Multi-Unit Franchisee Magazine - Issue II, 2019 by Franchise Update Media

ADRIAN GONZALEZ, Jersey Mikeâ&#x20AC;&#x2122;s franchisee

Q2 | 2019

2019 MUFC

2019 MVP AWARDS

Multi-Unit Franchising Conference sets new records pg. 68

GRAND OPENINGS

6 franchisees on making them outstanding pg. 72

MULTI-BRAND 50

Largest U.S. operators and their favorite brands pg. 54

YOUR BIG BREAK Average Second Year Total Revenue for Top 25 Stores

$684K

Average Second Year Net Income for Top 25 Stores

$120K

Contact Brynson Smith

877-224-4349 Franchising@uBreakiFix.com *As published in Item 19 of our FDD dated April 19, 2019, these figures represent the average total revenue and net income (total revenue, minus cost of goods sold and expenses excluding interest and income taxes) for the top 25 of 281 out of 458 franchisee-operated UBREAKIFIX stores that submitted unaudited profit and loss statements from Jan. 2013 through Dec. 2018. Average second year total revenue for the top 25 stores was $684,220 (median $663,760). Average second year net income for the top 25 stores was $120,273 (median $87,649). Of the stores included for the second year, 9 (or 41%) attained or exceeded the average total revenue and 7 (or 32%) attained or exceeded the average net income. Average second year total revenue for the bottom 25 stores was $224,527 (median $224,875). Average second year net income for the bottom 25 stores was -$21,639 (median $40,132). Of the stores included for the second year, 8 (or 53%) attained or exceeded the average total revenue and 8 (or 53%) attained or exceeded the average net income. You should review our FDD for details about these numbers. Your results may differ and there are no assurances you will do as well and must accept that risk. **This information is not intended as an offer to sell, or the solicitation of an offer to buy a franchise. If you are a resident of or want to locate a franchise in a state that regulates the offer and sale of franchises, we will not offer you a franchise unless we have complied with that applicable pre-sale registration and disclosure requirement in your state. This advertisement is not an offering. An offering can only be made by a franchise disclosure document filed with the Department of Law of the State of New York. Such filing does not constitute approval by the Department of Law of the State of New York. These franchises have been registered under the franchise investment law of the State of California. Such registration does not constitute approval, recommendation or endorsement by the Commissioner of Business Oversight nor a finding by the commissioner that the information provided herein is true, complete and not misleading. Minnesota Department of Commerce File No. F-7063.

Franchise Opportunities www.uBreakiFix.com/Franchising

AVERAGE UNIT SALES OF

1.2M*

A GREAT BUSINESS OPPORTUNITY RIGHT IN YOUR BACKYARD OWN THE RETAIL POOL SUPPLY AND SERVICE FRANCHISE THAT HELPS YOU LIVE THE GOOD LIFE

PROVEN BUSINESS MODEL 250+ retail locations in five states.

MULTIPLE REVENUE STREAMS Year-round business in retail, service, and maintenance.

40+ YEARS OF SALES GROWTH Year over year, our sales increase with average unit sales of $1.2M*.

FRANCHISEE SATISFACTION Consistently ranked in the top 10% for franchisee satisfaction, Franchise Business Review.

PINCHAPENNYPOOLFRANCHISE.COM | 727-261-0020

*For the year ending December 31, 2017, Pinch A Penny had 238 stores open. Of those stores, 225 have been open two years or longer. Of those open two years or longer, the average annual gross revenue was $1,265,631. Your results may differ. There is no assurance that you will do as well. See our 2018 Franchise Disclosure Document for more information. This information is not intended as an offer to sell, or the solicitation of an offer to buy, a franchise. It is for information purposes only. If you are a resident of a U.S. state or a country that regulates the offer and sale of franchises, are receiving this message in one of those states or countries, or intend to operate a franchise in any of those states or countries, we will not offer you a franchise unless and until we have complied with any applicable pre-sale registration and/or disclosure requirements in the applicable jurisdiction. Â©2019 Pinch A Penny. All Rights Reserved.

CONTENTS Multi-Unit Franchisee | Q2, 2019

ADRIAN GONZALEZ, Jersey Mike’s franchisee

DEPARTMENTS

CHAIRMAN’S NOTE Multi-Unit Franchise Conference a smashing success

DEPARTMENTS

ONLINE What’s online @ mufranchisee.com

RANKINGS

MULTI-BRAND 50 RANKINGS Franchising’s annual list of top operators and their brands

COVER STORY

2019 MVPS!

MU PROFILES

PRO ATHLETE: VERNON DAVIS Washington Redskins tight end is bringing Jamba Juice to his hometown of DC

And this year’s winners are… • Jake Alleman • Jeff Burroughs

• Bill Byrd • Raul & Lisa Ceide • Jennifer & Rylan Miller • Hu Odom

• Doug Pak • Jim Patel

FEATURES

2019 MUFC: BIGGEST EVER! Highlights from the annual Multi-Unit Franchising Conference

• Pratiksha & Noel Rigley

Multi-Unit Franchisee

UNDER 30: ALI MOMIN 3 brands (Captain D’s, DQ, Edible) open and more to come

• Adrian Gonzalez

MU PROFILES

ISSUE 2, 2019

CHAIRMAN

Gary Gardner

CEO

Therese Thilgen

EXECUTIVE VP OPERATIONS Sue Logan

SVP, CHIEF CONTENT OFFICER Diane Phibbs

VP BUSINESS DEVELOPMENT Barbara Yelmene

BUSINESS DEVELOPMENT EXECUTIVES

FEATURES

AINâ&#x20AC;&#x2122;T OPENINGS GRAND! Tips from 6 franchisees on making them the best

Krystal Acre Jeff Katis Judy Reichman

EXECUTIVE EDITOR Kerry Pipes

MANAGING EDITOR Eddy Goldberg

CREATIVE MANAGER Kevin Waterman

GRAPHIC/MAGAZINE DESIGNER

CUSTOMER SERVICE

BE A HERO When something goes wrong, make it right!

Cindy Cruz

DIRECTOR OF TECHNOLOGY Benjamin Foley

WEB DEVELOPER Don Rush

WEB PRODUCTION ASSISTANTS Esther Foley

INVESTMENT INSIGHTS

INVESTING IN 2019 7 lessons for these volatile times

FINANCE

TERRITORY REDUX Will your franchisor reduce your territory if you sell?

GROWTH STRATEGIES

BUYING YOUR NEXT BRAND Tips for improving your odds of success

TECHNOLOGY

SKIPPING THE LINE Little Caesars makes pick-up quick and easy

FRANCHISE MARKET UPDATE

BEST IN CLASS Franchising trains the unskilled for upward mobility

Juliana Foley

DIRECTOR OF EVENT OPERATIONS Christa Pulling

SENIOR MANAGER, EVENTS & PRODUCTION Katy Coutts

SENIOR SUPPORT MANAGER Sharon Wilkinson

PROJECT COORDINATOR Joanne Peralta

SUPPORT COORDINATOR Leticia Pascal

FRANCHISEE LIAISON SUPPORT Greg DelBene

CONTRIBUTING EDITORS Rod Bristol Carty Davis John DiJulius Darrell Johnson Carol Schleif CONTRIBUTING EDITORS Helen Bond

Sara Wykes

ADVERTISING & EDITORIAL OFFICES Franchise Update Media 6489 Camden Avenue, Suite 204 San Jose, CA 95120 Telephone: 408-402-5681 Fax: 408-402-5738

SEND ARTICLE INQUIRIES TO: editorial@franchiseupdate.com

MULTI-UNIT FRANCHISEE MAGAZINE IS PUBLISHED FOUR TIMES ANNUALLY Annual Subscription rate is $39.95 (U.S.)

SUBSCRIPTIONS

sharonw@franchiseupdate.com or call 408-997-7795

REPRINTS

Foster Printing at 800-382-0808 www.fosterprinting.com

Multi-Unit Franchisee

ISSUE 2, 2019

COME GROW WITH US inspirefranchising.com

Chairman’s Note

Record-Breaking Multi-Unit Franchise Conference As I reflect back on the recent Multi-Unit Franchising Conference at Caesars Palace in Las Vegas, I want to thank all the hard-working Franchise Update Media staff and my fellow Conference Advisory Board members for making it a great one! With record-breaking attendance, fantastic speakers, information-packed breakout sessions, and sold-out vendor space, everyone involved should be proud of another job well done. It was a true pleasure and honor to serve as this year’s conference chairman. The support team, headed by Franchise Update CEO Therese Thilgen and SVP Diane Phibbs, made my job fun and easy. So did the great audiovisual pros, catering department, and management team at Caesars Palace. It’s been great to watch this awesome conference grow over the past 15 years since I first attended in Scottsdale. Every year it continues to improve, and I continue to meet new people, discover new brands, and learn new ways to improve my operations, from hiring to finance to tips on leadership and growth. I have always wanted to meet television’s “Bar Rescue” pro Jon Taffer—and glad I didn’t have to crash and burn a bar or restaurant to get to meet him! As Taffer said in his keynote talk, the work he does is not about bars and restaurants—it’s really about people rescue. Keynote speakers Chris Wallace, award-winning journalist and host of Fox News Sunday, and Matt Gutman, chief national correspondent for ABC News, also were a pleasure

Multi-Unit Franchisee

ISSUE 2, 2019

to meet and presented riveting talks—Wallace about life inside the Beltway and the 2020 election, and Gutman about his time in Thailand reporting on the rescue of a boys soccer team trapped in a cave for weeks. I also want to congratulate this year’s MVP Award winners! A very inspiring group of franchise professionals we can all learn something from. I particularly enjoyed sharing my “$90,000 to $90 million (the hard way)” story at the franchisee luncheon, and appreciated all the nice comments I received afterward from those in attendance. Next year’s Multi-Unit Franchising Conference will be April 13–16, 2020, at Caesars Palace in Las Vegas. And to incoming MUFC Chairman Tony Lutfi, I wish you the best of success! P.S. – If you can’t wait that long, Franchise Update Chair Gary Gardner announced the dates for the company’s second European Master & Multi-Unit Franchising Conference, January 28–29, 2020 in Vienna at the Hotel Savoyen. Cheers!

Greg S. Cutchall

The fast-casual concept THAT’S MAKING WAVES.

Captain D’s is in a category of one as the nation’s leading fast-casual seafood restaurant. Add a concept that complements—rather than competes with—your existing portfolio.

CASUAL DINING FOOD QUALIT Y

QSR PRICE POINT

One of the best business decisions I’ve ever made. Chris Benner, Multi-Unit Franchise Owner

FAST- CASUAL EXPERIENCE

SEA HOW WE’RE LEADING THE WAY. • $1,548,780 Average Unit Volume • Incentives of 0% royalties for 6 months* • 50% of our locations are corporate-owned— we lead by example • 50 years of seafood dining leadership

WE’RE GROWING FAST. GET ON BOARD TO SECURE YOUR MARKET TODAY! CAPTAINDSFR ANCHISING.COM • 612.257.7450

*When you open 60 days prior to your scheduled opening date. © 2019 Captain D’s, LLC. This is not an offer to sell or the solicitation of an offer to buy a franchise. The offer of a Captain D’s franchise may take place only through the delivery of a current Captain D’s Franchise Disclosure Document or prospectus.

CONFERENCES Franchise Update Media now hosts 4 annual conferences Franchise Marketing Leadership Conference

European Master & Multi-Unit Franchising Conference

June 18–20, 2019

January 28–29, 2020, Vienna, Austria

June 18-20,CMOs, 2019 and top marketing executives together presidents, Atlanta, GA for two full days combining speakers and presentations with peer-to-peer problem-solving workshops and roundtables.

Franchise Leadership & Development Conference October 15–17, 2019, Atlanta An exclusive event for franchisor CEOs, presidents, COOs, CDOs, and franchise development executives. The advisory board of experienced franchise leaders directs the programs and content, focused on recruitment, sales, and development, as well as professional leadership—and the annual STAR Awards honoring the best franchise development teams.

For those interested in franchise expansion in Europe, this is a golden opportunity to meet like-minded franchising pros from across the pond. Join industry leaders, franchisors, franchisees, and master developers as they address common issues and solutions relating to European expansion.

2020

The only industry event focused solely on topics of #FMLCon importance to franchise marketers brings franchisor CEOs,

Multi-Unit Franchising Conference April 13–16, 2020, Las Vegas

The annual Multi-Unit Franchising Conference is the premier event targeting multi-unit franchisees in the food, hospitality, retail and service sectors—along with developers, chain store operators and private investment groups looking to build and expand multi-unit operations. This is the ultimate deal-making event for franchisors, multi-unit franchisees, and service providers.

Rankings

Franchise Opportunities

This issue contains our annual Multi-Brand 50 list, ranking the largest multi-brand franchisees, and how many units of each brand they operate. The MB 50 also lists the 25 most popular brands of these franchisees. For our Multi-Unit 50 rankings of brands with the highest percentage of multi-unit franchisees, go to https://bit.ly/2XmH5l3

Looking for your next franchise opportunity? Have we got the tools for you! Find articles on companies, concepts, industries, trends, and profiles—and search our features. Find franchisors looking for multi-unit franchisees, area reps, and area developers. Search by top opportunities, alphabetically, investment level, industry, state, and more at franchising.com

Publications

Quicklink

“Don’t just survive, thrive!” Franchise Update Media’s 2019 Annual Franchise Development Report and the best-selling book Grow to Greatness by leading franchise consultant Steve Olson, offer invaluable tips for franchise sales success and unit growth. To order, visit afdr.franchiseupdate.com and https://bit.ly/2IEBti8

ONLINE Multi-Unit Community Grows Check out our community-based website for multi-unit operators. It’s your exclusive look into the world of multiunit franchising, your one-stop shop to find: • New brand opportunities • Networking opportunities • Online edition and archives

• Exclusive interviews • Operator profi les • Financing resources

www.franchising.com/topics/multiunit_franchising

Multi-Unit Franchisee

ISSUE 2, 2019

For a one-click link to articles in this magazine and to past issues of Multi-Unit Franchisee magazine, visit https://bit.ly/2ZhBz4Z

What makes Bill Byrd tick I love helping people. Whether it is a team member, a general manager, or a fellow franchisee, I want to help people be successful. I am often called on by fellow franchisees to help them understand something or to help them with a problem. This is what makes me tick, seeing people flourish and knowing that I may have had a little something to do with it.”

Bill Byrd

20 KFCs, 6 KFC/Taco Bells, 2 Taco Bells, 4 Capriotti’s and recipient of the 2019 MVP Award for Multi-Brand Growth Leadership

POWERING YOUR GROWTH, PRONTO. Amado Sanchez opened 3 franchise locations in just 18 months.

FRANCHISE WITH THE EXPERTS IN THE HISPANIC INSURANCE INDUSTRY. Average gross sales up

YR 1

YR 2

171 YR 3

YR 4

THE OPPORTUNITY IS HUGE AND YOURS FOR THE TAKING!

$2.5T

56%

$40B

NEARLY

Hispanic American purchasing power

YR 5

size of non-standard insurance industry

of Hispanic Americans live in our territories

300

Pronto Insurance Locations

WITH OUR RESIDUAL-BASED REVENUE MODEL, PRONTO INSURANCE FRANCHISE OWNERS EXPERIENCE A 171% INCREASE IN AVERAGE GROSS SALES FROM YEAR 1 TO YEAR 5.*

POWER YOUR GROWTH WITH A PRONTO INSURANCE FRANCHISE.

prontofranchise.com | 855-687-7088 Proud to be part of the RPS/Arthur J. Gallagher & Co. Group, one of the largest insurance brokers in the world. *This information appears in Item 19 of our Franchise Disclosure Document. Your results may differ. There is no assurance that you will earn as much. The franchise sales information here does not constitute an offer to sell a franchise. This offer of franchise can only be made through the delivery of a Franchise Disclosure Document (FDD). Certain states require that we register the FDD in those states. The communications here are not directed by us to the residents of any of those states. Moreover, we will not offer or sell franchises in those states until we have registered the franchise (or obtained an applicable exemption from registration) and delivered the FDD to the prospective franchisee in compliance with applicable law. Â©2019 Pronto Insurance. All rights reserved.

2019 MVP Winners Best of the best franchisees

Winners of our annual Most Valuable Performer (MVP) Awards are chosen from applications submitted on behalf of some of the best multi-unit franchisees in the business. This year’s winners were recognized on stage at the 2019 MultiUnit Franchising Conference in March at Caesars Palace in Las Vegas. To qualify, multi-unit franchisees must have at least five operating units and been in a franchise system for at least 2 years. Congratulations to this year’s MVP Award winners, who exemplify the best in franchising. PRO ATHLETE INFLUENCER AWARD Adrian Gonzalez is a consummate professional, whether in baseball or in business. The five-time All-Star first baseman and longtime San Diego Padres star is embracing new challenges and opportunities as a Jersey Mike’s franchisee in Southern California. With nine locations and two more in development, he has nearly doubled his locations since acquiring a majority stake in six stores last year. AMERICAN DREAM AWARD When she was 18, Pratiksha Rigley came to study in the U.S. from Zambia, where education was considered a luxury reserved only for the wealthy. Today, known as “Dr. Rigley” to her students and their parents, she considers education a gift she works tirelessly to bestow every day on the families that attend one of the five Primrose Schools she owns with her husband Noel Rigley, who was born in India. SINGLE-BRAND LEADERSHIP AWARD In just 2 years with Wayback Burgers, Jigar (Jim) Patel has excelled. Last October the brand named him its Multi-Unit Franchisee of the Year. With 5 Wayback restaurants open, he is gearing up to open 2 to 3 more annually in the next 5 years. And is committed to contributing to each community his restaurants serve, sponsoring local sports teams and supporting fundraisers. MULTI-BRAND GROWTH LEADERSHIP AWARD Bill Byrd, whose PMTD Restaurant company operates 32 KFC, Taco Bell, and Capriotti’s restaurants in Georgia and Alabama, is a team player who believes in the power of surrounding himself with the right people. “Once you have good people, take good care of them and ensure their needs are met too. People Make The Difference!” COMMUNITY INVOLVEMENT LEADERSHIP AWARD Houston (Hu) Odom believes that if you take care of business first, community giving will follow naturally. Odom, owner of 20 Golden Corral restaurants in four states and a three-time Franchisee of the Year, has achieved both—and then some, including pioneering the practice of honoring U.S. military personnel at his restaurants, long before the concept became commonplace.

Multi-Unit Franchisee

ISSUE 2, 2019

Written By EDDY GOLDBERG

NOBLE CAUSE AWARD Jeff Burroughs has always been driven to lead with a purpose. Named Team Leader/Owner of the Year in 2014 by Sport Clips, he was honored again in 2018 with the brand’s “Heart of a Champion” award for his community activities—and fully credits his team of employees throughout his 21 salons for his business success and giving spirit. INNOVATION AWARD Lisa and Raul Ceide operate 10 Jersey Mike’s Subs in Florida, with four more in development. Two years ago, they signed on with the then-new Uber Eats in Orlando. In the first year, their restaurants averaged more than $3,000 a week in sales generated from Uber Eats. Last October, Jersey Mike’s went live with an official partnership for the entire system. INFLUENCER AWARD FOR HUSBAND & WIFE TEAM Jennifer and Rylan Miller, Tropical Smoothie franchisees with 7 units, are asked all the time what their secret is to successfully working together as a married couple. “I think it is key for a husband-and-wife team to lean on each other’s strengths,” says Jennifer. “People say, ‘How can you work with your husband?’ Honestly, it is difficult to work without him. We work better as a team.” SPIRIT OF FRANCHISING AWARD Jake Alleman’s “people first” mantra makes him a deserving recipient of this award, presented for extraordinary and enduring performance, growth, and community giving. The Lafayette, La.-based franchisee has been in on the ground floor of two fast-growing Southern-inspired concepts—Another Broken Egg Cafe and Chicken Salad Chick. MEGA GROWTH LEADERSHIP AWARD Doug Pak was fresh out of college with a degree in business and economics from UCLA. “All my friends were looking at investment banking, consulting, and CPA firms. I just wanted to learn how to own and operate a business, so I took a job with a small franchisee who had one Denny’s.” Today he operates 72 Papa John’s and 50 Hardee’s that generate $130 million in annual sales. Pro Athlete—When Vernon Davis isn’t catching footballs as a tight end for the NFL’s Washington Redskins, he’s busy with his 5 Jamba Juice locations in Northern California. Last year, he teamed up with Atlanta Falcons wide receiver Mohamed Sanu to open and operate six Jamba Juice locations in the Northern Virginia/DC metro area. Under 30—Ali Momin began working in a Dairy Queen when he was 16. One big difference: the restaurant was his father’s, who only 2 years later made his son a 50 percent owner. That’s how a career in franchising started for the now 27-year-old. But it almost didn’t… Finally, be sure to take a look at our annual Multi-Brand 50 rankings. Turn to page 54 to see the nation’s largest multibrand franchisees, along with their most popular brands.

