Growing Up Fast (Food!): At 36, Anand Gala has Spent 28 Years in the Family Business
Anand Gala never planned on getting into the family business of operating franchised fast food restaurants. What he had planned on was medical school. But as he was working his way through his med school interviews, it dawned on him that he just wasn't all that interested in medicine. He's never looked back.
Gala grew up in the fast food business, helping his mother as she managed a string of 12 Jack in the Box locations.
"As early as 8 or 9, I was going with my mother to work on weekends and holidays," he says. "I stood on a milk crate and worked in uniform as a cashier or cook. I've basically done every position in the restaurant, and that's where I learned the business: at the foot of my mother. It was truly a family business. My elder brother also went through all of the stages of operations and management. My father was involved, but to a lesser extent."
Today Gala runs a much bigger operation. As he began to diversify into Applebee's, Famous Dave's, and Del Taco, the Jacks were sold off. A company that once registered $500,000 in sales has grown to $77 million--and he has expanded into new locations in California and Arizona.
There have been plenty of challenges along the way, probably none as big as a recession that has landed hardest in his key markets. But he's well equipped to ride it out with the best of them. And after soaking up plenty of practical advice from his family, and learning as he's grown in the business, Gala is now passing some of that experience and business savvy to other franchisees as chair of Famous Dave's advisory board.
When you ask him about the work he does, his zeal for the life he's chosen shines through. "I have the opportunity to make a positive impact on someone's life every single day," says the 36-year-old entrepreneur. He doesn't miss a single chance.
Name: Anand Gala
Title: President and CEO
Company: Gala Corp.
No. of units: 19 Applebee's; 5 Famous Dave's; 3 Del Taco
Family: Married with two children
Years in current position: 12
Years in franchising: 26
Key accomplishments: When I took over the business we were at 12 Jack in the Boxes. Since then, the categories we operate in have changed and we've gone through significant and steady growth, adding new units or acquiring them. The Jack in the Boxes were sold as we approached the expiration of the franchises, from 2004 to 2007. We sold them in small groups.
Biggest mistake: Getting into a business I didn't fully understand. We got a coffee franchise with 80 percent of sales at breakfast, and so the traditional methodologies of site selection and operation and my reliance on lunch and dinner did not translate to that business. We had built several cafes and had to exit that business.
Smartest mistake: Applebee's and Famous Dave's. I got into Applebee's not knowing what it was, Famous Dave's as well. It was like finding the diamond in the coal, not seeing it for what it was until I got involved.
Typical day: In the office at 8 a.m. and leave at 7 p.m. I have no problem with 12-hour days, but I don't work on the weekends. Weekends are for family and kids.
Work week: I wouldn't say any week is predictable. There are always different things to do. Because I have great people, I can be actively involved in many areas of the business: marketing, finance, management. I travel a lot, usually every other week for two or three days. I'll do store visits or review site selection, and there are periodical regional meetings. I'm chair of Famous Dave's advisory board.
Favorite fun activities: Doing something with my kids that's active and outdoors. I love sports. I don't get a chance to indulge in that as often as I would like.
Exercise/workout: I aspire to do that one day.
Favorite stuff/tech toys: I just got a BlackBerry two months ago. It is a great asset and a liability. It keeps you connected and informed, but also creates an expectation that you are always connected and informed. It can also lead to less productivity if you can't focus.
What are you reading? Two books: The Education of an Accidental CEO by David Novak, and Six Rules for Brand Revitalization by Larry Light.
Favorite quote or advice? It's from Mahatma Gandhi: You must be the change you want to see in the world.
Best advice you ever got: Believe in yourself and never give up.
Formative influences/events: The biggest influences are very simple. My family has been my best and most formative influence. My father encouraged my different activities. He always said that it doesn't matter how tall you are, how short or fast or slow--you can do anything you set your mind to. I have a brother who is continually working to help me improve myself. He helps as a check and balance and he's very bright. He started another company and has done very, very well in it. He's always helped me keep my perspective on who I am and where I am in the business.
How do you balance life and work? I don't think I do. I don't know what balance means. I'm an entrepreneur and I love what I do, so I perceive work as fun. Because my immediate family was involved in the business, family and work were really interwoven as I grew up. I do the best I can.
Business philosophy: My philosophy is very simple: Take care of your customers.
Would you say you are in the franchising, real estate, or customer service business? Why? I think customer service. Franchising simply provides me a vehicle to deliver great customer service. Real estate just gives me a location to provide great customer service.
