Mr. Hospitality

"If you're not hospitable, you're in the wrong game."

If President Obama decided to name an Ambassador of Franchising, John "JD" Draper, with his dapper attire, mile-wide smile, and booming voice would surely make the "short list" of top candidates. At least someone in Washington is listening: Draper was just voted onto the board of the IFA Educational Foundation's Diversity Institute.

Draper has been a student of franchising since his first job out of Wayne State University. "I went to work straight out of college as a shift manager for a Burger King in Detroit. I made $1.75 per hour," he says. Today, as president of operations for V&J Holding Companies in Milwaukee, he is responsible for 125 units, 6 brands, and 4,000 team members in 6 states (Wisconsin, Michigan, New York, Ohio, Minnesota, and Massachusetts).

From his Milwaukee office, Draper, who describes himself as a "participatory manager," discussed the Affordable Care Act, multi-brand challenges, the economy, and relationships with franchisors, team members, and employees. He comes on strong on each topic, throwing in a memorable, usually original, quip. And he always concludes the glass is at least half full.

Even when it comes to weathering the economic downturn, he remains encouraging with his teams: "You guys have written a page in history. Few people have gone through this tough an economy--it's only the second worst in our country's history--and lived and managed through it. These life skills will be with you the rest of your life. Be proud."

When it comes to achieving goals, Draper tells his teams: "Only if effort turns to results did 'try' have anything to do with it."

And his favorite theme, and one big reason he's fondly known as "JD" throughout the industry: "If you're not hospitable, you're in the wrong game."

Draper, who joined V&J in 1994, is a staunch supporter of all V&J's food brands and believes the diversity makes the organization stronger and more nimble. "Each brand operates in a different climate. Burger Kings are in urban markets as well as suburban markets. Pizza Huts are generally in our upstate markets, and Auntie Anne's are in the malls," he says. "Each point of distribution gives us a different sensitivity to our customer base. The diversity in my opinion has been a blessing because when one brand is doing well and another is not, they can help each other."

This U.S. Army veteran, philanthropist, husband, father, and grandfather is also a cheerleader for franchising in general. "It's a great time to be a franchisee. Franchisors are looking for multi-store operators, people with fire in the belly. If you have fire in the belly, a humble desire to serve, and are hospitable in nature, get in now!"

Name: John "JD" Draper
Title: President of Operations
Company: V&J Holding Companies, Inc.
No. of units: Pizza Hut, 61; Burger King, 30; Auntie Anne's, 24; Coffee Beanery, 6; Häagen Dazs, 2; Edy's, 2
Age: 62
Family: Wife Deborah, three children, Angela, John (a Wingstop franchisee), and Kristal, and five grandchildren
Years in franchising: 42
Years in current position: 12

Personal

First job:
When I was in high school, I walked by a clothing store where I saw some pants I wanted. I didn't have any money but talked to the owner, who said, "Come work for me. I like your attitude." That was my first job. I've always liked nice clothes. I got that from my mother.

Formative influences/events:
The most influential event was in the late 1970s when I heard Herman Cain speak at a Burger King convention when he was still executive vice president of operations. He gave a compelling speech about motivation and the will to serve customers.

Key accomplishments:
In business, it was the acquisition of the Pizza Hut group in upstate New York in 1997. Personally, my biggest accomplishment is my family. I love them dearly and am elated at being a grandparent.

Biggest mistake:
I really don't have a lot of regrets. Perhaps I regret not returning to college for my master's degree.

Smartest mistake:
My wife Deborah and I met in high school. She was friendly and I was awkward. I walked up to her and said something like, "I want to be your boyfriend." She laughed at me like I was the biggest fool ever. But years later, we met again and got married.

Decision I wish I could do over:
None.

Work week:
I'm available 24/7. Everybody has my cell numbers. I usually work 60 to 70 hours a week.

How do you spend a typical day?
I start with conference calls, go into meetings, handle emails in between, lunch at one of our restaurants, and have more conference calls. Every other day, in the early evening, I play racquetball, and in the summer I play golf on weekends. After that I have dinner with my family and chat with them.

Favorite fun activities:
Golf doesn't like me, but I like golf. I love to control things, so I'm trying to figure out how to control golf.

Exercise/workout:
Three or four times week.

Favorite tech toys:
My iPhone. I can't get away from it and it can't get away from me.

What are you reading?
David Novak's Taking People with You: The Only Way to Make Big Things Happen. The biggest idea I'm taking away from the book is that you really can't get anywhere without people, so you need to take them with you.

Do you have a favorite quote?
"Only if effort turns out to be results did 'try' have anything to do with it." I said that in a meeting when a district manager talked about some results that weren't achieved. He was absolutely right: the effort didn't result in success. We do the work to achieve the goal.

Best advice you ever got:
My mother told me, "Fall down seven times, get up eight."

What gets you out of bed in the morning?
My duty to serve. I get up early even on Saturday morning to shovel snow. And I won't just do the walkway, I'll do the whole driveway. On Sunday, I get up to go to church. These duties are part of my core belief system.

What's your passion in business?
Hospitality--you have to be hospitable to be in the business I'm in. I'm in fast food, fast casual. It's tough today. The 16- and 17-year-olds used to be our mainstay, but that's not necessarily true today since we hire people who may not be able to get a job somewhere else. We try to find people with good attitudes, who are cheerleaders for the team. I tell them, "Your attitude determines your altitude."

How do you balance life and work?
I do it with the help of my "life coach," my wife Deborah. We've grown up with each other and are constantly bouncing ideas off each other. We also check each other the same way.

Last vacation:
A working vacation, of course, in Nassau, Bahamas.

