Balancing Act: Maintaining a healthy perspective in growth mode
For Bill Gellert, who currently owns and operates 14 franchise units across three brands, with a fourth on the way, business is "a constant mixture of fear and excitement." And he loves it.
"There was a brief period in my life where I worked for someone else out of college," he says. "I realized I enjoyed in a very sadistic kind of way the pressure of making decisions and having my success or failure determined by my own actions."
Gellert, who's been a franchisee since 1998, currently operates Cinnabons, Carvel, and Quiznos, all in the Metro New York area. He's currently working to open a fourth brand, Five Guys Famous Burgers and Fries. He discovered Five Guys, a popular mid-Atlantic brand, in spring 2006, searching for an expansion vehicle to add to his mix.
"It's relatively new, at least in terms of franchising," says Gellert, who describes Five Guys as burgers, hand-formed and cooked to order; and fries, fresh Idahos cut on–site and cooked in peanut oil. "It's simple, like In and Out minus the shakes, but better," he says. The brand, he says, is growing by leaps and bounds: 18 months ago Five Guys had 90 stores, and today 255 are open, with commitments far beyond. He's committed to 31, and has 3 leases completed and another two well under way.
Gellert had no experience in franchising 10 years ago when his uncle convinced him to take a look at an opportunity with Cinnabon. But he did know food.
"I had worked in food distribution selling to fine restaurants and delis. I'd worked in brand management for a large packaged goods company in the food business. I even had worked on farms. I had probably every element in food business covered." But no franchising, or retail for that matter.
Gellert had just sold a food distribution business he'd run for 12 years with a different set of family members, and he wasn't looking to add to his remaining workload. "I had it easy, down to almost 50 hours a week," he says. He even had weekends free for his family. But his uncle was persistent. "He said, 'Just go look at one of the stores, look at the financials, and if you're not interested, fine.' Because of my respect for him, I agreed to look."
When Gellert and his wife looked at one of the stores, it was quickly apparent to them it would work. "I had never heard of Cinnabon. I worked in the food business as a small specialty distributor, so I didn't know that market at all. How could you possibly make money selling one kind of baked goods as a primary vehicle? Then you start looking at the numbers on paper, verify the numbers, and watch what goes on in the store. Like anything else, you have to approach things with an open mind, so in a good location it's much more than viable."
One of his primary challenges early on was understanding how the real estate worked in establishing a successful retail business. He says he overpaid for his first Cinnabons, "a true regret." (See "Biggest Mistake," below, for more.)
More recently, a couple of real estate transactions that seemed like done deals fell through for Gellert. "It's a bit humbling, but you continue to hone the basics and try to not let the failure of one deal going through affect the next," he says.
"Location is an important barometer of how your investment is going to go. It's the first critical decision," he says. "I feel confident with the brands I represent, and with the people I have running my stores. If you score correctly on those two decisions—right location and right product—you're a long way toward success," he says.
Today he has three partners, all of them cousins. "A big part of our success is due to our relationship, and their support. Their daily activities and backgrounds provide an excellent sounding board for me as we look at different opportunities," says Gellert."
Making it all go
"Franchising is interesting because unlike in any other business, you have someone else writing the playbook. The common misperception is all you have to do is sign up and turn the key," says Gellert. "The expectation is that all the mistakes have been worked out of the system."
Still, business is change, and Gellert likes to be part of working out new kinks. "Ninety-eight percent of the time when there's a new product or idea we'll volunteer. Most of them don't work." But they always tell him two things.
"First, it gives me an idea of what the guests want. Second, it gives our employees something to sink their teeth into, and feel part of the brand. It interrupts their daily routine so they don't get bored. It pushes the envelope for them and spills over into other areas."
Gellert says he has evolved from the hands-on role he's played in the past. When he started out in 1998, he talked to every one of his managers at least five minutes every day. "I'd be very aware if we hired a new person, no matter what they did. Now I speak to every manager every week, but I speak to my two district managers every day. There's a lot more funneling of information in both directions, and gradually they're performing the role I performed at the beginning."
When it comes to letting go, says Gellert, he's still a work in progress. "I think I'm getting better at it, but never as quickly as I would like. I'm better than six months ago, but there's still a long way to go. It depends on which day you ask," he says with a laugh.
