Brands To Believe In: Going Long with Popeyes and Captain D's

Brands To Believe In: Going Long with Popeyes and Captain D's

Numbers and research notwithstanding, veteran franchisee Brian Smith chooses his brands using his gut instincts. "I like to go with things I believe in and know I can sell," says the Arkansas family man.

That's why it wouldn't be surprising to find the jovial Smith on any given day attired in his Mossy Oak camouflage attire while he chows down on at Captain D's or at Popeyes Louisiana Kitchen in his hometown of Springdale, Ark. Smith is an avid outdoorsman and hunter and longtime fan of Mossy Oak camouflage so when the company began to market specializing in selling farm hunting land and other rural property, he got on board in 2008.

"I didn't even have to clean out my closet because I've always worn Mossy Oak. I had confidence in them, and I had bought and sold farms my whole career," Smith recalls. "Early on, I bought a 10-acre property for $6,000 and sold it for $14,000, which enabled me to buy my first business." Today he has 11 Mossy Oak Properties offices spread across Missouri, Kansas, and Oklahoma.

He also threw in his lot with Popeyes and Captain D's because he loves the products and believes in the brands. It's no accident that his first Popeyes and his first Captain D's were built in his hometown of Springdale, where Smith's neighbors are the Duggars of reality TV fame.

In 1990, he and a friend were introduced to franchising when they bought a Subway. "Our franchise number was 1252--that's how early in the game we were with them. There were only six in our state then, so we scraped the money together to buy one in Little Rock. We didn't know how we'd build it out, but I have a philosophy that I use all the brains I have and borrow as much as I can, so we finally got it open," Smith says. "I see being a franchisee as owning part of a consumer's mind. It's a path to quick growth."

At one point, Smith and his partner owned 12 Subways. They sold them off gradually, wrapping up in 2002, and signing an area development agreement with Popeyes.

Again, his gut had come into play. "When we opened a Subway in Monticello, Arkansas, there was a Popeyes next door. The first time I ate there, I knew right then that I could sell this. The was phenomenal. It's addictive," says Smith.

Smith came upon his second brand by virtue of a member of the Captain D's sales franchise team who "kept bugging" him about it. "I got so tired of her calling that I said I'd have a look at the brand. We didn't have one close by so we went out in February 2015 to meet the Captain D's folks in Nashville," he recalls.

"I'd not had their food in years, but I went down based on our research, including the fact that Captain D's has been around since 1969 and we wanted to go with an established franchise for a second restaurant brand," he says. "I learned that Phil Greifeld had re-invented the brand in a way that was absolutely amazing. We loved the new grilled platform and the batter-dipped fish. Great product, great new building look, great leadership--and I was blown away by the quality of the food for the price and amount of food."

Having come near the end of his current Popeyes' contract (he'll be finished with new builds in about 18 months), Smith said he knew Captain D's was a great way to "dilute risk, grow in some of the markets we're already in, and generate revenue." His first Captain D's opened in Arkansas in December 2015, and another is under Smith's contract calls for a total of 50 Captain D's restaurants by 2026.

In between acquiring and building Popeyes and Captain D's franchises, Smith and his company became involved with Mossy Oak. The commission-based franchise requires little overhead and is a great, well-known brand, he says. "My thought was that the worse the world becomes, the more people will want to go into the country and buy their own piece of heaven on earth. Mossy Oak has done a great job of leveraging a brand to grow a new business model. We love it."

That love is evident in Smith's enjoyment of his farm in Missouri: a retreat where he and his family regularly host hunting and fishing weekends. The fits in just fine with Popeyes and Captain D's, where the Smith family eats regularly. "We're our own best customers," he says.


Name: Brian Davis Smith
Title: CEO
Company: SmitCo Eateries & SmitCo D's
No. of units: 11 Popeyes Louisiana Kitchen (2 more in development); 1 Captain D's (plus 1 in and a contract for 48 more); 11 Mossy Oak Properties (Missouri, Kansas, Oklahoma)
Age: 48
Family: Wife Debra, children Bo, Ashton, Josie Kate, Jon Davis,
Years in franchising: 26
Years in current position: 26


First job:
Golf course greenskeeper for three summers when I was 17, 18, and 19.

Formative influences/events:
A very easy question: Without a doubt, it was meeting the Lord on March 13, 1997, and becoming a believer in Jesus Christ.

Key accomplishments:
1994 Subway Franchisee of the Year and being recently elected to the President's Advisory Council for Captain D's.

Biggest current challenge:
Land and construction costs without a doubt.

Next big goal:
To grow the Captain D's brand in a big way: 50 new restaurants by 2026.

First turning point in your career:
When I sold our Subways in the early 2000s to pursue the Popeyes development in Northwest Arkansas.

Best business decision:
Selling the Subways to pursue a Popeyes Louisiana Kitchen development.

Hardest lesson learned:
That the Krystal Burger brand didn't work in Northwest Arkansas.

Work week:
Each day starts with quiet time and K-Love satellite when I am at home. On Tuesday morning all the numbers for the previous week are in, and I analyze them before an Above Store Leader conference call at 9 a.m. I hold construction call meetings at some point each week. I am involved in my local church on Sundays so I am there when I am in town. The rest is a target since my world revolves around growth and operations.

Monday-Friday workouts at Planet Fitness.

Best advice you ever got:
To slow down and enjoy life.

What's your passion in business?
Finding great up-and-coming brands and growing them in new markets.