Southern Hospitality Jake Alleman sets the gold standard for two brands

Written By HELEN BOND

Multi-Unit Franchisee

ISSUE 2, 2019

2019 MVP - Jake Alleman

Jake Alleman, 36 COO, co-founder

No. of units: 9 Another Broken Egg Cafe, 3 Chicken Salad Chick (13 under development) Family: Wife Katie, 2 daughters, Charlotte 6 and Alice 2 Years in franchising: 11 Years in current position: 11

a ke A l le m a n’s te a m approach and “people first” mantra makes him a deserving recipient of the 2019 Spirit of Franchising MVP Award, presented for extraordinary and enduring performance, growth, and community giving. The Lafayette, Louisianabased multi-brand franchisee has been in on the ground floor of two Southern-inspired concepts—Another Broken Egg Cafe and Chicken Salad Chick—operating a portfolio of locations that serve as the gold standard for both brands. A mong the innovations Alleman’s training and operational leaders have implemented are the Customer Service Vision and “the perfect kitchen layout” for menu execution at Another Broken Egg (ABE). Chicken Salad Chick (CSC) franchisees have also come flocking for a firsthand look at the organizational “smart wall” grid developed by Alleman’s director of operations. “Being on the franchise advisory council for ABE and CSC has allowed me to be on the front lines, working diligently with our corporate teams to help create training programs

and operational platforms to make the restaurants’ workflow more efficient, sharing what works and what doesn’t work,” says Alleman, chief operating officer and co-founder of Cojak Investments. “It really made me realize that we are in it together and have the same goal. We win as a team and lose as a team.” Alleman is equally invested in giving back. Among his many community contributions, Alleman hosts an annual golf tournament in memory of his son, Will, with all proceeds benefiting Dreams Come True of Louisiana, a local nonprofit that provides dreams to area children with life-threatening illnesses. “One of my passions is community involvement and giving back to the communities in which I do business,” Alleman says. “I think of community involvement like deposits in a trust bank, that in bad times can help carry me through. That’s the business reason to give back, but my reasons for doing so are personal, and I will never stop giving back in good times or bad.” Alleman has deep roots in franchising. His first job was as a busboy and server at the

original Broken Egg Cafe in Mandeville, Louisiana, where he worked while attending Louisiana State University. When the brand geared up to franchise, founder Ron Green approached Alleman about buying into the concept. Alleman turned to his friend Cody Gielen, co -fou nder and now president of Cojak Enterprises, who set up a meeting with his grandfather, the late John Dan Gielen—a local legend who built the ShopRite and Tobacco Plus conven ienc e s tore s a nd Church Point Wholesale into a Louisiana empire. The elder Gielen remained a partner in Cojak Enterprises until his death in 2018. Alleman says he will never forget the way Gielen jumped at the chance to partner with the young entrepreneurs as a way to pay it forward for all the support he’d received when starting out in business. “Words can’t express how much it means to me to receive the Spirit of Franchising Award,” says Alleman. “None of this would be possible without the help of my business partner and mentor John Dan Gielen. He gave us an Multi-Unit Franchisee

opportunity, and with his help we ran with it. To me, the spirit of franchising means giving back. Watching John Dan over the years, with his charitable contributions to many organizations, and seeing the impact he had on the communities, made me want to follow in his footsteps. It’s something I continue to strive for every day.”

PERSONAL

Formative influences/events: I would have to say the loss of my son and adopting my daughter. It made me appreciate the value of life, and I don’t want to waste a moment of it. Key accomplishments: Having the support of my family to get to do what I love. I also host a golf tournament in memory of my son Will. We donate all proceed to Dreams Come True of Louisiana, an organization that grants drea ms to children w ith life-threatening illnesses. Work week: I think when you own a business, you work every day. What are you reading? The Five Dysfunctions of a Team by Patrick Lencioni. Best advice you ever got: Keep moving forward! ISSUE 2, 2019

2019 MVP - Jake Alleman MANAGEMENT

Business philosophy: To be focused on quality and hospitality by spreading joy, enriching lives, and serving others. Management method or style: Participative and affiliative. Greatest challenge: Hiring the right people to fit our culture. How do others describe you? I’m fair. I’m appreciative. I’m caring. I don’t ask anyone to do something I haven’t done or won’t do myself. I listen. How do you hire and fire, train and retain? We perform at least two interviews when hiring, and call their previous employers and references. I’m

and coaching. Everything is documented. We coach all employees on all situations, but sometimes they fall short of our expectation and culture. If we have to make the tough decision and let them go, it’s always done face to face, with a witness present and our HR director on the phone listening.

BOTTOM LINE

Annual revenue: $17 million. 2019 goals: 1) Customer experience: enhance the customer experience by continuing to increase our overall satisfaction scores to 88 percent or above, and our Net Promoter Scores to 60 or above. 2) Team

I had no idea when I started in my first restaurant job 21 years ago that I’d own nine Another Broken Eggs and three Chicken Salad Chicks, with more restaurants in development over the next 5 years. I’m pretty invested in the Chicken Salad and Egg business now, and I’m confident I won’t be ready to retire in the next 5 to 10 years. I want to run great restaurants, provide a great guest experience, and be the best leader I can be. usually the last one to interview the prospective team member. We look for people who will spread joy, enrich lives, and serve others. We also look for people who are happy and are willing to share their happiness. As for firing, we send everything to our HR director and director of training for correct documentation

development: develop our team to be more efficient to increase productivity and profitability. 3) Building our bench: We are also continuing to build a bench for future growth by adding more hourly team members to our management staff. 4) Building a better culture: Continuing to improve the confidence and productivity

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in our team to reduce turnover and boost employee morale. 5) Growth: Open five Chicken Salad Chicks in the Houston area. Growth meter: How do you measure your grow th? I measure growth, or overall success, two ways. First, I measure turnover at both the management and hourly level, since lower turnover means my focus on “People First” is working. Lower turnover reduces my recruitment and training costs, and an improving economy makes it much harder to recruit and retain great talent. More importantly, lower turnover means I’m ultimately able to provide a better overall experience for my guests and drive repeat visit frequency, as well as positive word of mouth. Second, while I do closely monitor increases in top-line sales, a steady increase in guest counts truly validates the health of my business. If I can increase guest counts and PPA (per person average) simultaneously with an emphasis on hospitality, higher-ticket LTOs, and brunch cocktails, versus driving incremental guest counts with deals and discounts, then I know my plan is working. We closely watch our Net Promoter Scores to ensure we’re generating more 5-star reviews than 1- to 3-star reviews. We incentivize our managers based on this metric as the hundreds of guest reviews we get every month across all our cafes are much more credible to me and my leadership team than the occasional mystery shop. There is a very strong correlation between 5-star ratings and guest count growth. Vision meter: W here do you want to be in 5 years? 10 years? I had no idea when

I started in my first restaurant job 21 years ago that I’d own nine Another Broken Eggs and three Chicken Salad Chicks, with more restaurants in development over the next 5 years. I’m pretty invested in the Chicken Salad and Egg business now, and I’m confident I won’t be ready to retire in the next 5 to 10 years. I want to run great restaurants, provide a great guest experience, and be the best leader I can be. I want to support the two brands that support me because I truly believe that when you give you get back tenfold. For now, I plan to take it day by day and see where the future takes me. With the team we have in place, I know it’s going to be great! What are you doing to take care of your employees? I’m lucky to be in the breakfast/ brunch/lunch category, open only from 7 a.m. to 2 p.m., so my employees know they will always have their afternoons and evenings free to do what they want or to hold down a second job if they need to. I monitor the competition and what they are paying their managers and employees and make certain I’m competitive. That’s a core basic when it comes to ensuring employee satisfaction. Also, based on my personal experiences back in the day when I worked in a restaurant and before I owned my own, I know that employees also want to be acknowledged and appreciated for a job well done. We make sure we don’t just focus on the nuts and bolts of training, which are of course critically important to ensuring strong job satisfaction and employee retention, but we’re also the biggest cheerleader for our teams. We have a team who are constantly coming up with ideas and initiatives to

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Senior Director of Franchise Sales *As shown in Item 19 of the current Franchise Disclosure Document of Fazoli’s Franchising Systems, LLC, for the 12 months ending March 28, 2018. There is no assurance that a franchisee of Fazoli’s will sell or earn as much.

2019 MVP - Jake Alleman acknowledge and reward a job well done. We’ve developed our “Egg Dough and Chick Cash” program, which consists simply of a card that our managers complete to acknowledge strong performance above the norm. It allows employees to use the fake money for employee meals, uniforms, etc.—a simple concept generating amazing results. What kind of exit strategy do you have in place? To one day sell our restaurants. But as you know, opportunities change daily. Maybe my daughters will want to follow in my footsteps.

MVP QUESTIONS

Why do you think you were recognized with this award? Honestly, I’m not sure. While it is an honor to be recognized, we wouldn’t be where we are today without the help of everyone who works with us. They are the reason we’ve been able to be successful up to this point. I have the easy job. How have you raised the bar in your own company? I try to always lead by example and challenge myself to operate my restaurants at or above the highest standards established by the franchisor. I follow the guidelines, procedures, standards, and recommendations of the franchisor as they are the subject matter experts. But with that said, I also will provide input and suggestions based on my own observations and operations designed to help improve the system as a whole. What innovations have you created and used to build your company? As the very first franchisee for Another Broken Egg Cafe, I’ve been in at the ground level, so to speak, of virtually every initiative since the inception of the brand. My team and I have

been instrumental in providing ideas and input related to all aspects of the brand, including recipe ideation, restaurant design efficiencies, kitchen layout revisions for improved throughput, employee training processes and procedures, and local store marketing campaign development with a strong focus on community involvement, to name a few. We’ve also begun doing the same with Chicken Salad Chick by bringing in new ideas to assist with the operations. Both brands are now some of the fastest-growing, successful concepts in the U.S., and I am very proud to be a brand ambassador for each company. With our continued partnership, the future is very bright. W hat core values do you think helped you win this award? Integrit y and my commitment to our people, whether team member, guest, or vendor. How important is community involvement to you and your company? We’re always looking for ways to give back to our local communities because they support us day in and day out. I’ve been so blessed to have the opportunity to do what I love, so it only feels right to pay it forward in any way I can. Some of the ways we give back are by adopting families in each market for Christmas, serving on the board of Dreams Come True of Louisiana, and hosting a golf tournament in memory of my son. What leadership qualities are important to you and to your team? Integrit y, empowerment, empathy, and striving to inspire others through our actions. 1

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ABOUT SAVE A LOT We are the nation’s leading hard discount grocery chain designed for independent retailers. Our business model is focused on empowering our Retail Partners with the tools to succeed, which includes more effective store layouts, exclusive private label products, buying power cost savings and low operating overhead.

SAVE A LOT FUN FACTS No Franchise or Royalty Fees 1,250+ Store Locations 200+ Independent Retailers Fastest Growing Grocery Channel

FEEDING YOUR INDEPENDENT SPIRIT Save A Lot offers a full program that equips independent retailers with an innovative store format designed to give the owner a competitive advantage in the market. Our dynamic format allows you, as a Save A Lot Retail Partner, to own and operate a turn-key grocery business. Save A Lot’s corporate operations include a full support organization to ensure our Retail Partners are able to fully leverage the benefits of scale that being part of a large national brand provides. FINANCIAL INCENTIVES Save A Lot offers a financial incentive program designed to offset startup costs for independent retailers interested in opening or converting new stores. Eligible Retail Partners can qualify for support towards equipment costs, marketing expenses, and inventory rebate options.

REAL ESTATE SERVICES Location is a key success factor for retail businesses. Our teams of real estate professionals are ready to assist Retail Partners with their real estate needs; providing expert knowledge, time & cost savings, and industry best practices around lease negotiations and ongoing landlord support. A store’s location, lease terms, and financial agreements highly influence future business profitability. Our team is here to offer professional support during real estate negotiations to assure that our Retail Partners are engaging in the best transaction possible.

ONGOING SUPPORT Save A Lot’s corporate and field support teams provide independent retailers with the services and solutions to help them position their business for growth. From store construction & onboarding, to professional & accounting services, to ongoing training courses, to field operations and distribution support. Save A Lot does whatever it takes to keep our Retail Partners on the right track. RIGHT ASSORTMENT & DEDICATED DISTRIBUTION On average, we have fewer than 2,000 SKUs per store, tailoring our in-store selection to the families and communities we serve. Fewer SKUs allows much greater operational efficiency, higher velocity, and increased buying power. Our 15+ dedicated distribution centers supply fresh meat, produce, and exclusive private label brands to all operating store units - providing best in class systems and services.

314.592.9350 • savealot.com/own • OwnershipOpportunity@savealot.com

2019 MVP - Jeff Burroughs

HEART OF A CHAMPION 2019 Noble Cause MVP gives generously to many Written By HELEN BOND

eff Burroughs has always been driven to lead with a purpose. A big believer that “you get what you give” in business, his passionate, unwavering support for his communities and those in need makes him a fitting recipient of the 2019 Noble Cause MVP Award.

Burroughs, named Team Leader/Owner of the Year in

2014 by Sport Clips, was honored in 2018 with the brand’s “Heart of a Champion” award for his community activities—and credits his team of employees throughout his 21 salons for his business success and a giving spirit. “We ask our teams to look for ways we can continue to get involved within our communities,” he says. “They are

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also asked to help with events, and we never have a problem getting support from our team members.”

accident scene to save a life, and once was called to an incident where he rendered medical aid to one of his own employees.

Burroughs and his wife Robyn were both working fulltime at other jobs when they opened their first Sport Clips salon in 2009. They quickly discovered financial freedom, a welcoming work/life balance, and a brand they loved. These days, Burroughs oversees a burgeoning portfolio of hair salons from his Southern Maryland home base, where he looks to make a hands-on difference every day—in ways both big and small.

“Being involved in the volunteer fire department you never know what might come your way,” he says. “It could be a medical call, vehicle accident, house fire, administrative duties, or even fundraising. No matter which, you just find a way to react in the right manner. When it comes to other community involvement, I tend to lean toward trying to help many with some, instead of a lot with one.”

Burroughs and his team have stepped up to donate, volunteer, and champion a wide range of nonprofit organizations and charitable causes, both locally and through the brand’s national charitable partners. Often, their work on the home front is personal and grassroots. Burroughs has rallied around such noble causes as sponsoring the concert series of the St. Leonard Volunteer Fire Department; t a k i n g pa r t i n K a r s y n’s Karnival, benefiting an organization that seeks to enhance the quality of life for individuals with Down syndrome; and raising money for the local Humane Society. For t he pa st 5 yea r s, Burroughs has also been a volunteer firefighter for the city of Huntingtown, Maryland. His decision to step in as a firefighter during an emergency fulfills a childhood dream and has resulted in some memorable moments—showing him a side of community life most people only hear or read about. Burroughs has rescued someone from a burning building, assisted with the roadside birth of a baby boy, worked an

PERSONAL

Fo r m a t i v e i n f l u e n c e s / events: I worked for 17 years in auto sales at local Ford dealerships. During some of this time, I was a single dad and living paycheck to paycheck. After meeting my wife in 2001, I was determined to find ways to make a better life for myself, Robyn, and my son Tyler. Not seeing any future growth potential, it was time to look for something new. I was introduced to a franchise option known as Sport Clips Haircuts. This would allow me to grow my own business while still at my regular job. In 2009, we opened our first location and were able to walk away from the auto industry in 2014 with six locations open. Key accomplishments: 2014 Team Leader/Owner of the Year for Sport Clips. 2018 Sport Clips Heart of a Champion Award. Elected to the Sport Clips Haircuts Team Leader Advisory Council. Work week: I am in some way working every day. To be honest, it doesn’t feel like work when you love what you do. As a franchise owner I have flexibility in my schedule, which

2019 MVP - Jeff Burroughs What are you doing to take care of your employees? We do our best to make them feel they are part of a family and not just a business. There are several times we have had a chance to help our employees, not only in their professional lives but also in their personal lives. “Happy Staff = Happy Clients = Happy Business.”

Jeff Burroughs, 47 Owner/Team Leader

No. of units: 21 Sport Clips

Family: Wife Robyn Hanson, son Tyler Burroughs Years in franchising: 10

Years in current position: 10 isn’t normally possible when working for someone else. What are you reading? The 10X Rule and Sell or Be Sold, both by Grant Cardone. Best advice you ever got: Two: “You are only as good as the people working under you,” and “Make the deal, don’t wait for the deal.”

MANAGEMENT

Business philosophy: You get what you give. Grow your team, grow your business. Management method or style: Work to hire the right people day one. Once a person is on board, we work to provide continuous training and education to each employee. “Train Up.” G r e at e s t c h a l le n g e : I n the hair industry it’s hiring career-oriented individuals. Our hope is to keep working to be the employer of choice, while continuing to build a fun work culture. How do others describe you? They would say I am driven, determined, and refuse to fail. It would also probably be said that I am always wanting to help.

How do you hire and fire, train and retain? We trust our managers to hire, fire, train, and retain our staff. Our managers are trained on what we expect of our employees. Our franchise provides training.

BOTTOM LINE

Annual revenue: $7.5 million (2018). 2019 goals: I would like to add two to three more locations. We also want to find more ways to have an impact in the community. Growth meter: How do you measure your growth? My growth can be measured in two ways: 1) by the number of stores I add during the year, and 2) by the client count increase at my existing locations. Vision meter: Where do you want to be in 5 years? 10 years? We got to 21 locations in 10 years. The next 5 years will be about strategic growth to support our existing locations. There is a potential over the next 10 years to also add other brands to the existing portfolio.

What kind of exit strategy do you have in place? At this time, I am really not focused on an exit plan. I like the franchise business. My focus right now is on growth.

MVP QUESTIONS

Why do you think you were recognized with this award? My involvement with several organizations in my community. When owning a business, I feel it is important to give back. There are many ways I have found to give back. One is being a volunteer fireman at the local fire department. Being part of the Huntingtown Volunteer Fire Department has given me a chance to make a difference, even down to an incident that included one of my own employees. Also, we help support our local Humane Society, after adopting a very special puppy. We have raised several thousands of dollars for another local fire department during their big fundraisers, supported initiatives for kids fighting childhood cancer like NolanStrong for Nolan Scully, and helped with fundraisers for the National Fallen Firefighters Foundation. We also provide support for Karsyn’s Karnival, an organization that creates connections to the community for kids diagnosed with Down syndrome. We also support many other programs in the area.

have raised our accountability standards. Also, there is an understanding that our team needs to perform at a higher level to stand out above the average in the market. What innovations have you created and used to build your company? As our number of stores has grown, so has the behind-the-scenes part of the organization. Adding more support staff for the stores has really helped the culture and the performance of our group. W hat core values do you think helped you win this awa rd? I ca re about my employees, clients, and community. To be honest, it is an easy decision to always try to help with our employees, clients, and community. If it wasn’t for them, my business wouldn’t be where it is today. How important is community involvement to you and your company? It is important to me to make a difference in the community. In addition to all we do with fundraisers and causes locally that I mentioned, we also support our national partners, such as the Sport Clips Help a Hero Scholarship prog ram, which prov ides scholarships to active-duty service members and veterans; the American Red Cross, with blood drive campaigns; Ageless Aviation Dreams, a nonprofit dedicated to honoring seniors and U.S. military veterans; and the St. Baldrick’s Foundation, which raises money for childhood cancer research. What leadership qualities are important to you and to your team? Trust, commitment, and showing that you car. 1

How have you raised the bar in your own company? We Multi-Unit Franchisee

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PEOPLE MAKE THE DIFFERENCE It’s people first for Bill Byrd at PMTD Restaurants

Written By HELEN BOND

ill Byrd is passionate about restaurant growth. Winner of the 2019 MVP Award for Multi-Brand Growth Leadership, Byrd operates his restaurants with an entrepreneurial spirit and a helping hand. With 32 KFC, Taco Bell, and Capriotti’s in Georgia and Alabama, Byrd is the consummate team player who believes in the power of surrounding himself with the right people.

Bill Byrd, 61

President, co-owner, PMTD Restaurants No. of units: 20 KFC, 6 KFC/Taco Bell, 2 Taco Bell, 4 Capriotti’s Sandwich Shop Family: Married to Kay Byrd for 40 years this September, 3 children, Kristin Byrd Davis, Jason Byrd, and Justin Byrd Years in franchising: 12-plus Years in current position: 12-plus

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“Whether you are selling food, clothing, or services, you must put your efforts into selecting the best people you can find to help you be successful,” says Byrd, president and co-owner of PMTD Restaurants. “Once you have good people, take good care of them and ensure their needs are met too. People Make The Difference!” Byrd brings a wealth of experience in restaurant operations to each of his brands. His background includes management and executive roles with Pizza Hut, Morrison’s Cafeteria, Domino’s Pizza, and Pilot Travel Centers. He practically grew up running restaurants. At 13, he began working in his family’s full-serve Mexican restaurant in Norfolk, Virginia, which he operated in high school. He loved food and people, and running restaurants came naturally—and became a more personal quest following the unexpected death of his father.

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Visit owncheckersfranchise.com/Update or Call 888-913-9135 ©2019 Checkers Drive-In Restaurants, Inc. 4300 W. Cypress St., Suite 600, Tampa, FL 33607. 1. Checkers & Rally’s 2018 Franchise Disclosure Document (FDD). 2. Best Franchise Deals by QSR Magazine 2018, 2017, & 2016. Written substantiation will be provided on request. This advertisement is not intended as an offer to sell, or the solicitation of an offer to buy, a franchise. It is for information purposes only. The franchisor, Checkers Drive-In Restaurants, Inc. is located at 4300 West Cypress Street, Suite 600, Tampa, Florida 33607, and is registered as file number F-4351 in the state of Minnesota. In New York, an offering can only be made by a prospectus filed first with the Department of Law, and such filing does not constitute approval by that Department. 20190500

2019 MVP - Bill Byrd

“Our family business was sold about six months after my father was killed in a car accident,” he says. “When the business was sold, I went to work for Taco Bell in February of my senior year and was promoted to restaurant general manager right after I turned 18.” PMTD’s first Capriotti’s restau ra nt in Ken nesaw, Georgia—where his son Jason Byrd is general manager—is a test site for innovation aimed at spurring brand growth. The senior Byrd also serves on Capriotti’s Franchise Advisory Council and KFC’s National Cou ncil a nd Adver tising Cooperative. He recently wrapped up his role as president of the Southeastern KFC Franchisee Association, with its nearly 100 franchisees and 1,100 restaurants in 11 states. “It was very rewarding for me, and I learned as much as I was able to share,” he says. In the next 5 years, Byrd plans to grow to at least 50 restaurants and see his team grow both personally and financially—and expects to add more brands to his burgeoning portfolio. He says his secret to success is people. “Franchising is an outstanding platform that helps those with that entrepreneurial spirit to be successful,” Byrd says. “Entrepreneurs have a lot of drive, and franchising gives them the support and tools that are much needed to be successful.”

PERSONAL

Formative influences/events: Enjoy family vacations and holidays every year with my family. We do an annual Throw Down Cooking Challenge with my three children every year. Each has to prepare an entrée

and a side dish and serve. We normally have 16 people for them to serve and everyone gets to vote for their best. Each year a plaque is updated with the winner’s name and they hold the plaque for the year. I believe we are on our 9th year. This year’s theme is “Georgia in My Belly” and they will have to create a dish that is all about Georgia to them. We did Hawaiian last year! It is a fun time, stressful for my three chefs, but an outstanding meal each year. Key accomplishments: Successfully raised three children. All three graduated from college: Kristin, Georgia Southern University; Ja son, The Citadel; a nd Justin, University of Alabama (Roll Tide!). Work week: Every day I do something for our business. I pride myself on always being available for our team, regardless of where I may be or what time it is. What are you reading? I like reading novels that get my mind off the business, such as John Gresham, Patricia Cornwell, etc. Best advice you ever got: “Only worr y about those things you can control.” I was told this when I was 20 and it has forever been good advice that I have lived by.

