Big Operator, Bigger Heart: Family, Philanthropy, Diversity, and Drive

Tony Lutfi, who immigrated to the United States from Lebanon, is one of the most successful QSR franchisees in the country, rapidly growing his five food brands to market domination and record revenues.

Lutfi, who first ventured into franchise ownership in the early 1990s as a franchisee of Arby’s and Long John Silver’s in Northern California, now owns a whopping 130-plus restaurants in California, Nevada, Arizona, Texas, and Missouri.

No one-trick pony, in 2011 began diversifying his portfolio beyond food, and just 3 years later operates a total of 29 Sears retail stores: 17 Sears Home Appliance Showrooms, 3 Sears Appliance & Hardware stores, and 9 Sears Outlet stores.

His MarLu Investment Group was able to accomplish such rapid growth across brands because, he says, “We keep the same focus on culture that has kept us in business and away from trouble.” Lutfi’s culture promotes teamwork and cross-functionality, and a sense of ownership for the store managers. “This has been the driving factor behind our cost controls and the real engine for our growth,” he says. “No organization can survive without great unit managers, especially in a multi-unit, multi-brand, multi-state setting.”

A family man and philanthropist, Lutfi, who has added more than 100 units in the past 5 years, is still not done growing his 160-unit organization. He plans to continue moving ahead with each of his brands, and is looking forward to a time when his company will have developed the necessary experience to buy a brand and become a franchisor. “Our biggest challenge as we get larger and more spread out is how to maintain our culture of family atmosphere and enjoy the collaboration that we’ve enjoyed for so many years.”

Q&A

Name: Tony Lutfi
Title: CEO, President, MarLu Investment Group, Elk Grove, Calif
. No. of units: Arby’s, 53; Church’s Chicken, 47; Jack in the Box, 21; Little Caesars, 5 (plus 12 more this quarter); Sizzler, 5; Sears Home Appliance Showroom, 17; Sears Outlet 9; Sears Appliance & Hardware, 3 (and managing 13 Sears locations for another franchisee)
Age: 54
Family: Married for 30 years to Anna; 3 children, Metri, Stephen, and Ramsey; twin grandchildren,d Beckham and Mya
Years in franchising: 21
Years in current position: 21

PERSONAL

Formative influences/events:
I have been fortunate enough to have been mentored by some of the very best in the business, but my parents and older siblings deserve the credit for their influence and confidence in me.

Key accomplishments:
Being happily married for 30 years with a wonderful family.

Work week:
Six days. My day starts at 6 a.m. and ends at 7 p.m. I travel 10 to 12 days a month.

What are you reading?
Trade publications.

Best advice you ever got:
When you find yourself in a hole, stop digging!

What’s your passion in business?
I love and appreciate our employees and feel privileged that they allow us to be part of their lives. Our employees become an extension of our family, and watching them achieve and grow is extremely rewarding.

MANAGEMENT

Business philosophy:
Under promise and over deliver repeatedly.

Management method or style:
Tell the truth and encourage others in the company to do the same.

Greatest challenge:
It is difficult for me to give up on people, so I am often too slow to fire.

How do others describe you?
Truthful and caring as a human being, but hard-working and committed as a businessman.

How do you hire and fire, train and retain?
We are committed to promoting from within and have had great success in maintaining minimum turnover because of it. I was given opportunities to grow by others who mentored me, and I wish to do the same for the very best of our team members. Retaining people is easy for us because we are respectful and appreciative of our extended family members. Best hiring is when someone is recommended by our best employees.

BOTTOM LINE

Annual revenue:
Prefer not to say.

2014 goals:
$240 million.

Growth meter: How do you measure your growth?
By revenue dollars, but also how we affect the lives of our employees for the better.

Vision meter: Where do you want to be in 5 years? 10 years?
We certainly wish to grow with each of the brands, but we hope that we will have developed the necessary experience to buy a brand and become a franchisor. We also wish to expand our commercial real estate portfolio.

What are you doing to take care of your employees?
I have been fortunate to have had the best employers during my career who have taken the time to mentor me and teach me along the way. Several of our past employees have moved into ownership and a couple of them have had major successes in our space. I believe that an employer can best take care of employees by providing for growth opportunities and mentoring them to overcome fears and challenges so they’re prepared for their own story to be written.

What kind of exit strategy do you have in place?
We are most focused on teaching the next generation to care for and grow our organization. I really do not think of it as an exit strategy since it is a family business and our obligation is to protect it for future generations.