Lessons from the Fairway: Multi-brand Operator Leads with Discipline, Focus, and Humility

Name: Alex Carney
Title: Vice President
Company: TR Hospitality Group (Freddy's Frozen Custard & Steakburgers) and High Plains Brew (7 Brew Drive Thru Coffee)
No. of units: 10 Freddy's Frozen Custard & Steakburgers (11 in August), 3 7 Brew Drive Thru Coffee
Age: 32
Family: Wife Shelby, daughter Henley, 4, sons Palmer, 3, and Quentin, 1
Years in franchising: 10
Years in current position: 3

While playing golf for Kansas State University, Alex Carney learned lessons that now serve him well in the business world more than a decade later. Traits like teamwork, discipline, commitment, humility, and resilience are as important for a golfer as they are for a multi-unit franchisee.

While still in school, Carney saw business opportunities all around him as national brands moved into his college town of Manhattan, Kansas. Carney, a marketing major, was intrigued by this growth and kept an eye on the development of franchise businesses in local communities.

Carney was no stranger to entrepreneurship. Several family members have owned businesses over the years. His parents have operated a strategic marketing firm for the past three decades.

During his senior year, he met with several groups affiliated with national brands in his hometown of Wichita, Kansas. One of those groups was Freddy's Frozen Custard & Steakburgers. Carney didn't know much about the brand or the franchising process, so he researched the company and the business model. After meeting with the Freddy's development team, he moved forward with his first franchise agreement.

Carney went through management training and oversaw a location in Kansas while his initial store in Nebraska was being built. He opened his Freddy's with partner Ron Oberg in Lincoln to great fanfare. Carney, who was at the time of the opening, and his partner quickly signed a development agreement for more locations. They will open their 11th Freddy's restaurant this summer. The partners also operate three 7-Brew Drive Thru Coffee locations.

Reflecting on the first 10 years of his career, Carney says franchising has opened a wealth of opportunities and exceeded all his expectations. "As a young person starting off my career, franchising has taught me so much, whether it was about the food and beverage industry or important aspects of operating a business," Carney says. "I've had the opportunity to work with some great people and interact with many loyal customers. I feel like we are just getting started."

PERSONAL

First job: Associate at Wichita Country Club Tennis/Fitness Center when I was in high school.

Formative influences/events: I was a member of the Kansas State University golf team from 2011 to 2014. That experience taught me discipline, focus, and humility, which have defined my career over the past 10 years. Golf is a game of failure. The business world is also full of many ups and downs. My experience with the golf team taught me how to learn from setbacks and get up after being knocked down. I come from a family of entrepreneurs. My parents have operated a strategic marketing firm for the past 30 years, which is where I got my professional start. My grandfather was in banking, insurance, real estate, and numerous other ventures. There are several other entrepreneurs in our extended family.

Key accomplishments: My family first and foremost. Building the infrastructure to grow our company from one Freddy's location to 11 and easily adapt to 7 Brew development and operations.

Biggest current challenge: Giving quality time and attention to my team and my family while maintaining my focus on operations, development, and growth.

Next big goal: Complete current development agreements for Freddy's (19) and 7 Brew (30).

First turning point in your career: The day we opened our first Freddy's in Lincoln, Nebraska. We knew it would be welcomed, but we didn't realize it would be overwhelmingly loved. We quickly signed a development agreement to add an additional five locations to our existing five-store agreement. We have since signed an additional agreement for locations in South Dakota and Iowa. Nebraska and South Dakota have been incredible states in which to do business.

Best business decision: Franchising. It isn't what I thought it was going to be as a young graduate, but it turned out to be better than I could've ever expected. There are endless opportunities and incredible people.

Hardest lesson learned: Sometimes people leave no matter how close you are to them. I have been blessed to have high-quality team members and managers, and we became friends. In some cases, they worked at one of the stores as a path to go to something else that they are more passionate about. They might move closer to family or pursue what they studied in college. I'm always happy to see people move on and succeed, but their departure can sting when you are in an industry in which we work so many hours together. I am proud to have built many great relationships with the people who have worked for me over the years.

Work week: Splitting time between travel and office work Monday through Friday. Mostly family time on Saturdays and Sundays with a little bit of prep for the upcoming week on Sunday evenings. I like to walk into the office Monday morning not feeling like I have to play catch-up. This business doesn't stop.

Exercise/workout: I am working toward some strength goals through heavy lifting three to four days per week. I am definitely not a morning gym guy, but I'll sneak over to the gym over the lunch hour or on my way home from the office. I have worked really hard to focus on my strength this year, understanding that it leads to better performance at work, a clearer and more focused mind, and added energy for the three littles that await me when I get home. It also sets a good example for my team.

Best advice you ever got: Pick a career that pays you while you sleep. Thanks, Pops.

What's your passion in business? Business is fun! I came into franchising with no food and beverage experience. My toolbelt now includes construction, development, real estate, management, accounting, and finance as well as being a part-time plumber, electrician, and handyman. How many other careers teach you so many diverse skills?

