Catching the Spirit: Franchisee Finds His Place as a Smoothie Operator

Names: James Bullock
Title: Multi-Unit Franchisee
Company: Ekon Investments
No. of units: 14 Tropical Smoothie Cafe
Age: 53
Family: Wife, Paula, and 3 children, Tripp, 21, Taylor, 19, and Austin, 15
Years in franchising: 11
Years in current position: 8

Whether it was selling newspaper subscriptions as a kid or watching his father launch a Hallmark store after retiring from the Navy, James Bullock caught the entrepreneurial spirit from an early age.

“If you could make $100,000 owning a business or the same amount working for a company, 10 times out of 10 I would select working on my own,” Bullock says. “The opportunity to be your own boss, call your own shots, and make your own schedule is extremely enticing to me.”

After beginning his career in medical sales, Bullock, along with his wife, Paula, opened a home decor kiosk in a mall. The venture required long hours and ended with a $10,000 loss in two months. Their first experience in franchising came later with Sport Clips, but neither had a background in hairstyling. They never felt comfortable in the business.

The couple found their calling when they opened their first Tropical Smoothie Cafe in the Raleigh, North Carolina, area eight years ago. Though new to the restaurant industry, they felt they could play active roles by stepping behind the counter, helping with high school fundraisers, fixing plumbing issues, and doing whatever else was needed to keep their store running. The pair also liked the brand’s healthy menu offerings, which include fruit smoothies, wraps, and acai bowls.

“We think it is a pretty cool thing,” he says. “We are very involved in the community, and people know us. It is just fun.”

During their first few years of ownership, Paula spent most of her time in the store, and Bullock handled HR responsibilities while continuing with his full-time job. When Covid hit, many restaurant operators lost money or considered leaving the business. The Bullocks’ cafe remained open and profitable. They used that period as an opportunity to grow. Instead of using the Payroll Protection Plan money they received to cover their bills, they applied it to paying off their SBA loan and scaling their business.

The pair opened two stores during the pandemic, purchased two more, and signed an agreement for an additional cafe after another franchisee backed out. As multi-unit owners, they knew they had to approach their business differently.

“When I realized the time had come when we could sustain and even improve our lifestyle, I pulled my boss at the time aside and told him I would be there as long as he needed me, but I wanted to make smoothies for a living,” Bullock says. “It was one of the most liberating feelings I ever had. When I was able to fully dedicate my time to the business, I stepped in and took over a lot.”

He now runs the day-to-day operations while Paula remains involved with the stores’ catering services, school meal programs, and smoothie and meal preparation and deliveries. The couple opened their 14th location earlier this summer, and another cafe is under construction. Their next goal is to open three more units over the next two years.

They are bringing the next generation into the business. When he graduates with a business degree, Tripp, 21, will work as a manager to gain experience. The plan is to partner with him at a new location in Mebane, North Carolina, next year. So, another generation of Bullocks has caught the entrepreneurial spirit.

Personal

First job: Delivering newspapers when I was 13.

Formative influences/events: My father was a Navy pilot for 20 years, and we lived in Hawaii, California, Mississippi, Florida, and Virginia Beach. This taught me how to quickly make friends and how to tolerate being on my own and become self-reliant.

Key accomplishments: In sales, I achieved many awards, which gave me a sense of pride. I was focused on patient care and able to make recommendations to improve outcomes without pushing needless treatments.

Biggest current challenge: It is critical to hire, train, and retain the best employees. There has been a change in mindset since Covid. People seem to want to work less and get paid more. It shrinks our talent pool, and we have to hire people who have fewer skills.

Next big goal: Our current goal and trajectory in business is to open 18 total locations. We would love to do this by the end of 2027 or by the spring of 2028.

First turning point in your career: While most people were pulling back and not attempting to expand during the Covid years, we opened two new locations, took over a lease agreement for another cafe, and bought two other restaurants from existing franchisees. At that time, my wife was doing the heavy lifting with the stores. This quick move, combined with an excellent concept, enabled me to leave my corporate job and focus on continued growth.

