Couple of Opportunity! Husband-and-wife team score a new brand at MUFC

Name: Kaleb Warnock

Title: President, CEO

Company: FloWar

No. of units: 5 Tropical Smoothie Cafe plus 2 in development, 2 Marco’s Pizza plus 1 in development, 3 Hand & Stone Massage and Facial Spa in development

Age: 41

Family: Wife Patricia, 5 children

Years in franchising: 5

Years in current position: 5

Attending the 2021 Multi-Unit Franchising Conference in Las Vegas paid off big for Kaleb and Patricia Warnock. That’s because the husband-and-wife franchising couple were introduced to Hand & Stone Massage and Facial Spa during the event. Signed development deal in hand, they are now preparing to open their first of three locations in the El Paso market later this year. They will be the first to bring the Hand & Stone brand to that West Texas city.

The couple have been a quick study in multi-unit franchising success. They already operate five Tropical Smoothie Cafes with two more in development, and two Marco’s Pizza locations with another in development in the El Paso market.

“After building a successful food service portfolio over the past several years, we knew it was time to diversify with a new segment and are tapping into the thriving wellness market with the industry’s leading spa franchise concept,” says Kaleb.

Before getting hit by the franchise bug, he spent 5 years in the U.S. Navy and another decade working for government services in El Paso before joining the ranks of entrepreneurs in 2016. During the past 5 years, he and Patricia have developed a franchise portfolio consisting of several successful Tropical Smoothie Cafes and Marco's Pizza locations, in addition to the construction company Patricia owns. 

There’s a common theme to the Warnocks’ business approach: healthy concepts and service. “Since we started our businesses, we’ve helped so many people, not just our customers, but our managers, our crew members, and our community,” he says. 

For now, the couple is focused on expansion with all three brands. Kaleb says that he and Patricia have set out to build an empire with a 10-year goal of becoming billionaires. “We started that goal in 2016 and we’re halfway there.”

PERSONAL

First job: Military police officer for the U.S. Navy.

Formative influences/events: Marrying my wife, Patricia. She is the person who has made it all happen. She’s always been very supportive of everything I’ve wanted to do and is 100% in it with me. She’s an equal partner in our franchises and owns her own construction company in El Paso. She’s my motivation to keep going and keep moving.

Key accomplishments: Building a portfolio of 10 franchises in under 5 years. I was also awarded the El Paso District Veteran-Owned Small Business of the Year by the SBA during National Small Business Week in 2020, which meant a lot to me.

Biggest current challenge: Time management. In business, you’re the only one who pushes yourself to get stuff done. Managing family life and business is so important, and it’s something you must do daily.

Next big goal: I would like to get into farming and agriculture.

First turning point in your career: After leaving the Navy, I worked for the Border Patrol in El Paso and thought that health was something that was really being neglected all around. Patricia and I wanted to be part of the trend to change that—giving people back healthy concepts and service while being involved in our local community.

Best business decision: Taking that first jump into franchising even though we didn’t know how to do it. It’s a scary leap of faith. It’s not really a business decision; it’s trusting that everything will work out.

Hardest lesson learned: It’s something that happens all the time: You can lead a horse to water, but you can’t make it drink. Being as people-focused and community-oriented as we are, we always want to help people, but in some cases, no matter how hard you try, not everyone is willing to help themselves. 

Work week: Monday to Sunday, 24/7.

Exercise/workout: Right now it’s tough with kids. Our youngest is 3. I’m a family man first, so I find pockets of time to do small things at home. Eventually I’d like to reestablish a routine in the mornings before work.

Best advice you ever got: The greatest danger in most of our lives is not that we aim too high to miss our mark, we aim too low to achieve it.

What’s your passion in business? Healthy concepts and service. Since we started our businesses, we’ve helped so many people, and it’s not just about service to our customers. We aim to be of service to our managers, our crew members, and our community and make a lasting impact in their lives.

How do you balance life and work? I integrate the two: my life is my work, and my work is my life. I include everybody.

Guilty pleasure: Chocolate. I absolutely love it.

Favorite book: I have two. Think and Grow Rich by Napoleon Hill, and Good to Great by Jim Collins.

Favorite movie: “Batteries Not Included.”

What do most people not know about you? Nothing. I’m an open book.

Pet peeve: Not being able to do what I said I was going to do.

What did you want to be when you grew up? Police officer.

Last vacation: Disney World.

Person I’d most like to have lunch with: Rick Francis. He’s the chairman and CEO of WestStar Bank, a locally owned community bank serving the El Paso, Las Cruces, and Northern Mexico area. He’s become a billionaire, which is a goal of mine, so I’d love to sit down and have a one-on-one conversation.

MANAGEMENT

Business philosophy: Treat others the way you want to be treated.

Management method or style: I don’t think I subscribe to one specific management method or style. I just try to create a family atmosphere and keep that people-first approach at the forefront of everything I do.

Greatest challenge: Building leadership.

How do others describe you? Depends who you ask.

One thing I’m looking to do better: Patricia is such an integral piece of our businesses. I’m always looking to be a better husband to her.