By doing so I can grow my business, and that rewards me financially.
What gets you out of bed in the morning? The excitement of the business I'm in. For someone with a science degree and background, I get an opportunity to get involved in marketing, finance, operations. This is all very exciting to me. And, I get a chance to change someone's life, even if it's just for 45 minutes when they are dining in one of my restaurants.
What's your passion in business? My passion is the entire process. It's the creation of a business, of a brand, of a store, of jobs. It's the process of being an entrepreneur; the creation of value.
Management method or style: I try to surround myself with the best and the brightest because I know I am not the smartest person in the room. I provide them direction and then hold them accountable. I try to teach and develop where there are gaps so that there is opportunity for my team to grow.
Greatest challenge: Today, it's the economic environment we find ourselves in. When will the recovery truly take effect?
How close are you to operations? Very. I'm in stores at least every couple of weeks. I participate in general manager meetings, monthly or every quarter. I want to be actively involved.
Personality: I see myself as an outgoing individual. I want to be actively engaged. I have a thirst for knowledge. And I have no problem being in front of groups of people and interacting with them.
How do others describe you? I think similarly.
How do you hire and fire? Hire slow, fire fast. I take my time hiring, really understanding what the needs are for the position and then searching for the appropriate candidate who fits the need. I do my due diligence on the candidate, make sure they fit. Once I've done that, we provide a tremendous amount of training and coaching. If the person is still not fitting, we're going to move on quickly. We will not suffer for an extended period of time.
How do you train and retain? Franchisors provide a training criteria, training materials, and a schedule. We take that and supplement it with additional resources and materials and additional attention. We truly believe that training is the single biggest distinguishing factor in the success of a company. Businesses that have a high emphasis on training and service will be the ones that beat their peers on performance.
How do you deal with problem employees? Problem employees are given a 30-day plan. We want everybody to understand at all times where they stand and what is expected to succeed in the company.
Annual revenue: $77 million in 2009
2010 goals: $80 million. That's conservative, with one new store opening.
Growth meter: How do you measure your growth? Growth can be measured a variety of ways. It depends on the strategic plan for that year. Our perspective is very simple: return on investment capital. What is the creation of value for shareholders? We put money at risk and we expect a return. If it means store growth, growing comparative store sales, more bottom line, a better return, then that's the right thing to do.
Vision meter: Where do you want to be in 5 years? 10 years? I think the company will be much larger 5 or 10 years from now. Larger could mean different brands, more units of existing brands, as well as third-party management and consulting for other franchisees who wish to retain their businesses but not the day-to-day management.
How has the most recent economic cycle affected you, your employees, your customers? I would say it all begins with the customer. In the Western U.S. in markets I operate in, the current economic cycle has dramatically affected our customers and their income. They see their home values or the value of their investments decline in value, and they feel less rich. It affects their spending patterns and may trigger a decision to save more. Job losses in the region have clearly affected disposable income and spending. If a family with two incomes at $80,000 loses a job, they have one income at $40,000 and no longer have disposable income. You've just lost a whole family of customers. That in turn affects our business. We have to get more customers to fill the frequency lost by existing customers.
Are you experiencing economic growth/recovery in your market? We're not. I don't expect to experience any recovery in our markets for the balance of 12 to 14 months. But with the coming commercial mortgage defaults for large real estate, I don't see this as a recovery that includes job growth for the near term. For the long term we'll be fine.
What have you changed or done differently that you plan to continue in the future? We've increased our focus on cost controls and customer service. We look to retain and attract new guests and improve our bottom line. We look at every opportunity to save money.
How do you forecast in today's economy? I'm not sure we can appropriately forecast for our business in this environment. We will continue to do the best we can with the trends we see and the economic data at hand. That said, there are shocks to the system that cannot be forecasted for.
Where do you find capital for expansion? Our capital is primarily internally generated.
Is capital getting easier to access? Why/why not? No, I have not seen any change in the credit markets and one's ability to access capital.
Have you used private equity, local banks, national banks, other institutions? Why/why not? We have used the national franchise finance companies in the past and we're currently exploring local bank opportunities.
What kind of exit strategy do you have in place? I don't think I have an exit strategy. I think of building a business and building a legacy, maybe for my children. Time will tell if they wish to come into the business. If there isn't an interest I will consider how we might install professional management to run the business, or I may consider selling the business. But it's not something I think about.
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