How do you balance life and work?
I have a farm in Southwest Missouri that is my place of refuge. I carry my family and friends there for special times like Christmas and Thanksgiving and many other events and fun times. We hunt and fish on the farms there. We actually just had our annual rabbit hunt where we harvested 80 rabbits. We had many friends and business associates come for the three-day hunt. Each time I leave the farm, I tell my farm manager Steven, "I am just trying to get back here."

Guilty pleasure:
Lying in my bed at night stuffing my face with right before going to sleep.

Favorite book:
The Bible.

Favorite movie:
"Smokey and the Bandit" or "Scarface."

What do most people not know about you?
I have this fear of spiders and I will not stay in what I call "rat holes" that could have spiders crawling around.

Pet peeve:
Smudges on and door glass.

What did you want to be when you grew up?
I wasn't really sure to be quite honest.

Last vacation:
Moon Palace resort in Cancun, Mexico, in July 2015 with my family.

Person I'd most like to have lunch with:
Mark Cuban of TV's "Shark Tank" fame.


Business philosophy:
Always live by our core values, then focus on building a great brand, great leadership, great sites, and continuous development of all leadership and team members. We strive to grow sales and the brand through great customer experiences and we expect success.

Management method or style:
Surround myself with talented people, pay them well, have high expectations, and inspect what I expect.

Greatest challenge:
Overcoming the lack of great sites, the cost of land, and construction costs.

How do others describe you?
That's a funny question. I would say driven, bold, and high energy.

One thing I'm looking to do better:
Be more patient and manage my time better.

How I give my team room to innovate and experiment:
Because we operate franchise brands, there is only so much innovation and experimentation we can do. But I will say that everything outside of the brand's standard is fair game, and we highly encourage it.

How close are you to operations?
Very close. I am heavily involved in the opening of all new restaurants. I do my best to get in my restaurants to see my people, but the growth of recent years has not allowed me to as much as I would like.

What are the two most important things you rely on from your franchisor?
Innovation and brand growth.

What I need from vendors:
Timely deliveries and quick responses to my needs.

Have you changed your marketing strategy in response to the economy? How?
This is an area that we let the franchisor drive since we send marketing dollars to them. I will say we prefer TV over all others and vote for that vehicle. We have always been committed to supporting our local schools and organizations through food donations. My philosophy has always been, "I can see this community without our brand, but could never see the brand without the community." We give relentlessly. We believe our biggest marketing is our next customer.

How is social media affecting your business?
We don't really have a gauge to tell because we don't have store-level social media. But I will tell you that social media has an effect on our business. I'm glad it's there.

How do you hire and fire?
Everything is based on metrics and measurable expectations. If you don't meet them, you will be successful elsewhere.

How do you train and retain?
I have a chief people officer I work closely with who does nothing but secure talent, assess our current leadership and team, and hold our Above Store Leaders and GMs accountable for developing all of our people. He holds team-building exercises several times a year.

How do you deal with problem employees?
We don't--we cut the "cancer" very quickly. Our expectations are very clear so there isn't much room for excuses. We do attempt to save them from being terminated, but it is not a long process.

Fastest way into my doghouse:
Run poor numbers and not focus on the customer's experience.

Bottom Line

Annual revenue:
$21 million.

2016 goals:
Open 3 Popeyes and at least 2 new Captain D's.

Growth meter: How do you measure your growth?
By our same-store comparable sales.

Vision meter: Where do you want to be in 5 years? 10 years?
In 5 years, I want 20 new Captain D's open, and in 10 years, 50 open. I'd like to have 25 Mossy Oak Properties offices opened by 2026 and have other brands growing.

How is the economy in your region affecting you, your employees, your customers?
We are based in a very strong economic area where most folks enjoy a level of good living.

Are you experiencing economic growth in your market?
Yes. We are based in a thriving area that is the home of Walmart and many other corporations, such as Tyson Foods.

How do changes in the economy affect the way you do business?
Like most successful businesses, we are more careful with each move when times are tight.

How do you forecast for your business?
I wish I had a Harvard degree when it comes to some things such as forecasting. Unfortunately I don't, and I have to rely on my gut instincts a lot when it comes to the markets I am looking to develop a brand in, and in our ability to place great leadership there and find acceptable locations.

What are the best sources for capital expansion?
We have found local banks and money from folks like GE Capital user-friendly for us.

Experience with private equity, local banks, national banks, other institutions? Why/why not?
Private equity most of the time is for larger-unit franchisees so we have no experience there. We have worked with local banks because they know our brands and operational capabilities. We have no experience with national or other institutions.

What are you doing to take care of your employees?
We pay our Captain D's team members $10 an hour, and our Popeyes team members $9 an hour with hopes to increase them to up to $10 by the third quarter. We pay our GMs 10 percent of the profits, which pushes total compensation for GMs at our high-volume restaurant upwards of $80,000, and our Above Store Leaders can earn in excess of $100,000.

How are you handling rising employee costs (payroll, minimum wage, healthcare, etc.)?
We are taking small menu increases coupled with a focus on food costs to help offset the rise in labor costs. The fear of us all is the public paying two to three times what we are selling our food for now to offset the cost of labor or mandates that could be coming soon. It ends up as the end-user's tab for the most part.

How do you reward/recognize top-performing employees?
We recognize a "Team Member of the Period," a quarterly award. It is voted on by their peers and the leadership teams in each restaurant.

What kind of exit strategy do you have in place?
I don't currently have an exit strategy in place. I am still growing the brands. An exit will take care of itself when that time comes.

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