How I give my team room to innovate and experiment: I empower them to try new things, but I always try to stay close enough to pick them back up if they fall.

How close are you to operations? I try not to be because I feel the closer I am, the less I’m actually empowering my team.

What are the two most important things you rely on from your franchisor? Training and training again. That should always be a top priority.

What I need from vendors: Consistency.

Have you changed your marketing strategy in response to the economy? How? Fortunately, we haven’t had to change it at all because our primary focus is on our people and taking care of our community.

How is social media affecting your business? Social media has provided us with a way to further promote our businesses and drive engagement, but because we’re so deeply involved in our local community we don’t depend on it.

How do you hire and fire? I follow my dad’s advice. He always told me to hire slowly, fire quickly.

How do you train and retain? Training is the number-one thing we look for in a franchisor, which should serve as a testament to the caliber of support the brands in our portfolio provide. That being said, we rely heavily on our franchisors for training, not just for us as franchisees but also for our managers and crew members. We also have regular meetings, frequently read professional development books, and focus on the character development plans for each individual on our team.

How do you deal with problem employees? We try to keep in mind that sometimes the problem isn’t the crew member. Maybe it’s just that they’re not being challenged. It’s important to discern if the problem is the crew member or something on our end. If it is the crew member, we remove any weeds in the group as fast as possible. 

Fastest way into my doghouse: Lying and being disrespectful.

COVID-19

How did Covid-19 affect your business? Just like everyone else, we had to close our doors and implement restrictive measures. But we approached Covid like we would approach any other busines issue. Because whether it’s Covid or a shipment delay, there will always be issues in business. We remain solution-oriented in all we do.

How have you responded? Of course we implemented restrictive measures and offered things like curbside pickup. But what was most important to me was my people. At the beginning of the pandemic there was a lot of fear, so I was just honest with my team and tried to educate the people around me by presenting them with actual numbers so they remained informed. I never made a forceful decision or pressured others into making one. It was about being open and transparent, keeping them informed, and creating a comfortable atmosphere—for both our teams and our customers.

What changes do you think will be permanent? We don’t think there will be any permanent changes on our end.

BOTTOM LINE

Annual revenue: N/A.

2022 goals: Making Hand & Stone in El Paso one of the number-one stores in the nation.

Growth meter: How do you measure your growth? By net worth. I try to double my salary every year.

Vision meter: Where do you want to be in 5 years? 10 years? When we set out to build our franchise empire, we had the 10-year goal of becoming billionaires. We started that goal in 2016 and we’re halfway there.

Do you have brands in different segments? Why/why not? We do. We have two food concepts with Tropical Smoothie Cafe and Marco’s Pizza, and we just signed a franchise agreement with Hand & Stone to develop three spas in El Paso. For us, signing with Hand & Stone wasn’t about diversifying out of food. When we met with the team at the Multi-Unit Franchising Conference last year, we were immediately blown away by the concept and thought it would do exceptionally well in our area. The main thing for us is that we have always striven to better our community by investing in brands we believe will enrich the lives of those who live there. When it came to Hand & Stone, we loved that the brand offered affordable massage and facial services that would make wellness accessible for everyone, and that it fostered a culture of connection and holistic well-being. We’re so excited to bring the brand to El Paso for the first time and provide a place for people with a tranquil retreat to relax and unwind.

How is the economy in your region affecting you, your employees, your customers? It’s not. 

Are you experiencing economic growth in your market? El Paso is experiencing economic growth, but so is the entire Southwest region. We’re excited to be part of all that’s to come.

How do changes in the economy affect the way you do business? The state of the economy doesn’t necessarily affect the way we do business. Our focus has always been on people and in keeping that people-first mentality, and we’ve developed relationships in our local community that keep our businesses going and thriving.

How do you forecast for your business? I try to maintain correct percentages around profit, labor, etc., but we’re more so focused on how to better serve the community and have a greater impact.

What are the best sources for capital expansion? If you can provide a strong business plan and show return on investment, securing capital can be a fairly easy process.

Experience with private equity, local banks, national banks, other institutions? Why/why not? We do have experience. I always recommend that if it’s your first business, go to the SBA and get a loan. Banks both love it and hate it, but the SBA will force you to cross your all your t’s and dot all your i’s.

What are you doing to take care of your employees? We offer things like paid vacation, but we don’t have a money-based culture. We’ve tried monetary incentives in the past, but money is the worst way to get your people to like you. For us, it’s about creating opportunities and showing we care through being consistent.

How are you handling rising employee costs (payroll, minimum wage, healthcare, etc.)? We keep an eye on our competitors and make sure we’re offering our crew members competitive wages. We’ve raised our minimum wage.

What laws and regulations are affecting your business and how are you dealing with them? There aren’t any specific laws or regulations affecting our business. We just follow statewide guidelines that our governor puts out.

How do you reward/recognize top-performing employees? Through nonmonetary incentives. We’ve worked hard to foster a culture that prioritizes each individual person.

What kind of exit strategy do you have in place? I don’t have one yet. We’re in the middle of our growth, putting aside money to invest in further expanding our portfolio within the next couple of years. I don’t think I’ll ever retire.