaki Madness is not fast food and it's not bento.

"Bento is a little fancier, we're more home cooking. We're a bowl: starch and beef or chicken."

COURTESY: TERIYAKI MADNESS - Teriyaki Madness customers queuing for their bowl of rice, meat and sauce. The Denver based chain, which competes with mom and pop stores selling Seattle-style versions of the Japanese street food, hopes to sell 32 franchises in Oregon.

Culture

The company has its own culture. "People take pride in working there just like how people are proud to be baristas at Starbucks."

Seattle staff start at $15 but that's because it's the law. Oregon staff will start at minimum wage, plus tips. There are no dishwashers or servers, which saves on payroll.

He says that Teriyaki Madness shops average $1.1 million in sales a year, compared to around $350,000 for Subways restaurants.

The corporate office determines how close stores can be to each other. Two miles is the minimum. "We want them close enough close enough for convenience, but not to cannibalize each other."

Franchisees must do their own marketing. Haith says usually four or five of them will band together to run advertisements and specials. "It's an economy of scale, where they band together for marketing. Social media, promos, direct mail, radio, TV… They work together to create awareness of Teriyaki Madness."

Franchisees are expected to spend a minimum of $20,000 a year on marketing.

"That goes fast when you offer discount coupons for Mother's Day, donations to nonprofits, gift certificates to silent auctions: everything you have to do to make sure you stay in front of your community."

The company supplies marketing kits so restaurants can sponsor little league teams and offer school fundraisers.

COURTESY: TERIYAKI MADNESS - Teriyaki Madness customers queuing for their bowl of rice, meat and sauce.

#DontBeAChicken

"It's like 'Here's something that maybe worked in Alabama, maybe it will work for you.'"

Oregonians might not know it but Haith says Teriyaki Madness is known for its tone. "We have an irreverent voice and want to stand out from crowd."

One campaign, during National Chicken Month, was called #DontBeAChicken and celebrated customers who conquer their fears.

Haith previously owned at Maui Wowie (Hawaiian smoothies) and Doc Popcorn (naturally flavored popcorn.) He bought Teriyaki Madness three years ago and turned it into a franchise business. He is not a fan of many food franchises.

"A franchise executive I admire is Shelly Sun of BrightStar Care for seniors. Steve Ells, CEO of Chipotle Mexican Grill, they made some mistakes but they did it with the right intention.

It was almost too perfect, we all put it on a pedestal. As soon as it went wrong people jumped on it."

A food brand he admires is MOD Pizza, the fast-casual pizza place whose former COO Chris Schultz is now in charge of growing Voodoo Doughnut.

"I really value culture. You're built with the best interests of customers and business owners. You do what's right, build a solid infrastructure, and use quality ingredients. Our demographic, the Millennials, they're really focused on quality of ingredients. People care where their food comes from. I've got two kids, 16 and 19 now, and they never want to go to McDonald's. But they love Teriyaki Madness. That's one of the reasons I got into it."

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Joseph Gallivan
Reporter, The Business Tribune
971-204-7874
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