Taking a Chance: Early Qdoba Franchisee Jumps In and Comes Up A Winner

When Indianapolis native Greg Willman and his friend Phil Salsbery talked years ago about forming a small investment company or owning and operating franchise concepts, they consciously omitted the restaurants category. "Neither of us knew anything about the food industry or had any experience in it," recalls Willman, who had worked in marketing and product development at large pharmaceutical, chemical, and medical device corporations.

Working in Denver in the mid-1990s, he found himself eating burritos three or four times a week at a busy new restaurant called Z-teca. The food was fresh, not expensive, and prepared quickly--and the long lines out the door didn't escape the notice of the would-be entrepreneur. (Z-teca would later become Qdoba Mexican Grill.)

"I had enjoyed working for others and had gotten some great corporate experience with lots of global travel, but I'd always thought I'd become an entrepreneur. With my antennae always up, I couldn't avoid seeing what was happening with Z-teca. I told my partner that I really thought Z-teca and this category had legs," Willman says.

Though the chain had only eight restaurants at the time, the partners signed their first development contract in early 1998 for 10 stores in the Indianapolis area. Willman moved back home to Indianapolis, and they opened their first four stores in 90 days, from October 1998 to January 1999.

"We dove right in," says Willman. "It was either the smartest or the dumbest thing we ever did--it almost put us under. We were small with no restaurant experience, but it ended up working out well and those stores all continue to do well."

Willman says he also didn't know a lot about franchising at the time, but that he did his homework and went into the deal with no preconceptions. "Getting involved with a company that only had eight restaurants was an experience in itself. They were still learning and building the model. We assumed they would have all the answers, and that didn't always turn out to be the case. But from the beginning, these guys have been terrific to work with and terrific partners. And since these were early times, we felt we had a voice in how the brand developed."

Twelve years later, Willman and Salsbery own 27 Qdobas in Indiana and South Carolina and expect to increase that number to at least 40 units over the next 5 years.

At the time they signed on, he says, the only franchises in the category were Z-teca, with 8 restaurants and Chipotle with 20. However, Willman's instincts proved to be on target. "I think this category resonates because the concepts live in the sweet spot where you can provide a casual dining setting with high-quality food at a marginally higher price than fast food, and within a similar time window," he says. "That's a combination of elements people are looking for. All the research tells us that people have no time, but that they aren't willing to sacrifice quality. These fast-casual concepts hit on that in a powerful way."

At the Indianapolis-based company, Willman, CEO and president, handles day-to-day management and operations, and Salsbery handles finances, raising capital, and researching new concepts and markets. "Our skill sets fit nicely, but the biggest mistake we made early on was failing to trust our instincts and our experiences. I think we listened too much to people who told us that restaurants were different animals and that none of our prior experience applied here," he says. "My partner came from a primarily manufacturing background. What is a restaurant but a mini-factory? So he brought a lot to bear. My background was marketing and new product development, so we actually did have a lot of important experience."

Willman, who believes in "sweating the details every day," says there is no deep, dark secret to their success. "We're not inventing anything or doing anything overly sophisticated--we're serving food. We're a meat-and-potatoes, blocking-and-tackling kind of organization," he says. "We try to be brilliant at the basics every day in every store so that guests have a great experience. We pay a lot of attention to doing that."

Their restaurants have survived the economic downturn "quite nicely," Willman says. "We reacted early and got focused on being cost-conscious and right-sizing where needed. As things have started to come out a little, we've been able to be pretty aggressive."

Three years ago, Willman and Salsbery added the Steak 'n Shake brand to their holdings, opening a new restaurant in Myrtle Beach. S.C. "Now that the new prototype store has opened in Rome, Georgia, and we know what it looks like, we'll be looking again at more development with them," he says.

The most rewarding part of his job, he says, is watching his team and 500 employees grow. "I take pride in the fact that we created this organization from a blank piece of paper and that it has enabled a lot of people to make more money and achieve more than ever."