MANAGEMENT

Business philosophy: Ensure your team is successful, and you will be. It is all about your people. Hire the best people for the job, give them the tools they need, and let them manage the business. Management method or style: A generally organized approach to achieving results. Have a plan and know what you

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are going to do next. I truly believe that People Make The Difference (PMTD). David Barr and I share the same philosophies on people. Everything we have going well in our lives is because of people, and every issue is because of people. Our restaurant company, PMTD Restaurants, is not just a name, but our philosophy and our belief in people. Greatest challenge: Sourcing, selecting, and retaining great team members. It is getting more difficult every day. You have to take care of your people! How do others describe you? Always available, open, easy to have discussions, willing to help. How do you hire and fire, train and retain? Take time to hire the right person. Know the new team member or manager has to make the right decision too. It is not only an employer’s decision; the applicant also has to make the right decision. Regardless of whether you hire the individual or not, get back with the applicant as soon as a decision is reached. Remember, they were a customer first and you want them to remain a customer. I feel this way even when we terminate or someone resigns: keep them as a customer. Use the tools to train them as well as possible. Do not short-term their training. In the restaurant business you must train them correctly the first time. There is no time to retrain!

BOTTOM LINE

Annual revenue: $33 million. 2019 goals: Add 7 to10 restaurants to our company through new builds and acquisitions. Enjoy my 40th wedding anniversary with my bride. Growth meter: How do you measure growth? Grow topline same store sales 5 percent.

We finished 2018 well and Q1 of 2019 has started out strong. I am certainly bullish on the future of all three brands we operate. Vision meter: W here do you want to be in 5 years? 10 years? In 5 years I want to have at least 50 restaurants, all profitable and growing. I want to see the same team I have today be with me and growing both personally and financially—and be able to add many more like my team today. I have not gone out 10 years with my thoughts for now, but I will focus on the next 5 years with all of my energy to ensure I accomplish my vision for our company and our people. What are you doing to take care of your employees? It starts with hiring someone who wants to be with you. Then provide them the training they deserve and reward them throughout. We provide good bonus opportunities for our general managers and director of operations. The bonus is all about performance and taking care of their people. We invest practically every dollar we make back into our business. Our teams can see that we give them the tools they need to do the job and are constantly upgrading our facilities to encourage new team members and guests. What kind of exit strategy do you have in place? Currently, I do not have an exit strategy. I love this business and am not sure when I will exit. But for now we are sticking with our business plan. We like to purchase the property, build the building, and operate the restaurants. This model has served us well since the beginning of PMTD Restaurants, which was started by my partner David Barr in 1998.

2019 MVP - Bill Byrd MVP QUESTIONS

Why do you think you were recognized with this award? I am not totally sure, but certainly honored. I love helping people. Whether it is a team member, a general manager, or a fellow franchisee, I want to help people be successful. I am often called on by fellow franchisees to help them understand something or to help them with a problem. This is what makes me tick, seeing people flourish and knowing that I may have had a little something to do with it. How have you raised the bar in your own company? I measure the bar by sales. We have had positive same store sales growth every year except one in the past 20 years. Same store sales is the key. Sales is an excellent barometer on what is going on in your business. There are many ways to get feedback from your guests, but I feel sales growth is the best! You see it daily and know if you are doing a better job than others. Our guests vote every day with their dollars. What innovations have you created and used to build your company? I created a very simple performance appraisal for all levels to help our super visors and team members accurately evaluate themselves. It is all based on a 10-point system and very easy to complete. It allows each to know what they can do to get better. A second innovation is a very simple bonus plan where you can easily see how much you can make each period and what you may have left on the table. I feel it is important for your team to know where they stand and what they can do to earn more or perform at a higher level.

What core values do think helped you win this award? It is all about the people. Have integrity, do what you say. Ensure your team has the resources to do the job, and help them instill discipline to do the job. How important is community involvement to you and your company? We encourage our general managers to recognize certain people around all of the holidays. For example, we allow all of our teams to bring in their mothers on Mother’s Day to dine with them—and the same for fathers on Father’s Day. In addition, we encourage each to bring in a veteran for lunch on Veteran’s Day. At Thanksgiving and Christmas we encourage our teams in each restaurant to make the holiday special for a family in the community or within their restaurant. Many enjoy this opportunity in their trade area to give a little back, and it is great to see the smiles on so many faces when the GMs do these simple acts of kindness. It is very rewarding for me. W hat leadership qua lities are important to you and your team? General concern about people. Have self-awareness. Integrity without question. Self-motivated. Lead by example. Delegate. Inspire others. Set targets and ensure everyone knows the targets and goals. Help others get where they want to go. 1

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Innovators who enriched the entire system Written By HELEN BOND

isa and Raul Ceide are game-changing franchisees—and winners of the 2019 Innovation MVP Award for delivering a new and unique contribution to their brand.

The Ceides, who operate 10 Jersey Mike’s Subs in Florida, with four more in development, turned to franchising 9 years ago after Raul’s 25-year career in manufacturing ended suddenly. The couple found a new and rewarding journey and a winning partner in Jersey Mike’s, bringing a wealth of creative expertise to the brand. Raul, a native of New Jersey whose family hails from Spain, has a degree in engineering. Before becoming a Jersey Mike’s franchisee, he spent 25 years as general manager and COO of a manufacturing and engineering firm. Lisa is a graduate of culinary school, with a bachelor’s degree in business administration and experience working in the insurance, real estate, and fine dining fields. Two years ago, they made a decision for their Orlando area restaurants that would soon enhance the growth of the entire franchise system: they signed on with Uber Eats, as one of the first to try out the then-new delivery platform in Orlando, which served as a pioneering U.S. market for the launch of the online food ordering and delivery service. On day one, at just one of their Jersey Mike’s, Uber Eats orders generated more than 180 orders. At one restaurant, the additional volume was so high that the store ran out of food. In the first year, each

Multi-Unit Franchisee

Raul, 56 & Lisa Ceide, 52 Franchisees

No. of units: 10 Jersey Mike’s Subs, 4 in development Family: Daughter Jennifer, son-in-law Matt, and a grandbaby on the way Years in franchising: 9 Years in current position: 9

of their restaurants averaged more than $3,000 a week in sales generated from Uber Eats orders. They saw early on the promise of using third-party technology as a way to grow and to reach new customers, long before it became standard fare for restaurants. “The food carried extremely well. Cold subs were always made to order fresh, and hot subs had an innovative wrap that kept them warm for up to 45 minutes,” says Raul. “Delivery offerings were perfect for our concept. As long as we responded quickly to demand, and didn’t look at it as a secondary business, the customers could experience almost the same thing as walking into one of our locations.” ISSUE 2, 2019

Eager to share their success with Jersey Mike’s, the couple made a presentation to the executive team, National Advisory Council, and fellow franchisees. And last October, Jersey Mike’s went live with an official partnership with Uber Eats to fully integrate its platform into the company’s proprietary POS system. The integration has already led to improved standardization, operational efficiencies, and cost savings. Within two months, more than 1,225 of Jersey Mike’s restaurants, nearly 80 percent of its system, had been integrated, with more to come. On average, each Uber Eats delivery is completed in less than 30 minutes.

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248.414.3300 *Results measure company-wide same store sales figures for each calendar year over the previous calendar year. The measuring period is January 1, 2010 through December 31, 2018. Excludes store sales from the State of Florida, units which are not obligated to and do not report sales to Hungry Howie’s, and units which opened and/or closed during the measuring period. Not all individual stores experienced the same results. New franchisees may have results that differ. This advertisement is not an offer of a franchise. Franchises are offered and sold only through a Franchise Disclosure Document. STATE OF CALIFORNIA: THESE FRANCHISES HAVE BEEN REGISTERED UNDER THE FRANCHISE INVESTMENT LAW OF THE STATE OF CALIFORNIA. SUCH REGISTRATION DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION, OR ENDORSEMENT BY THE COMMISSIONER OF CORPORATIONS NOR A FINDING BY THE COMMISSIONER THAT THE INFORMATION PROVIDED HEREIN IS TRUE, COMPLETE, AND NOT MISLEADING. STATE OF NEW YORK: THIS ADVERTISEMENT IS NOT AN OFFERING. AN OFFERING CAN ONLY BE MADE BY A FRANCHISE DISCLOSURE DOCUMENT FILED WITH THE DEPARTMENT OF LAW OF THE STATE OF NEW YORK. SUCH FILING DOES NOT CONSTITUTE APPROVAL BY THE DEPARTMENT OF LAW OF THE STATE OF NEW YORK. MINNESOTA STATE REGISTRATION NUMBER F-2873. †545 open stores in 21 states with an additional 19 agreements signed as of 12/18/2018.

2019 MVP - Raul & Lisa Ceide “Lisa and I may have sparked Jersey Mike’s to jump on board the third-party delivery craze, but many individuals within Jersey Mike’s recognized the opportunity and pushed the company toward achieving the results it is seeing today,” says Raul. “Senior leadership, marketing, IT, and area directors quickly jumped on board and made it easy for everyone to integrate this new business model into their day-to-day operations.” The Ceides share Jersey Mike’s commitment to quality products and exceptional customer service and are dedicated to giving back to the local community. “At the end of the day, you need to take care of your customer and do it with the staff and resources you have available in your organization,” says Raul.

and business career from the ground up in a completely different field and different city from where we had spent the last 30 years. Work week: Always on. We pull back a little on weekends thanks to the great team we have working with us. What are you reading? RC: Spanish history and espionage novels. LC: I usually read books only on vacation because I don’t have time to read during the day, and at night I get too sleepy when I read. So I usually just get caught up reading the Orlando Business Journal and other trade publications and food magazines.

“Do not settle for the status quo within your industry. Look for ways of always pushing the envelope and rewarding the team that gets you to where your vision is. It doesn’t matter whether you are making subs, computers, or selling real estate. Your success comes down to the staff you cultivate and empower to achieve those goals.”

Best advice you ever got: RC: Observing my parents’ work ethic. They were first-generation immigrants who worked tirelessly to provide opportunities for their family. LC: Too many people become paralyzed because they are afraid to make a decision for fear it might be the wrong one. At some point you have to make a decision. When you do, don’t waste time second-guessing yourself. Spend that time making sure everything you do going forward supports that having been the right decision.

PERSONAL

MANAGEMENT

Formative influences/events: RC: This is a second career for both of us. Lisa is a culinary school graduate, has a B.A. in business administration, and has worked in insurance, real estate, and fine dining. I’m an engineering graduate and had worked as a general manager and chief operating officer of a manufacturing/engineering firm for 25 years before entering the restaurant field. Key accomplishments: Persevering through the downturn and job change of 10 years ago and building a new life

Business philosophy: RC: Strive to be the best at whatever it is you do. LC: Yep… “Be a Sub Above.” And I’m not sure who coined the phrase, but “The dream is free, but the hustle is sold separately.” Management method or style: RC: Empathy. Listen. Encourage. Support. Whenever possible, let data drive decisions. LC: Lead by example. “Speed of the leader, speed of the pack.” Greatest challenge: Hiring and retaining great people in

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Orlando, the “service industry mecca of the world.” How do others describe you? RC: Respectful, introspective, intuitive. LC: Outgoing and opinionated. Bossy, according to Raul. How do you hire and fire, train and retain? This is the toughest part of the job. We need to spend more effort on retaining the great employees we have so that we do not have to fill that many open positions all the time. All interviews are a two-step process. Fire as a last resort. Can we put this person in a different store environment where they will be more successful?

BOTTOM LINE

Annual revenue: $7.2 million (2018, 7 locations). 2019 goals: Survive going from 8 locations to 14 locations in 6 months. Growth meter: How do you measure your growth? It needs to make sense for us. We’re not looking to open more stores just for the sake of opening more stores. Vision meter: W here do you want to be in 5 years? 10 years? In 5 years, have the stores paid off with a strong management/operating partner team in place. In 10 years, splitting time between homes in Spain and Florida. And taking the grandchild to soccer practice. What are you doing to take care of your employees? Aboveaverage compensation, health insurance, vacation, quality of life work schedules, and rewarding performance. We always try to promote from within. What kind of exit strategy do you have in place? We’re only in the early stages of putting this together.

MVP QUESTIONS

Why do you think you were recognized with this award? We were one of the first to jump on board with thirdparty delivery back in 2016. We presented our case to Jersey Mike’s for engaging in the shift toward off-premise dining. Initially, we met with some resistance since it is so opposite of who we were and what we did as a brand. But we kept talking and trying to convince everyone that it (at least for the time being) was the wave of the future. How have you raised the bar in your own company? Our management bonus plan rewards the results we are trying to achieve for the current year. We also believe in sharing the wealth among the team. We never rest, there are always improvements you can make. What innovations have you created and used to build your company? All management tools are tablet-based and instantly available to all. W hat core values do you think helped you win this award? Adaptability and optimism. Being able to take new challenges head-on and sharing experiences with others. How important is community involvement to you and your company? Jersey Mike’s opened our eyes to the impact one can make on a local level on an everyday basis. What leadership qualities are important to you and to your team? Integrity. Do what you say you’re going to do. Self-starter. We can always be better. The customer, both internal and external, is of utmost importance. 1

Team Player Former MLB star is a big Jersey Mike’s fan Written By HELEN BOND

hether in baseball or in business, five-time All-Star first baseman Adrian Gonzalez is the consummate pro. The four-time Gold Glove Award winner, and longtime San Diego Padres star, is embracing new challenges and opportunities in Southern California as a franchisee of Jersey Mike’s Subs. His fast start in franchising makes the 15-year MLB veteran a fitting choice for the 2019 MVP Influencer Award for Former Pro Athlete, for excellence in franchising. Naturally, Gonzalez is all about the team.

Adrian Gonzalez, 36

“We preach being a team player and working together as one to make good things happen,” says Gonzalez, who is currently a free agent.

No. of units: 11 Jersey Mike’s Subs (in 2019) Family: Wife Betsy, daughters, Brianna and Alessandra Years in franchising: 4 Years in current position: 4

A big fan of Jersey Mike’s, Gonzalez has evolved from a silent partner to an active franchisee. With nine locations in San Diego County and two more under development in Coachella Valley, he has nearly doubled the number of his locations since he acquired a majority stake in six existing stores last year. Gonzalez is now turning his attention to growth and expansion in new markets, with plans to add two to four Jersey Mike’s stores a year.

Born and raised in the San Diego area, Gonzalez was a first-round draft selection in 2000 out of Eastlake High School in Chula Vista, California. Along with the Padres, his major league journey has taken him to the Texas Rangers, Boston Red Sox, Los Angeles Dodgers, and New York Mets.

Owner and managing member

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2019 MVP - Adrian Gonzalez

No stranger to a challenge, Gonzalez, nicknamed A-Gon and El Titan, admits there has been a learning curve that comes with the game of franchising— and he is catching on quickly. When you love what you do, he says, the rest comes easy. “I think the best thing is that I didn’t get into this with a business mentality. I got into franchising because I loved the subs and I loved the brand,” says Gonzalez. “Just like baseball. I love the game of baseball. I’m passionate and I’m dedicated. I want to be involved in the same way with Jersey Mike’s. I’m going into this with the same excitement and passion and want to help take the brand to another level. I can’t do that on my own—it is a team effort.” He and his wife Betsy are also focused on giving back to the community through Jersey Mike’s and the Adrian and Betsy Gonzalez Foundation, founded in 2009. Over the past 10 years, the pair have handed out more than 120 scholarships and donated more than $1.5 million through their organization, which aims to empower underprivileged youths in the areas of athletics, education, and health. “I’m extremely grateful, and to have this award is something I wasn’t expecting,” says Gonzalez. “I’m also very grateful for the opportunity that Jersey Mike’s has given us and trusting us to take on more stores. Hopefully, we will continue to do well and continue to grow.” If on-the-field contributions are a measure of off-the-field success, expect big things from Gonzalez and his future in franchising.

PERSONAL

Formative influences/events: I came into franchising through a retired friend. The brand won me over instantly with its new, refreshing taste, becoming my favorite sub shop. So being a partner was an easy decision. When my partner left the group, I was able to take over. I brought along three new business partners and everything has been working great. Without them and the team members at each store, our success wouldn’t be possible. Key accomplishments: Being a professional baseball player I’ve earned many awards, but the best accomplishment, by far, is being able to surround myself with the ones I care most about, giving people opportunities and watching the success of others. The key value in life is integrity. Work week: We just acquired three Jersey Mike’s stores, with two more in development, and I have a couple of other projects. So right now my work week is typically four to six days, whether with phone calls or being present in the stores. W hat a re you read ing? The Third Option: Hope for a Racially Divided Nation by Miles McPherson. Best advice you ever got: Always push forward and never let any obstacles get in the way of your goal.

MANAGEMENT

Business philosophy: Go big or go home. If you’re going big, be prepared to challenge yourself by putting in the hard work each and every day. Every moment is an opportunity to build another relationship, change a person’s day, or simply provide the best of who you are.

Management method or style: Can I clearly identify one style? No, but it requires a team to inspire, collaborate, and set the example with one another to achieve success. A great leader requires the ability to relate with the people who drive their business. Greatest challenge: Finding the right people behind the line. It’s been mentioned time after time that people, people, and people are key. The saying is true without a doubt. Building a great team makes those obstacles a whole lot easier. “The strength of the team is each individual member. The strength of each member is the team.” (Phil Jackson) How do others describe you? I hope honest and trustworthy. How do you hire and f i re , t r a i n a nd re t a i n? Characteristics we look for when hiring new employees are people with a positive attitude who are highly self-motivated and also work well within a team. Unfortunately, there are times when a person isn’t upholding our standards and we have to part ways. We strive to ensure that all employees are trained efficiently and feel comfortable enough to ask questions and ask for help along the way. Teamwork can only be accomplished when everyone is truly working together and helping each other, which allows for training to be at its best. Treating our employees right, giving them opportunities to be in charge of their own path, and steering them in the right direction encourages employees to want to stay with us until they feel ready to advance to something bigger.

Multi-Unit Franchisee

BOTTOM LINE

Annual revenue: $6.5 million (2018); $9.5 million (2019 projected). 2019 goals: Double the size of our company and expand into new markets. Growth meter: How do you measure your growth? We look at same-store sales and unit count. We plan to add two to four stores per year. Vision meter: Where do you want to be in 5 years? 10 years? My plan is to continuously improve our business, expand our sights, and envision a company that others can thrive in. Opening more stores, dabbling in other ventures, or expanding to other parts of the world are all things that are possible. I like to dream big in everything I do! What are you doing to take care of your employees? We consistently encourage our employees to take advantage of the opportunity we give them to develop their skill set in many areas and increase their knowledge of the business. We help them build relationships within the community by encouraging a welcoming environment and promote many employees from within. We also strive to motivate our employees to continue their education and offer flexible schedules, which makes it easier for them to continue with their goals. The great thing about Jersey Mike’s is that it gives the employees an opportunity to grow with us. And that is one thing we love. When someone comes to work for us they have an opportunity to be a manager and eventually a partner with us. We love that we aren’t just giving someone employment for the time being, we are giving them a possible career. ISSUE 2, 2019

2019 MVP - Adrian Gonzalez

What kind of exit strategy do you have in place? As of now, none. I’m not in business to get out of business. When you believe in a brand and concept there’s no slowing down.

MVP QUESTIONS

Why do you think you were recognized with this award? Because of the great team we have. We continue to want to grow and become a great group that can be counted on and trusted. How have you raised the bar in your own company? We continue and will continue to

What innovations have you created and used to build your company? Having everyone on the same page by being in contact at all times. Communication is very important, as it is in every relationship.

How important is community involvement to you and your company? Jersey Mike’s has a great mentality when it comes to giving and community involvement. We as a family feel the same way and are always looking for new ways to get in the community and serve. Giving back is very important to us as a group.

W hat core values do you think helped you win this award? Honesty and integrity, along with hard work. I really, truly believe that when making decisions those two components should be at the top.

What leadership qualities are important to you and your team? Being a good team player, being punctual and communicating, and being a good person with a “happy-tobe-at work” attitude. The most

follow the Jersey Mike’s way. We will follow their direction and will always push the bar within our guidelines.

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important thing in the food industry, or any restaurant, is customer service. If the customer comes in and loves the experience they had while getting their meal, they are going to come back. The biggest thing is that they respect the brand. It is such an important brand and we are very high on it. If they are going to put on the Jersey Mike’s uniform, they have to follow all the rules and be a team player. 1

1,000 Units Anyone? This couple dreams big!

Written By HELEN BOND

ropical Smoothie franchisees Jennifer and Rylan Miller get asked all the time what their secret is to successfully working together as a married couple. “I think it is key for a husbandand-wife team to lean on each other’s strengths,” says Jennifer. “People say, ‘How can you work with your husband?’ Honestly, it is difficult to work without him. We work better as a team.”

Jennifer, 29 & Rylan Miller, 32

This strong sense of teamwork and drive for excellence makes the Millers a perfect fit for the 2019 MVP Influencer Award for Husband & Wife Team. And the South Carolina-based couple are just getting started. With seven locations in two states, the Millers are gearing up for immediate growth with Tropical Smoothie, along with a longer-term vision that includes future expansion through the addition of multiple brands.

