Ed Doherty has been pushing the envelope on growing a business packed with different franchises - lots of them. To date, they include Applebee's (51), Panera Breads (15), Chevys Fresh Mex (3), and an original concept, the Shannon Rose Irish Pub (1), in New Jersey. And ahead on the menu are the 20 El Pollo Loco locations he's developing in New Jersey.
That's a lot of pressure for his vice president of real estate development, who has to find 5 to 10 new restaurant locations each year, hammering out leases, dealing with zoning requirements, and putting up and building out the structures. But Doherty feels the veep can handle it. After all, he raised Tim Doherty from a baby.
"I think it's exciting and thrilling to be able to share your business philosophy and watch them develop and take on more responsibility as we grow the business," says Doherty about the work being done by Tim, his 30-year-old son. Shannon, a daughter, has come to work for Allendale, N.J.-based Doherty Enterprises as well, forming a family trio that runs a $250 million business with more than 5,000 employees.
Franchisees who work with family members on multiple locations say there are some big advantages when it comes to partnering with a parent, sibling, son, or daughter. One word you hear a lot is trust.
Compared with partnering or working with most anyone else you go into business with, the family relationship creates a bond that can make all the trials and tribulations of starting and growing a franchise business a lot easier. Ideally, family members bring complementary skills and perspectives to the organization, allowing each to concentrate on what they do best and build on one another's accomplishments. Recognizing those strengths and appreciating the value they bring to the franchise is a big part of making a family-run operation successful.
But there can be downsides, too. Some we spoke with say it's important to prevent family get-togethers from turning into company retreats; or, conversely, from letting company summits devolve into a family squabble. In the best cases, the business relationship builds on the family tie, gaining strength as everyone learns how to draw the line between the personal and the professional. In the worst cases, things can turn tense when too much family baggage is dropped at the organization's door, harming the business.
Kathleen Neave had worked for years with her husband, Bill, and son, Scott, in the family landscaping business when they branched out by buying a Christmas Decor franchise in 2000. Their landscaping business is seasonal, and the Christmas theme matches their family and business schedules perfectly: as one business waxes, the other wanes.
"The good thing is you can trust each other," says Neave, about the tightly knit family operation, based in Croton-on-Hudson, N.Y. "You're building something for your children to take over someday." Another plus: "My husband and I can go on more vacations" - and they don't have to worry about who's minding the store.
Younger people not only bring a lot of energy to their jobs, they also illuminate essential business issues surrounding any growing business, and keep their aged parents up to date on the current generation of consumers. Because of their age, the children can relate better to younger customers, says Neave.
In addition to that, they also help push new ways of managing the business. "With the younger generation, I feel they're so much more educated, more savvy in every way about computers and technology," she says. However, as any parent knows, there's a careful line parents must walk, trying to balance between youthful enthusiasm and the folly of youth. Some knowledge and wisdom is possible only after years of experience.
So for Neave, while an on-the-job relationship with her son allows her a chance to pass along the lessons she's learned, she also has to know when to step back and let her son learn on his own - even if it means biting her tongue. "I think that's all a part of respect," she says. "Sometimes I see my son doing things you know could be a mistake, and be so dead set on it. So you let them go ahead and do it. Even though I've been there and done that, you say, â€˜Okay, let's try it.'"
In Doherty's case, it means a lot when his 28-year-old daughter offers suggestions for what a target audience of 21- to 35-year-olds wants in an Irish pub: territory best left to youth. "That's especially true after 10 at night, when the young people are out and partying and the rest of us are at home in bed," says the 60-year-old company chief.
There is one rule that all of Doherty's children have had to face, though. No one went to work for Dad right out of college. His two older children both had to go to work somewhere else for four years, to see what it was like working for someone else, before being allowed to hang their hat at the family enterprise.
"Then it was their decision," says Doherty.
Doherty says he's keenly aware of two big potential pitfalls of working with family members. "One is that because they're family you can be a little more demanding of them versus other employees. And you also have to make sure you keep business away from family and personal life. On weekends, you have to make sure you don't go back and start talking about business."
And, as noted earlier, it's also important not to bring the family life into the business. That's another reason Doherty is particularly bullish about making sure the second generation gets "real world" on-the-job experience. After all, if something is not acceptable at a bank or a factory, why should it be acceptable at Doherty Enterprises? But once his kids have passed through that gauntlet, bigger things await in the family nest.
Says Doherty about his son, "He needs to get his hands-on experience in development and opening 2, 3, 4, or 5 restaurants." After that, if everything works out, he could wind up replacing his father in the top slot. And that's the way successful family businesses solve the exit strategy problem: by keeping the company in the family as the leader lays the groundwork for a smooth transition from one generation to the next.
