Lutfi Family Works Together to Build Franchise Legacy

As the one-time fry cook was building a multi-unit franchising empire, Tony Lutfi imagined a future in which his three sons would one day carry on his legacy.

"I knew if they followed in my footsteps, they would be successful," Lutfi says.

But he didn't want to force it. He wanted them to choose to join the business. So, he sowed the seeds early and waited to see what would sprout. When the boys were young, he regularly brought them to his restaurants and assigned them small tasks. Today, Lutfi's quiet hope has become a reality. All three sons and his nephew now serve as the pillars of MarLu Investment Group.

If transitioning from family to co-workers sounds easy, it isn't. There's a careful balancing act that must take place when franchisees decide to bring their children into their business enterprise. The roles need to be clearly defined; their skill set should be carefully considered; and performance expectations must be explicitly set.

There are risks. Other employees could harbor resentment, and family dynamics could be harmed. A bad fit could usher in long-term damage to the organization and create a full-blown family crisis.

"Some days are great; other days are more difficult as they've grown," Lutfi says. "I want it done my way, and they want it done their way. I had to be flexible."

Earning their place

For the Lutfis, the secret to making it work hasn't been shared DNA. It's required a rigorous commitment to each other's triumphs and a constant striving to maintain professional boundaries.

At one time, Lutfi owned more than 200 units of quick-service restaurants and Sears Hardware & Appliance stores. Now, MarLu Investment Group's portfolio includes Batteries Plus, Church's Texas Chicken, and Arby's as well as management agreements with franchisees in other brands.

His nephew, Nader Lutfi, who is 10 years older than Lutfi's oldest child, got involved in the business first. As each of Lutfi's children grew into teenagers, they worked at their father's nearby Arby's restaurant.

Today, Nader runs the HR department and is the vice president of operations. Lutfi's oldest son, Metri, 40, oversees the company's portfolio of real estate. Stephen, 38, is the franchisee of record for 17 Batteries Plus stores in Arizona. Ramsey, 33, is the vice president of operations for Church's Texas Chicken restaurants in Arizona and Nevada.

"The rule was to get an education, graduate, and you will always have an opportunity with us," Lutfi says. But, he adds, "nothing was given to them, ever."

His sons went through franchisee training. They had to learn the ropes from the bottom up, he says. Not all of them immediately embraced the idea of walking the path he had blazed for them.

Stephen Lutfi was a civil engineering major at Fresno State.

"I always had a dream of building something on my own—nothing against my dad," he says. "But, by the time I was getting ready to graduate, there was a larger opportunity with him."

Tony had just acquired 42 Arby's restaurants in Washington state and Oregon, and he needed someone who could grow into overseeing them. Stephen faced a tough decision.

"I was at a crossroads. I kind of always knew, even though I never wanted to admit it, that there was a longer runway with the family business," he says. "But there's something to be said about earning something and not being given something."

He need not have worried. His father made sure he would earn his role.

"My dad says, 'We don't quite know what direction we're going to go from a leadership perspective. But, for now, I just need you to get in and just learn everything,'" he says.

So, Stephen bounced between attending school and franchisee training. "I was working opening shifts, closing shifts, the back line, doing everything, so I could learn," he says.

When he finished school, he says his father told him, "'Just sit on the sidelines and shadow. Just watch. Attend all the meetings until we figure out which role is going to be best.'"

Eventually, he began overseeing four district managers. When the family bought 10 more restaurants in Los Angeles, six district managers reported to him. He was young. He had to prove himself.

"It was hard," he says. "My dad never was one to kind of just give us the answer. He wanted us to face the music and figure it out on our own. Certainly, he was there as a consultant, but he wasn't going to handhold us through the process."

Some employees bristled at Stephen's supervisory role. He understood. "Going from maybe being in a promotable position to now having what they would see as an owner's son come in and kind of maybe take opportunity away from them, that certainly was a challenge," Stephen says. "It took me a long time to navigate that and figure out how I was going to prove to these people that I work with every single day that I'm deserving of this opportunity and me being in that role wasn't designed to limit their opportunity."

In the end, he says, they came to understand that he wasn't an obstacle. He was a resource. He was an advocate. And he knew the business.

"I was in the trenches with them and, wherever they had a knowledge gap or something that maybe they weren't exposed to on the corporate side, I was more than happy to bring them in on the franchise side and say, 'Hey, this is how we do it. This is something that you can learn and maybe didn't have an opportunity to before,'" he says.

Working in the family business was the best decision he ever made, he says. Sure, sometimes, interactions can be overly informal. They might respond to each other in a tone they would never dream of responding to another employee.

"We certainly do strive to keep it professional," Stephen says. "But, when you're in a meeting with all your brothers and your cousin and your dad, sometimes we do lose sight of that."

But he wouldn't trade it for anything. "We see it as a blessing. We grew into our roles. My dad is kind of passing the baton and limiting his role at times, and that's hard for him," Stephen says. "We're all going toward the same goal. But sometimes, as generations change, we have different ways of getting there."

When the leadership team/family disagrees, the rule is to keep arguments from spilling from one day into the next. When a decision is reached, Stephen says, "Everybody supports a decision, whether we succeed or we fail. There's nobody coming back and saying, 'We should have done X, Y and Z'—ever. We live by that."

He, his brothers, and his cousin want to leave a thriving company in the hands of their own children one day. And, like his father, Stephen wants it to be his children's choice.

"My dad's dream was to build a legacy company and multi-generational wealth, and he has done phenomenal things when you look at this company and what he came here with from the Middle East," he says. "I think, if I raise my kids the right way—how my dad raised us—they will decide that they want to work with us."