Person I'd most like to have lunch with:
Abe Lincoln. I'd like to ask him how he managed to raise a son after losing another one while at the same time trying to run the country. It must have been overpowering, but he did both very well.

Management

Business philosophy:
Over time, I've created an award and named it ABC, which stands for Accountability Balanced against Compassion. If a person figures those things out, they can genuinely lead and manage teams.

Management method or style:
I'm a participatory manager. I like to get everybody involved when we have time. Sometimes that complicates or oversimplifies a solution. When there's not enough time for discussions or meetings, I practice executive privilege.

Greatest challenge:
Beating back negativity. It's in everything we see and do. The issue isn't the problem--it's how you look at the problem that helps you solve it. It's important for people to fight back the negativities within them, because I believe that what's inside will eventually come out and can hinder you from being a better person.

How do others describe you?
I think most people would say I'm positive, energetic, and very happy.

One thing I'm looking to do better:
I put my life in four categories: physical/health, mental, spiritual, and wealth. I list things I want to achieve under each column and I work on them.

How I give my team room to innovate and experiment:
I believe in coaching and giving examples of life experiences to encourage my team. I try not to tell them what do, but to say, "I remember..."

How close are you to operations?
I'm very close, maybe too close, but it's my job.

What are the two most important things you rely on from your franchisor?
I'd like to see our franchisors lead in the categories of marketing and training.

What I need from vendors:
Value.

Have you changed your marketing strategy in response to the economy?
Not really. Our core focus has to be on great service, then great products.

How is social media affecting your business?
Social media is affecting our marketing in many ways as we use Facebook, Foursquare, and Twitter.

How do you hire and fire?
Hiring: Slowly, we do it real slow. When we hire team members, we have a corporate policy--not mandated by the franchisor--that we have orientation. Every employee, hourly or manager, goes through it. We also do background checks and drug tests, depending on the level of management and responsibility. Firing: We also work slowly on the other end. If an employee is not doing well, they have an opportunity to raise their concerns to a higher level in the organization. We don't leave it all to the shift manager. And we always wait 24 hours before any termination so that cool heads prevail.

How do you train and retain?
Thank God, we have franchisors that provide us with tons of information. Because of our many brands, we use the training tools they provide. We're good at retention, I believe, because of our internal process. I look at employment as a track where we orient, communicate, train, re-train, and follow up on the whole process. We allow people to express themselves in a variety of ways, including an employee hotline. As a result of all this, we have some stores with zero percent turnover, which is unheard of in our industry.

How do you deal with problem employees?
We look back at ourselves in the mirror and see if we did everything right. If a shift manager wants to fire an employee, he needs the approval of the restaurant manager, who needs the approval of the district manager. We have internal and external customers--we don't want ex-employees to have bad feelings about us.

Fastest way into my doghouse:
Mistakes are to be expected. But if you lie about it or intentionally violate company policy, that's it. Integrity is very important in our operation.

Bottom Line

Annual revenue:
$50 million to $90 million

2013 goals:
To continue to grow profitably, look for deals, and increase sales.

Growth meter: How do you measure your growth?
By sales and profits.

Vision meter: Where do you want to be in 5 years? 10 years?
I'd like to double our business in 5 years. In 10, I'd like to possibly consider retiring to consultant work.

How is the economy affecting you, your employees, your customers?
It has been difficult because we have been forced to make decisions we would not have made in a more positive environment. The economy has been south since 2008. That's a long time to fight internally. It's affected us, but it's made us stronger. We've told our team members, "Don't let the bad time turn you off. Let it turn you on. When the going gets tough, the tough get going, so let's do our best."

Are you experiencing economic growth or recovery in your market?
Yes. In years past, the fast food industry has been the first to recover and first to go down when things are going down. I see us recovering slowly, but surely. I'm optimistic that we've seen the worst.

What did you change or do differently in this economy that you plan to continue doing?
In our speaking with team members, we're constantly focusing on positivity. I tell them, "You guys have written a page in history. Few people have gone through this tough economy--it's only the second worst in our country's history--and lived and managed through it. These life skills will be with you the rest of your life." It's a way to be proud and not negative.

How do you forecast for your business in this economy?
We used to do our five-year plan once a year. Now we plan every day. We take our national plans and our quarterly plans and dilute them to daily plans. This is how we have to manage the business now.

Is capital getting easier to access? Why/why not?
No, not easier. I'm also a bank board member. Banks want to lend money, but they're restricted because they have to be sure they have returns. It's difficult to lend money without a guarantee, and the restaurant industry in general has been a bad investment lately.

Where do you find capital for expansion?
If you run your business right, you find it internally. If not, you go out and borrow.

Have you used private equity, local banks, national banks, other institutions? Why/why not?
Local banks, yes; private equity, no, not yet. But we'll keep the phone lines open to any large equity groups out there.

What are you doing to take care of your employees?
We have incentive programs, bonus programs, and quarterly and annual reviews. We constantly communicate. I call it the "Big C"--did we over-communicate with a capital C?

How are you handling rising employee costs (payroll, healthcare, etc.)?
It's evolving. Every day we hear a different take on the new affordable healthcare law. Each of our brands has provided us with experts who have read the law and can anticipate costs, but no one really knows yet. We're also dealing with the hardship of that 2 percent increase in FICA taxes--that's not something we were anticipating. We all understand and appreciate it, but no one knew it would have the cost impact it did.

How do you reward/recognize top-performing employees?
In addition to our review process and orientation for retention, we have recognition on our website any time an employee comes up with something unique.

What kind of exit strategy do you have in place?
I don't have one. I'm not planning to go anywhere.