Best business decision: When my wife was pregnant with our oldest son, we opened a small home decor kiosk at a mall and lost $10,000 in two months. We had no employees and worked from open to close each day. We then took a chance on a franchise model and, after opening three locations, realized it was not a great fit. Our best business decision was not quitting and not feeling like the corporate golden handcuffs would keep us bound any longer. We continued to allow our entrepreneurial spirit to drive us and opened our first Tropical Smoothie Cafe.

Hardest lesson learned: The kiosk we opened was terrible. It was not due to our customer service; our product wasn’t desirable. Product matters.

Work week: We have no traditional work week and will work until the job is done.

Exercise/workout: My wife and I go on four or five walks per week. We joined a local gym but prefer doing “Tiff x Dan” YouTube workouts in our garage. At some point, seeing how much I can bench doesn’t sound fun anymore. However, I can give 35 minutes in the garage with 30 to 40-pound dumbbells three to four times per week and feel good.

Best advice you ever got: As Ronald Reagan once said, “Trust but verify.”

What’s your passion in business? I enjoy the growth. It is like mowing my lawn. It can sometimes drain you, but when you are finished and look back at what was accomplished, it feels great, especially if you take that extra time to do a really good job.

How do you balance life and work? My faith in Jesus is the most important thing in my life. If I put his teachings first and walk according to his perfect plan for my life, everything else will fall in line. My wife and I do our best to always make time for each other and do as much together as possible. We also try to be there for our kids as much as possible. We go to all their activities and make time for their passions too.

Guilty pleasure: I love extremely fast sports cars.

Favorite book: The Bible. I love the history and God’s redemptive plan.

Favorite movie: “Battleship.” It is an inside secret as to why.

What do most people not know about you? I didn’t take school seriously and failed out of college. I sold cars and then went back to school. I also slept on an air mattress for about six months when I didn’t have enough money for a bed after college.

Pet peeve: When someone doesn’t shoot straight with me. Tell me the truth. I can handle it.

What did you want to be when you grew up? An entrepreneur, but I didn’t know in what. I delivered and sold subscriptions to the local newspaper and won a trip to go snow skiing.

Last vacation: We love the Caribbean and went to Jamaica earlier this year.

Person you’d most like to have lunch with: Jesus. I have some good questions that we’d all love to hear his responses to.

Management

Business philosophy: Always do the right thing, and everything else will fall in line. A sense of urgency and attention to detail are critical to success in almost anything. Procrastination creates more frustration and decreases your time.

Management method or style: I am committed to meritocracy. I do not promote pay raises because it is the end of the year or because you have been with the company the longest. I believe great performance deserves great opportunities.

Greatest challenge: Convincing someone that a steady pace will usually beat someone who is fast but lacks commitment and consistency.

How do others describe you? Type A but fair and caring. Loves his family.

Have you ever been in a mentor-mentee relationship? What did you learn? The first person who ever truly invested time in me and gave of himself freely was a gentleman in Virginia Beach, Virginia, named Bill Edwards. I believe his wife was my 10th-grade geometry teacher at the time, and he was involved with Young Life. I’ve never forgotten his kindness or his willingness to serve others. I’ve always appreciated the impact he had on my life.

One thing you’re looking to do better: We are fully committed to improving our entire operation: how we train, how we hire, and how we run our operations. We are always trying to find a better, more efficient, and more fun way to do things.

How you give your team room to innovate and experiment: I allow them to improve upon our existing operations. If they find a better approach, I ask that they convince me. If they do, we will change. The truth is that when an area manager approaches me with an improvement in our procedures, it is almost always better, and we make a change.

How close are you to operations? Very involved and daily. I can make smoothies, make food, run the register, do the schedule, and function as a full-time operations manager. I’m now a pretty good plumber. However, over the past year and a half, I have moved out of this role and focused more on growth and operations.

What are the two most important things you rely on from your franchisor? Product innovation and name recognition.