How do you balance life and work? I'm extremely fortunate. My wife Shelby has embraced my work schedule, ethic, and passion for business. We look at it as give and take. If we can sneak out for lunch on a Tuesday, dinner on a Thursday, or a quick weekend getaway to the desert, we'll do it at a moment's notice. The food and beverage industry is 24/7, and I love that. I focus on being with my family when it matters and the same for my businesses.

Guilty pleasure: I have several: a great ribeye steak, a glass of fine tequila, a quick nine holes of golf after dinner, or a Padron cigar.

Favorite book: I also have several. Most recently, I have enjoyed the James Reece series by Jack Carr. Some of my all-time favorites are Quench Your Own Thirst by Jim Koch, Never Finished by David Goggins, and Sideline CEO by Marty Smith.

Favorite movie: "The Lincoln Lawyer."

What do most people not know about you? Mostly, I'm an open book. I have chosen and thrive in a career that is full steam ahead even though it has always been my ambition to lead a quiet life. I have actually competed in a professional golf tournament on one of the development tours. Sadly, I didn't make the weekend cut.

Pet peeve: When others are dishonest or not punctual.

What did you want to be when you grew up? A professional golfer. I played competitively from age 10 through college. I continue to compete in amateur events once in a while.

Last vacation: Las Vegas in May 2024.

Person you'd most like to have lunch with: Entrepreneur and author Jesse Itzler. I've read Jesse's book, subscribed to his newsletter, and listened to several podcasts in which he has been a guest. I think he is an excellent businessman. He swims against the current and helps push people to be their best. He is very passionate, and I love that.

MANAGEMENT

Business philosophy: People will always have options. We have an opportunity to increase the value of the products we deliver by adding incredible, personable, and genuine hospitality.

Management method or style: I love to facilitate joy. When surrounded by high-quality individuals, the restaurant industry is a ton of fun and time flies by. I also value honesty. I have always been honest with my team, to a fault, because I know they will be honest with me in return. We have been focusing on bringing accountability back to the workplace because the hard conversations and the actions, in return, show the true character of the team.

Greatest challenge: Trying to do everything at once. When you care about results as much as I do, you want to have your hand in everything. I can be a bit of a perfectionist and try to get involved in everything.

How do others describe you? Passionate, energetic, and enthusiastic.

Have you ever been in a mentor-mentee relationship? What did you learn? I've been lucky enough to partner with a lifelong family friend, Ron Oberg, in both Freddy's and 7 Brew. He has given me incredible opportunities and taught me more than I could've ever imagined about business.

One thing you're looking to do better: Focus on the details. I tend to try to do too many things at once and can miss the fine print. I've improved as my role has evolved, but there's still room to grow.

How you give your team room to innovate and experiment: I love to try new things, so I am drawn toward people with big ideas. My team knows that I am willing to try just about anything, but we will quickly abort if we find that it isn't solving the problem at hand. I also try to explain the "why" if their idea isn't feasible. My team also knows they can shut down my bad ideas with no hard feelings.

How close are you to operations? You will definitely find me directing traffic at new store openings. And any given day, you can find me pulling shots of espresso at 7 Brew, making a Double Steakburger or Turtle Sundae at Freddy's, or tidying up around the stores. I have to pull myself away because I love the operations and could do it every minute of the day.

What are the two most important things you rely on from your franchisor? Brand recognition and systems and processes to help improve the guest experience. Both Freddy's and 7 Brew are emerging brands with an incredible support staff at the franchisor level. I don't know how many other franchisees get texts and calls from their CEOs regularly to check in, give recognition, or ask for opinions. We are blessed beyond belief with the leadership from both brands.

What you need from vendors: Consistency and communication. We need our vendors to perform at the highest level at all times to ensure that we can do the same. Again, we have been very fortunate to work with some incredible vendors who will go out of their way to make sure we are successful.

Have you changed your marketing strategy in response to the economy? How? Absolutely! Growing up in marketing and having a passion for economics has helped me focus on the future of our brands. We just rolled out family night at Freddy's where families can purchase adult meals and get kid's meals for free on Tuesday nights. People are looking for value right now, and I want Freddy's to be a part of the dinner discussion in every household on Tuesdays. For 7 Brew, we have focused on building our loyalty base with direct mail pieces as well as community outreach events, introducing the brand to new faces.

How is social media affecting your business? It is incredible and terrifying all in the same breath. Both brands have teams dedicated to social media who follow trends and get the brand in front of new consumers. On the other hand, we know that if we make a silly mistake, it could easily be a viral moment that destroys our reputation.

How do you hire and fire? We are looking for personalities and work ethic. I have always told my team that it's more about the person than the resume. We hire people who we believe we can trust, have a great time with, and hold accountable if needed. When it comes to firing, I've learned some hard lessons. I have held on to folks I shouldn't have, and it impacted us negatively for longer than it should have. We try to identify the folks who need to be successful somewhere else and help them on that journey. We've seen people thrive after parting ways. Sometimes, folks just aren't a good fit, and that's okay.

How do you train and retain? We now have a director of training, and we couldn't be more excited. We are focused on consistent systems and processes to ensure that everyone who walks through the door gets a fair shot by giving them quality training. Retention is difficult right now. We are focused on rewarding accomplishments, consistent communication, and training as well as having a fun/safe workplace. Additionally, removing the bad apples tends to keep the good ones around.

