From left, John Jones leads Krystal franchisee WAC Enterprises alongside the husband-and-wife team of Wayne and Carolyn Hale.
In July, Krystal franchisee WAC Enterprises opened its 92nd location in Arab, Alabama, a community with a population under 9,000.
The restaurant was an immediate success, setting brand records for sales in its first weeks and first month. For the leaders of WAC Enterprises, it reaffirmed a commitment to the brand that began when Krystal launched its franchise system.
“I think it reinvigorated us as franchisees and reaffirmed to us that people still love the brand,” said John Jones, WAC’s co-owner and chief operating officer. “It’s just up to us to make sure we serve that food hot and fresh, giving the customers what they want, and I think the future will be bright.”
That preparation for the future is built on three decades of experience, as WAC was Krystal’s first franchisee when the system launched in 1990. Based in Chattanooga, Tennessee, WAC was founded by Wayne Hale and his wife, Carolyn.
Originally an engineer, Hale said franchising looked like an appealing option after he sold his medical equipment company and saw a newspaper ad from Krystal about the franchise program. Already fans of the brand, they decided to pursue their own restaurant.
“I started calling them and talking to them probably about once a week for a year before they made up their mind about who was going to be their first franchisee,” Hale said. “That ended up being us and we opened the first restaurant in September 1990. We expanded from there, with a mix of purchasing existing units and developing more.”
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Now with 93 units open, WAC is Krystal’s largest franchisee and it has four more locations in development. Around the same time WAC was getting started, Jones joined Krystal.
It was a continuation of a restaurant career that began when Jones was 14. After working at a diner, Jones moved on to Captain D’s as an assistant manager when he was 17. After serving in the U.S. Army, Jones returned to restaurants, eventually getting into Krystal on the corporate side.
As a regional training supervisor when Krystal started franchising, Jones was able to meet the Hales and taught other early ownership groups. WAC later acquired the restaurants owned by another early franchisee, and Jones made the switch in 1997.
“I think over the years our philosophy has been staying passionate about what we do,” Jones said. “We do our best to hire the right team, train that team to give an exceptional customer experience and build what we consider a dependable reputation. One where people can depend on our restaurants to deliver them a fast, fresh and friendly experience.”
In addition to strong training methods, Jones said picking the right locations is crucial, something that led to challenges in the early years.
“We made some mistakes in site selections earlier,” Jones said. “We learned pretty quickly how to develop Krystals based on whether it’s a rural or an urban market. It’s not like other QSR brands. You need to have a lot of space when developing in more rural areas. We learned the importance of site selection; that’s helped us prevent more failures.”
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Along with their own challenges as franchisees, WAC had to navigate struggles faced by the franchisor over the last decade. The company ran into financial trouble in late 2018 and 2019, when court filings say it breached several debt covenants. It filed for bankruptcy in January 2020 and that spring Fortress Investment Group acquired the company for $48 million.
“I think the bankruptcy gave the brand a black eye for about a year or so,” Jones said. “It made all the banks nervous, and borrowing money was kind of brought to a halt. So, a lot of franchisees were trying to figure out loan ratios with their bank and how to borrow money to do renovations and fund capital expenditures.”
In WAC’s case, the solution was sale-leasebacks, which allowed it to get into a good position financially. Krystal, meanwhile, merged in 2023 with SPB Hospitality, which counts Logan’s Roadhouse and Old Chicago under its umbrella. It also launched a refranchising program.
“I do think it has made Krystal a little more financially solvent and with their refranchising restaurants, it gives us opportunities within our markets to expand.” Jones said. “I think the merger has made them rethink what their approach is as a franchisor and that benefits us as franchisees.”