Partner Power: Making the Move from Corporate to Operator
Before signing on as a multi-unit franchisee, Rob Parsons already had an insider's view of franchising, having spent time at Denny's and Popeyes working with franchisees on the real estate side.
At Popeyes, Parsons worked with Jim Lyons, an industry veteran who is now chief development officer for Del Taco and Captain D's. Lyons played a key role in mentoring the young Parsons. During a five-year stretch at Popeyes, Parsons played a key role in pushing the brand's New York market from 58 to 101 locations.
Just turning 40, about to get married, and enjoying a successful corporate career during a savage economic downturn, Parsons decided the time was right to emulate the entrepreneurs he had been working with for years. "I decided that I wanted to walk the walk," says Parsons. And he chose a tough region to take that walk.
Parsons got his start working the real estate market in New Hampshire before becoming directly involved in franchise development in the Northeast. He knows firsthand how tough it is to develop a franchise in New England, where the locals tend to remain steadfastly loyal to their favorite restaurants. It's the polar opposite from the Midwest market, he says, where most are quick to embrace a new franchise location. Also, he says, "Real estate is expensive in New England and good locations are hard to find. I couldn't recruit people to it, but I believed in it because I lived here."
With all the real estate development savvy he needed, Parsons teamed up with investors and an experienced operations chief to form Synergy Dining Group.
"You need three things in this business: capital, operations, and real estate development," he says. "That's what we have in our three-way partnership, and that's why we're called Synergy. We formed in February 2009, and I retained my post at Popeyes until July, training my replacement. I resigned and two weeks later opened my first restaurant." That was July 17.
"We did $1 million in sales inside of four months in that unit," he says. Three days after they hit the $1 million mark, the partners opened their second store, in Fall River, Mass. And they're a long way from finished: the deal with Popeyes calls for Synergy to build 18 restaurants in their territory.
As those late-night TV ads say, "But wait, there's more!" Once those 18 units are built, Parsons plans on adding a noncompeting brand to help improve the odds for long-term success. And then he might add more Popeyes locations.
"Who knows how many restaurants the market will hold?" he says. "And there are other markets. I sold franchises for a long time, and every franchisee that ever came to me had a number in mind for how many locations they wanted to have. Usually it was 100."
Parsons chuckles at that. If each location makes money and reports growing sales, then he's doing fine. He says there's no real magic number that adds up to success. "I will open as many stores as I can control and maintain profitable."
Name: Rob Parsons
Title: Managing partner
Company: Synergy Dining Group
No. of units: 2 Popeyes, with a deal to add 16 more
Family: I got married between the openings of my two stores.
Years in current position: 1
Years in franchising: 12
Key accomplishments: Going from a corporate position to two stores in six months I think is a huge accomplishment. Each store is like a child.
Biggest mistake: Not having the guts to have done this sooner. I was in a comfortable corporate position and enjoyed what I was doing. I feared talking that step to become a franchisee. I wish I had done it years ago.
How do you spend a typical day? There is no such thing as an average work day in this business. I begin looking at the numbers. I make sure the cash position is tight, that we're not missing anything. Then I begin working. Today we met with the mayor in our town, who's been working with us. We've sponsored parades, the Chamber. I do a lot with the community with each store. I believe I have a presence at each store.
Work week: I would say I spend 40 percent of my time working on the development of new sites.
Favorite fun activities: I like to golf and it's a fond memory.
Exercise/workout: I have a personal trainer I'm a pen-pal with.
Favorite stuff/tech toys: I'm a BlackBerry addict.
What are you reading? I'm reading Blink: The Power of Thinking Without Thinking, by Malcolm Gladwell.
Do you have a favorite quote or advice you give? A lot of people view fast food as a dead-end position. I tell staff that whatever you're doing, do it with passion. It does not have to be a dead-end job. There's a bright future in this business, and it is what you make it.
Best advice you ever got: I had a franchisee who did three stores with me in a year and he told me: "Why are you letting me do this? You should be doing this."
Formative influences/events: I would say Jim Lyons, currently chief development officer of Del Taco, was probably my biggest influence. He made me a director at 27. He believed in me, put his faith in me, and it paid off for both of us. I would never let him down when I worked for him.
How do you balance life and work? It's so intermingled. I don't view what I do as work. I love what I do and I love doing it with passion and it is my life.