How do you deal with problem employees? I love face-to-face conversations with someone who's having a bad day. Usually, there is an external cause that they didn't have a chance to process before clocking in. If a team member is causing trouble consistently, I have a different approach. A good friend in the industry once taught me this method. We will pull the team member aside and ask them to go home and think about how much they want to work with us because their behavior isn't reflecting that. We will then ask them to come back to their next shift with a positive mental attitude or let us know that they are going to take their talents elsewhere. It seems to work almost every time. Sometimes people just have bad days.

Fastest way into your doghouse: Be dishonest, tardy, or lazy.

BOTTOM LINE

Annual revenue: $30,000,000 (combined).

2024 goals: Open five 7 Brew locations. Open one Freddy's and start on the next two.

Growth meter: How do you measure your growth? I have always measured it by seeing the growth in my team. If they aren't growing, I'm not either. Our blooming development helps as well.

Vision meter: Where do you want to be in five years? 10 years? I want to build an empire. I would like to add more brands across more segments. We have a nucleus that can handle more; that's when you know.

Do you have brands in different segments? Why/why not? At the moment, we are in the QSR better burger and coffee segments. They complement each other well, have similarities that make operations flow, and are both targeting the daily consumer.

How is the economy in your region(s) affecting you, your employees, your customers? Nebraska and South Dakota have been very strong since day one for us. We have seen a sentiment from our guests looking for value more recently. We are focused on not outpricing ourselves as well as making sure our teams are compensated fairly and comparably across the industry. The guests notice when we increase prices and mostly understand. As the wallet of the consumer gets squeezed, we know we have to differentiate ourselves to earn their business. Freddy's and 7 Brew both offer products that are fresh, consistent, and desirable.

Are you experiencing economic growth in your market? Absolutely. The Midwest has been very good for business. Omaha, Lincoln, and Sioux Falls are a few markets that we are developing that have been growing at incredible rates. The suburbs that surround them are following suit, allowing us to add locations as well.

How do changes in the economy affect the way you do business? We are focused on hospitality, quality, and cleanliness. At the end of the day, coffee shops and burger restaurants aren't going away. In the best economy and the worst economy, the QSRs that serve a great product in a clean environment with great hospitality will outlast the competition.

How do you forecast for your business? Forecasting has been a big part of our budgeting over the past few years as margins have been slimmed. Fortunately, Freddy's has a long record of sales data that tends to follow the same trends. 7 Brew is a little bit tougher. We are trying to pay close attention to our week-over-week trends until we have a few years of data to help us forecast. Both businesses are extremely consistent week in and week out.

What are the best sources for capital expansion? Although it may not be the best, we have always used private capital from a small network of individuals in the Midwest. It doesn't always allow us to grow as quickly as we'd like, but our partners trust us and give us free rein to make decisions without second-guessing us.

Experience with private equity, local banks, national banks, other institutions? Why/why not? We had a PE deal fall through near the finish line a couple of years ago. It taught us a lot and gave us a fresh perspective on how financiers view our business. We are always happy to meet with investment groups, but we're thrilled with how things have worked out so far. We currently have a relationship with a regional bank in Kansas that has been more like a partner than a bank. They have been along for the majority of our journey and love the brands that we represent.

What are you doing to take care of your employees? We do the standard shoutouts for birthdays and anniversaries, etc., but I have realized that recognition for a job well done, especially in front of others, goes a long way. Everyone loves to hear "good job" from time to time. We also have a constant schedule of competitions and events that allow us to reward our teams for their efforts.

How are you handling rising employee costs (payroll, minimum wage, healthcare, etc.)? The margins are shrinking; there's no doubt about that. Minimum wage has been tough to navigate with competitors consistently raising the bar to attract talent. Some brands are putting golden handcuffs on their team members just to retain staff by overpaying by 10-20%. We know that the best way to manage the personnel budget is through tenure. Tenured team members work smarter and faster. They waste less and give better hospitality to new hires. Both of our brands have an incredible track record with retention.

What laws and regulations are affecting your business, and how are you dealing with them? Like most QSRs, our managers are working more than 40 hours per week. As the Department of Labor continues to raise the minimum salary threshold, we will have to make some critical decisions on the structure of our operations. We are starting to plan for the changes but haven't made any critical decisions at this time. There is also a large population of kids under the age of 16 who want to get into the workforce. As an employer, there is more risk than reward for employing them. It's too bad because that's a great batch of prospective employees.

How do you reward/recognize top-performing employees? Our goal is to promote from within as we grow. Our top performers have constant opportunities to move up in our group. In the next 18 months, we will need 30-50 more managers, supervisors, and trainers. A passionate, driven person can make a great living managing a Freddy's or a 7 Brew. Beyond promotions, a top performer may have their pick at the best shifts throughout the week, have a higher pay rate, or get the opportunity to travel to a new store opening.

What kind of exit strategy do you have in place? As a group, we are constantly discussing succession and strategically planning for the future. Personally, I have made it my mission to train up my team and implement processes and best practices to keep the train moving forward regardless of who is on it.