"I try to keep my pulse on the operations. But I to try to do so in a more delegating fashion, promoting greater freedom and good decision-making."
He's testing a new POS system that he hopes will allow him to automate what his managers do and provide better information in a quicker, more concise way. "There are two ways to look at the business: going in all the time, or letting the numbers give you a general sense of what's going on," he says. "As you add more concepts or stores, you can't reach each person."
Particularly important now, with the company in a more rapid growth stage, he says, is finding ways to balance so many more things." In growth mode, he's the point person for finding new locations and negotiating with landlords—another part of his job he likes. "Once we get to operational, that's where I can hand it off more easily. That's where I've built my depth."
Gellert says two of the things he enjoys most are dealing with the challenging business issues and pounding the flesh. "The interacting, interpersonal, interactive part is where I feel fulfilled. The intellectual part is dealing with the challenges of the business, says Gellert, who has an MBA from Cornell. "I like analyzing the operations, but I don't get any sustained pleasure out of making a sandwich or mixing the dough."
He also enjoys the challenge of trying to make all his brands work together—"how to get it to all working seamlessly"—and is constantly looking at co-branding opportunities at locations.
The benefits that can be derived from multi-concept are huge, says Gellert. One is minimizing some sense of risk through different concepts, real estate, meal occasions, and customer appeal. Also, he says, "You are exposed to a much greater range of business people at different stages because the brands are very different that way. The more people you meet, the more you learn."
Inevitable difficulties arise from the nuances unique to each brand, such as attempting to have them fit his set of values and meld them all together operationally. "That's one of the biggest challenges," he says. For example, with only two Quiznos, he's too small to have a separate district manager. "But you need to have someone oversee it who is as fluent and passionate as the six Five Guys they run. How do you get them to deliver the same level of expertise and passion?"
For Gellert, the business side is relatively straightforward. He has one financial person, and plans to add a second when he has several Five Guys open.
Recently, he's begun to cross-train more people across his brands. For example, front-line employees can shift back and forth for his co-located brands, depending on time of day and traffic flow; or even fill in for no-shows. But it doesn't always work for everyone. "Someone who likes to make sandwiches can't necessarily roll Cinnabons rolls, or a cashier doesn't want to work near an oven." But for those who do take to cross-training, he says, "It multiplies their capabilities and gives them a broader sense of vision."
Gellert, who was president of the Cinnabon Franchise Advisory Council for two years until the end of January, takes a similar view toward his own growth. "Being FAC president is rewarding. I can make an impact beyond the four walls of my bakery.
There's a great group of franchisees in the system with a very similar commitment level," he says. "It's an opportunity for me to give to the system and contribute, and also an opportunity to gain more benefits. I can get out of the stores and look at things on a higher level. Quite selfishly, I learn from people with bigger businesses, more experience, or just a different perspective."
Name: Bill Gellert
Title: President, head bottle washer
Company: Great Bons Inc.
No. of units: 10 Cinnabon, 2 Carvels, and 2 Quiznos; recently signed to open 31 locations for Five Guys Famous Burgers and Fries.
Family: married 19 years; daughter 16, two sons, 13 and 9
Years in current position: 9
Years in franchising: 9
How do you spend a day, typically? I average 75–80 hours/week; there's a fair amount of variety. My wife Jill works full-time also. My time is split between overseeing the business and strategic aspects. I'm spending more time on development than ever; trying to adjust some of my own time management to get some balance. And I try to spend a fair amount of time interacting with guests and employees—primarily managers, but also shift supervisors and hourly, because someday they might be managers. There are moments where the time commitments are a pain in the neck, but like anything else, you get out of it what you put into it.
Work week: In my office four days a week, and on the road in stores three days a week, with some variance. The shortest drive to any of my stores is 1 hour 5 minutes, and the longest is 3 hours without traffic. So I spend 20 to 30 hours a week in the car in some sort of work-related activity, mostly on the phone.
Biggest mistake: When we first looked at Cinnabon and decided to pursue it further, there was a lot of pressure from the sellers to get the deal done quickly. Everyone got so excited about it that we did not spend enough time understanding the real estate quotient. We probably would have paid less for the business had we spent a little more time and not rushed into it headlong.
