Capital Access: Sunita Sagar Takes A Turnaround Shot

Sunita Sagar got her first shot at franchising in 2007, when she was given the chance to buy an underperforming Denny's in Campbell, Calif.

"That restaurant was going downhill," she recalls, "and we turned that restaurant upside down. We turned the people around, we turned the operation around, and we turned the sales around. We started staffing the restaurant with the right people, and then we had an opportunity to purchase more. So we bought three stores in Fresno in 2008."

Sagar stepped in on each, where she could see for herself what needed to change. "We took over those three stores and managed those stores for a few weeks," she says. "We made some staffing changes, found people right for the business, and took a few months to bring those stores around. That was our first experience running multiple locations."

In just four short years, Sunita and her husband have built an organization with 18 locations and three different concepts (8 Denny's, 5 Baja Fresh, 5 Jack in the Box). It's a fast-paced operation that requires her to keep up a frenetic pace, but she seems to relish the unending stream of calls from her expanding organization.

Her company's annual revenue exceeds $15 million as they seek to increase the guest count in restaurants, profits of existing restaurants, and add more restaurants.

How has the most recent economic cycle affected you, your employees, your customers?
The double-digit unemployment rate has definitely affected the cycle. Customers want more for their buck. The pie is so big and people expect more than what they had in the past. Of course, people are looking for jobs, so it's easier to find employees now. People tend to perform better.

Are you experiencing economic growth/recovery in your market?
We have seen growth. Compared with last year we've seen an increase in the guest count and sales, and I hope it continues.

What did you change or do differently in today's economy that you plan to continue?
There's an ongoing effort to take care of customer service; above all else, listening to the guests and getting feedback. This has always been my business philosophy: to listen to the guest and respond in 24 hours about any concerns. Also, we have discounted more than before to get the guests in. And everyone has adopted the value meal. But the top line is getting better and that's a good thing. We also have a greater variety of foods to attract guests.

How do you forecast for your business in this economy?
Forecasting is difficult, but you have to forecast to know what your goals are.

Where do you find capital for expansion?
Savings, friends and family, and local community banks.

Is capital getting easier to access? Why/why not?
It depends on the project you're presenting. The bank is looking at your portfolio with the project, backtracking on performance. We have not had difficulty getting capital.

Have you used private equity, local banks, national banks, other institutions? Why/why not?
Local community banks. It is easier to work with them.

What kind of exit strategy do you have in place?
I'm too young to exit yet. But as my kids grow up, they've started to learn the business. So maybe that's my strategy.

Click Here to see more of Sunita Sagar's profile from 2011 Multi-Unit Franchisee Magazine Issue 4