The Montana-based restaurant chain is expanding rapidly, and, in fact, is now the second-fastest-growing small chain in the nation, according to Restaurant Business magazine. The magazine contracted with Technomic, a food industry research and consulting firm in Chicago, to produce a list of the 50 fastest-growing restaurant franchises with total sales between $25 million and $50 million.
HuHot, which has corporate offices in Missoula, was the only company from Montana to make the list. Clocking systemwide sales of $27.5 million and average per-store sales of $1.7 million, it was outpaced only by Salsarita's Fresh Cantina of Charlotte, N.C.
But unlike the ancient military leader on whom the restaurant is based, Vap says he never set out to conquer the world.
“When we did our first store we didn't have any intention of franchising,” Vap said last week.
He'd always hoped to open more restaurants, he said, but considered it an eventuality because it can take years to develop a viable franchise plan. It's downright dangerous to grow rapidly without one.
The first HuHot restaurant in Missoula was launched in 1999 under the name Mongo's Mongolian Grill. A few years later, when Vap began considering franchising, he researched trademarks and discovered the name was already registered in other states. So he did some more research and eventually settled on HuHot, the ancient capital of Inner Mongolia.
The Mongolian grill concept has been around for a long time, Vap said, but it has typically been offered as a side attraction. Vap and his family thought it could stand on its own.
The idea is to let patrons choose from a buffet-style array of ingredients and sauces, then hand their dishes over to a chef to cook up as they watch.
HuHot's theme plays on Ghengis Khan's war to unite the Mongol Empire in the 13th Century. The kids' plates, for instance, are labeled “little warriors.” Sides of soup and salads are called “trusted allies.”
Vap was sure he had a winning idea, but the restaurant's immediate popularity still caught him by surprise. He thought it might take people a little while to catch on to the idea, but from the start, the business has been fielding offers to franchise, he said.
It probably helped, he added, that HuHot taps into a number of rising national trends. Asian-influenced cuisine is increasingly popular, he noted. The restaurant also answers the health-conscious craze by allowing customers to select healthier or less-healthy ingredients as they see fit.
In fact, from ice-cream parlors to sandwich shops, it seems more quick-service restaurants are embracing a growing consumer preference for choosing their own ingredients.
The Vap family is especially familiar with this trend, having gotten its start with Billings-based Godfathers Pizza franchises.
Vap's new restaurant chain is still a family-run affair. Andy's sister, Molly Vap, is the director of franchise development, he pointed out.
“My aunt and uncle work with us, my mom and dad are still involved,” he added.
Growing up in the business gave Andy Vap a good sense of what it takes to make it in the food and beverage industry, as well as valuable experience with franchising.
“It's a crazy industry,” he said. “You have to put everything up front and open a store and then hold your breath. In the restaurant industry you can't ever avoid competition - all you can do is pick a niche. The hard part is opening that first store, proving that the concept works.”
National studies have pegged the first-year failure rate for restaurants at about 25 percent, meaning one out of four new restaurants doesn't survive past its first year. Restaurant Business magazine's recent feature focused on the other side of the story, highlighting small restaurants that have enjoyed great success and rapid growth.
Franchising is a common growth engine, explained editor-in-chief Sam Smith.
“It's got its positives and negatives,” he said via telephone from the magazine's headquarters in New York. “The positives, of course, is that you've got a larger pool of people helping you grow, you've got a flush of cash when franchises come on board. But you've got to be very smart about it.”
After all, many chains have tried to franchise and failed. Most of them either expanded too quickly or didn't do enough vetting of franchisees, Smith said. Franchisers need to make sure they're signing on the right people, he said.
It's also important, he said, to make sure franchises stick to the original concept. It's tempting for franchisees to want to bring in their own ideas, but that's dangerous for a growing chain.
“The concept has to stay pure,” Smith said.
Most of all, he said, any company looking at franchising has to create a network of reliable systems. That means distribution systems, operational systems, communications systems - any systems they can think up.
Vap's family has found communication particularly challenging. They prefer to offer a lot of hands-on training and in-person observation, and that requires a lot of travel.
“You try to fly out of Missoula, and every trip you have to add on a day, at least, just for travel,” Vap said.
Other than that, things are going smoothly for the folks at HuHot, he said, and they continue to field a lot of franchising offers despite the fact they do almost no advertising for them.
“What really drives the interest in opening more stores is just really seeing more busy stores out there,” Vap said.
What seems to sell the idea, he said, is walking into one of the restaurants and soaking up the atmosphere - and seeing it packed full with customers.
“Every year,” Vap said, “has just been a busier year than the last.”
Reporter Tyler Christensen can be reached at 523-5215 or tyler.christensen@lee.net
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