Ice Cream and Coffee: It's A Perfect Mix For Gavin Hart

Gavin Hart loves his Dairy Queen vanilla cones and Dunkin' Donuts coffee. But he also loves to see his customers enjoy them, too.

"That makes me glad to get up every morning," says the Indiana family man and multi-brand franchisee. "We try to create a family-type environment for our customers in all our restaurants--it makes them want to come back."

Hart, an athlete and a criminal justice graduate of Indiana University, strongly believes that a relaxing, fun, upbeat work environment is largely responsible for the success of his 9 Dairy Queens and 14 Dunkin' Donuts. "We believe good people equals good profits. We treat every employee as family, which creates loyalty and an emotional connection and makes a lot of things easier. We have no theft issues, our retention is good, and we have good employees taking care of our guests. We find that when we treat our guests like family, they return more often."

With five more DQs and five more DDs slated to open this year, Hart considers juggling two brands and multiple units a "benefit," rather than a challenge. "There are many similarities between the brands, so it's an opportunity to take the best from both and meld them together in our system," says Hart, who worked in restaurants as a teenager and in college.

Although he won't disclose his annual revenue he did share his thoughts about the state of the economy, the capital market, and his plans for growth.

2012 goals:
10 percent increase in sales.

Growth meter: How do you measure your growth?
We measure not only in number of units but also in same-store sales.

Vision meter: Where do you want to be in 5 years? 10 years?
In 5 years we want to increase expansion throughout Indiana on both brands. In 10 years, we'd like to be adding five to six stores a year on both brands and to be adding another two or three restaurant brands to our company.

How has the most recent economic cycle affected you, your employees, your customers?
Our business tends to follow the unemployment rate, so as the rate remains high, our guest transactions remain low. Recently, we've seen the rate come down a little, so there's been a bit of a bump.

Are you experiencing economic growth/recovery in your market?
We're seeing a little bit. In 2011 in Dunkin' we saw nice double-digit comp sales. For Dairy Queen, we were flat in 2011, because in our neck of the woods we had the worst weather we've seen in 20 years. We're in the ice cream business, so we are somewhat weather-dependent.

What did you change or do differently in this economy that you plan to continue doing?
We'll continue to pay attention to value prospects. We're giving customers loyalty programs and discount cards, but you don't want to discount too much and become known as a discounted brand. It's a fine line to walk.

How do you forecast for your business in this economy?
In addition to looking at unemployment rates, we forecast every week, looking at the trends from the previous year.

Where do you find capital for expansion?
We've been lucky to stay with local banks in Indiana.

Is capital getting easier to access? Why/why not?
We've not seen much of a change. Things are consistent for us since we've been working with the same local banks for years and we know which projects will be greenlighted.

Have you used private equity, local banks, national banks, other institutions? Why/why not?
We used local banks because they're easier to deal with and the customer service is a notch above national. It's nice to walk into a local branch where they know who you are and decisions can be made on the spot.

What kind of exit strategy do you have in place?
Right now, we're in growth mode and have no exit strategy yet. We just plan to build as many brands and units as we can and to be as profitable as possible.

Published: May 9th, 2012

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