Multi-unit franchisees

No. of units: 7 Tropical Smoothie Cafe Family: We are expecting our first child, a daughter, in July Years in franchising: 4 Years in current position: 4

Multi-Unit Franchisee

“We should be up to 15 Tropical Smoothie units this year,” says Rylan. “I think this is going to be a really good building number going forward into the next 15 to 20 years to get us to that 1,000unit mark.” ISSUE 2, 2019

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2019 MVP - Jennifer & Rylan Miller The couple f irst fell in love with their neighborhood Tropical Smoothie in Virginia Beach, where Rylan was stationed with the U.S. Navy. He served 5 years before deciding to transition into a contract role as a mission commander and UAV pilot for the Department of Defense. Along the way, the pair began saving to make the jump into franchising—and their wedding. Married in Pawleys Island, South Carolina in 2013, the Millers signed on with Tropical Smoothie the next year and opened their first store in Myrtle Beach in 2016. “We started off with a single unit and before we even got it opened, we bought a second unit because we just believed so much in the brand and the growth we wanted to achieve with it,” says Rylan, who was deployed 11 times handling aviation missions across the world, most recently in Libya, before joining his wife in franchising full-time in 2018. W h ile R yla n was on deployment, Jennifer worked vigorously, running the business as usual. Now, with Rylan back, they have learned to divide and conquer. Jennifer is the hands-on face of the company handling operations, training, and marketing, while Rylan uses the analytical skills he learned in the military to build the business. “We identified our strengths and weaknesses,” says Rylan. “At the very beginning, we were both doing both of our jobs, so there is an appreciation there. And if anything comes up, we are able to pick up the ball and run with it.” The Millers are set to pick up the pace, expanding the franchise company and their

own family, eager to welcome the birth of their first child in July. They are also busy putting together a strong management team to gear up for growth and scale as they analyze adding new brands. Passionate about serving the community and sharing the power of franchising with other veterans, the Millers are reaping the rewards of their success. Along with being honored as a 2019 MVP they are celebrating their recognition as the brand’s top multi-unit franchisee, awarded at the 2019 Tropical Smoothie Cafe Convention. “We are completely humbled and honored by all the recognition and awards we have received,” says Jennifer.

PERSONAL

Formative influences/events: RM: Serving in the military and deploying 11 times. Over the years of being gone, I often was faced with remembering what the most important things are in life. Being away gave me a true appreciation for family and the desire to succeed. Key accomplishments: RM: Opening our first Tropical Smoothie Cafe! It was a very long time in the making. We feel very accomplished that we finally have units open and operating. I am almost done with my bachelor’s degree from American Military University. I have four classes left and I have been chipping away at it. Although I haven’t accomplished it yet, I feel good that I am almost done. Work week: 100 hours. What are you reading? RM: Five Stars by Carmine Gallo. JM: We’ve been so busy with the acquisition of three cafes in Greensboro, North Carolina, and the opening of a new one

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in the Myrtle Beach market, the only thing I’ve been reading lately is emails. Best advice you ever got: RM: It is hard to identify one specific thing that I would label “The Best.” I get great advice all the time. JM: Be here, now. Often we are a few months ahead of ourselves (you have to be in our line of work), but taking time to focus on the here and now keeps me grounded and helps me not become consumed with the many tasks that lie ahead. It is very easy to let yourself be consumed with stress, but yoga is my way to take a break from that, and “be here, now” is my mantra.

MANAGEMENT

Business philosophy: RM: My philosophy comes from a quote that inspires me: “Once you have tasted flight, you will forever walk the earth with your eyes turned skyward, for there you have been, and there you will always long to return.” I found this quote when I was getting my commercial pilot’s license and it has resonated with me ever since. This is truly the feeling I get when I fly an airplane, but that feeling is also so similar to how it feels when building relationships, mentoring leaders, and building businesses. There is an attraction to business that can only be satisfied by more business. Management method or style: RM: Consultative. I find that giving employees and especially leaders in the businesses the ability to be heard helps foster trust and build strong relationships. JM: Lead from the front. There is not anything I would ask my employees to do that I would not first do myself. Greatest challenge: R M: Finding good leaders. Filling

critical roles in our organizations. For us, we feel that there has to be a relationship that we can build on in some way. We want to know that there is a certain amount of loyalty. JM: Engaging Millennials to become invested in the longterm goal. While I understand that we are an entry-level job, there is plenty of room for growth within our organization since we are multi-unit, multi-state operators. It is easy to inform the team members of this growth potential, but sometimes difficult to get them to realize and understand that it’s within their reach if they want to put in the sweat equity. We are very old-school in the manner that we value hard work and unparalleled work ethic. It can be challenging to inspire and motivate this work ethic among some, not all, of the Millennials we employ. For example, we have one young woman who has worked with us since we opened one of our cafes. She joined our team when she was 15 and is now months away from graduating high school and pursing a degree in business administration. As I type this, she is assisting in the opening of another one of our cafes, solely handling seven new employees working their first day of operations. It’s hard to find the words to express how proud I am of her. How do others describe you? RM: Easygoing. JM: This is a difficult question for me to answer, so much so that I had to reach out to a former employee who is now a good friend. She describes me as “hard working, dedicated, and passionate about her business and her employees.” She goes on to say that I answer any questions that team members

2019 MVP - Jennifer & Rylan Miller may have without belittling them or making them feel as if they can’t come to me. How do you hire and fire, train and retain? We try to hire the best candidates, train them through our leadership team in the cafes, and keep them by cultivating a strong relationship based on trust. We do our best to be the employer of choice in the food industry.

BOTTOM LINE

Annual revenue: $4.5 million. 2019 goals: Grow to 15 units— and give birth to our first daughter. Growth meter: How do you measure your growth? This will change over time, but right now our growth meter for us is units, how many units we are adding. Vision meter: Where do you want to be in 5 years? 10 years? RM: I would like us to have four-plus brands, with over 100 units. In 10 to 20 years, we will be surpassing the 1,000 unit-mark. What are you doing to take care of your employees? JM: We have various bonus incentives for managers that hinge on key metrics in the cafe that include labor, cost of goods, and customer satisfaction. Additionally, we try to reward individual crew members for their hard work with surprises such as gift cards and other items. For example, this past Christmas we used our cash-back rewards from business credit cards to host a Christmas party where we provided gifts for a white elephant gift exchange. Top prizes included big ticket tech items. What kind of exit strategy do you have in place? We work to keep the unit economics as best as possible. As

We have various bonus incentives for managers that hinge on key metrics in the cafe that include labor, cost of goods, and customer satisfaction. Additionally, we try to reward individual crew members for their hard work with surprises such as gift cards and other items. For example, this past Christmas we used our cash-back rewards from business credit cards to host a Christmas party where we provided gifts for a white elephant gift exchange. Top prizes included big ticket tech items. an example, this means going into individual cafes and fixing things that would cost hundreds of dollars to call in professional help. There is a point where this will no longer be feasible, but for now doing things like this keeps profits up and the businesses attractive from a valuation standpoint in case the situation arises to sell.

MVP QUESTIONS

Why do you think you were recognized with this award? RM: Jennifer and I work hard as franchisees and are willing to go the extra mile to help others in our industry. We often host new franchisees at our cafes for training and will field phone calls and help out where we can when others in our brand reach out. How have you raised the bar in your own company? By implementing procedural changes that start from the cafe level. This means that employees have real checklists to follow on an iPad to perform

actions. This is one small thing we do that results in consistency across our cafes. What innovations have you created and used to build your company? JM: We do a lot of community outreach locally to grow the brand in the Myrtle Beach area. I also suggested doing a school supply drive that corporate ended up taking on and implemented across the nation with all Tropical Smoothies. What core values do you think helped you win this award? Integrity. This is a big one for us. This attribute is key because it makes us better as an organization. For example, if someone makes a mistake, we require ownership of it. With this mentality we can learn from our mistakes and continue evolving. How important is community involvement to you and your company? RM: We really love our national charity partner, Camp Sunshine. Every Multi-Unit Franchisee

year, Tropical Smoothie raises money for the organization through National Flip Flop Day. We host an annual event to drive donations at the cafe level where customers come in wearing flip-flops and receive a free smoothie. The idea is that they also will donate to Camp Sunshine. Additionally, we are animal lovers and really like doing fundraisers for animal shelters and hospitals in our towns. We do this by driving traffic into the cafes through advertising and then give a percentage of sales to the organizations. JM: Being a part of the local community is an integral part of running a successful and thriving business. People want to support a business they know and trust. We foster these relationships by partnering with local teams, schools, and nonprofits to help raise funds for their efforts. Recently, we celebrated the 3-year anniversary of our North Myrtle Beach cafe and donated 15 percent of our anniversary sales back to The Humane Society of North Myrtle Beach. We’ve also partnered with our local Boy Scout troop to help them raise money during the annual Blessing of the Inlet, held in Murrells Inlet, South Carolina. We donated smoothies for them to sell at the event. They kept half of the proceeds, while the other half was donated to our national charity partner Camp Sunshine. What leadership qualities are important to you and to your team? Accountability and leading from the front. It’s important that we as leaders are accountable for our own mistakes. Not only that, but leading by example is such an effective way to show people you are invested in the organization and the jobs they do. 1 ISSUE 2, 2019

MILITARY APPRECIATION KNIGHT 2019 MVP winner pioneered thank-you meals for veterans Written By HELEN BOND

ouston (Hu) Odom believes that if you take care of business first, your success will allow community giving to follow naturally. Odom, owner of 20 Golden Corral restaurants in four states (Virginia, Maryland, South Carolina, and Georgia) and a three-time Franchisee of the Year, has achieved both—and then some. A shining example for others to follow, Odom is the 2019 MVP recipient of the Community Involvement Leadership Award for his visionary commitment to community service. Among his many contributions, Odom pioneered the practice of honoring U.S. military personnel at his restaurants long before the concept became commonplace. These days, he is focused on finding ways to help build the next generation of restaurant leaders by creating opportunities for young people—particularly those in need—to explore their own paths in the hospitality field. The son of a career military man, Odom was a senior in high school when his father died unexpectedly. To earn a little money in college, he took his first restaurant job manning the fry station at a McDonald’s in Elizabeth City, North Carolina. He spent 8 years in management with that high-volume McDonald’s before joining Southland Corp., which operates and franchises 7-Elevens wordwide. “With those two companies I saw the power of franchising,” says Odom, president and founder of Virginia Beach-based Both, Inc.

Multi-Unit Franchisee

Houston “Hu” Odom, Jr. President, Both, Inc. No. of units: 20 Golden Corral Family: Wife Evie Years in franchising: 27 Years in current position: 27

Odom, who has been with Golden Corral since 1986, first at corporate and today as a franchisee, now leads the way as one of the brand’s most successful operators. In 1999, he organized a thank-you dinner at his restaurants for active and retired U.S. military members. The Military Appreciation Night started out as a way to honor his late father, who spent 33 years in the U.S. Air Force, and to serve as a gesture of thanks to the many loyal customers who helped support Odom’s initial success at his restaurants in Hampton Roads, considered the East Coast epicenter of military activity. The event would soon include a philanthropic tie-in with the Disabled American Veterans (DAV) organization that remains today and would later be adopted across the system. In 18 years of hosting the annual Military Appreciation Night, the Golden Corral system has provided more than 5.7 million free meals for active and retired military members and raised more than ISSUE 2, 2019

$15.7 million for DAV. Odom’s restaurants alone have served more than 324,000 free meals and raised more than $2.2 million for DAV during his 20 years of hosting the event. Since 2012, Odom’s restaurant group has also raised $766,956 to support Camp Corral, a free summer camp for children of wounded, injured, ill, or fallen military families. “After 9/11 everyone has gotten involved in doing something for the veterans,” says Odom. “Back in 1999 there was nobody. We are proud of what we started.” Odom also is making his mark with two recent gifts to support restaurant education. A National Restaurant Association (NR A) Board Member Emeritus, he donated the largest-ever individual gift of $1.1 million to the NRA Educational Foundation to support ProStart, a national program teaching high school students the culinary techniques and management skills needed to prepare them for careers in the restaurant field. The funds will be used to enhance the ProStart program

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2019 MVP - Hu Odom in the Hampton Roads area, where three of the local cities exceed the national average for child poverty. The donation was given in conjunction with a seven-figure donation by Odom and his wife Evie to support the building of the Patricia & Douglas Perry TCC Center for Visual & Culinary Arts and Hospitality Management on the campus of Tidewater Community College. In recognition of Odom’s generosity, which includes funds for scholarships, the college will name its Culinary Arts and Restaurant Management school in his honor. “The restaurant industry is a great industry to go from the dish room to the boardroom, as the cliché goes. And that is what happened to me. I went from the fry station to the boardroom. There are a lot of great success stories,” says Odom. “I have always looked at the restaurant industry as being one of the last frontiers in America where, if you are willing to work hard and have a little bit of persistence, you can make a great career for yourself. But for a lot of underprivileged kids from low-income homes, they don’t really have a way to get started.” Odom is providing those future restaurant leaders with a role model to pioneer their own path to making a difference.

PERSONAL

Formative influences/events: My parents both lived through the Great Depression and both grew up in very small towns. My father had a 33-year career in the Air Force and my mother was a traditional housewife, so we were a middle-class family. I was taught the importance of saving and the importance of “small town values” from

an early age. There is no doubt that those boyhood lessons and teachings helped me greatly in forming our franchise company in 1992 and managing afterward, as well. Key accomplishments: Finally, an easy question. Marrying my lovely wife Evie has been my most important accomplishment. The restaurant industry is hard work, and if you are going to be married you must have a loving, supportive wife. Evie is all that and more, being recently retired from a 25-year university faculty career that included the authorship of three textbooks, one now in its 10th edition. I am very proud of Evie’s professional accomplishments and very lucky to have her love and support. Work week: There is no doubt that I am in our restaurants less in 2019 then I was 20 years ago, or even 10 years ago. The fact is, my responsibilities have changed over the years. Both, Inc. is fortunate to have a talented and experienced senior management team, which allows me f lexibility in my schedule. Currently, I have two direct reports: our senior VP for operations, and our chief financial officer/chief administrative officer. I maintain responsibility for site acquisition and legal. I stay in touch with restaurant operations and marketing as closely as possible, but we have good people in those areas and I try to give them room to do their job. One thing is true for my work schedule that is true for many others in similar positions at big companies and small: very seldom does a day go by—including vacations and holidays—that I am not doing some work. That is just the nature of the beast and the reality of my position. I guess the bottom line for me is that

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there are few jobs in restaurants I haven’t done over the years, and few long shifts I haven’t covered. Now that my work week is often more favorable, I try very hard to never forget the hard work required for successful four-wall execution in any restaurant, but particularly restaurants as large and complex as Golden Corral. What are you reading? My wife and I just spent January of this year in South Africa, our second trip in 4 years to that very interesting and diverse country. Accordingly, I am reading two histories of that area: one book focused on the Dutch and British influences from the 18th century to the early 20th century, and one book detailing the more recent history of the last 50 to 60 years in South Africa and neighboring countries. I love to read, but I often manage only a few pages per night. Best advice you ever got: From my father: “You can go broke buying bargains.”

MANAGEMENT

Business philosophy: At Both, Inc. we work very hard to balance aggressive business tactics and caution. In business you need both traits in your quiver of arrows, but you also must be careful of too much or too little of either. I like to use a baseball analogy to describe our company’s business philosophy. We focus on the fundamentals and hit a lot of singles, doubles, and triples. We may miss a home run opportunity now and then, but we don’t strike out very often. Management method or style: No management method or style works 100 percent of the time in every situation. But I always try to keep the Golden Rule top of mind. I find it short, simple, and powerful.

“Treat others as you want to be treated.” Applying the Golden Rule in business makes a lot of sense to me. Treat your customers right and they will be more likely to come back. Treat your employees right and they will be more motivated. Greatest challenge: Several come to mind. Hiring and retaining talented people. Av o i d i n g c o m p l a c e n c y. Maintaining market share. Managing debt carefully. How do others describe you? This is a tough question to answer honestly, and sometimes you never know for certain. I hope most people see me as fair, thoughtful, and loyal. All of us have good qualities and not-so-good qualities that I think of as opportunities to improve. Some days are better than others, particularly in the restaurant business, but I hope my better instincts prevail on most days. How do you hire and fire, train and retain? Of course, the answer to this question varies by position, and we rely on our franchisor for most training materials. But good character is important for any position: we can train how to work in a Golden Corral, but we can’t train for good character. Any position in a Golden Corral restaurant is hard work, so work ethic is important. Finally, it always helps if new hires at any level fit the culture of our company. Golden Corral is not fine dining and you have to be comfortable with that. To these ends, I believe in promoting from within when possible. Our seven key senior managers average more than 25 years of experience with Golden Corral, and several worked with me on the corporate side of Golden Corral before I started our franchise company.

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This advertisement does not constitute an offer to sell any “The Coffee Bean & Tea Leaf®” franchise in, nor is this intended to be directed to the residents of any jurisdiction requiring registration of the franchise before it is offered and sold in that jurisdiction. No ““The The Coffee Bean & Tea Leaf®” franchises will be sold to any resident of any such jurisdiction until the offering has been exempted from the requirements of, or duly registered in and declared effective by, such jurisdiction and the required Franchise Disclosure Document (if applicable) has been delivered to the prospective franchisee before the sale in compliance with applicable law.

2019 MVP - Hu Odom

Every one of our senior managers, except for our CFO/ chief administrative officer, started at Golden Corral as an hourly employee. One of the most gratifying things for me over the years has been to see people at all levels of our organization grow and develop to the best of their abilities.

BOTTOM LINE

2019 goals: We are a profit-oriented company, so we always want to earn at least $1 more than last year. In addition, we have two new restaurant locations under development, which we hope to open this year or early 2020. Growth meter: How do you measure your growth? We have the financing and organizational structure in place to continue to grow new units and would like to do so. However, the Golden Corral concept requires large, freestanding buildings with a lot of parking, all of which cannot be too

expensive. Generally speaking, we need the same quality site as any casual-themed national chain, but because of certain costs built into operating a Golden Corral we usually cannot pay as much for sites as others. We strongly prefer to own our land and buildings, but we will lease a good site if there is no alternative. These factors make new site acquisitions very difficult, particularly in our primary growth markets of Northern Virginia and Baltimore. The good news is that when we do find a new site that works in those markets, we usually do well. Vision meter: W here do you want to be in 5 years? 10 years? When I started our company, I wanted to be in business for 50 years. We have the organization and structure in place to do that and are now over halfway to that goal. I think it important to mention the support we have received from our franchisor along the

Multi-Unit Franchisee

ISSUE 2, 2019

way. Any franchisee can only be as successful as their franchisor allows them to be. We are lucky to have a franchisor with very stable ownership and very stable leadership, both of whom have always wanted their franchisees to be successful and acted accordingly. Like any franchisee, we sometimes have disagreements with our franchisor, but we have always been able to work out our problems because goodwill exists on both sides. What are you doing to take care of your employees? During our busy summer season, we employ almost 2,000 people. Once an employee has established that they are doing a good job, we consider them to be part of our larger Both, Inc. family. Sometimes we are able to help with employee problems in ways that would be difficult for a larger company. Furthermore, we offer a n above-avera ge hea lt h insurance program within

our industry segment and an above-average 401(k) program with a 4 percent match. We also pay a $1,000 bonus to any employee with 10 years of service, $2,000 for 20 years, and soon to be $3,000 for 30 years. We have paid out more than $400,000 under this program, which is one way we thank our longest-tenured employees for their service. Finally, while we work hard, we find time to have fun as well. Our most successful managers are celebrated each year with cash bonuses and sometimes free trips to include the Super Bowl and Hawaii. For our companyâ&#x20AC;&#x2122;s 10th anniversary, we brought in the Beach Boys for a private concert. The very positive feedback from that event really opened my eyes to how important it is to give our employees the opportunity to celebrate success and have fun in ways many of them would not otherwise be able to enjoy. For our 20th anniversary, we took 150

2019 MVP - Hu Odom managers and their spouses to London and Paris during our slow month of January. Yes, that trip was a major investment, but I believe it was worth every penny in building morale and loyalty. Probably 98 percent of our attendees on that trip had never been to Europe and probably would never otherwise have gotten a chance to do so. Personally, to be able to give such a special trip to the very people who had given so much to our company really put a smile in my heart. Two years ago, we took the same group to New York City, but we added all our 20-year, hourly co-workers and their spouses—an idea that turned out great, making me wish I had thought of it earlier. What kind of exit strategy do you have in place? To quote Jimmy Buffet, “Retire from what?” I am very fortunate to

be at a position in my life where I have the best of both worlds. I enjoy and look forward to my work (at least most days) and I have enough freedom in my schedule to enjoy other pursuits. So I have no plans or need to retire. And while Both, Inc. is a private company, almost all of our senior managers have an ownership interest. In the future I hope to find ways to expand that ownership interest. The only way I would ever consider selling our company was if I felt the buyer would do a better job of taking care of our employees and our guests—which seems very unlikely at the moment.

MVP QUESTIONS

W hy do you t h in k you were recognized with this award? To be honest I am not sure. Perhaps you should ask the editors.

How have you raised the bar in your own company? We focus on the basics, blocking and tackling. There are many aspects to a successful restaurant, but first and foremost we focus on the preparation and presentation of our food, which is critical in a buffet concept. To paraphrase James Carville, “It’s the food, stupid.” What innovations have you created and used to build your company? I’m not sure this idea really qualifies as an innovation, but from day one I have had a policy I like to call “constructive confrontation.” By that I mean, I want to hear your opinion if you are a direct subordinate even if your opinion disagrees with mine—without fear of retribution. I have said many times that I consider our 20 general managers to be a kind of board of directors for our company. Our GMs are responsible for the thousands of “moments of truth” we have with our guests each day. Plus, we know that having good GMs in the right restaurants is by far the most important factor in that restaurant’s success. So I always listen carefully to contrary opinions from our general managers. Many companies say the same thing, but it is only lip service. They will tell you to “speak truth to power,” but they really don’t want to hear contrary views and often label people who raise questions or concerns as “not with the program.” I know because I have worked for such companies. I always try to listen to contrary opinions, particularly from key managers. Sometimes my views are changed, sometimes not. I don’t mind a vigorous debate as long as everyone gets on board once a final decision is made. My observation is that Multi-Unit Franchisee

the process of getting everyone behind final decisions works much better when everyone involved feels free to have their say and knows they have been listened to, if not agreed with. W hat core values do you think helped you win this award? We try to put the needs of our employees and guests first in most situations. I find that when we do that effectively, sales and profits tend to take care of themselves. And it is at that point we are able to invest in our communities. How important is community involvement to you and your company? It’s a pretty simple equation when you think about it. The success of our restaurants depends on the support of their surrounding community. That relationship between restaurant and community cannot be a one-way street. So it is clearly in our business's interest to find ways to give back to the communities that support our restaurants. But beyond business considerations, being involved with our surrounding communities is just the right thing to do. What leadership qualities are important to you and to your team? Tough question. Many qualities can contribute to good leadership. And good leaders can have different qualities. For me, I think empathy is the quality I always look for in myself and others. I grew up mostly in Oklahoma where my father was stationed in the Air Force. A Native American proverb I heard there has always stayed with me, “Never criticize a man until you’ve walked a mile in his moccasins.” Sometimes it can make a difference and sometimes not, but a useful thought to keep in mind for any leader. 1

ISSUE 2, 2019

Doug Pak, 46 CEO, co-founder

Building Lives and Dreams

No. of units: 72 Papa John’s, 50 Hardee’s Family: Wife and two kids Years in franchising: 13 Years in current position: 13

Rising from the ashes of failure to mega-success Written By HELEN BOND

erial entrepreneur Doug Pak was fresh out of college—armed with a degree in business and economics from UCLA—when he cut his teeth in franchising the old-fashioned way. “All of my friends were looking at investment banking, consulting, and CPA firms. I just wanted to learn how to own and operate a business,” remembers Pak, a franchisee of 72 Papa John’s and 50 Hardee’s restaurants. “I was intrigued by that, so I took a job with a small franchisee who had one Denny’s restaurant and I learned a lot about the franchise business.” An idea guy who loves solving problems, Pak is the recipient of the 2019 MVP Award for Mega Growth Leadership for building a diversified franchise enterprise that generates $130 million in annual revenue. “You kind of have to know where you are going first,” says Pak. “We always had an ambitious vision of fast growth, and that has allowed us to do so.”

