More Is More: Experienced multi-unit franchisees takes on a 170-unit area Rep Deal
Anil Yadav likes to think big. The multi-unit, multi-brand franchisee in Northern California owns 155 Jack in the Boxes and 26 Denny's restaurants in California and Texas. In fact, he's Jack in the Box's largest franchisee and he owns one of the largest privately held franchise companies in the country - which just happens to employ more than 4,000 people. Apparently, all that's not enough.
In May, Yadav inked an area development deal with Marco's Pizza to spearhead 170 new stores throughout California. For perspective, that would double the total number of Marco's Pizza locations now open.
Yadav says he likes what he sees in the Marco's Pizza brand and is excited about his first area development deal. 'The Marco's Pizza area developer program is an ideal structure for investors and franchisees who want to be part of a growing concept with the leadership of experienced and proven master-franchisees. The economic impact that Marco's expansion will have on the region is significant." Yadav knows the Northern California market well. He's lived in the area since emigrating from India at age 17. His first job was as a fry cook in a Jack in the Box in 1984. A quick study, he became manager within 18 months and owned his own location within five years.
He's making a bold move with this new Marco's Pizza deal but, as always, he says he's ready for it. We had a chance to pose a few questions to Yadav and he obliged with some insightfully candid responses.
Why make this Marco's Pizza move now?
Marco's Pizza is one of the fastest growing brands in the country and the Northern California territory was wide open. The opportunity and partnership we have created with Marco's Franchising as an area developer is the direction that we felt was the right fit for us. We like to grow high quality/fair value brands. As I imagine looking back 3 to 5 years from now, I expect that this will have proven to be an especially good time to get in early with Marco's Pizza.
Also, Marco's Pizza management and I share the same business philosophy to do the right thing for the business and people, and our personalities are also in line with one another.
Why are you attracted to the area developer model of Marco's and how will that be different for you than being a multi-unit franchisee?
I have been with Jack in the Box for 20 years as a franchisee and with Denny's for a number of years now as well. Both of these brands have treated us with respect and have given us the opportunity to grow. Diversification is important for us and I was not looking for another franchise concept strictly for the growth, as I am continuing to grow through Jack in the Box and Denny's. Instead, as an area developer we've been given the opportunity to create a partnership with the Marco's franchisor.
Our role is to sell the territory to other prospective franchisees to develop the restaurant and share not only the responsibility with the franchisor operationally, but also the upside of revenue. The structure is right for us and it made sense to partner with Marco's as we know that burgers and pizza are a huge part of the U.S. food segment and are here to stay.
Will your management style be any different with Marco's than it has been with Jack in the Box and Denny's?
No, my management style will remain the same. I attribute my success with Jack in the Box and Denny's to my current structure. Having an operating partner with extensive business experience as part of our organization to take care of day-to-day operations with ownership structure has been very successful for us.
I have a similar structure in place for Marco's Pizza. Deepak Gupta, who is currently a Marco's franchisee, is part of my growth plan. Deepak will be responsible for the day-to-day operations and legwork that needs to be handled. Deepak was instrumental in getting me involved in the Marco's concept and my goal will be to help direct and coach him to success in his new role. With this kind of structure in place, I have been given the opportunity to continue to help grow our business. Having a vested operating partner has been successful for us and we will continue with the same management style and structure.
Will all these Marco's stores be new build-outs or will some be existing locations?
Yes, these are all new build-out Marco's Pizza stores and the timing is perfect for this model. Due to the soft real estate market, the doors are open for great lease or purchase opportunities for prospective franchisees and we know that landlords are motivated and willing to do what it takes to lease their properties.
How will this move change your company's internal infrastructure?
Deepak Gupta will be responsible for the day-to-day operations and will become an integral part of our structure. We may also add a few individuals to support operations and sales.
How quickly do you plan to get all 170 stores up and running?
We have signed a development agreement to complete all 170 stores within 10 years. However, due to the high level of interest we have received concerning Marco's Pizza, we anticipate having them up and running much sooner than that. Although we're in on the ground floor of Marco's growth, this brand has already generated impressive success since the decision was taken to expand across the U.S.
How do you expect this new area development deal to affect your financial situation?
My goal is to sell the territories to prospective franchisees to develop their units. As far as our growth, we will open a few stores and we have the full support of the franchisor to facilitate the growth financially or operationally. Marco's Franchising has developed some financing tools that will be helpful to some franchisee candidates even in a financing-starved economy.
Are you continuing to search for other franchise brand opportunities? Would you consider non-food?
No, we are not actively looking for any other brand beyond this Marco's Pizza expansion. For now we need to focus on our existing businesses.
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