What you need from vendors: For them to keep our pricing low and not run out of supplies.

Have you changed your marketing strategy in response to the economy? How? No. Our approach has largely remained the same.

How is social media affecting your business? I’m a bit older and personally do not have any social media beyond a LinkedIn profile. However, I do think that when you create a fun experience for today’s youth, they love to share with their friends where they are and what they are doing. This can also work in reverse, so we must be on guard.

In what ways are you using technology (like AI) to manage your business? I have discovered ChatGPT over the past few months, which has revolutionized how I respond to people via email. I have used it to create spreadsheets that help control our supplies. I have also used several other AI tools to assess the locations of new cafes we are exploring to gauge the viability of those sites.

How do you hire and fire? We use Indeed to find good employees and managers. Most of our managers are hired from within. We rarely fire anyone.

How do you train and retain? With the help of our area managers, we have created a formal two-week template for all new managers. We will then modify their schedules over the next month based on their needs. New crew members begin with our online training, which takes about four hours. We then move them to the register until they are proficient. As for retention, we try to reward our team often and create a fun environment. However, we understand that quite a few of our employees are still in high school, and we will naturally lose them after a few years.

How do you deal with problem employees? I handle and micromanage HR, and it can be challenging. When we have employees who are not working out, the vast majority are young workers who are maybe not showing up for shifts. We will then stop putting them on the schedule.

Fastest way into your doghouse: Lie to me.

Bottom Line

Annual revenue: $15 million-plus.

Goals over the next year: We are focused on opening our 14th and 15th cafes this year and finding the best locations for our three other cafes under development. We also want to find the right people to support the openings of each new store.

Growth meter: How do you measure your growth? Through total revenue, number of locations, and number of employees.

Vision meter: Where do you want to be in five years? 10 years? In five years, handing over the business to my son, who is joining my team. In 10 years, I plan to be retired and more active in my church.

Do you have brands in different segments? Why/why not? We have worked and owned businesses in other industries in the past. We found that the restaurant industry was a good fit, allowing us to play active roles in the day-to-day business operations. We also liked the healthier aspect of Tropical Smoothie versus other restaurants.

How is the economy in your region(s) affecting you, your employees, your customers? Staffing is always the most challenging. Our payroll has gone up. Things have changed since Covid. We estimate that payroll has doubled since 2019.

Are you experiencing economic growth in your market? Yes. Most of our cafes are busier this year than last year, and some are growing substantially.

How do changes in the economy affect the way you do business? We run a tight ship by controlling our expenses and minimizing waste and inefficiency. We make sure to keep water bills as low as possible and closely monitor our heating and cooling expenses.

How do you forecast for your business? We use Synergy, a POS application system that creates projections for scheduling. The weather also affects how many customers we will see.

What are the best sources for capital expansion? Our first two to three cafes came through SBA loans. We then used the revenue generated from those to open our other cafes.

Experience with private equity, local banks, national banks, other institutions? Why/why not? If you are new, the SBA will be your best bet. If you’ve been around a bit, you likely already have a relationship. Tropical Smoothie has a partnership with a national bank. We lean on them for help.

What are you doing to take care of your employees? We offer much better healthcare options than required.

How are you handling rising employee costs (payroll, minimum wage, healthcare, etc.)? By raising our prices. It stinks, but it is a reality.

What laws and regulations are affecting your business, and how are you dealing with them? We’ve worked with our state’s Department of Labor and Department of Revenue regarding paying employees and filling out certain tax forms. Laws consistently change. I’ve made mistakes in the past, and we adapt.

How do you reward/recognize top-performing employees? We have a bonus structure for what we pay every four weeks based on the four pillars of our business: cost of goods sold, labor, customer satisfaction, and cleanliness. We give employees two raises per year.

What kind of exit strategy do you have in place? Our oldest son is about to graduate with a business degree, and he will start as a manager at one of our cafes. He has worked with us for several years and has expressed interest in eventually taking over the business.