Balancing Act: Multiple-Concept Area Developers Make Juggling Look Easy
Florida-based businessman Peter Economys and New York entrepreneur Rob Tobias have a very special talent important to area developers: they're champion multi-taskers. But the concentration and mental agility necessary for the success of any area developer is doubly important for them--because each oversees multiple concepts.
Economys is an area developer for Subway, Dunkin' Donuts, and Hurricane Grill and Wings. He's also a multi-concept franchisee who owns four Subways and seven Dunkin' Donuts--some located in gas stations he's built. He also has five Hurricane Grill and Wings restaurants under construction in Las Vegas.
Tobias, who became an area developer in a huge territory with no prior franchising experience, has had major success in Greater New York, opening 85 Quiznos there since 1999. His latest challenge is overseeing the opening of Hurricane Grill and Wings in the area. He hopes to have 65 open in the next few years.
Why do they do it? Obviously, money is a consideration, but both also enjoy it tremendously. "The challenge is the fun," says Tobias. "It's what makes things interesting."
Being an area developer and unning his own units is "a major challenge on a daily basis," says Economys. "I have good people working for me. And I multi-task a lopt--I have my hands in all of it. I like being busy and being challenged. I'm not interested in the status quo. I'm more successful when challenged."
Economys doesn't have a partner so his calendar is packed, but he says a busy schedule doesn't mean chaos rules. He's a stickler for staying mean and lean and maximizing efficiency: he has only five people in his corporate office and three in the field.
"It's always made sense to me to own multiple units for the same franchise," he says. "With franchising, each unit uses the same program, training, suppliers, and bookkeeping. This makes it easy to have multiple units operate at the same time."
His entry into franchising came in 1994 when he decided to put Subways inside his gas stations and convenience stores in Florida. "I didn't know anything about the food business, but I went with the Subways, which are pretty simple to run," he says. "I learned that I could always count on the freshest products and the best prices from them."
As he began to think about diversification, he leased a space inside one gas station to Dunkin' Donuts, "another concept that draws people," he says. Economys decided he wanted to own it. But with Dunkin' Donuts, he says, that meant a commitment to a four-store territory. He soon had three more gas stations with a Dunkin' inside.
"It made sense to have both Subways and Dunkin' Donuts. Subway is more of an afternoon/evening concept, and Dunkin' Donuts brings in people in the mornings. Now we have people coming in at all hours of the day," says Economys, who lives in Fort Pierce, Fla.
Like all successful multi-unit franchisees and area developers, Economys must keep the different needs of each franchise in mind at all times. But he doesn't see that as a conflict since, by strict franchise agreement, he owns no competitive units.
"Obviously, I couldn't have a Quiznos or another donut franchise, but these three I have work well together. It's a good mix," he says.
When he heard about Hurricane Grill and Wings, he was interested, but preferred to build the sit-down restaurants in fast-growing Las Vegas. "It meant bringing in a new brand that wasn't out there, which is challenging. But the Hurricane folks were new and being very flexible about things, and I thought it'd work very well," he says.
Economys owns the area rights for Hurricane Grill in Nevada and Arizona. His first five restaurants were slated open in Nevada by the end of March, with plans to open in Arizona within the year.
Economys--who learned his core business values and the basics of retail in the late '70s working at his uncle's side in his father's south Florida citrus shop--has developed a knack for choosing the best people for his different brands.
"The person buying has to have the right background. But I tell all potential franchisees that the best franchise operator in the country is not going to look out for the individual business the way they will, because they're putting their own money into it," he says.
"Each franchise company has an approval process, and I know what type of person, experience, and ability each concept requires." For example, experience has taught him that a Subway is perfect for a couple who have never owned anything, but who want to have their own business. "You can't go wrong with Subway. It's a top-of-the-line franchisor," he says.
A Dunkin' Donuts is more complicated, he says. "With a Dunkin', you're dealing with health department regulations, food safety, and other food service-related issues. So it helps to have some knowledge of the food industry before you take on a Dunkin'."
With Hurricane Grill and Wings, a sit-down restaurant that has a full kitchen with fryers and grills, Economys says he wouldn't feel comfortable selling a unit to a franchisee who didn't have prior experience in the restaurant business and the ability to be "very flexible." Fortunately, he says, he's found an abundance of great candidates in Vegas.