Doherty also has a 22-year-old daughter, Kerry. In a few years, says Dad, she could wind up working at Doherty Enterprises alongside her brother and sister. But first she needs to experience business life outside the family nest.
In 1995, Stephen Wiles knew it was time to make a change. His job kept him on the road a lot. Too much. Coincidentally, his father Jerry was working in Hong Kong and wanted to make a change as well.
They decided to invest in a Batteries Plus franchise together. They opened their first store in Denver, a city neither knew well, but it fit their budget.
"A lot of fathers and sons fail because they can't get along. But from the get-go we wound up complementing each other," says Wiles. "I had a sales background, so I could sell and handle customer service. My dad was detail-oriented and took care of the books and back office. We had very distinct roles in the company." That harmony was especially important, he says, because starting up was anything but easy.
"Our first three or four years were extremely tough. The stores were losing money. But somehow we managed to make it through and get along perfectly. I could count on one hand the times we got angry enough to yell at each other," recalls Wiles.
"We're fortunate that Father and I think alike," he adds, "because if you can't communicate now, buying a business isn't going to help you."
There are plenty of opportunities to test the relationship, too, he says. During those first few years, even traveling was a bonding experience as they shared rooms to cut expenses. "There was a lot of close proximity," he says.
One tip from Wiles: If you're working a lot with someone else in the family, get an outside interest that doesn't involve them. "If you're spending 15 hours a day with family," he says, "you don't want to go out to dinner with them."
That formula has worked out well for both father and son. A franchise business that started with the father owning a majority of the operation has now settled into a 50/50 relationship, with the son running the six-store business. At 71, Jerry is semi-retired now, but he still works regularly with his son - who has some big plans for growing the business-to-business side of the operation.
Long before Andrew and Kathy Stamps married, they had a good sense they functioned well as a team. "We worked in the Forest Service," says Andrew. "Kathy was an accountant, and I was a wildlife biologist. Her office was 30 feet away from mine."
They got along well, both at home and in the office. But there was something else both realized about working for the government: future job prospects didn't look great. "If we were going to end up at home broke, with our face on the floor," says Andrew, they wanted to do it on their own.
Today, from their base in Rancho Cucamonga, Calif., they're talking more about a future in Hawaii - a scenario that doesn't include anything about being broke or on the floor.
The husband-and-wife team operate multiple franchises across three brands: Green Life Interiors, Wingstop, and Interiors by Decorating Den. They bought their first franchise in 2004 and added Green Life in 2007.
By buying into franchises, says Kathy, they were able to get the kind of training and support they needed to jump into fields where they had no previous experience. But after they looked, they leapt together.
"We recognize and play off each other's strength," says Kathy. "He's hands-on where I'm a paperwork person, an accountant. There's not really a lot of conflict."
"I'm the enforcer," says Andrew enthusiastically. "We'll sit down, have our company meeting, and then I'm the one that goes in and physically makes sure these things get done the way they are supposed to get done. She's more in charge of putting the policies on paper, and I'm the one that enforces it."
"There's a lot of trust," says Kathy. And that's an ingredient in their family recipe she's now spicing up. "As we grow our business," she says, "my mom and step-dad are coming to work with us. We're surrounding ourselves with family, because eventually Drew and I are going to be in Hawaii."
Rocky Patel got a taste of family business at an early age. He, along with his brother, started working at his mother's Baskin-Robbins franchise as a teenager in the early 1990s. After college he started his own ice cream shop, then partnered with his mother to turn that into a Baskin-Robbins franchise. Now his brother has joined them to manage a third location.
"I always loved working in our business," he says, taking a moment to scoop some ice cream for a customer in Watsonville, Calif. "My mom was the boss, but she trusted us and we ran the store well. I wanted to be in business for myself, in the same trade as my family."
His brother to the ice-cream business makes it possible for Mom and her two sons to each operate their own store - yet have all three be part of the family business. "For a lot of people," says Patel, "it's hard to work with family members because everybody wants to be the boss, everybody feels they can do whatever they want. For us, the conflicts centered on working together. When we separated the stores, we did what we wanted. It worked better."
And with all three family members on board, it's comforting for all to know they can rely on one another when necessary, or if the going gets tough. "The strength is the backup," says Patel. "If there are issues where things come up, you know your partner is not going to run out on you." And with a young child at home, Patel knows he's lucky to be able to count on his brother to come in and manage the store if he has an emergency.
"You know what it takes to make it in an ice cream franchise?" he asks. The answer: "Good customer service and really enjoying what you're doing." Having someone else in the family by your side who gets that is a big plus.
Working together separately is working out for the family. "Our relationship actually has gotten stronger," says Patel.
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