Smokin' Hot!: Food Industry Pro Takes Virginia by Storm

Mike Pietrzyk's 37 years in the food business began auspiciously in 1972, when, as a newly promoted manager of a Burger Chef in Virginia, he was put in a store scheduled to close in 7 months.

"The restaurant wasn't doing well, and they'd decided to close it," he recalls. "They just asked me to keep it together for a few more months." Pietrzyk worked seven days a week and did his own marketing, passing out local coupons and getting acquainted with the community.

When the seven months were up, his superiors had a problem: the 21-year-old had turned sales around and made the unit profitable. "We had the highest growth in sales, so they renewed the lease," he says. "I knew then that the food business was for me."

Pietrzyk, a native of Detroit, has been repeating his formula for success ever since for food franchises including Pizza Hut, Wendy's, Little Caesars, and now Firehouse Subs. After working in food services for years, and with financial backing from his father-in-law, "I finally got the nerve to go out on my own as a franchisee with Little Caesars," he says. "I opened my first location in 1984, was 1994 Franchisee of the Year, and sold my 33 stores in 1996."

In 1993, Pietrzyk, who believes any successful business must be part of its community, received a special award from Easter Seals when his stores raised more money for the charitable organization than any other franchisee in the nation. He'd told his store managers in the Roanoke, Va., area that if they raised $50,000 that year for Easter Seals he'd shave his head. They raised $53,000 and he did the deed in front of everyone at a company banquet.

Another highlight for the detail-oriented and super-organized Pietrzyk came in 1995, when he was recognized by the U.S. Department of Labor for his excellence over the years in audits, reviews, keeping his insurance ratio below the national average of incidents, and reducing cuts and back injuries.

After he sold his Little Caesars stores, Pietrzyk ventured briefly into hotel management, but was soon back in the food industry he loves. In 2005, he and his son and partner, Chris, opened the first Firehouse Subs unit in Virginia. And he is gung-ho about the brand.

"In all my years in the food business, I've never seen loyalty to a brand like there is with Firehouse Subs," he says. "They have a great product, of course: they slice the meats daily and they have a great sub roll. But the association with firefighters, who since 9/11 have been recognized by everyone as American heroes, is key. Firefighters and brothers Robin and Chris Sorensen started the company, and the atmosphere and décor reflect that association. When you come into a local Firehouse Subs, you see photos of your local firefighters on the wall."

His enthusiasm has paid off. In 2009, Pietrzyk and his son were named Area Reps of the Year for Firehouse Subs for their work in the Virginia and West Virginia markets. They have developed 21 units and have a contract for 58 before 2015.

Pietrzyk says he considers himself a resource to the franchisees he works with, training them for six weeks at his training store in Roanoke and one week at headquarters in Jacksonville, Fla. "I have learned new things everywhere I've worked, and I take those skills with me. At Burger Chef, I learned the basics; at Pizza Hut, I was a district manager; at Wendy's, I worked briefly for the franchisor in franchise development; and then, with all that restaurant experience, I became a franchisee with Little Caesars. I know what they're going through because I've done it."

He considers this the edge he's brought to being a franchisee. "Most of the franchisees coming in now don't have that food industry experience, so they come in with a learning curve," he adds. "My first franchisee was a fireman, my second was a policeman, and my third an IT guy. Probably my most successful franchisee worked before for Ford Motor Company. When the plant shut down, he took his buyout and came to me."

Describing himself as a "tough but fair" supervisor, Pietrzyk continues to try new ways of motivating franchisees and store managers and growing the business. In 2009, he purchased a hidden camera system to use to review the customer experience in each store in Virginia. Having revealed in advance that secret visits were going to occur, he and Chris then reviewed the experiences with each franchisee. "We were trying to make the information 'real world' to the franchisees," he says.

Pietrzyk is convinced the way to do well in tough economic times is never to let up. "I tell franchisees, 'When you walk out of the restaurant at the end of the day, ask yourself what you've accomplished that day other than the normal routine. What have you done different to improve the restaurant, operations, or employees?'"

QUESTIONS

Name: Mike Pietrzyk
Title: President, area developer
Company: Fire Hydrant Management LLC
No. of units: 21 Firehouse Subs, signed to develop 58

