Turn Up the Volume!: "Once You Have That, Everything Else Falls Into Place."
Tom Kazbour doesn't believe the secret to success lies in studying the ABCs of business. He believes new franchisees can whiz on past most of the alphabet and focus on the letter "V."
"Volume is key. Volume can cure a lot of problems. You can have a small margin and still do well if you have the volume," says Kazbour who, with his brothers and partners, owns and operates 56 Hungry Howie's pizza and sub restaurants in Florida and Alabama. "I learned that years ago when I was struggling with a new store in the Gainesville market and had to discount just to make it. Soon we went from struggling to having the highest volume store in the system at that time."
That experience led Kazbour, with the blessing of Hungry Howie's founder Jim Hearn, to offer an inexpensive large pizza on the menu at all times. "Remember when Little Caesars became popular with 'buy one, get one free'? Well, almost 2 years ago, Jim Hearn, my brothers, partners, and all the franchisees got together and decided that since the economy was starting to slump, we'd go back to basics and promote value-priced products. So we implemented the $5.55 large cheese or pepperoni pizza. We still have it today. It has saved us so that our stores continue to do well, even in today's economy," says Kazbour, who also is an area developer overseeing 30 other franchisees and units.
For a man who has been making pizzas for 34 years, Kazbour has boundless enthusiasm for his business. "I love it," he says. "I get up every morning excited to go to work. If I work from 8 in the morning until 8 at night, you won't hear me complaining, because I love what I do."
Kazbour, who moved from Lebanon to the U.S. when he was 9 years old, started working at the age of 15 for Roman Village, a pizza place in Dearborn, Mich., where he grew up. "I worked washing dishes and making pizzas throughout high school," he says. "That place is still in business."
Because he liked the pizza business, Kazbour passed on college and continued to work and learn. At 20, he bought Super Crust Pizza in Oxford, Mich., and built it up. He sold it in 1984, convinced that he was more likely to better himself in Florida. He went to work for a Hungry Howie's franchisee who had opened the first store in the state.
After six months in the system, he and that franchisee opened up a unit in Bartow, Fla., where he learned a lot about franchising. "I came from a situation where I was a single-unit with a large menu to Hungry Howie's where there was more consistency as far as the product and system went. I liked it," says Kazbour.
Pretty soon, one of his brothers followed him to Florida. Then another brother came, and they all began to partner and open stores in central Florida with each other and with other friends from high school. "I opened a lot of stores myself and then with my operating partners. I wanted to reward people who wanted to move and expand by making them operating partners," Kazbour says. "I wasn't so concerned about people who brought a lot of money to the table. I was more interested in the quality of the people and their expertise. I've continued that formula to today. It's one of the reasons for our success."
Kazbour, a self-proclaimed "people person," shrugs off talk of titles, saying "We're a team. All of the people involved with our business spend time in the units. We're not office people, we have no middle management. We handle all the back-end, billing, and receivables from our Managing Foods office in Brandon, and our partners in the different markets concentrate on the day-to-day operations," he says. "But we're hands-on. It's nothing for me to fly into Pensacola and pop into a store and visit our partners there. We talk about business, but that's not all we talk about. We go out to dinner and visit, because we have great relationships. It's not all about work."
In 1993, Kazbour signed a development deal with Hungry Howie's that enabled him to sell franchises, oversee franchisees, and own stores of his own in Florida and, in 2000, in Alabama. In 2010, his group added eight stores, and they anticipate adding another dozen units this year. "We started slowly in Alabama, but we didn't want to get too aggressive until we'd filled in the gaps in Florida. We put the same system in place in Alabama and we're experiencing good sales. Now we're ready to expedite growth in Alabama and try to saturate the market there," he says.
As an area developer, Kazbour says he gives the same advice to his franchisees that he gives to those in his company and teaches them to run things the same way. "In my relationship with the franchisees, I'm just another franchisee, and I enjoy meeting with them regularly to be sure things are going well," he says.
Despite the size of Hungry Howie's, now 600 stores strong, Kazbour calls it "one big family with lots of uncles, brothers, cousins, and friends." He gives credit to Hearn, who is also hands-on, knows the business intimately, and is willing to make changes when needed.
Kazbour, who considers himself a practical man says he doesn't believe that numbers tell the whole story. "Even though I see the numbers, I still need to know how it feels in the stores. I like to talk to our people on the counter. I ask them, 'What do you think? Why are people getting this product? What is customer reaction to the place?' People like to work in a busy place. It makes them feel good."