Multi-Unit Franchisee

ISSUE 2, 2019

Pak is founder, chairman, and co-CEO of BLD Brands in Newport Beach, California. BLD includes three divisions: the multi-unit franchise investment company Serazen (operators of Papa John’s and Hardee’s); the corporate-owned and operated Spaghetti Warehouse chain (8 units); and ARK09, a multi-unit business management system and technology platform. Pak is no stranger to adversity. He was just 14 when he moved from South Korea to California, where he had to learn a new language and way of life. He says his parents’ business struggles left the family broke for a short time; and his own Internet start-up company, launched during the dot.com era, folded when the economy went bust. “Everything you go through, you learn a lot and become more humble,” he says. In 2005, he launched BLD Brands, raising more than $120 million with the help of Derek Kim, a senior

2019 MVP - Doug Pak officer at Korean global giant SK Group, who believed in Pak and taught the young entrepreneur the art of strategic thinking. Pak also counts the late John V. Shields Jr., former CEO of Trader Joe’s, as a life-changing mentor. Shields, who built the California grocery chain into a national powerhouse, was the keynote speaker at a business conference in 2010. Pak was in the audience and still has the six pages of notes he took that day. “I was the only one who was frantically writing notes. Everything he talked about, his experience and what he did, was so new to me. I learned so much in that one hour,” says Pak. “So I approached him and begged him to become my mentor.” Once focused solely on rapid growth, Pak is now focused on the quality of his growth. Among his many ventures, Pak expects to franchise additional brands and is set to launch a new concept, Warehouse 72, that will pay homage to the legacy of the full-service Spaghetti Warehouse brand, founded in 1972. No matter how he gets there, expect Pak’s path to continued success to be a longterm journey.

PERSONAL

Formative influences/events: Two key mentors in my life: John Shields, former CEO and chairman of Trader Joe’s; and Derek Kim, a senior officer of SK Group from South Korea. The event I love is the World Business Forum in New York. Key accomplishments: Married the love of my life and have two awesome kids. Everything else is icing on the cake. Started and failed in many business startups. Learned a lot. Still learning. Went from broke, getting calls

from credit card companies daily, and living on 99-cent burgers to starting and growing a company from zero to $200 million in 8 years. Came to the U.S. at the age of 14 (freshman in high school with very little English). I was able to get a great education and graduate from UCLA with a business/economics major. Donor and a board member of Pepperdine University. Work week: Work all the time, with a lot of travel. Two days are administrative days in the office. What are you reading? I used to hate reading when I was young. I just played all the time. Now I have become an avid reader and read about 20 books a year. Dark Nights of the Soul by Thomas Moore (just finished and it is a life-changing book); A Shattered Peace by David Andelman; and Love Wins by Rob Bell. Best advice you ever got: Don’t make decisions based on fear. Life is 10 percent what happens to you and 90 percent what you decide to do after. Focus on what you can control.

MANAGEMENT

Business philosophy: If you have the right ideas, the right people, and right system in place, money will follow you. Start with a 100-year dream. Then work your way down to a 10-year vision, 3-year business plan and strategy, 1-year operating plan, and daily actions. Business is not about transactions. It’s about building relationships. Always leave something on the table. I do get burned by this philosophy for sure, but I know I can sleep well at night. Management method or style: BLD, which stands for Building Lives and Dreams. We

have six pillars that capture it all: 1) Drive Results; 2) Make Money; 3) Explore the World; 4) Have Fun; 5) Do Good; 6) Grow Your Mind. I try to make decisions based on these principles. Greatest challenge: I love technology to solve problems and grow the business, but I can’t keep up with technology and social changes that are happening so much faster than before. Too many emails. It is also hard to hire great people with the overheated and over-financed economy.

actually measure culture. We are working on that, but we don’t have the answers yet. Vision meter: W here do you want to be in 5 years? 10 years? When I started, my goal was only about fast growth, which I achieved in the early years. My new vision is slow growth, but building an amazing company and culture for a long-term legacy and to make a positive impact in the world. We plan to diversify into additional brands and non-food franchise brands as

Among his many ventures, Pak expects to franchise additional brands and is set to launch a new concept, Warehouse 72, that will pay homage to the legacy of the full-service Spaghetti Warehouse brand, founded in 1972. How do others describe you? Visionary (and way too many ideas), driven, and energetic. Thinker and strategic. How do you hire and fire, train and retain? Hire slow and fire fast principle (most people do the opposite). Demand performance but be good to people and build relationships. We don’t do as good of a job as I would like with training. We need to do better.

BOTTOM LINE

2019 goals: $130 million (from Serazen, our franchise business). Growth meter: How do you measure your growth? Same store sales, profitability, and store count. We are really trying to measure company culture growth and are having a hard time with how you

Multi-Unit Franchisee

well, especially in health and fitness, education, and children-related areas. What are you doing to take care of your employees? We have built a culture of doing good by taking care of our team members. We identify key life events (marriage, newborn, graduation, death in family, birthday, etc.) and send flowers or gift cards. We built our own technology to handle this. We created our own support fund (Sherry’s Fund, named after my wife because she put up with me all these years) where team members who have financial emergencies can apply for a grant, not a loan. They are typically $100 to $1,000. We have helped team members who have experienced a disaster such as a fire or hurricane, vehicle emergencies, funeral support, etc. ISSUE 2, 2019

2019 MVP - Doug Pak

What kind of exit strategy do you have in place? My former mentor, John Shields, once told me something very insightful when I asked him about exit strategies. He graduated from Stanford University with an MBA in the 1960s. He said, back then, the term “exit strategy” didn’t even exist. I also heard from Bill Marriott (of Marriott International), who said even in his 80s, his only focus was to keep growing and building more hotels, and not think about exit strategy. So while I do eng age in acquisitions and divestitures from time to time, I do not have an exit strategy for my main company (although I think about it all the time, especially when I am faced with daunting challenges). It’s about building it for the long term, and building lives and dreams in small and big ways along the way. I believe that more exciting business and

life opportunities will appear as I continue to engage in my business in a positive way. I will keep working and try to figure things out.

MVP QUESTIONS

Why do you think you were recognized with this award? I grew from nothing to a $200 million company in 8 years starting with nothing in my pocket. Definitely there was fast growth through the Great Recession in 2008 and 2009. I got to a point in 2013 where the company was about $200 million in annual revenue— not too shabby in terms of fast growth. The technology: we built our own technology that really allowed us to grow faster and operate well. How have you raised the bar in your own company? With my tech background, we have built amazing technology to manage our business. This is how we are able to manage

Multi-Unit Franchisee

ISSUE 2, 2019

100-plus locations from my home office in California, where we presently have no operations. What innovations have you created and used to build your company? We built our own technology, a multi-unit business management system we call ARK09. We have an internal development team with four full-time programmers who report to me directly. It has big data, an executive dashboard, online financials, workf low, ops reporting, a leadership and culture management module, marketing system, and more. Tech is my passion. W hat core values do you think helped you win this award? Fast growth, innovation, inspiring vision. How important is community involvement to you and your company? It’s been difficult to focus on community

involvement when both the Papa John’s and Hardee’s brands are not doing well. However, we are trying to embody local fundraising as a key strategy and culture, where each location partners with local community organizations for a long-term fundraising partnership. The key here is not just trying to get more sales. It’s about creating real partnerships that help us “do good” and also build sales. What leadership qualities are important to you and to your team? Business success is 10 percent ideas and 90 percent execution. Details, details, details. Embrace change. Focus on the long term and big picture. Focus on drivers of results, not the results themselves. “Fierce conversations.” We try to have direct conversations, respectfully, so we can make tough decisions and solve real problems. 1

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* Figures are for freestanding company-operated Del Taco restaurants that we have operated for at least 12 months. At the end of our most recent fiscal year ended January 1, 2019, we had a total of 322 company-owned Restaurants. Of those, 319 constituted freestanding Restaurants and 297 of them have operated for more than one year. Of the 297 Restaurants, 144 Restaurants (48%) had sales in excess of the $1,512,152 average. See Item 19 of our April 2019 Franchise Disclosure Document for more information. There is no assurance that you will do as well, a new franchisee’s results may differ from the represented results.

Multi-Unit Franchisee

ISSUE 2, 2019

2019 MVP - Jigar (Jim) Patel

For Patel, every day is a chance to learn new ways to lead and motivate his team to fulfill the potential he sees in his employees and for his franchise business. He turns to books for inspiration and is a big fan of biographies and autobiographies written by respected leaders. Delaware. He learned the value of a strong work ethic from his father, an entrepreneur with various retail businesses, and was always looking for the right opportunity to be his own boss.

100 PERCENTER Building on hard work and teamwork Written By HELEN BOND

n just 2 years with Wayback Burgers, Jigar (Jim) Patel has excelled. Last October, at the Driving Wayback to the Future Franchisee Convention, the fast-casual chain named him its Multi-Unit Franchisee of the Year. This year, he is the winner of the 2019 MVP Award for Single Brand Leadership. Cu r rently operating f ive Wayback Burgers restaurants in Delaware and Maryland, Patel is gearing up to open two

to three more annually over the next 5 years. “I believe in letting everyone have an opportunity to prove their success—whatever their talent,” he says. “I might have different talents from someone else, so why not let everybody explore their talents?” Patel may be relatively new to franchising, but he’s no stranger to hard work. Born in India, he was 16 when he moved with his family to

Multi-Unit Franchisee

ISSUE 2, 2019

“I always wanted to work in a platform where I could prove myself and put 100 percent toward it,” he says. “The difficulty in non-franchised locations is that there is no structure to owning a small store or gas station. With Wayback Burgers I found the platform that I needed, and I loved the product.” Patel strives to lead by example as a hands-on operator who also works closely with his franchisor to make the most of the relationship. As a team player, he follows the system and thrives on being a mentor to other franchisees. “I know the pros and cons of the retail world,” he says. “I try to get feedback from corporate, which makes us stronger as a business. The franchise system really works.” L i ke m a n y s uc c e s s f u l franchisees, Patel gives as much as he gets. He’s committed to contributing to each community his restaurants serve, sponsoring local sports teams, and supporting fundraisers. His success in

embracing the marketing programs at Wayback earned him a seat on the Wayback Burgers Marketing Committee. This exchange of ideas helps make Patel the best operator he can be, he says.“Marketing is about trying new things to reach out to our guests in the best possible way, so they feel like they are welcomed at our location,” says Patel. “Corporate has a great marketing team, and I like to listen to their ideas and share ideas with them.” For Patel, every day is a chance to learn new ways to lead and motivate his team to fulfill the potential he sees in his employees and for his franchise business. He turns to books for inspiration and is a big fan of biographies and autobiographies written by respected leaders. “In reading biographies, I’ve found that if I want to be a leader, I have to respect other people as a leader,” he says. “What I have learned about hard work is that if you work hard you might not have success today, but down the road you are eventually going to succeed. That is what motivates me.” Patel believes he has found a once-in-a-lifetime-opportunity in franchising. While future plans include adding

2019 MVP - Jigar (Jim) Patel graphies. My favorite is Wings of Fire, the autobiography of A.P.J. Abdul Kalam. He was a scientist and former president of India. Best advice you ever got: Work hard and do things the right way—and never use shortcuts.

MANAGEMENT

Business philosophy: Make a strong team. I really try to give all the credit for our success to the team and not myself. By giving credit to my team, they are motivated to do better and that helps build a great team and company. Our company’s mission statement is, “Whatever you do…do it best.” Management method or style: My management method is pyramid style: area manager to manager to assistant manager to shift leaders and front-line members.

Jigar (Jim) Patel, 32 President

No. of units: 5 Wayback Burgers Family: Wife, two kids, my parents, and grandparents Years in franchising: 2 Years in current position: 2

another brand, today he is focused on making the most of his success with Wayback Burgers. “Down the road, I will look at opportunities in the market, but I want to make sure that what I am doing now I’m doing 100 percent,” he says. “My success is my team. If you have a strong team, you can pursue any dream.”

PERSONAL

Formative influences/events: I have always wanted to make the impossible thing possible. Since I started in business, I always followed two mentors. One is my dad, who taught me

to work hard in life. Second is my guru, who taught me lots of lessons of business. Key accomplishments: I don’t usually count my accomplishments, but would say keeping my team as one family. Last October, I was recognized by Wayback Burgers as their Multi-Unit Franchisee of the Year for 2017–2018 and awarded third place for “Highest Increase in Sales” at the 2018 Driving Wayback to the Future Franchisee Convention. Work week: Six days. W hat are you reading? Autobiog raph ies a nd bio

Greatest challenge: Uncertainty and a tight labor market. How do others describe you? Very quiet. I believe in “action speaks louder than words.” How do you hire and fire, train and retain? We have a great system set by corporate to train and retain team members. Firing is my last option, I don’t believe in it.

BOTTOM LINE

Annual revenue: $3 million. 2019 goals: Make our team stronger than what we have today, open more restaurants, and be more successful. Grow t h meter : How do you measure your growth? Great customer service along with quality food—what we already have. Vision meter: Where do you want to be in 5 years? 10 years? I want to open more restaurants and, additionally, expand into a different field of Multi-Unit Franchisee

businesses. In 5 years, I want our company to be known as great in customer service. In 10 years, I want all my team leaders to set their own examples as great leaders. What are you doing to take care of your employees? Recognizing their great talents and giving them a chance to show their performance. What kind of exit strategy do you have in place? Make a great leader from the team and give them a chance to show their performance.

MVP QUESTIONS

Why do you think you were recognized with this award? The hard work done by all team members of this great company. It would not have been possible without great support by corporate. How have you raised the bar in your own company? I always believe in giving our team a chance to prove their talent. That gives me inspiration to expand. What innovations have you created and used to build your company? We believe in quality food with great customer service. W hat core values do you think helped you win this award? A positive and honest workplace environment along with hard work. How important is community involvement to you and your company? We sponsor local sports team, fundraisers, provide special discounts for public service personnel, and volunteer for good causes for the community. What leadership qualities are important to you and your team? Be honest, work hard, and do better today than yesterday. 1

ISSUE 2, 2019

American Dreamers Where education comes first 50

Multi-Unit Franchisee

ISSUE 2, 2019

Written By HELEN BOND

2019 MVP - Pratiksha Rigley

Pratiksha Rigley, 51 Franchisee

No. of units: 5 Primrose Schools, 3 under construction Family: Husband Noel, daughters Maya and Meira Years in franchising: 10 Years in current position: 10

hen she was 18, Pratiksha Rigley came to study in the U.S. from Zambia, where education was considered a luxury reserved only for the wealthy. Today, known as “Dr. Rigley” to her students and their parents, she considers education a gift she works tirelessly to bestow every day on the families that attend one of the five Primrose Schools she owns with her husband Noel Rigley. With five Primrose Schools open and three more under construction in the Dallas area, the R igleys are the 2019 American Dream MVP Award winners for achieving remarkable success in their new country. “There is so much opportunity in this country if you just work hard, show up, and say yes to opportunities,” she says. “We always say yes to opportunities and then figure out how to do it.” As the face of the business, she focuses on daily operations and marketing, while her husband oversees the finance and construction of their growing portfolio of Primrose Schools. She credits their success to a strong work ethic.

“I may not be the smartest person in the room, but I can outwork almost anybody,” she says. “My husband Noel is even more disciplined. He has five degrees—four master’s and a Ph.D.—and he never stops learning.” The couple met in Weatherford, Oklahoma, where she graduated from pharmacy scho ol at S out hwester n Oklahoma State University. She built a career as a retail pharmacist, managing up to 34 stores and honing skills that have served her well as a franchisee. After the birth of their second daughter, she decided to combine her operational and management experience with her passion for education, and in 2008 they opened their first Primrose School. As a working mom, she knows firsthand what it’s like to drop off kids in the care of others. She strives to make each school feel like a home away from home, with fresh flowers and a welcoming face always up front to open the door for parents. Leadership at each school has funds specifically budgeted to reach out at their discretion—whether providing a care package for

someone in need, or visiting a mother with a new baby in the hospital and sending a pizza home with the father caring for another child at home.

so glad to be home,” she says. “This is such a great nation, and we are both so grateful for the people of the U.S. and just being in this country.”

“We do the little things every day,” she says. “The little things have to be just as important as the big things.”

PERSONAL

Pratiksha and Noel, who was born in India, together have created a culture of caring in their schools. For the past 3 years, the couple have been honored with the Platinum Award from Save the Children, given to their schools for raising the most money for the organization, the brand’s primary charitable partner. The Rigleys are also committed to serving others without fanfare. As part of their commitment to “travel with a purpose,” they often contribute in meaningful ways when they visit a place of need. Most recently, after a journey to Southeast Asia, the couple donated money for an additional classroom to be built in a monastery housing orphans of Myanmar violence against the Rohingya. “It doesn’t matter where we travel in the world, the day we land on U.S. soil we are always Multi-Unit Franchisee

Formative influences/events: I’ve been fortunate to have so many strong female role models who have made a tremendous impact on my life. My mother was my earliest influence. She immigrated to Africa from India and is undoubtedly the most resourceful person I know. Even during times of shortages, she would always find creative ways to provide for our family. She encouraged me to be persistent, especially when it came to education. She used to tell me, “Make sure you study. Education will always be with you.” That inspired my lifelong love for learning. I see the same determination and discipline that she had in my daughters. I’m blown away by how hard they work. I watch them succeed, and it makes me want to work even harder. Becoming a mom was a life-changing event for me. Never one to compromise in any aspects of my life, I had to find a way to have a meaningful career while remaining ISSUE 2, 2019

2019 MVP - Pratiksha Rigley

present for my family. My previous career in corporate retail came at a cost. If I were to grow in that role, I needed to work longer hours and spend time away from my young daughters. Primrose Schools offered a perfect balance for me. With Primrose, I have the flexibility to prioritize time with my family, while I pursue a career where making a difference in the lives of others is at the core of what I do. I was a mom who needed a safe and trusted place where my children would receive quality education while I worked. I have great empathy for the moms and dads who entrust our schools with their children because I know exactly how they feel. Even though my daughters are now responsible young women, the parent in me never stops. I am constantly thinking about ways I can be the best mom I can for them, and I know the parents we serve have similar experiences. As parents, we sometimes feel guilty when leaving our children to take care of other needs, but as a Primrose franchise owner, I’m hoping to help ease that guilt and give parents the peace of mind that comes from knowing

their children are well taken care of and happy. As I’ve grown from a Primrose parent to a multi-unit franchise owner, my relationship with Jo Kirchner, CEO of Primrose Schools, continues to bring greater meaning to my life. Specifically, her relentless drive to make a difference in the world by serving organizations like Save the Children continues to inspire me to give back to my own community. Key accomplishments: In Zambia, where I grew up, education is a luxury. As an immigrant from Africa, my greatest accomplishment was coming to the U.S. for school. My education set the stage for my entire life and influences everything I do today. Work week: A typical work week for me includes spending about 30 percent of my time working in my schools, 20 percent of my time managing our business’s finances, 20 percent actively growing my leadership team and staff, and the remaining 30 percent working to improve and create new systems to better run our schools. It is so important to find that work/life balance when owning

Multi-Unit Franchisee

ISSUE 2, 2019

and operating your own business, which is something that was attractive about Primrose Schools. As a franchisee, I was able to spend more time with my children as they grew and could find the right balance because of the flexibility the franchise provided. In addition to taking family time, I also spend several hours a week focusing on how I can better serve my community. Giving back fuels my soul and is an example I want to instill in my daughters. My motto is “Good, better, best. Never let it rest, until your good is better, and your better is best.” W hat a re you read ing? Michelle Obama’s Becoming, but I always have about six to eight books by my nightstand. I’m a voracious reader and love simultaneously reading a variety of books on topics like motivation, early education, business, and travel. Best advice you ever got: Be present in the moment. People feel most valued when you’re completely focused on them. I intentionally put my phone away when I’m interacting with teachers and staff at my schools or spending time with my family. It’s an ongoing effort because I constantly have work to do, but it’s very important to me.

MANAGEMENT

Business philosophy: With everything Noel and I do, we first ask, “Is this decision in the best interest of the children and our staff?” We never make decisions based on the bottom line. It’s all about the people and doing the right thing. Management method or style: I empower my team and give them room to fail. The safety of the children always comes first; in this area

we must be perfect without exception. In secondary areas, I believe it’s okay to make mistakes. This is how we grow and become better. I have very open, trusting relationships with my leadership and staff, and we’re able to give each other constructive feedback and know that it comes from a place of genuine care. Greatest challenge: Our challenges are twofold. As a multi-unit owner, I have to find ways to be present at my schools without being there all the time. In addition, retention is not only an industry-wide challenge many early education and care providers face, but a national challenge for employers in many industries as the job market becomes even more competitive. Relationshipbuilding is key to reach my team and energize them. I take their feedback seriously and make a point to follow through on recommendations from all team members, so they know they are a greater part of the vision we have for our schools. How do others describe you? My team recently said that my strengths include organization, people skills, multi-tasking, and goal-orientated leadership. They say that I am able to visualize a final result and develop a clear path to attain that result. My team also says I’m passionate about developing other people and helping them reach their highest potential. How do you hire and fire, train and retain? Culture is a huge part of success in any industry, and we live it out every day. We sat down as an entire team and mapped out our company culture together. My overall strategy is that I’m always recruiting. Everywhere I go, I look for positive people

2019 MVP - Pratiksha Rigley who love children, have certain skill sets, and, most important, share our values and mission of forging a path that leads to a brighter future for all children. Retaining employees is tied directly to management. It’s our responsibility to establish a positive and healthy work environment and make our staff feel they belong and are valued, which often makes them stay. All employees are looking for companies that will invest in them and offer a path for them to grow.

