Capital Access: Chirag Patel Is Expanding His $9 Million Operation
Chirag Patel left India to work as an engineer and consultant in America. But it didn't take long to learn that franchising offered big opportunities for anyone with an entrepreneurial spirit.
In 1999, he acquired his first Dunkin' Donuts in Burlington, N.J., and expanded to 10 units in New Jersey, New York, and Pennsylvania. "The key challenges I faced as a new franchisee were starting in a completely different business--franchising wasn't around in India when I was there--and understanding fundamentals such as system development and financial management," he says. "Having family members in the business made the transition go much more smoothly." (All of Patel's family members, with the exception of his parents, are in the U.S. now.)
Two years ago Patel became CEO of Philadelphia-based Prayosha Philly Group, where he is one of four partners, along with family friends Ashok Patel, Dasharath Patel, and Atul Patel. "My older partner is in charge of finances and has been an important mentor to me, and there are two younger partners who are the eyes and ears of the organization," he says.
Last November, the close-knit multi-brand operation expanded its portfolio (Dunkin' Donuts, Moe's Southwest Grill, Comfort Inn, Hampton Inn, and Howard Johnson's) by signing a 30-unit area development deal with Schlotzsky's for both traditional and non-traditional locations in the Philadelphia area. The company had $9 million in annual revenue in 2011 and is targeting $12 this year.
How has the most recent economic cycle affected you, your employees, your customers?
Of course it affects our bottom line, but we're working hard to retain our valued team members. We see our regular customers coming in less often because of the economy.
Are you experiencing economic growth/recovery in your market?
The last two quarters have been positive ones.
What did you change or do differently in this economy that you plan to continue doing?
We've been buying quality locations and building faster, and we'll continue to do that.
How do you forecast for your business in this economy?
It's difficult to forecast, but we are in full growth mode.
Where do you find capital for expansion?
Primarily from our bank partners.
Is capital getting easier to access? Why/why not?
Not really. The banks are still tightening, so things continue to tighten for franchisees.
Have you used private equity, local banks, national banks, other institutions? Why/why not?
We've used local banks because that's what works best for us.
What kind of exit strategy do you have in place?
We don't have one in place and don't feel the need for one in the near future.