When Kazbour isn't working, the father of six enjoys family time. "My wife, Kimberly, is an adventurous traveler, so it's fun to go places with her. We've been to Dubai seven times. We found the restaurants there to be the best in the world," he says. "We also go to England often, since I own a beverage bottling business with a partner there." His dream trip? A safari in Africa.
The businessman also has a pilot's license, and he and his brother own a twin Cessna 421, which they fly around Florida and Alabama on business.
All in all, Kazbour says he's a happy man with a bright future. "We have a good team, great partners, good stores, and we do good, solid growth. It's all about the volume. Once you have that, everything else falls into place."
Name: Tom Kazbour
Title: President and area developer
Company: Managing Foods
No. of units by brand: 56 Hungry Howie's
Family: Wife Kimberly, and six children
Years in franchising: 26
Years in current position: 26
Building a successful business and choosing the right partners to make it work.
I don't believe there are mistakes in business, just opportunities for learning.
Building a store in Gainesville, Florida. After I bought an ad for this new location, the gentleman took my check and said, "Good luck. Most pizza places in Gainesville have come in and failed." A few weeks after opening, it seemed he was right. So I took out a full-page ad in the university newsletter promoting a $2.99 large cheese pie. Within a couple of weeks, the store exceeded sales of all the stores I own.
How do you spend a typical day?
I divide my time between the office and visiting many of our locations. At the office I spend time on marketing plans, operations, management, and site selection for future locations. I establish a regular presence at many of the locations to support the managing partners, troubleshoot any problems that arise, and maintain customer service standards.
Six days, or whatever it takes to get the job done
Favorite fun activities:
Flying. I have my pilot's license and my brother and I have a plane.
Six days a week, a combination of speed walking and weight lifting
Favorite tech toys:
What are you reading?
Trade and industry magazines.
Do you have a favorite quote/advice?
Money doesn't sleep.
Best advice you ever got:
Quality food + good service + clean operations = success!
My father taught us all by example what it means to have a strong work ethic and family loyalty.
How do you balance life and work?
When I leave the office and go home to my family, I leave the business behind me and focus on my family.
To offer great products at a great value. And volume overcomes a lot of problems.
Are you in the franchising, real estate, or customer service business? Why?
You can't be in one area without considering the others. They go hand in hand.
What gets you out of bed in the morning?
I love what I do.
What's your passion in business?
Making every deal a successful one.
Management method or style:
I believe in grooming employees to take on larger roles as managers and partners.
The death of my father from pancreatic cancer.
How close are you to operations?
Have you changed your marketing strategy in response to the economy? How?
When we realized how the economy was changing, we moved forward with an aggressive pricing strategy for the last 2 years. Because of this, we have not experienced any business losses.
How is social media affecting your business operations?
Social media has made it easy for customers to communicate with us quickly with any questions or comments they might have, and for us to respond to them quickly. The majority of our social media is run by our corporate office up in Michigan.
I'm driven to succeed and believe that failure is not an option.
How do others describe you?
Down to earth.
How do you hire and fire?
We hire young trainees and encourage our operating partners to groom them for more responsibility.
How do you train and retain?
Our operating partners train employees, and we offer those who do well the opportunity for advancement.
How do you deal with problem employees?
We counsel them, give them a couple of chances, and if performance doesn't improve we mutually agree it's time for them to move on.
Prefer not to say.
I'd like to see us expanding to 12-18 more stores.
Growth meter: How do you measure your growth?
By the number of successful stores.
Vision meter: Where do you want to be in 5 years? 10 years?
I don't look that far ahead, but rather in 2-year increments.
How has the most recent economic cycle affected you, your employees, your customers?
It's had no real effect on our business model but it has changed our bottom line a bit.
Are you experiencing economic growth/recovery in your market?
What did you change or do differently in this economy that you plan to continue doing?
Nothing. We kept true to our business model.
How do you forecast for your business in this economy?
You really can't do more than follow your gut.
Where do you find capital for expansion?
Have you used private equity, local banks, national banks, other institutions? Why/why not?
What kind of exit strategy do you have in place?
None. We are all in.
What are you doing to take care of your employees?
We give them opportunities to advance.
How are you handling rising employee costs (payroll, healthcare, etc.)?
We're absorbing it.
How do you reward/recognize top-performing employees?
We have a bonus program for managers who keep their food and labor costs down while maintaining store cleanliness. And we encourage them to look ahead, work hard, and maybe someday give them the opportunity to own their own store.
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