BOTTOM LINE

Annual revenue: $9 million (approx.). 2019 goals: Each year I write out my schools’ goals for enrollment and retention, but this year is a little different. As we build three new schools, we’re mentoring our leadership team and using my “Plus One” philosophy to train employees to be ready to step in when needed. Our overall goal is to maintain the excellence in our existing schools and set up our new schools for the same success. Growth meter: How do you measure your growth? You can’t build new schools if your existing schools aren’t excellent. Our growth meter is not based on the number of schools we hope to open. We are more interested in the quality of our schools and programs, as well as the satisfaction and quality of life for both my staff and the families we serve. We were very intentional with this year’s growth and have taken the necessary steps to prepare for the new schools. Vision meter: Where do you want to be in 5 years? 10 years? Projecting 10 or even 5 years out is somewhat elusive for me, as I approach my work one day at a time and seek to

improve from yesterday. Every year, I want to be better as a business owner, wife, mother, and daughter. I focus on how I can be present for my family and inspire the people who work for me. Two things I know the next few years will hold are the opportunity to continue to watch my daughters grow, and more time for travel and ser v ice. The three topics I’m most passionate about are education, children’s issues, and the worldwide advancement of women. I want to find more ways to advocate for t hese causes loca l ly and internationally. What are you doing to take care of your employees? I’m easily accessible for all my employees. We host regular leadership meetings and team-building activities, and I try to make every event personal and special. I stay connected with them through team days and celebrations, and I find small, personal ways to make them feel appreciated, whether it’s giving them seasonal goody bags throughout the year or giving new moms extra vacation time around the holidays. It’s about doing little things all the time to show them how much we care. We also pay for our teachers’ continued education and child development diplomas. When we reach our enrollment goals we award bonuses. We also give retention bonuses and celebrate 5-year and 10-year anniversaries with gifts. What kind of exit strategy do you have in place? It’s not something we’re thinking about currently because we’re in growth mode. But Noel and I place such an emphasis on recruiting and developing our team that we are confident our schools are operating day-to-day

under leaders who share our values. By helping our staff reach their goals, we will eventually be well positioned to take a step back when we are ready to do so.

MVP QUESTIONS

Why do you think you were recognized with this award? We’re not only interested in running successful schools, but also in caring for our community and the people who work for us. Primrose Schools is a trusted brand with a great story. They’re always making me a better business owner and person through their strong mission and values. How have you raised the bar in your own company? We’re outside-the-box thinkers. Noel and I have bought older buildings, gutted them, and turned them into thriving schools with excellent reputations. We’ve built schools in smaller communities in Texas, like Waco and Temple, and inspired other franchise owners to have an open mind to investing in smaller markets. We have had such a positive experience as Primrose franchise owners that we were able to encourage 11 other enterprising and service-focused friends to become franchise owners with the brand. Inside our schools, we go all-out and treat our families like guests. We are never complacent with our programming. If new and better options are available for our students, we are eager to implement them in all our schools. W hat in novations have you created and used to build your company? Our innovation lies within our consistency. We created a team outside of the traditional roles found within a single Primrose school to help us manage and oversee the daily operations Multi-Unit Franchisee

of each school. Our team has developed systems that make our work more efficient and streamline our processes. Our trust in this team has helped us manage the day-to-day operations even when we’re not around. We ensure consistency across the board, from our daily balanced menus to the quality of our employees. You can walk into any of our schools and have the exact same experience, which is not easy to do. What core values do you think helped you win this award? We serve others with passion and integrity and work as a team by being present and supportive. How important is community involvement to you and your company? We constantly seek out ways to give back to our community and are proud of the servant leadership culture we’ve established in our schools. We create opportunities for our leadership, staff, teachers, children, and families to stay actively involved in the community through canned food drives, donation drives, and giving events. Compassion and nurturing a desire to give without expectation are elements that set the Primrose Balanced Learning approach apart from other teaching methods. What leadership qualities are important to you and your team? We look at people for who they are. Are they genuine and caring? I can teach any employee skills for a job in early education, but they must have high energy, natural leadership skills, and a standard of excellence that aligns with our culture and values. I need to trust every employee to protect the children we serve and the brand my husband and I love so much. 1

ISSUE 2, 2019

2019 MULTI-BRAND 50 1 NPC INTERNATIONAL PIZZA HUT WENDY'S

1,599

JAMBA JUICE

1,213

FRESHII

TACO BELL

STEAK â&#x20AC;&#x2122;N SHAKE

386

2 FLYNN RESTAURANT GROUP

1,244

APPLEBEE'S

458

QDOBA MEXICAN EATS

ARBY'S

368

QUIZNOS

TACO BELL

283

TIM HORTONS

PANERA BREAD

135

CHILI'S

3 SUN HOLDINGS

995

MOOYAH

BURGER KING

294

ERBERT & GERBERT'S

T-MOBILE

155

MCALISTER'S DELI

POPEYES LOUISIANA KITCHEN

153

QUAKER STEAK & LUBE

TACO BUENO

150

WAHOO'S FISH TACO

ARBY'S

WENDY'S

GNC

DENNY'S

CICIS

KFC

GOLDEN CORRAL

THE EXTREME PITA

KRISPY KREME DOUGHNUTS

AU BON PAIN

4 DHANANI GROUP

820

BURGERFI

BURGER KING

503

CARIBOU COFFEE

POPEYES LOUISIANA KITCHEN

280

IHOP

LA MADELEINE FRENCH BAKERY & CAFE

PINKBERRY

5 MUY BRANDS

762

PJ'S COFFEE OF NEW ORLEANS

PIZZA HUT

367

WINGSTOP

WENDY'S

315

THE COFFEE BEAN & TEA LEAF

TACO BELL

DUNKIN'

693

NATHAN'S FAMOUS

607

LA MADELEINE FRENCH BAKERY & CAFE

6 KBP FOODS KFC TACO BELL

7 ARAMARK

8 PILOT TRAVEL CENTERS

591

601

SUBWAY

212

CHICK-FIL-A

119

CINNABON

167

EINSTEIN BROS. BAGELS

115

WENDY'S

SUBWAY

ARBY'S

PANDA EXPRESS

DUNKIN'

PAPA JOHN'S

DQ TREAT

PIZZA HUT

TACO BELL

WHICH WICH

MOE'S SOUTHWEST GRILL

PIZZA HUT

Multi-Unit Franchisee

ISSUE 2, 2019

YOUR OPPORTUNITY AVERAGE NET PROFIT

AVERAGE GROSS INCOME

37.53% $662,144 *top three franchisees open more than one year.

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234

FRANCHISE

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· A simple 2 employee business model

2019 MULTI-BRAND 50 HOT STUFF PIZZA

KFC

139

KFC

PIZZA HUT

126

CARVEL

LONG JOHN SILVER'S

CHESTER'S

TIM HORTONS

TACO BELL

IHOP

9 GPS HOSPITALITY

495

BURGER KING

402

15 388

IHOP

266

APPLEBEE'S

122

PIZZA HUT

POPEYES LOUISIANA KITCHEN

15 YADAV ENTERPRISES

358

10 ARMY & AIR FORCE EXCHANGE SERVICES

493

JACK IN THE BOX

213

SUBWAY

129

DENNY'S

BURGER KING

120

TGI FRIDAYS

CHARLEYS PHILLY STEAKS

SIZZLER

16 TACALA/BOOM FOODS

POPEYES LOUISIANA KITCHEN

TACO BELL

ARBY'S

SONIC

EINSTEIN BROS. BAGELS

WING ZONE

EINSTEIN BROS. BAGELS

PIZZA HUT

CHICK-FIL-A

BLIMPIE

WOW CAFE & WINGERY

TACO JOHN'S

SUBWAY

CHURCH'S CHICKEN

PIZZA HUT

DOMINO'S PIZZA

11 LOVE'S TRAVEL STOPS & COUNTRY STORES SUBWAY CHESTER'S

17 SODEXO

352 288 64 347

UFOOD GRILL

428

JAMBA JUICE

200

TACO BELL

PAPA JOHN'S

GODFATHER'S PIZZA

BAJA FRESH

HARDEE'S

ERBERT & GERBERT'S

IHOP

BURGER KING

ARBY'S

MOE'S SOUTHWEST GRILL

TACO JOHN'S

QDOBA MEXICAN EATS

DQ TREAT

QUIZNOS

397

STEAK â&#x20AC;&#x2122;N SHAKE

KFC

261

TIM HORTONS

A&W

116

AU BON PAIN

LONG JOHN SILVER'S

12 HARMAN MANAGEMENT

PIZZA HUT

13 AMPEX BRANDS

14 SUMMIT RESTAURANT GROUP

Multi-Unit Franchisee

391

ISSUE 2, 2019

DENNY'S

GARBANZO MEDITERRANEAN FRESH

HOT STUFF PIZZA

MCALISTER'S DELI

FAMOUS FAMIGLIA PIZZERIA

CHESTER'S

SMASHBURGER

GODFATHER'S PIZZA

SHULA BURGER

NRGIZE LIFESTYLE CAFE

JOHNNY ROCKETS

SBARRO

KFC

THE COFFEE BEAN & TEA LEAF

PINKBERRY

FRESHII

EINSTEIN BROS. BAGELS

MOOYAH

STEAK ’N SHAKE

345

LA MADELEINE FRENCH BAKERY & CAFE

254

FIREHOUSE SUBS

18 SIZZLING PLATTER LITTLE CAESARS WINGSTOP

GODFATHER'S PIZZA

DUNKIN'

GREAT STEAK

SIZZLER

KELLY'S CAJUN GRILL

301

MOE'S SOUTHWEST GRILL

286

SALSARITA'S FRESH MEXICAN GRILL

19 THE COVELLI FAMILY LTD PARTNERSHIP PANERA BREAD O’CHARLEY'S

THE COUNTER

DQ GRILL & CHILL

YEUNG'S LOTUS EXPRESS

DQ TREAT

20 K-MAC ENTERPRISES TACO BELL KFC

PANDA EXPRESS

298

PIZZA STUDIO

285

PIZZA BELL HOP

THE COFFEE BEAN & TEA LEAF

21 PACIFIC BELLS

281

BLIMPIE

TACO BELL

215

BURGERFI

BUFFALO WILD WINGS

CARL'S JR.

BLAZE PIZZA

22 ADF COMPANIES PIZZA HUT PANERA BREAD

276 261 15

24 COMPASS GROUP USA

259

PAPA JOHN'S

271

EINSTEIN BROS. BAGELS

BURGER KING

SUBWAY

SBARRO

AU BON PAIN

CINNABON

MOE'S SOUTHWEST GRILL

QUIZNOS

PIZZA HUT

CHILI'S

DENNY'S

ROY ROGERS

JAMBA JUICE

PIZZA HUT

QUIZNOS

POPEYES LOUISIANA KITCHEN

SMASHBURGER

NATHAN'S FAMOUS

BLIMPIE

CHICK-FIL-A

CARIBOU COFFEE

23 HMSHOST

Multi-Unit Franchisee

ISSUE 2, 2019

2019 MULTI-BRAND 50 PJ'S COFFEE OF NEW ORLEANS

A&W

SALSARITA'S FRESH MEXICAN GRILL

CHARLEYS PHILLY STEAKS

TACO BELL

WENDY'S

TIM HORTONS

TACOTIME

WHICH WICH

CARL'S JR.

BOJANGLES'

CHESTER'S

BURGER KING

DQ GRILL & CHILL

CHILI'S

BOSTON MARKET

ERBERT & GERBERT'S

BASKIN-ROBBINS

FRESHII

QUAKER STEAK & LUBE EXPRESS

MARCO'S PIZZA

SBARRO

STEAK â&#x20AC;&#x2122;N SHAKE

TOSSED

CALIFORNIA TORTILLA

DUNKIN'

ILLY

BASKIN-ROBBINS

IHOP

29 FUGATE ENTERPRISES

244

JOHNNY ROCKETS

PIZZA HUT

169

KFC

TACO BELL

NATHAN'S FAMOUS

30 APPLE HOSPITALITY REIT

PITA PIT

HILTON GARDEN INN

SLIM CHICKENS

COURTYARD BY MARRIOTT

253

HAMPTON INN BY HILTON

CHEVRON (BRANDED)

144

HOMEWOOD SUITES BY HILTON

EXTRAMILE (CHEVRON)

109

RESIDENCE INN BY MARRIOTT

25 G & M OIL CO

26 TA OPERATING

27 MITRA QSR KFC TACO BELL

28 CAFUA MANAGEMENT COMPANY

250 202 48 247 240

241

251

SPRINGHILL SUITES BY MARRIOTT

POPEYES LOUISIANA KITCHEN

TOWNEPLACE SUITES BY MARRIOTT

SUBWAY

FAIRFIELD INN BY MARRIOTT

BURGER KING

HOME2 SUITES BY HILTON

TACO BELL

EMBASSY SUITES BY HILTON

PIZZA HUT

MARRIOTT HOTELS

DUNKIN'

RENAISSANCE HOTELS

STARBUCKS

TACO BELL/PIZZA HUT

TACO BELL

170

ARBY'S

PIZZA HUT

FAZOLI'S

SBARRO

Multi-Unit Franchisee

ISSUE 2, 2019

31 DESERT DE ORO FOODS

32 CIRCLE K STORES SUBWAY

236

220 166

HOT STUFF PIZZA

SUBWAY

BLIMPIE

YOGURTLAND

CHURCH'S CHICKEN

HARDEE'S

BURGER KING

DQ TREAT

APPLEBEE'S

DQ GRILL & CHILL

PIZZA HUT

NOBLE ROMAN'S

IHOP

HUDDLE HOUSE

STEVI B'S PIZZA

33 EYM GROUP

173 3

41 APPLE INVESTORS GROUP

176

43 PALO ALTO

175

BURGER KING

TACO BELL

143

PIZZA HUT

DENNY'S

34 CHARTER FOODS

216

44 CELEBRATION RESTAURANT GROUP

167

215

PIZZA HUT

130

TACO BELL

144

TACO BELL

LONG JOHN SILVER'S

KFC

A&W

45 SUNDANCE

166

KFC

TACO BELL

155

35 FOURTEEN FOODS DQ GRILL & CHILL DQ TREAT

36 QUALITY DINING

210

KFC

204

PIZZA HUT

46 WENDY'S OF COLORADO SPRINGS

209

WENDY'S

BURGER KING

164

GOLDEN CORRAL

CHILI'S

156 148 8

47 JRN

155

202

KFC

154

DUNKIN'

153

PIZZA HUT

BASKIN-ROBBINS

37 KONSTANTINO SKRIVANOS

38 FALCON HOLDINGS

47 INTERFOODS OF AMERICA (SAILORMEN)

155

195

POPEYES LOUISIANA KITCHEN

132

CHURCH'S CHICKEN

150

BURGER KING

LONG JOHN SILVER'S

47 HAMRA ENTERPRISES

155

39 COTTI FOODS

192

WENDY'S

100

PANERA BREAD

TACO BELL

NOODLES & COMPANY

PIEOLOGY

40 BRIAD RESTAURANT GROUP

50 GHAI MANAGEMENT SERVICES

183

BURGER KING

WENDY'S

111

TACO BELL

TGI FRIDAYS

ZINBURGER

41 MARWAHA GROUP

9 154 123 31

SOURCE: FRANdata & Franchise Update Media

176

Multi-Unit Franchisee

ISSUE 2, 2019

TOP BRANDS OF THE 2019 25 MULTI-BRAND 50 RANKING BRAND

UNITS

PIZZA HUT

2,643

TACO BELL

2,256

BURGER KING

1,917

KFC

1,399

WENDY'S

1,217

SUBWAY

1,063

POPEYES LOUISIANA KITCHEN

713

APPLEBEE'S

634

ARBY'S

551

PANERA BREAD

492

DUNKIN'

478

IHOP

285

LITTLE CAESARS

254

EINSTEIN BROS. BAGELS

249

DQ GRILL & CHILL/DQ TREAT

240

JACK IN THE BOX

213

CHICK-FIL-A

188

LONG JOHN SILVER'S

185

CINNABON

184

CHURCH'S CHICKEN

160

T-MOBILE

155

DENNY'S

146

CHEVRON (BRANDED)

144

A&W

126

TGI FRIDAYS

124 SOURCE: FRANdata & Franchise Update Media

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ISSUE 2, 2019

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RECIPE FOR SUCCESS NFLer transitions to franchising with Jamba Juice Written By KERRY PIPES

hen Vernon Davis isn’t catching footballs as a tight end for the NFL’s Washington Redskins, he’s busy with his 5 Jamba Juice locations in Northern California. His franchising career began 6 years ago during his playing days with the San Francisco 49ers.

Last year, Davis teamed up with Atlanta Falcons wide receiver Mohamed Sanu in an agreement to open and operate six Jamba Juice locations in the Northern Virginia/DC metro area. Davis says he’s excited about partnering with Sanu and “bringing more of the fresh fruit and vegetable goodness of Jamba to the region.” Think of them as a couple of smoothie operators. It’s a homecoming of sorts for Davis, who grew up in Washington, D.C., and played college football at the University of Maryland before the 49ers drafted him sixth overall in 2006. He racked up nine seasons with the 49ers before being traded to the Denver Broncos, where he won a Super Bowl ring. In 2016, Davis came home to play for the Washington Redskins. Operating Jamba Juice stores from the other side of the country requires belief and trust in his people, and Davis says that’s just what he has. “I’m close to operations still, but I know my people are good at what they do and can handle the stores without me,” he says. It’s not lost on him how essential good employees are to his operation. And while he relies on Jamba Juice’s corporate training materials, he also puts his own spin on hiring, welcoming, caring for, and retaining great employees. “I have my own videos where I speak to new hires with a special Vernon Davis welcome,” he says. “And I hold quarterly calls with my team where we connect and stay in touch on business.” Davis says his life in athletics taught him how to face adversity and dedicate himself to the cause—a skill set that transfers directly to the world of business. Looking to the future, Davis says he wants to continue growing and adding more stores, and someday sees himself becoming a franchisor.

Multi-Unit Franchisee

ISSUE 2, 2019

Vernon Davis, 35 Multi-unit franchisee (right)

Company: Jamba Juice No. of units: 5 in Northern California, plans to open 6 more Family: 3 children, Jianni, Valeigh, and Vallaughn; fiancee Kayla Years in franchising: 6 Years in current position: 6 Multi-Unit Franchisee

ISSUE 2, 2019

Pro Athlete - Vernon Davis Guilty pleasure: Brownies. Favorite book: Rich Dad, Poor Dad by Robert Kiyosaki. Favorite movie: “Save the Last Dance.” What do most people not know about you? I’m a pretty good dancer. Pet peeve: The sound of chalk being used on a chalkboard.

PERSONAL

What did you want to be when you grew up? Police officer.

Formative influences/events: My grandma.

Last vacation: Brazil.

First job: Quiznos.

Key accomplishments: Getting drafted, having kids, winning a Super Bowl, meeting my fiancee. Biggest current challenge: R a isi n g my ch i ld ren to surpass me as a professional, a philanthropist, and most of all, as a person. Next big goals: Hold a business empire and develop an acting career and produce films. First turning point in your career: When Mike Singletary sent me to the locker room during a game. Best business decision: Working with like-minded people who share the same interests and values. Hardest lesson learned: Putting trust in someone I didn’t really know.

Person I’d most like to have lunch with: Will Smith.

MANAGEMENT

Business philosophy: Learn a little bit about everything. Management method or style: Nice, but firm. Greatest challenge: Staying consistent. How do others describe you? Encouraging. One thing I’m looking to do better: Marketing and advertising. How I give my team room to innovate and experiment: I let my GMs take control of their locations and come up with solutions. How close are you to operations? Very close.

Exercise/workout: Lift 3 days a week and run 5 days.

W hat are the t wo most important things you rely on from your franchisor? Marketing and cutting costs.

Best advice you ever got: Learn as if I’ll live forever.

What I need from vendors: Fresh product and accountability.

What’s your passion in business? I like making deals and investing in things I believe in, from technology to real estate.

Have you changed your marketing strategy in response to the economy? How? Yes, by giving the consumer what they want. At the moment discounts are good, especially during this season.

How do you balance life and work? I understand that family comes before work. If you keep that in mind, you’ll naturally have the balance you need to make a living and give love and energy to your family.

How is social media affecting your business? It brings instant awareness.

Multi-Unit Franchisee

ISSUE 2, 2019

How do you hire and fire? The district manager conducts an interview along with viewing resumes. Fire the same way you hire, with hospitality and benevolence. How do you train and retain? We use the corporate-mandated training for all of our employees. However, I put my own personal touch to how I present it. I have created videos where I am speaking to new hires so they feel like they are getting a special Vernon Davis welcome. I like to hold quarterly calls with my Jamba team to go over all updates and hot topics. It also gives them a time to connect with me and provide the excitement of meeting with a boss who happens to be a celebrity. How do you deal with problem employees? Problem employees need constant communication. Fastest way into my doghouse: By stealing.

SPORTS & BUSINESS

What skills/experience from sports have carried over to operating a business? Ability to rise above adversity and dedicate myself to the craft. Which do you find more competitive, sports or business? For me, they are the same. Why did you choose franchising as an investment option? Because the manual has been created. I just have to get the key and turn it. How did you transition from sports to franchising? It was a way I could continue to compete in a way other than running and making contact with football equipment. W hat was your greatest achievement in sports, and what has been your biggest accomplishment as a franchisee? Winning a Super Bowl, and sustainability.