PERSONAL

Age: 60
Family: Wife Pam, four children, nine grandchildren
Years in current position: 6
Years in franchising: 18, 6 with Firehouse Subs, 12 with Little Caesars Pizza
Key accomplishments: In 2009, my son Chris and I were selected as Area Reps of the Year for Firehouse Subs Inc. And since 2006, through franchisee development, we have opened an additional 20 Firehouse Subs throughout Virginia. I'm also proud that in 1993 we received an award from Easter Seals, because as a Little Caesars franchisee, we'd raised more money for Easter Seals than any other franchisee in the U.S.
Biggest mistake: In my early years, I sacrificed family time for the sake of a successful career and business.
Smartest mistake: I had a willingness to move on with different companies, which in the end was not a mistake. I realized that you can grow with change.
How do you typically spend a day? My day starts early. I am generally on the computer by 7:30, dealing with the never-ending emails, collecting data on future sites, responding to customers, tracking and monitoring sales, staying on top of corporate communication, etc. Work week: Most weeks I am on the road two or three days a week working with the existing franchisees. My responsibility also includes involvement in the recruiting, interviewing, and training of franchisees.
Favorite fun activities: Still playing basketball on Sunday afternoons for 15 years and scuba diving when time allows.
Exercise/workout: Tai Kwon Do (first-degree black belt)
Favorite stuff/tech toys: I still have to ask for help from my kids. But I have mastered the garage door opener.
What are you reading? An occasional motivational book, but for the last 15 years I have always started my morning by reading a few chapters out of the Bible.
Do you have a favorite quote or advice you give? "Operations = Marketing." When customers receive that special experience at Firehouse Subs, they will talk about it. At all the Firehouse Subs in Virginia, as a reminder we have the sign in the office area, Operations = Marketing.
Best advice you ever got: My father-in-law, who was a brilliant doctor, said, "In starting a business, you have to think like a farmer. First, you build the barn, take care of the livestock, and then you build the house to live in. In other words, be disciplined, manage the business appropriately, take care of the employees, and the business will take care of you."
Formative influences/events: I've learned from every company for which I've worked, and I apply that knowledge every day.
How do you balance life and work? My family has been involved with what I do in one way or another, so this has helped. I still put in 10- to 12-hour days, but I try to keep the weekend open for family time. When I take a vacation, I generally remove myself from the business. Pam and I are planning a couple of extended vacations this summer, including a couple of weeks in Africa.

MANAGEMENT

Business philosophy: First, manage all aspects of the business with a fanatical attitude. Second, ask yourself: Does the customer walk out of your business saying, "Wow! That was different."
Would you say you are in the franchising, real estate, or customer service business? Why? All of the above, but the bottom line is that our success is measured by the customer. What gets you out of bed in the morning? I have been very industrious all my life. I think I create my own challenges to be successful. As the oldest of 11 children, I always had to earn whatever I wanted.
What's your passion in business? As an area rep, to help franchisees be as successful as they can be. If they are successful, then I will be successful.
Management method or style: I am a straight shooter, and I do not sugarcoat my beliefs, feelings, or information. The franchisees I am responsible for know that they will get my best assistance and information from my past 37 years in the food business.
Greatest challenge: Developing and working with franchisees who have limited, if any, food experience. When they come to me inquiring about becoming a Firehouse Subs franchisee, I have a moral obligation to make sure they are a good match, because they will be putting a lot on the line.
How close are you to operations? Very involved--you have to be on top of it. My son and partner and I communicate and meet with all the franchisees every month. Personality: Easygoing with a strong will and probably a little too organized. How do others describe you? As a team player who can obtain results and who will tell you what is on his mind.
How do you hire and fire? In my role as area rep, I am not directly responsible for firing anyone.
How do you train and retain? We take our franchisees through a seven-week training process before they open their first store: six weeks at our designated training store and one week at the home office training center. We have a certified in-store training manager whose role is to work side-by-side with the franchisee.
How do you deal with problem employees? Franchisees primarily deal with this, but it is important to have open communication with all employees and to make sure that all employees are properly trained.

BOTTOM LINE

Annual revenue: $13 million
2010 goals: Among other goals, we plan to develop 7 to 10 more new franchise stores and re-map the development potential in West Virginia and Richmond, Va.
Growth meter: How do you measure your growth? By franchise sales averages, stores opened, improvement of franchisee cash flow, consistency of the brand in all stores, and customer satisfaction through all the stores.
Vision meter: Where do you want to be in 5 years? 10 years? In five years, I plan to complete my development contract with Firehouse Subs and turn over a major portion of my workload to my son. In 10 years, I'll be semi-retired and possibly a consultant.
How has the most recent economic cycle affected you, your employees, your customers? I think my franchisees are recognizing just how well their operations are in this downturn of the economy. The Firehouse Subs brand is a superb brand that has strong momentum to maintain success. We have seen some negative sales, but franchisees that have excellent operations were able to maintain consistent sales.
Are you experiencing economic growth/recovery in your market? In 2009, we opened seven new Firehouse Subs with above-average sales. The last three months we have seen positive growth in all the Virginia markets except one.
What did you change/do differently during the recent tough economic times that you plan to continue doing into the future? We've tried to reduce spending, continued to emphasize Operations = Marketing, and been aggressive with local marketing.
How do you forecast for your business during trying times? Can you even forecast at all? The restaurant business has always been cyclical with the ups and downs of the economy. Franchisees have to be ready to weather the storm by having sound operations and lean business expenditures before the downswings.
Where do you find capital for expansion? First and foremost, the franchisee must generate the necessary cash flow from his existing business, so he needs a business plan and needs to operate his units with excellent controls. Gone are the days when you could put down 20 percent to 30 percent and use your future business as leverage. Second, franchise candidates who have a little nest egg sometimes find a financial partner to help with this.
Is capital getting easier to access? Why/why not? It's definitely tougher. Banks are taking no risks so the franchisee has to have assets to cover the loan totals.
Have you used private equity, local banks, national banks, other institutions? Why/why not? We will use whoever is willing to loan money for a restaurant proposal.
What kind of exit strategy do you have in place for your business? Two options: transfer/sell to my son, and sell back to Firehouse Subs.
What kinds of things are you doing to take care of your employees? Since we own only one store (the training store with a manager, an assistant manager, and 20 employees), our company is very limited in size. We offer our manager a bonus program and we favor a five-day work week.
How are you handling rising employee costs (payroll, healthcare, etc.)? See above.
How do you reward/recognize top-performing employees? We encourage everybody to work a five-day week and take family time. And again, we offer our store manager a bonus program.