Business philosophy: Working for companies, people overuse words like teamwork, and what happens is that it becomes just talk. You don't have to talk about it if you're doing it.
Would you say you are in the franchising, real estate, or customer service business? Why? Yes.
What gets you out of bed in the morning? No two days are exactly the same, and it's exciting to find out how this day is going to end.
What's your passion in business? When you walk away from a built restaurant with people in line to buy your product and hearing them tell you how much they enjoy it--that's what it is all about. You start with a piece of raw, undeveloped land, and the day that you envisioned has materialized. That's success, and it's addictive.
Management method or style: In the stores, we have an operating partner who has over 20 years' experience. My style would be to let people who have expertise use their style. I don't override their area of expertise. Let everyone utilize their expertise.
Greatest challenge: Right now it's been securing real estate. Even in the recession the best market is still valuable. The challenge is to not digress and take a discounted site because it is available at a distressed rate. The challenge is to stay true to your core beliefs.
How close are you to operations? It's vital to have a strong presence in the store. We don't have a corporate office per se. We have an office in our store. We feel it would remove us from the operation of our restaurants, and we want to be in the restaurants as much as we can.
How do others describe you? You'd have to ask some others that. I shudder to think.
How do you hire and fire? I have not had to fire anyone. Our general managers are responsible for hiring and terminations. I don't think we've fired many people. We also try to over-hire for the position. We are in a true growth mode. We are trying to hire people at a higher level and we top out the pay scale for the general manager. We over-hire so we can grow. We over-manage the restaurant so when we have a new opening we have fully trained staff in place.
How do you train and retain? We have a training facility in our second store. We have a 3,600-square foot Popeyes, which is way larger than the average. We built a training facility in the store so we can train in-house.
What kinds of things are you doing to take care of your employees? We've done very special things in individual cases for those who have gone above and beyond the call of duty. We have health benefits and bonus programs, of course. But for key individuals, we've done some unique things.
How are you handling rising employee costs (payroll, healthcare, etc.)? What we try to do is build sales. Sales cure all ills.
How do you reward/recognize top-performing employees? We call that a promotion.
Annual revenue: In our first six months, we did more than $2 million.
2010 goals: We don't know what month our next store will open, so that's tough to project.
Growth meter: How do you measure your growth? On a daily basis, a store-by-store basis, and that's how we will continue to measure growth. We'll never set a hurdle for the company as a whole; that needs to be done on a store-by-store basis.
Vision meter: Where do you want to be in 5 years? 10 years? I would like to add a second brand comfortably, a completely noncompetitive brand to complement our growth and development and diversify the product.
How has the most recent economic cycle affected you, your employees, your customers? I left a corporate position in what would be the worst economic environment in my lifetime. The reason is that I view this economy as a great opportunity to secure real estate at a time you can get it at far lower prices than it has been in our lifetime. Sales are up. People will not stop eating out. They may not go to Applebee's and Chili's, but that doesn't mean that they're going to cook at home. We're well positioned to take advantage of a down economy.
Are you experiencing economic growth/recovery in your market? There's a ways to go. The real estate market in pockets is still strong, but every day with some failures there are new opportunities.
What did you change/do differently during the recent tough economic times that you plan to continue doing into the future? We're not saddled with huge rent or acquisitions made in the peak, and now we can take advantage of costs when they drop. Many restaurants are failing today more because of bad economics.
How do you forecast for your business during trying times? Can you even forecast at all? When we look at opening a restaurant we work backward. We project sales conservatively and back our numbers in to fit that. So our economics match the sales expectations or we don't do the deal.
Where do you find capital for expansion? We have self-funded and we used no debt. I believe we can self-fund on the front side and we'll work to finance our way out of it. After the third store I will look to finance the package after it's been established. I've had great success with that approach.
Is capital getting easier to access? Why/why not? We haven't really discussed things with lenders.
Have you used private equity, local banks, national banks, other institutions? Why/why not? My belief is that it will probably be a more national franchise lender that understands the franchise lending market, and that's usually not the local bank. Ironically, we've been approached by local banks that know us, and it may be that we go that route.
What kind of exit strategy do you have in place for your business? I'm 41. I don't have one. We're not building these to flip them. We're building a company.
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