BOTTOM LINE

2019 goals: To exceed goals set in 2018. Grow th meter : How do you measure your growth? Bottom line, expansion, and percentage turnover. Vision meter: Where do you want to be in 5 years? 10 years? In 5 years I want to own more stores, and in 10 years I want to be a franchisor. How is the economy in your region affecting you, your employees? Being that the stores are in the Bay Area, more specifically Silicon Valley, the economy has a positive effect on my business. Are you experiencing econom ic g r ow t h i n you r market? Yes, incrementally. How do changes in the economy affect the way you do business? At times it pushes me to manage my overhead much more closely than during peak, strong seasons of economic growth. How do you forecast for your business? We keep a close look at the weather believe it or not. The weather plays a big role when creating a sales plan. What are you doing to take care of your employees? I make sure to give them some one-on-one time with me every year during the NFL off-season. I do not want them to feel like I’m not accessible and do not care about them simply because I’m a professional athlete. I also incorporate bonus plans and internal competitions among our Jamba stores with prizes. I try to make the atmosphere as enjoyable as possible. How are you handling rising employee costs (payroll, minimum wage, healthcare, etc.)? At times we have made slight increases to the cost of our product to help with increasing labor cost. 1

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6 months: 0% Royalty*

No Franchisee Fee ($20,000 savings) Free Digital Drive Thru Hardware ($10,000 value) Free Drive Thru Audio & Timer System ($5,000 value)

R e d u c e d R o y a l t i e s O v e r 3 Ye a r s* : 0-6 Months: 0% Royalty 7-12 Months: 2% Royalty 13-24 Months: 3% Royalty 25-36 Months: 4% Royalty A f t e r 3 Ye a r s : S t a n d a r d 5 % R o y a l t y

• We A r e T h e Q S R S e a f o o d L e a d e r • No Direct Competitors Of Matching Scale • S t r o n g C o n s u m e r Va l u e • 850+ Restaurants

* Subject to discussion with qualified candidates. Incentives apply to new applications approved before December 31, 2019 R A N K E D I N F R A N C H I S E T I M ES TO P 2 0 0 CO N TACT Dav i d .Ca r r @ lj s i l ve rs . co m

This information is not intended as an offer to sell, or the solicitation of an offer to buy, a franchise. It is for information purposes only. This offering is made by prospectus only. The franchisor, Long John Silver’s, LLC, is located at 10350 Ormsby Park Place, Louisville, KY 40223. ©2109 Long John Silver’s, LLC

Under 30 – Ali Momin

BORN TO FRANCHISE Young multi-brand operator does it right Written By KERRY PIPES

li Momin began working in a Dairy Queen when he was just 16— not that uncommon for today’s teens. But in Momin’s case, the Dairy Queen was operated by his father, who only 2 years later made his son a 50 percent owner of the location. That’s how a career in franchising started for the now 27-year-old entrepreneur. But it almost didn’t. That’s because a funny thing happened on Momin’s way to franchising. He went to college thinking he would become a doctor. He says one day of biology class was all it took for him to rethink his choice and walk out of the classroom and into his advisor’s office for a new direction. “There was no way I wanted to do that for a living,” he says. Today, he is a multi-unit operator of two Dairy Queens and two Edible Arrangements in the greater Atlanta market. Two years ago he opened his f irst Captain D’s and now has a second location in Douglasville, Georgia. “I own and operate six businesses throughout Georgia,” says Momin. “I’m proud of what I have been able to accomplish and there is more to come.” He attributes his

success to watching his dad operate that Dairy Queen and says that’s how he learned “to be my own boss.” Like many young g uns, Momin is eager to continue growing. Adding Captain D’s restaurants is his first priority. “I would like to open one Captain D’s location a year for the next few years,” he says. Then, he says, diversify his holdings by entering the sandwich and hotel spaces. With 6 units humming along, he’s still a hands-on operator but also understands he must evolve as his businesses continues to grow. That’s why he wants to create a management system where his employees have room to grow and advance in the organization. “That’s how we’ll be successful at the next level.”

PERSONAL

First job: When I was 16, I worked at my father’s Dairy Queen in Cochran, Georgia. I started washing dishes and worked my way up to the kitchen, guest services, inventory control, and eventually to store manager. When I was 18, my father gave me a 50 percent share of the company and it’s evolved from there.

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Formative influences/events: My dad has always been my biggest inf luence. From a young age, I got to watch him navigate the waters of franchising and it inspired me to stay in the business. He was a great teacher and the biggest lesson he taught me was to “be my own boss.” Key accomplishments: At 27, I own and operate six businesses throughout Georgia (2 Captain D’s in Lovejoy and Douglasville, 2 Dairy Queens in Cochran and Douglasville, and 2 Edible Arrangements in McDonough and Griffin). I’m proud of what I have been able to accomplish and look forward to all the growth that’s ahead of me. Biggest current challenge: The biggest roadblock I’ve noticed so far is how to retain employees. With the economy twisting and minimum wage rising, you have to create incentives to entice employees to stay. My team has created a bonus structure and reward system that has worked relatively well. For example, if any guest compliments an employee’s customer service, my team marks it down and at the end of the month the employee with the most compliments receives a $150 to $200 Visa gift card. Next big goal: My short-term goal is to develop more Captain D’s restaurants. I would like to open one Captain D’s location a year for the next few years. As for my long-term goal, I would like to diversify my portfolio and enter the hotel industry. First turning point in your career: Being a multi-concept operator, it can sometimes be a balancing act to make sure your current businesses are operating successfully, but still have room for growth. The biggest turning point for

me was realizing how much support I had to expand. From the moment I decided to franchise with Captain D’s, I was introduced to corporate members who did anything and everything they could to help me succeed. From the construction phase to opening day and beyond, all of that guidance helps push my businesses forward. Best business decision: Deciding to fully invest in franchising. It’s had challenges, but it’s rewarding. Hardest lesson learned: You have to have patience. Best advice you ever got: Do the right thing and don’t ever cheat anyone. I got this advice from my dad and I carry this with me still. How do you balance life and work? That’s a hard one. I try to balance my work life between the hours of 7 and 5, but that doesn’t always happen. However, I only work Monday to Friday so I am able to spend time with my family. Guilty pleasure: I love playing golf because it’s relaxing. Most of the time, no one is out there, so you can just enjoy the game and the quiet. Favorite book: I used to read a lot of religious books growing up, but I would say that my favorite is the Quran. Favor ite mov ie: “ The Wedding Ringer” with Kevin Hart is my all-time favorite. This also happens to be the first movie I saw with my wife. What do most people not know about you? Most people, especially my staff, think I’m a very straightforward businessman. However, my family will tell you that I’m very laid back at home and like to have fun. What did you want to be when you grew up? This is

Under 30 – Ali Momin for my staff so they don’t feel burned out and have room to grow. I also want to find more ways for my team to collaborate and experiment. This could be anything from brainstorming ideas on how to fry fish faster or coming up with creative ways to better serve customers.

Ali Momin, 27 President

Company: Mehdi Inc., Kishika LLC No. of units: 2 Captain D’s, 2 Dairy Queen, 2 Edible Arrangements Family: Wife Nabila; we have a baby on the way Years in franchising: 9

actually a funny story. I walked into college thinking I wanted to become a doctor, but that quickly changed. On my first day of biology class, I got up and walked out. I went to my advisor’s office and asked him to change my schedule because there was no way I wanted to do this for a living. Now I’m in franchising and it’s what my path always should have been. Last vacation: Last summer, I went to the Bahamas with my wife and it was an amazingly relaxing vacation. Person you’d most like to have lunch with: Without a doubt, my family. I get to sit down with them every night for dinner, but if I had the time to take lunch breaks I would use that time to catch up with my mom, dad, sister, and wife.

MANAGEMENT

Business philosophy: Take it day by day. Wake up every morning with a smile, thank God, and open the doors. One thing I’m looking to do better: I would like to create a better management program

How close are you to operations? Very close. I know a few owners who can walk into their stores and the employees don’t know who they are. I’m very hands-on and like to be a part of the operations. What is the most important thing you rely on from your franchisor? I believe communication is the biggest key to success. As I mentioned earlier, Captain D’s has done an incredible job of communicating with me from the start and has provided me with all the resources and tools necessary to succeed. How is social media affecting your businesses? Social media is a huge component in my businesses. People are constantly looking at customer reviews, and if you have a bad one it can negatively affect the perception of your brand in the local community. Across all of my brands, we will ask customers to leave reviews. If they show the review, they will be rewarded. At Captain D’s they receive $3 off a combo, at Dairy Queen it’s a free Blizzard, and at Edible Arrangements it’s a free Pineapple Pop. How do you hire and fire? We usually sit down with the employees and let them know what is going wrong so they have an opportunity to fix the issue. If it continues to happen, we thank them for working with us and respectfully part ways. How do you train and retain? All franchisors have a training program that all employees must go through. This works

really well, but we also provide additional post-training support should the employees need any extra help. As for retaining employees, we have a few incentives, including the complimentary gift cards I mentioned earlier. These work great.

UNDER 30

What jobs, skills, and experience have helped you operate a franchise business? College taught me the methodology to operate a franchise business, but the true smarts came from my dad. Having watched him successfully operate his own businesses showed me the do’s and don’ts of the industry at an early age. Also, talking with other business owners in the community has given me some valued insight into how to manage my businesses. What kinds of obstacles did you face in franchising at such a young age? Balancing school, work, and my personal life was the biggest obstacle. I opened the Douglasville Dairy Queen while I was in school, so I had to learn how to manage my time efficiently. You can never give too much time to your business, but I also needed to devote time to my education. How would you describe your generation? I believe half of my generation wants to be their own boss and own a business to give themselves a certain lifestyle and flexibility. The other half is still in the mind-set that solely looks forward to the weekend. Do you see franchising as a stepping-stone or a career for you? This is definitely a career move.

BOTTOM LINE

Annual revenue: Captain D’s brought in about $1.6 million, Dairy Queen about $1.3 million, and Edible Arrangements about $850,000. Multi-Unit Franchisee

2019 goals: This year I am focusing on increasing my revenue 10 percent for each of my businesses. I’m also planning to open an additional Captain D’s restaurant in Georgia, so I will be focused on making that new location a success. As for my portfolio, I would really like to expand this year by franchising with a sandwich concept such as Firehouse or Subway. Growth meter: How do you measure your growth? Through both monetary and operational achievements. This includes improving internal systems, hitting sales goals, etc. Vision meter: Where do you want to be in 5 years? 10 years? I would like to diversify my restaurant portfolio to include additional concepts, as well as enter the hotel industry. Specifically, I would like to grow to have 12 to 15 units open and operating across Captain D’s, Dairy Queen, and Edible Arrangements. How do changes in the economy affect the way you do business? My team and I have had to cut down on some processes. This also means making sure our money is being used in the most efficient way, so we’ve had to look at how to use our budgets most effectively. Experience with private equity, local banks, national banks and other institutions? I normally just work with local banks. They have been very supportive of my endeavors thus far. How are you handling rising employee costs (payroll, minimum wage, healthcare etc.)? Turnover is one of the biggest costs. You don’t want to lose an employee who has been trained, so I try to focus on payroll and making sure everyone is getting paid fairly. 1

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BIGGEST EVER!

Record-setting MUFC keeps the customers satisfied Written By KERRY PIPES & EDDY GOLDBERG

CONFERENCE BY THE NUMBERS Employees

Attendees

250,000+

1,720+

Systemwide revenue

Franchisees

$9 billion+

650+

Exhibitors

Units

200+

14,000

Seeking new brand

75%

ome of the biggest and brightest multi-unit operators in DAY 1, AM: KEYNOTES & GENERAL SESSIONS the country gathered March 24–27 at Caesars Palace in Las As the doors swung open for the first general session, Franchise Vegas for what has become franchising’s must-attend event Update Media CEO Therese Thilgen welcomed the crowd of for multi-unit franchisees: Franchise Update Media’s annual multi-unit operators and industry allies as they packed the room. Multi-Unit Franchising Conference (MUFC). Whether they oper- “We had more than 1,720 registrations for the event this year,” she ated 3 units or 300, they came for the education, the networking said, the largest number in the history of the conference. “There opportunities, and a chance to visit with representatives from are more than 650 franchisees representing almost 500 enterother brands, as well as vendors and suppliers. prises employing more than 250,000 people, and doing more than $9 billion in annual revenue.” And representing more industries PRE-CONFERENCE WARM-UP than at any previous MUFC. Once again, attendees eased into the conference with a scramAdditionally, of those who responded to a questionnaire: ble-style golf tournament at the Arroyo Golf Club in the balmy • 75 percent were seeking new brands in either breezes of Nevada’s high desert. The annual event, followed by food, retail, or service an awards banquet, is attendees’ first chance to network and enjoy some serous fun in the sun before business kicks in the • In the next 12 months they plan to add more next day. Later that evening, attendees flocked to Carmine’s in than 4,000 units Caesars Palace’s Forum Shops for the opening social. The meet• In the next 5 years, they plan to add 14,000 units and-greet offers first-time attendees to meet with Conference • 50% had 1 brand, 18% had 2, and 32% had 3 or more. Advisory Board members over hors d’oeuvres and drinks for the first hour, before the event opens up to franchisees who have previously attended.

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2019 MUFC Conference

Matt Gutmann, ABC News Chief National Correspondent

Jon Taffer, host of TV's Bar Rescue

Next up was 2019 Conference Chair Greg Cutchall, who took the stage to offer his own welcome. In the world of restaurateurs, he is something of a legend in his hometown of Omaha, where he operates multiple Sonics, Domino’s, and First Watch restaurants, along with a few concepts of his own. He thanked last year’s co-chairs, Supercuts franchisees Cheryl and Joe Robinson, for their hard work and dedication. Next up was the first keynote speaker, Chris Wallace, award-winning journalist and host of “Fox News Sunday.” The keynote was sponsored by Inspire Brands. Wallace warmed up the crowd with several jokes about Washington insiders before digging into political subjects including the current administration and the just-released Mueller Report. “Was there collusion by the Trump administration? No,” he said. “Was there obstruction of justice? Perhaps.” He also spoke about what he called “the biggest moment of my career,” when he moderated the final presidential debate between Hillary Clinton and Donald Trump in 2016. Wallace was followed by a high-powered general session panel titled “Open Markets, M&A, and the Impact on Franchisees.” Dunkin’ Brands franchisee Rob Branca facilitated a panel consisting of Omar Simmons, managing partner of Exaltaire Capital Partners and a Planet Fitness franchisee; David Tarantino, senior analyst for restaurants and co-director of research at Baird; Aziz Hashim, managing partner at NRD Capital and former IFA chair; and Steve Romaniello, managing director at Roark Capital Group, also a former IFA chair.

The general consensus among the panel was that the franchise space is still flush with capital and multiples are strong, perhaps too strong at present. “There are some eye-popping valuations out there today,” said Branca. Two major factors driving increased valuations, said Romaniello, are the historically low cost of capital and the high supply of investor money. Also, he said, “There’s a lot more competition for deals right now.” There’s also “a little bit of extra hype right now because new investors don’t get it,” said Simmons. Hashim noted the importance of unit economics. “Good unit economics are essential in today’s market,” he said. However, Tarantino noted, potential outside investors remain more interested in top-line sales than in the business model or unit economics of franchise brands and franchisee organizations. The morning session was followed by two luncheons, one exclusive (i.e., pitch-free) for franchisees, the other for franchisors and exhibitors to meet and mingle. At the franchisee luncheon, Greg Cutchall shared his “$90,000 to $90 Million (The Hard Way)” story to an appreciative crowd. At the franchisor and supplier luncheon the topic was the 5 deal-killers for multi-unit franchisees. DAY 1 PM: BREAKOUT SESSIONS The afternoon kicked off with a set of breakout sessions, with four tracks: Franchisee Growth, Mega Franchisees, Real Estate & Finance, and Service Brands. Topics included Adding New Brands to Your Franchise Portfolio, Growing to 10, 20, 30 Units & Beyond, Advice for Growing Franchisees, Operating Non-Brickand-Mortar Brands, Real Estate Trends & Tips To Find the Best ‘A’ Sites, and more. Multi-Unit Franchisee

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2019 MUFC Conference

Chris Wallace, host of Fox News Sunday

New to the conference this year was a room set aside for oneon-one meetings between franchisees and finance and real estate experts to discuss problems and solutions confidentially. The Finance & Real Estate (FIRE) Pavilion was open during the first two days of the conference. The afternoon ended with the Opening Network Reception in the Exhibit Hall, this year filled with more than 200 booths offering franchise opportunities, products, and services. DAY 2 AM: BAR RESCUE, MVPS, ECONOMY Continental breakfast (and coffee!) awaited attendees eager to gear up for the conference’s second full day. Franchise Update Media Co-Founder and Chairman Gary Gardner welcomed attendees to the general session before turning the stage over to the day’s first keynote talk, sponsored by Pronto Insurance. If anyone needed more than coffee to wake them up, Jon Taffer was their guy. Entrepreneur, bestselling author, and host of TV’s “Bar Rescue” show, Taffer kicked off the day with a bang. He began by explaining how he uses anger (his) as a tool to wake people up to see—and change—their behavior to achieve the results they want. He said the TV show was not so much about bar and restaurant rescue as it was about people rescue. One lesson he learned from the show was that the common denominator of failure was excuses, the inability of people to own their actions, accept responsibility, and move forward. “Accountability is #1 with me.” Another was about speed to make changes. “None of you do it as fast as you can,” he said. “Waiting is what hurts you. Plan for it. Go forward.”

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He also introduced his idea of Reaction Management. “The reaction is your product,” he said. Chefs are not preparing a meal, they’re preparing a reaction, he said. If there’s no reaction when the meal is placed in front of a customer, it failed. “The ones who create the greatest reactions win. Turn your company into a sales and reaction machine,” he exhorted the crowd. Next up was one of the conference’s most anticipated events: the announcement of this year’s MVP (Most Valuable Performer) Award winners—franchisees who are leaders in their organizations, their brands, and their communities. The presentation was sponsored again this year by American Family Care. See page 10 for profiles of this year’s winners. The awards were followed by the annual “State of the Industry” presentation by Frandata CEO Darrell Johnson. Overall, his presentation offered a cautious optimism, though he mentioned slowing global economies (China and Europe) and flat consumer demand. For 2019–2020, he said, the “Goldilocks era,” where business conditions are just right, will continue a while longer. “The low cost of capital is driving three franchise trends right now: brand diversification for multi-unit operators, an increasing focus on operator efficiency, and mergers and acquisitions of brands and franchisees.” Still, he said, “The air is going out of this balloon.” On another front, he addressed the role of franchising in solving the problem of skilled vs. unskilled labor in this country. He challenged the marketing and advertising people in the room to reframe and reassess what franchising is, and its role in the nation’s economy.

2019 MUFC Conference “We have allowed the brand of franchising to be defined by others. Yet you in this room have launched more than 1 million careers,” he said. “We’re already doing the very thing that is missing in employment circles: teaching fundamental skills like teamwork, training, computer literacy, and customer interaction. You are doing exactly the things this economy needs.” The problem, he noted, is getting this message out to the public, to legislators, and to the media in an effective way. DAY 2, AM, PART 2: LABOR & CAVE RESCUE Next up was a timely general session panel called “Attract, Recruit, & Retain in a Tight Labor Market.” Supercuts franchisee Gary Robins moderated a panel consisting of Matt Haller, senior vice president of government relations and public affairs at the IFA; Keith Miller, Subway multi-unit franchisee and former chair of the Coalition of Franchisee Associations; and attorney Michael Lotito, labor counsel to the IFA and co-chair of Littler’s Workplace Policy Institute. Panelists discussed issues ranging from federal issues such as joint employer and overtime rules to state and local regulations affecting employers and employees alike, such as minimum wage. “Some decent things are happening,” said Lotito, who expects a favorable outcome this fall regarding joint employer rules. He also expects a “pretty good” ruling on overtime pay and hours. “The real challenge is how do we keep them happening? How do we write a rule that will be sustained if Trump is not re-elected?” Miller, whose Subway stores are in California, raised a cautionary flag about ongoing minimum wage hikes. He said wages are up $30,000 per year for his three stores. “And I’m just a little guy. It affects our business model. And when we raise prices, franchisors get a bigger raise than we do,” he said. “We have to concentrate on efficiencies. We must do the same with fewer labor hours.” Eventually, he said, falling unit margins are not sustainable. And, he added, if some larger franchisees fall below their loan covenants, it could spell danger for their franchise systems. After this sobering discussion, attendees were treated to the inspiring story of what’s come to be known as the Thai Cave Rescue. ABC News Chief National Correspondent Matt Gutman told the riveting story of the rescue of 12 Thai boys and their soccer team coach trapped in a cave complex in Thailand for 18 days. Gutman, who was on the scene when a rescue seemed bleak, if not impossible, told a story of human spirit, survival, and inspiration. His on-the-scene knowledge and photos of the ordeal had attendees on the edges of their seats until it was past time to break for lunch. (And yes, his book on the rescue came out in November.) Lunch was served in the Exhibit Hall, offering franchisees another opportunity to rub elbows and talk shop with their peers, and to visit booths staffed by brands seeking new franchisees and suppliers seeking new clients. The afternoon was filled with breakout sessions on four tracks: People, Innovation & Disruption, Real Estate & Finance, and Operations & Profitability. Each track featured 2 or 3 “mini-sessions.” Topics included Develop Great Managers, Labor Reduction Ideas Using Technology, Attract & Recruit the Best Talent for Your Locations, Lease Negotiations & Renegotiations, and New Ideas for Online Ordering & Payment.

Greg Vojnovich, CDO, Inspire Brands

The Exhibit Hall opened its doors one more time for a closing networking reception and a final chance to check out new brands, suppliers, and connect with fellow franchisees. DAY 3: TIME FOR ACTION! The closing morning session, Build Your Franchisee Action Plan for Legislative Advocacy, focused on how franchisees can get involved in protecting and promoting the franchise business model. Franchisees were urged to get involved in educating their elected officials and shaping future legislation on the local, regional, state, and federal levels. Erica Farage, vice president of political affairs and grassroots advocacy at the IFA, facilitated a panel consisting of Mara Fortin, a Nothing Bundt Cakes franchisee; Tamra Kennedy, a Taco John’s franchisee who serves on the IFA board, is vice chair of the Franchisee Forum, a member of the Franchise Relations Committee, and Minnesota’s state captain for the Franchise Action Network (FAN); and Tom Baber, an IHOP and Money Mailer franchisee who serves on the IFA’s Franchise Relations Committee and Franchisee Forum. Each panelist shared their own stories of how they became so involved and how they learned to participate in local and national politics, offering advice on how other franchisees could—and should—get involved. The discussion made its way from NLRB joint employer rules and frivolous ADA lawsuits to the critical labor shortage and rising minimum wages. The 2020 Multi-Unit Franchising Conference will be held April 13–16 at Caesars Palace in Las Vegas. Find more at www.multiunitfranchisingconference.com. 1 Multi-Unit Franchisee

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AIN’T OPENINGS

GRAND! Tips from 6 franchisees on making them sing Written By SARA WYKES

othing beats the anticipation and excitement of a grand opening. It begins as soon as neighbors spot construction activity in an empty lot, or peek inside a vacant storefront to see what’s coming. Speculation builds until the first signs go up announcing the name of the new business, and interest escalates further with the announcement of an opening date. When the doors finally open, momentum that’s been building over months has customers and local businesses eager to come in to meet the new kid on the block. Among the critical factors in a successful grand opening are knowing how much time is needed to build that momentum; where to turn for effective ideas; and what to include and what to avoid. We asked six franchisees with a track record of successful grand opening to share some of their most recent experiences—and, of course, their key takeaways.