But with difficulty comes reward. "A Subway may move $8,000 a week, Dunkin' $14,000 a week, and Hurricane Grill and Wings about $25,000 a week. It's all related to the amount of work involved and the complexity of the franchise," he says.
At some point, says Economys, he'll be looking for franchisees for the units he owns. "I'm 40 now. By 50, I'd rather sell all my stores and focus on earning royalties and managing franchisees than be in day-to-day operations."
Making it in New York
In 1999, Tobias traded the family subcontracting business for franchising. Although he didn't have franchise experience, he says he had a "thick skin" and was good at dealing with people.
"I knew it was important to understand the franchisees and their specific needs. As an AD, you're in the middle of the franchisee and the franchisor and their legal obligations to each other," he says.
"We're structured like a mini-franchisor. There's nothing the franchisor does that we don't do," he says. "Your job is to figure out how you can add value for both. That can mean developing and bringing in new prospects for the franchisor and giving franchisees resources above and beyond what they get from the franchisor."
On an impulse, Tobias agreed to go with a friend to an entrepreneurial show. He didn't know what a franchise area developer was, and nothing really grabbed him until the show was almost over. Then came the Quiznos presentation and samples. He loved the product. "The question I always ask myself anywhere I eat is 'Would I come back here?' In this case, the answer was yes, and I believed others would feel the same way."
At that time there were no Quiznos on the East Coast, so Tobias flew to Denver to learn more. "I liked the Quiznos environment, it's a great sandwich, and I thought it had a lot of legs. It was a bit risky, I guess, but fortunately, I was correct. Only a handful of companies have ever done what Quiznos has," he says. Two months later, Tobias was the Quiznos area developer for all of New York City and Long Island--a region where the brand is still in growth mode, he says.
With his knowledge of the market and strong network of contacts, Tobias saw that finding prospects, directing them to the appropriate franchisor, and helping them find the right location added value to what he could offer both franchisees and franchisors.
Tobias, already a successful area developer for Quiznos, says that taking on a second concept doesn't mean giving the first one short shrift. "I want to prove to Quiznos that my serving as Hurricane Grill AD for New York does not stop the work we're doing with Quiznos," he says.
In fact, he says, it helps with the development of both concepts. "For example, my involvement with Hurricane Grill and Wings allows me to bring back an excellent vice president for sales, who didn't have enough on his plate with just Quiznos. But he came back in a heartbeat when we added Hurricane."
When developing two brands, says Tobias, "It's especially challenging to be protective of the leads each concept gives you. They spend a lot of money and resources to get those candidates, and we're careful to mark in our database which leads came in tagged by the concept--and we don't share information about the other concept with these people."
On the other hand, it's different for home-grown leads. "If we develop the lead, we'll steer the candidate toward the better brand for his or her skills and experience. Since Quiznos is quick service and Hurricane is a sit-down restaurant with bar, that's sometimes a determining factor."
Having two brands also helps from a real estate perspective. Tobias knows that many landlords prefer to lease to someone seeking a larger space in their buildings. A Quiznos requires only 1,200 square feet, a space for which there's a lot of competition, he says. "So if I go to the landlord with multiple concepts and an interest in taking down, say, 3,500 square feet, it makes me a bigger player and adds value to all my brands."
And the more work he can give architects and general contractors, the better prices he can get. "Our units also become more consistent, and if one brand is growing at a different rate than another, we can still give system work to our vendors," Tobias says.
There's more separation on the operations side, he says. "Each franchise has its own culture, and it lends itself to having an operations vice president overseeing all that concept's units.
A self-admitted sports fiend who's feeling pretty good these days about his New York Giants and New York Mets, Tobias also knew how fans feel about their wings. And when he traveled to Florida to check out Hurricane Grill and Wings, he wasn't disappointed.
"My colleague Walter Henry (also an AD for Hurricane) and I liked the way the restaurant looked. And after eating there--the quality of the food is great--we got it and said, 'This is it.' At the bar were two 60-ish people having wine and a salad. At a bar table, five guys after golf were having beer and wings. On the other side in the dining area, two families with small children were having dinner. It hit all the demographics. It was a nice, fun, friendly environment," Tobias says.
In the end, Tobias, who lives in nearby Connecticut, believes good people are the key to success for any concept. "We have good people overseeing sales, real estate, construction, and operations. That means if you find good people, you need to treat them right and let them do their jobs." That includes franchisors and franchisees as well.
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