You look back and say "woulda, coulda, shoulda." But you dust yourself off and try to prevent that from reoccurring. One of the prerequisites of being in business is failure. You can't be afraid of failure. Whether it's small decisions or large, I fail innumerable times, and 99 percent of the time it makes me better or stronger.
Favorite activities: I love spending time participating in my kids' activities: piano lessons, recitals, field hockey, concerts, etc. As a parent, I get as much enjoyment from that as anything I do. I coach youth basketball and probably get far more out of that than the kids do! I enjoy reading magazines and papers. And I listen to books on tape when not on the phone in the car.
Exercise: I try to run pretty regularly, five days a week if my knees allow. And I'm active with the kids.
What do you do for fun?: Try different foods. I'd like more time for plays or concerts. I have a diverse set of interests, but one of my primary attributes is that I can be pretty happy in any type of environment doing pretty much anything.
Books/magazines recently read/recommended: What I'll often do is rely on other people to give me a book when they're done. So I read and listen to things I wouldn't pull off the shelf. Recent examples are Under the Sun, Kite Runner, Last King of Scotland. The War (Ken Burns), Good to Great, a biography of Machiavelli, The Iliad, and books by James Patterson.
Management method or style: Two words: personal empowerment. I tend to develop personal relationships with employees. It's a big key to why we continue to be successful and have an excellent retention rate. I try to teach them to get to the point where my own efforts are obsolete, if you will, to make decisions, and to probe into issues by asking multiple questions, particularly with managers and district managers.
How close are you to operations? Very close. One of my own challenges is I have to let go.
Greatest challenge: There are a lot of them and they change day to day. Now it's to maintain balance, both on a personal and a professional level. For example, how much time to put into being in the store? To development? To being in or out of the office, on the phone, or there in person? How much to delegate, what to delegate? It's fascinating, though a bit stressful. And how to still have fun with the family, to carve out time on the personal side for family and friends, as well as for me personally.
Personality: I'm a lot of walking contradictions. On the one hand, I'm a pretty laid-back person, not a yeller or a screamer. But at same time, I'm pretty driven by the desire for success and the fear of failure, by the excitement and thrill of pursuing something new and the fear that I'll screw it up. I'm outgoing, friendly, and motivated, but also a private person.
How do you hire and fire? My first focus is hire a good manager who lives and breathes your values, who takes ownership of their store—not my store—that they're running. If you describe the personality of the manager, 98 percent of the time you'll describe the personality of the store. Second is to hire people based on attitude, not experience. And we try to promote diversity. Interactions between people are more dynamic with different backgrounds, and you get fewer cliques.
I don't do a lot of firing except early in the process. People learn quickly if they do not fit and leave on their own. I generally try to use this principle: The first time I assume you didn't know, the second time that you didn't understand, and the third time that you don't care. We're attitude-based and have one job description rule for all: We are paid to make guests happy and ensure they want to return. Every evaluation is based on those two criteria.
Find good people? By presenting a certain atmosphere. People generally look to work, especially at our level, where they'll feel comfortable. Again, it goes back to the manager. As we have more stores, generally hiring gets easier.
Train them? It goes back to values, first and foremost. Every time I go into a store or bakery, my goal is to make an impact that will either improve the stores themselves or improve the staff's outlook toward how they treat guests and live their lives outside of the store. This is really critical. By being involved in their lives, I first show them that no one person is more important than anyone else. That goes for every function and every person, both on a personal and business level.
Retain them? By living values and treating people in a respectful manner as individuals; creating a fun work environment; and providing the opportunity for advancement.
"Growth meter"—How do you measure your growth? The obvious financial indicators, net income. At the end of day, you want to make more than you did a year ago. Other ways are on a personal basis. What have we done for the people who work for us? Have we provided them the opportunities for growth, and have they grown?
Annual revenues: $6.7 million in 2007
2008 goals: I'm hoping to open a minimum of four stores this year. I have two signed leases and am well on the way toward that. An ongoing goal is to continue to build our comp sales and make mild strides on our operating margins.
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