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April 13-16, 2020 | Caesars, Las Vegas

Grand Openings

TIMING IS EVERYTHING Matt Rusconi recently opened the first freestanding location of Artichoke Basille’s Pizza, with seating for 35, in Newington, Connecticut. It’s the brand’s first location in the state and the first of five he has signed on to develop in Connecticut. Rusconi, who has completed more than 20 grand openings, has learned that success always starts with collaboration. “You spitball around ideas,” he says. Some may come from the franchisor, others from franchisees. Keeping things local is always a good idea, he says. Partnering with a community organization like a local high school, sports team, hospital, or charitable group for a soft opening event is a proven, time-tested tactic. “The best partner you will ever have is the community you’re in,” says Rusconi. And it’s a great way to meet your new neighbors and future customers. “You get to see who you will be serving right off the bat, contribute, and feel very lucky to have a platform to give back.” Involving the press always is a good idea, ensuring that your messaging reaches the larger community. The time of year also can influence the success of a store’s first day. “Opening around Thanksgiving, for instance, is difficult,” he says. “Everybody is so busy. People are much more likely to come in during the slowdown after the holidays when your opening can give them something exciting and new.” Rusconi learned that lesson the hard way when he opened a location in a college town right before the Thanksgiving holidays. It did not go well. For his Newington store opening, the time of year provided a natural tie-in. “We opened on Valentine’s Day and came up with a sweetheart special—two slices and two sodas for $9. It worked!” Figuring out when to do what may be determined by a brand’s policies. But ultimately, says Rusconi, “You pick a day, hold your breath, and cross your fingers. This year, we had a snowstorm on the Tuesday before our soft opening Wednesday.” Another important lesson he’s learned over the years is to build in some extra time before an opening. “Getting right down to the wire is not fun,” he says. “I’ve learned over the years that it’s good to give yourself an extra week or two. It pays dividends in the long term.” After the dust settles from the grand opening excitement, he says, “Make sure you stay relevant.” Working with your franchisor’s marketing team and field support staff should make that easier. WHO DOESN’T LIKE FREE? Halle Waggoner, an Amazing Lash franchisee in Cypress, Texas, has been on a fast track for grand openings since October 2016. This May, she will have racked up her sixth, so has had multiple shots at working out the kinks. With Amazing Lash, her grand opening plan became a little bit franchisor, a little bit her. “They say, ‘Here’s the budget for you to spend, and here’s the list of some grand opening activities.’ But making the party happen is what I do,” says Waggoner. She has her surefire tools: local advertising in magazines and small newspapers; social media postings, including Facebook Live; and working with local radio stations on grand opening promotions.

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“We also go to anyone who is around us to ask if they want to be part of our grand opening in some way. We give donations and we do giveaways, like ‘Walk up and spin to win a free set of lashes.’ Free lashes are the most popular. Who doesn’t like free?” Waggoner also has learned that her franchise is suited to a multiplicity of extras for grand opening pizazz. For example, she can station someone special in each lash room: a chiropractor, a masseuse, a henna artist, a face painter, a balloon artist. At one opening, she had a student chef out front making sushi rolls. Once she even served champagne. And, depending on the time of year, she’ll throw in something seasonal. For a grand opening near Christmas, Santa Claus was on hand. As for when to begin preparing for a grand opening, she says, “I might have figured that out after six grand openings—90 days is perfect.” SPREADING THE EXCITEMENT Judy Dredge is a Canadian franchisee of 9Round Fitness, a kickboxing concept that sends clients through workout stations in a 30-minute routine. Nearly 800 9Round locations are open in 42 U.S. states and in 17 countries in Europe, the U.K., Asia, and Middle East. Dredge credits 9Round’s Thao Tinsley with helping her design grand opening and open house strategies, tactics, and ideas. “She was my 9Round onboarding business coach, and an amazing one at that!,” says Dredge. Tinsley also guided her with the timing of the grand opening process. “That made our planning so much easier and less stressful,” says Dredge. In addition, 9Round’s digital agency, On Ideas, helped run her pre-sale campaign. When a large number of pre-sale members signed up before one opening, Dredge decided to do three days of open houses so the event wouldn’t be so crowded. “In the open houses we had members pick up their gloves, wraps, and purchase heart rate monitors. They also had a chance to learn how to wrap their hands and see what we were all about,” she says. She also delayed the official grand opening ceremony for a month. “That month open gave us a chance to get our name out

Grand Openings

in the community and get more interaction for the grand opening and ribbon-cutting event,” she says. To attract additional interest, she supplied prizes and refreshments. “People love free stuff, so the more we gave away, the more people became interested and engaged in who we were. We did a lot of social media posts for giveaways leading up to our opening, and that was a huge hit! The engagement on social media was a big thing for us.” Another plus for Dredge was the brand itself. “We were bringing something new to our community, and so many people were wondering who and what we were that the most successful element was to be real, positive, and excited for what we were about to offer,” Dredge says.

“There is no other 9Round near our community. Most people had no idea what we were going to offer, and we really didn’t know everything we had to offer. That meant we relied on the help of our onboarding coach and then ongoing coach to answer all my questions to make sure our members knew how amazing this was going to be.” As for timing, Dredge says she won’t make even the smallest promise about when she thinks her next opening will happen. “That was the most stressful part,” she says. “Our contractors were behind and I had to push our opening two weeks. Although most people understood the situation, it was stressful for me because I had told them a date!”

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ISSUE 2, 2019

Grand Openings

A LITTLE BIT OF EVERYTHING When we spoke with Josh Willingham, he was planning an April opening for his second Vitality Bowls cafe in Frisco, Texas, less than two years after he launched his first there. For grand opening ideas, he turned to Uriah Blum, vice president of business operations at the franchisor, Stephanie Boone, his field representative, and to a few business owners he knew. He ended up deploying a long list of pre-opening tactics. “We did mailers, marketing, visiting businesses in the same shopping centers or shopping centers across the street,” says Willingham. “We did a lot of flagging of cars with flyers, got involved with the local chamber of commerce, local events, and had aid from our public relations firm.” The opening featured a ribbon-cutting ceremony with the chamber, which Willingham says he will do again because it brought in a lot of people. He also offered discounts. The first 50 bowls were free, and then it was buy one get another for half price the rest of the day, which was very successful. “The line was out the door for the 50 free bowls. We had giveaways as well. And my wife and I made a point to meet as many customers as possible.” Once again, “free” had great appeal. “There was a great reaction to free bowls and a very good reaction to ‘Buy one get one 50% off,’” he says. “The reaction to meeting the owners was also positive. We got to tell people our journey to opening Vitality Bowls.” Next time, says Willingham, “We are going to try to make it even more of an event. We might bring in a face painter or a balloon artist or maybe even a live band to drive traffic.” TEAMWORK WORKS In March 2018, Allen Pinero opened the first franchised Blink Fitness location. Blink had already opened 70 corporate locations. The 16,000-sq.ft. club, in Lindenhurst, New York, is the first of six New York and New Jersey area clubs Pinero will co-own. He began with grand opening advice from corporate about the best ways to roll out the event, including the importance of training his employees on Blink Fitness standards. He got help with grand opening supplies, such as the ribbon and scissors, from marketing and communications agency The Brand Amp. To complete the team, Pinero says, “Our internal marketing managers took control of hiring a photographer, DJ, decorations, balloon stands, promotional materials, preparing speeches, and time management.” To give the grand opening a good, strong connection to the community, he says, “For our pre-sale, we invited the Lindenhurst Chamber of Commerce, local town officials, nearby business owners, local PTA representatives, and nonprofit organizations that we worked with,” he says. “We also wanted to make it an inclusive celebration for the town. We wanted to show the impact we would have in changing people’s lives in the community.” He had a nice long lead time, too. “Pre-sale efforts lasted about four months, with about two months of preparation for the grand opening event itself. We made sure our gym model reflected the standards Blink Fitness required by looking into

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ISSUE 2, 2019

proper positioning for retail items, equipment, and a reliably full supply of stock. At two months before the event, we contacted town officials and remained in contact with other local partners as we got closer to the event date.” This pre-sale build-up created relationships that boosted the popularity of the opening event, says Pinero. It all worked out quite well, he says: people posed for photos, a local paper printed a photo of the ribbon-cutting ceremony, and the face-to-face interaction was overwhelmingly positive. “We were very excited by the warm reception we received from the community,” Pinero says. “It gave our team a chance to interact with corporate employees and our new members.” The staff handed out promotional gifts to members from the gym’s fitness equipment vendors, which Pinero says was a great way to kick off the relationship. One item was a Long Island Blink Fitness t-shirt made just for members. Pinero is already thinking about what he might add to his next pre-sale and grand opening event. “I might consider reaching out to a local radio station and asking them to come down to the event to create more hype. I would like to invite local businesses to set up tables and promote their products and services in-house so we can draw relationships from each other.” THE BEST-LAID PLANS… FirstLight Home Care franchisees Bruce Lundeen and Bryan Carto led the brand’s expansion into greater Genesee County, Michigan, last November. Lundeen has the advantage of a background in marketing, PR, and admissions earned after nearly 30 years of working at a local college. Several family members also worked in the healthcare field, including his father, who was a physician. When it came time for their opening, the partners tapped into their own marketing know-how, with media outreach assistance from FirstLight. Their to-do list included a postcard design, an invitation list, and the use of social organizations like the local Council on Aging and chamber of commerce. One hiccup: the opening was held at a local bar. Despite two and a half months to prepare, construction was not completed by the grand opening date. Nonetheless, the event attracted 75 to 100 people, helped by the chamber’s enthusiastic embrace of the opening. “There was a lot of excitement,” says Lundeen. “We raffled off a TV and other prizes, and that was a big hit.” Lundeen and Carto are hoping their next grand opening will be different in one major respect. “While the bar was a fun atmosphere for the event, we really wish the construction had been complete on the office so we could have had the event there,” says Lundeen. “It would have felt more like a welcoming of the actual new business.” 1

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ISSUE 2, 2019

Customer Service

Be a Hero When something goes wrong, make it right! Written By JOHN DIJULIUS

One of the best benefits of building strong relationships with customers comes when you inevitably screw up. Customers are so much more forgiving and understanding of mistakes if you have built a relationship. When something doesn’t go right, you have a golden opportunity to demonstrate to your customers that you pose zero risk to them. What does zero risk look like? As a customer, it means you are sure that when you deal with a company and something goes wrong, they will make it right. When a problem arises with a customer, it gives us the opportunity to be a hero and own that customer for life. I have always had a saying in my businesses, “If it gets to me, it is free.” This was meant to make sure all my employees, including those on the front line, take care of anything that arises. No one wants to contact the GM or call the owner. If they do, clearly the situation has gotten out of hand. I also have a saying: “You will never get in trouble for something you do, only for something you don’t do.” Meaning: Just take care of the customer. Be naive instead of paranoid. Trust the customer. One of my favorite all-time customer service recovery stories happened several years ago when I was involved day-to-day in my first business, John Robert’s Spa. A client called me to tell me one of my hairdressers had gotten hair color on her blazer. I apologized and offered to pay to get her blazer cleaned. The client said it could not be cleaned; the stain was permanent. I again apologized and offered to replace the blazer, but she said it was part of an outfit no longer available, and the outfit was worthless now that the blazer was ruined. I told her I would put a check in the mail for the cost of the outfit. She was stunned and told me it cost $250 and asked if I wanted to see the blazer or receipt. I told her neither was necessary, and she seemed extremely happy. After we hung up, I looked up her history in our computer system and found that she had been coming to

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our salon about seven times a year for the last several years. I also noticed she had never referred anyone. So I sent her the check and included a John Robert’s gift certificate for the trouble and inconvenience that we had caused. About a year later, I was curious to see if we had retained her. When I looked her up, I saw that she was still coming in regularly. However, I was shocked to see she had also referred 18 new customers that year. What kind of advertising could I buy for $250 that would get me 18 new customers? I told all my stylists to start spilling color on everyone’s clothes! “While they may complain about the service defect, they will rave at how well we handled it.” CUSTOMERS ARE IRRATIONAL It is rational for customers to be irrational. When emotions are involved, logic disappears. Emotions outpower and manipulate our reasoning and lead to action. It’s no accident that customer experience can trigger a wide array of emotions that can have a great influence on repeat business. Sometimes we don’t know why we like going to a certain place, nevertheless something drives us to stop there. We may try to find a logical excuse, perhaps pointing to convenience or some other factor. But the truth is, the business delivered a unique experience that left a positive subconscious impression. On the other hand, negative thoughts about a brand are often caused by a poor experience that left a permanent blot in our memory.

ISSUE 2, 2019

It can be confusing and frustrating for employees when customers react unreasonably to something that seems minor. However, when a customer has expectations—not unrealistic expectations, but simple ones about what it will be like to do business with you—and the business fails to deliver, the customer can get emotional. Even though it may have been the first time the company messed up, the customer may still react irrationally. Daniel Kahneman, a psychology professor at Princeton, is a Nobel Prize winner for his research on how we behave emotionally first, rationally second. As human beings, our emotions are the most powerful factor in how we respond and interact with others. For that reason, it is critical that dealing with customer emotions—especially those of dissatisfied customers—is part of service-recovery training for employees. Once employees understand there is a good probability of a customer’s reacting emotionally instead of rationally, they won’t take it personally and are better able to make a brilliant comeback. The watchword for employees should be QTIP—Quit Taking It Personally. 1 John R. DiJulius III, author of The Customer Service Revolution, is president of The DiJulius Group, a customer service consulting firm that works with companies including Starbucks, Chick-fil-A, RitzCarlton, Nestle, PwC, Lexus, and many more. Contact him at 216-839-1430 or info@thedijuliusgroup.com.

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Investment Insights

Investing in 2019

7 lessons for volatile times Written By CAROL SCHLEIF

“The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.” —Thomas Sowell, American economist

Late 2018 and early 2019 have been a more challenging experience for asset market investors than most of the past decade has been, given wide intra-day swings. The worst December in 87 years was followed in rapid order by the best January in nearly three decades, leaving many participants with a bad case of whiplash. The popular press credited economic and political issues as the root cause of the volatility. However, we hesitate to ascribe too much fundamental forethought to the trading activity during the final weeks of December and suspect a number of non-fundamental factors contributed to the whipsaw action. These include algorithmic trading, year-end tax loss harvesting, and a dearth of traditional liquidity sources. While the economy and the markets powered strongly through much of 2018—including several notable technology stocks that briefly sported $1 trillion market caps in early fall—the market gains were all erased in a heart-wrenching, hand-wringing final few weeks. As 2019 has begun, it seems to us that domestic markets have settled into a fairly constructive mind-set. Acute concerns over trade tensions and the government shutdown have cooled (for the moment) as headlines alluding to developments in key areas seem to be greeted with optimism, or at least not with disdain. Domestic markets have regained much of the ground lost late last year, while traditional indicators of either excessive optimism (ebullient investor or business sentiment, elevated valuations, overpriced acquisitions, rampant IPOs) or excessive fright are notably absent.

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While markets have stabilized and most economic statistics are registering readings supportive of a reasonably healthy economy, both uptrends are long in the tooth. We remain overweight in equities and growth-biased in our positioning, though watchful of a variety of indicators that might hint at the next downturn’s imminence. Given this combination of factors, it may be an opportune time to pause and reflect upon how the intensity of late 2018 affected your comfort with how your portfolio is constructed. Toward this end, we offer up a few of the lessons that can be gleaned from what just occurred. Lesson 1: Volatility is normal. Although it is exceedingly uncomfortable, especially when we haven’t witnessed it in a while. As reported in Bloomberg Markets, the first 10 months of 2017 had 8 days with a 1% gain or loss, while the same period in 2018 had 48 such days! If you were left feeling nervous, sleepless, and overly concerned, it might be time to reassess your public/private or stock/bond mixes. Lesson 2: Stay focused on the fundamentals. Short-term volatility can be (and, more often than not, is) caused by structural and emotional issues rather than thoughtful reactions to long-term fundamental changes. It’s tough to turn the U.S. or global economies on a dime. The trajectory of the U.S. economy has basically been upward since its founding, and stock markets tend to represent the best and brightest of this economic trajectory over the very long pull. Lesson 3: Market timing typically doesn’t work. Market timing is difficult because it requires precision on at least two decisions: when to get out and when to get back in. A third decision—where to park proceeds—further complicates the issue, as do trading costs and potential taxes. Having a long-term allocation that feels durable no matter what the environment, and then using volatility to trim overvalued assets and round up on undervalued ones can help straddle a variety of potential outcomes. Lesson 4: Ensure that your spend rate is sustainable. And ideally, that larger future liabilities are decked against specific assets (e.g., bonds/cash). Knowing that a bulk of your annual spending needs are provided for by dividend and interest payments or against a pool of short-term fixed income can make swings in the more growth-oriented parts of your portfolio more tolerable.

ISSUE 2, 2019

Lesson 5: Focus on what you can control. That is, taxes, turnover, costs, and allocation, versus what you can’t (headlines). If markets and economies are upwardly biased long term and you have patience, participation should have the upper hand. Lesson 6: Dollar cost averaging can help you get “unstuck.” The funding of new accounts, or dealing with the need to reduce large concentrations in specific sectors or stocks, can prompt one to freeze with inaction for fear of making a “wrong” decision, especially around timing. The fear of regret is a powerful motivator. One way to address this is to “schedule” dollar cost averaging in or out, although this strategy does not assure a profit or protect against a loss in declining markets. Lesson 7: Short-term markets can be exceedingly emotional. Greed and fear aren’t the only two emotions that drive markets. As emotional turning points are neared, volume tends to get heavy, and investor emotions can run excessively complacent, greedy, or fearful. Fundamentals get tossed and our hardwired “fight or flight” responses tend to kick in. It’s vital to remember at these points, though, that we are the only creature with the capability to insert a “pause” between stimulus and response. In that pause, it’s helpful to reassess your investment objectives, understand why you are investing in the first place, and what you want your funds to accomplish over the long pull. 1 Carol Schleif, CFA, is deputy chief investment officer at Abbot Downing, which provides products and services through Wells Fargo Bank and its affiliates and subsidiaries. She welcomes questions and comments at carol.schleif@abbotdowning.com.

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Finance

Territory Redux?

Delayed disclosure harms buyers and sellers Written By ROD BRISTOL

In franchising, disclosure is required. Franchisors provide prospective franchisees with an annually updated Franchise Disclosure Document (FDD), which gives them information regarding history, lawsuits, management, financial performance, etc. However, there are other areas where franchisors are not as forthright. RESALE TERRITORY REDUCTION It is a practice among mature franchisors to reduce the territory of a franchisee who is selling. This is done in a variety of ways, based on how territories are created by the network. These include reducing the number of ZIP codes in a protected territory, reducing the number of counties the franchisee can serve, reducing the number of businesses included in a protected territory, or any other method that specifically relates to how territories are allocated. This practice allows the mature franchisor to continue creating new territories to sell to new franchisees, as well as continuing to resell old territories. At one conference I attended, the running joke was about a franchisor that sells about 40 new territories a year, year after year, and always has about 400 to sell as a result of resale territory reduction. The challenge for a new franchisee buying a resale is when this reduced territory information is disclosed in the purchasing process. In some networks, disclosure of the reduced territory is delayed and not provided until the buyer signs the franchise agreement and assumes ownership of their new business. Unfortunately, the buyer had not received this information before preparing their financial projections and seeking financing for their new business. So the new franchisee prepares a loan proposal based on financial statements, typically from the past 3 years based on the old territory. However, the old

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territory was larger than the new one the franchisee is acquiring—invalidating the financial information used to make the loan proposal for the new business. EFFECT ON THE SELLER The price you’ve established for your company usually is based on a multiple of your EBITDA for the past 3 years, based on the same—now invalid—financials. If you are considering selling, dig out your franchise agreement and look for the clause, typically in the back, that gives your franchisor the right to reduce your territory at resale. You probably didn’t notice or think about it when you were signing up, but it could be an issue going forward with your selling plans. EFFECT ON THE LENDER If you are a lender financing resale transactions, compare the description of the old territory with the description of the new territory being acquired to check that they are the same. If they are not, confirm that information with the new franchisee and review the loan package to be sure that the territory being acquired will actually create the financial results reflected in the historic financial statements. If you made a loan to a new resale franchisee and that business is inexplicably struggling, check the old and new territory maps as part of your special credits review. SELLER FINANCING ISSUES If you are a multi-unit owner planning to sell and in the position of becoming part ISSUE 2, 2019

of the financing package by carrying back a note, it is critically important that you understand any changes in the territory your new owner is acquiring. You built your success on the territory you serve. If that territory is to be changed and reduced, your new owner will have a greater challenge. It is in your best interest to know as soon as possible in the proposed sale if your franchisor is planning a territory reduction as part of the transaction. One red flag in the process is if your franchisor requires you to not discuss your territory with any new owner prospect. Typically, this will mean that a territory reduction is planned and that your franchisor will control the timing of the disclosure. If this occurs, be proactive with your franchisor to learn of their intentions regarding a territory reduction and, more important, when they intend to disclose that reduction to prospective buyers. If that disclosure comes after financing is secured and you are carrying a note to help finance the deal, you could be in trouble. 1 Rod Bristol is the director of business development and a presenter at Profit Soup, a financial education organization specializing in franchised companies. He can be reached at 206-427-5333 or at rod.bristol@profitsoup.com.

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