The Wow Factor: How Ed Doherty Became the 12th Largest Franchisee In The U.S.

Ed Doherty knows how to "wow" people. In fact, he has command of the word and he knows how to use it. He uses "wow" as an adjective, as in the "wow factor," and he uses it as a noun, as in "that's a wow." But he most often uses it as a verb. "We want to wow our guests every time. We want to wow our employees and our suppliers. And an okay is not a wow," he says.

Doherty, now the 12th largest franchisee in the U.S., jokes that he wishes he'd trademarked his use of "wow," because it was part of his company's mission statement long before it became everyday language.

That passion, partnered with the success of his 97 New York- and New Jersey-based restaurants (five brands, including Applebee's and Panera Bread), garnered Doherty Multi-Unit Franchisee magazine's 2012 MVP Spirit of Franchising Leadership Award. He adds that honor to his company's recent selection as Applebee's Franchisee of the Year (third consecutive year) and Panera Bread's equivalent award, Featured Operator of the Year, for exceptional leadership and growth in operations, sales, profits, people, and communities.

Doherty's roots in the restaurant business trace back to his youth when he worked after school and college to help his mother run a deli. "She worked so hard to provide for me and to put me through college. I got my work ethic and my determination from her," he says.

After college, he went to work for Marriott Corp. where he eventually became vice president and general manager of the Big Boy division. He took a big step himself in 1985, leaving that job to become a Roy Rogers franchisee, buying 19 Connecticut restaurants for $1 million. He turned the losing restaurants around in five years and grew the company to 28 stores.

Doherty and other Roy Rogers franchisees had a rude awakening in 1990 when Hardee's bought the concept from Marriott, he says. "The brand was hurt by Hardee's management, and ultimately all the Roy Rogers were closed down. I had hard conversations with the banks and sold out our leaseholds to Boston Market, McDonald's, and Burger King. One of the hardest things was to tell my managers that there would be no raises or bonuses, but I made them one guarantee: I would never lay them off and would make part of my deals with Boston Market and McDonald's the requirement that they be hired at the same salary. Over the process of three years, not one was laid off. I saw that as a moral obligation."

In 1993, Doherty was able to acquire the franchise rights for Applebee's in New Jersey and has never looked back. Today he has 61 Applebee's, 30 Panera Breads, two Chevys Fresh Mex, and two concepts he developed with his three children--all of whom work at Doherty Enterprises.

In 2007, he assigned his middle child, Shannon Portell, the task of developing a great Irish pub. That concept, Shannon Rose Irish Pubs, is now doing well in three locations. In April, his youngest daughter, Kerry, led the opening of Spuntino Wine Bar & Italian Tapas, a Clifton, N.J., restaurant with a "cool, New York City meat-packing look" and a list of 42 Italian wines sold by the glass and nine Italian beers. His oldest child, Tim, also holds leadership positions within the company and sits on the board of directors with his mother and sisters.

Doherty also sounds like a proud father when he talks about his employees. He's especially passionate about Doherty Enterprises' Wow-A-Friend Foundation, administered by six people who work for the company (no executives). "The idea is that all our employees contribute something on a weekly basis, whether it's 25 cents or a dollar. Anyone who works for us and faces a unique financial crisis can apply for a grant--not a loan--from the foundation to help them get through the crisis," he says.

At first the foundation raised $35,000 to $40,000 a year. Two years ago, Doherty gave the board of directors a challenge. "I said, 'If you can get 3,500 people enrolled and raise $75,000, my wife Joan and I will match it. We can do a lot more with $150,000.' Well, they raised $79,000 that year and we matched it. Last year, we challenged them to increase to 4,500 contributing and to raise $100,000 and we'd match it. They got over 4,500 and raised $125,000 and we matched it. That gave us a pool of $250,000 to help people. Applicants don't even have to contribute to get a grant. This project makes people feel good about working for our company."

An especially poignant example of the foundation's good came when a cook at one of the restaurants went out with his buddies after work to celebrate his last night before his fiancée would give birth to their child. When the young man left the bar, he was murdered. The next day his fiancée went into the hospital to have a C-section. "His GM explained to the company what had happened and asked if Wow-A-Friend could give anything to help her," Doherty says. "She'd never worked for us and they weren't even married, but the foundation made a significant contribution. My wife and I matched it. There are tons of stories like that. Our people have really gotten into helping each other and treating others well. That's how we've grown our business."

In addition, the company, the 100th largest restaurant organization in the country, asks that management and crew volunteer twice a year at community charitable events. "They don't have to do it, but we see it as part of teaching young people to give back to the community and to society," Doherty says. "With all these types of things, you retain people. Our crew turnover for last year was under 75 percent, and for our management it has been around 10 to 12 percent over the past five years, which are great numbers for this business. We've never stopped raises, benefits, or bonuses and we continue to grow."

Most importantly, he adds, "We continue to wow."

Name: Ed Doherty
Title: Chairman and CEO
Company: Doherty Enterprises Inc.
Brands: 61 Applebee's, 30 Panera Bread, 2 Chevys Fresh Mex, 3 Shannon Rose Irish Pub, 1 Spuntino Wine Bar & Italian Tapas