Hank Huth didn't set out to be in franchising. As a matter of fact, he was a banker. But in the mid-1980s, he was introduced to some executives at then-emerging Blockbuster Video and decided to "take a leap of faith" and give franchising a try. He called on his high school buddy Tim Nolan, who had managed some McDonald's franchises, to be his partner.
The relationship has blossomed, and Huth and Nolan have now overseen the development and growth of five different franchise concepts over the past 20 years. At one point, that meant 60 Blockbuster Video franchises in Connecticut, New Jersey, and New York.
"All of our locations have always been within a 100-mile radius of downtown Manhattan," says the 49-year-old Huth. They still adhere to that strategy today.
In 1993, Huth became the very first Boston Chicken franchisee, building 75 units before selling them back to the franchisor in 1996. In 1997, he opened his first Einstein Bros Bagels, building that group up to 40 stores before selling. He tried his hand at Corners Custom Framing in 1999, reaching 40 units before selling back in 2001. His company then concentrated on its Blockbuster stores until signing on with Palm Beach Tan in 2005. Today, Huth has seven Palm Beach Tan stores, three more in construction, and a plan to open another 15 to 20 during 2007.
"We're real estate guys," says Huth. "In our market, good locations are hard to find. The market here is built up, crowded, and real estate is stagnant, so we have to work hard and be savvy at finding good sites." But as their track record shows, they know the area and how to make it work, regardless of the concept.
Huth says one of his philosophies is to "build for cost and sell for cash flow." That explains his system of building chains to critical mass and then selling them. "We really try to look at getting into a new franchise every two or three years," he says.
But ultimately, Huth says, the company can't succeed without good people at all levels. "We know that to be successful we need terrific people who share our goals and enthusiasm for this company." He says his people are his greatest asset, from the top on down. And he's got plenty of long-timers to prove it.
"Successful franchise development relies on a good brand and good people. That's what we try to emphasize inside our organization."
Name: Hank Huth, managing member
Company: NorthEast Tan and New York New England Video
No. of units: 7 Palm Beach Tan; 23 Blockbuster Video
Years in current position: 20
Years in franchising: 20
Key accomplishments: Being able to consistently pick franchise concepts at the right moment in their growth cycleâ€"just as they're really breaking onto the scene
Biggest mistake: Waiting so long to get into the tanning franchise segment. I dragged my feet a little in the beginning, but this is a great concept to be in right now.
Smartest mistake: Getting into video franchising in 1986. I didn't know what I was getting into or how it would turn out. It eventually turned into 60 stores at the height of our operations.
Management method: For me, it's working with great people. That's really our greatest assetâ€"that's how we do what we do. We try to have continuity in what we do at all levels, and we concentrate on details.
Greatest challenge: Finding good sites in the metropolitan New York area. Real estate is a real tough issue here.
Management style and personality: Straightforward, demanding, but fair
How do you hire and fire? I always say we don't just hire shift managers at our stores, we hire store managers. We empower them by giving them authority and responsibility while holding them accountable for results.
Find good people? This is so tough, and it's why we work so hard to keep our peopleâ€"so we don't have to replace them.
Train them? We believe fundamentally in training and offer opportunities regularly.
Retain them? I've been fortunate enough to have worked with some great people who have been with us for 10 and 15 years. We try to provide opportunities and encourage growth in whatever ways we can. We try to motivate our people. One of our philosophies here is, "This is not a job, it's a lifestyle." Each year, we take all of our GMs on a "fun trip" to spend time with them and say thanks for what they're doing.
How close are you to actual operations? I'm not responsible for day-to-day activity, but I see and review the reports daily.
How does size of franchise matter? The size of the franchise doesn't matterâ€¦ the concept matters. We look at it from the standpoint of: Is it something we can build? Is it something we can grow? What are the people like throughout the entire system from coast to coast? Those are the kinds of things that are important to us.
How do you spend a typical work week? I usually spend some time visiting stores. Mondays I usually review financials from the previous week, Tuesdays generally are filled with various staff meetings. Once a month we have training meetings that are attended by all of our operators. We're all there and we all learn something from attending those meetings. It's a great tool.
Exercise: We have a gym in our main office. I begin every day there with a workout at 6 a.m. If I do that, the rest of the day always seems to go better.
What do you do for fun? Anything that gets me outdoorsâ€"skiing, golfing, hunting, fishing. That's where I like to be.
Growth meter (how do you measure your growth?): By the number of stores and related revenue, but also by how our stores are doing year over year in terms of revenue. Obviously, as a private company we also keep an eye on cash flow.
2007 goals: We'd like to open, either new or through acquisition, 15 to 20 more Palm Beach Tan units.
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