Two Multi-Unit Owners Branch Out
Brad Bruckman owned 15 Krispy Kreme franchises in the Northern California/Sacramento area when he felt a desire to reexamine his career direction. "I didn't necessarily foresee any of the problems that were soon to begin affecting that franchise, but I did begin to wonder about other opportunities, and, ultimately, I feel like I got out at just the right time," says the 42-year-old entrepreneur.
Today, Bruckman is one of a new breed of multi-unit franchise operators who aren't content to stay with just one brand or concept. His Reno, Nev.-based company is named FoodFun. He says the name says it all about his philosophy and business approach. "We're in the food business and we want everybody from employees to customers to have a fun food experience. As long as we have franchises that can do that, we'll be successful."
Changing direction required a process of patient, careful evaluation for Bruckman and his partners. "As we looked for something new, we came to the conclusion that we were sure we wanted to stay in franchising and stay in the food business," he says. That approach makes sense, considering his background in the food service industry (PepsiCo and Krispy Kreme), although he did briefly consider going outside the food industry.
Bruckman is quick to point out that starting a business from scratch requires a lot of research, more investment dollars and certainly more time-and of course the overall risk is considerably greater. On the other hand, the franchising business model is tried and true and backed by an infrastructure including technology systems, training, and marketing that's already in place.
"Franchising allows you to get going more quickly and, as a result, build cash flow more rapidly," he says.
Along with his partners, Bruckman pored through industry trade publications and related web sites, searching for franchise opportunities that interested them. He also networked through his franchise industry associates to uncover potential leads for his next franchise opportunity. Finally, they decided the "quick casual" market was the right fit.
"I'd say we did extensive research on 25 different concepts before narrowing it down to 10 and then, ultimately, thoroughly evaluating seven," he says. Once the number was reduced to seven, Bruckman and his partners continued their investigations, which included "stealth" visits to several of the franchise stores. "You want to know how the food tastes, what the service is like, the overall feel of a restaurant without them knowing that you're there to check them out," he says.
Making the Right Choice
Bruckman used a number of criteria in the selection process. His team looked at the investment costs associated with each franchise concept they examined. He recommends researching the overall financial position of the franchise. Look for a franchise concept or niche that is not already present or saturated in your market, he says, and identify a franchise dedicated to providing top-quality products and services. "Some concepts are more interested in rapid expansion than they are in quality food," he says.
Other advice: Identify a franchise whose management is passionate about what they do. Make sure their financials are in order. Is the organization in a financial position that will survive over the long haul? And, it almost goes without saying, look for a quality food product. Bruckman looked for a concept that provided enough fresh and unique food offerings to attract customers and bring them back often.
Bruckman and his partners decided on a new restaurant concept out of Dallas named Tin Star, which features southwestern cuisine in a casual atmosphere. "The first time I tasted their food I knew instantly that this was the one. It was very similar to the way that I knew Krispy Kreme was the right franchise for me the first time I tasted one of their hot, fresh doughnuts," he says.
Not only did Bruckman like what he saw and tasted at Tin Star, he saw how the southwestern cuisine niche fit perfectly in his part of the country. And the concept was unique enough to provide a fresh dining opportunity.
Bruckman has secured the territories of the Greater Phoenix area, Northern California, and Nevada for his Tin Star franchises. His first wave of Tin Star openings will begin with 21 stores, with the first scheduled to open March 15th. Two subsequent waves of store openings are in the works to launch 57 more restaurants.
Build 'Em and Leave 'Em
Going forward, Bruckman says he'd like to have a continuous cycle of buying into a concept and building it up, before selling it and investing in another. "If I had a crystal ball I would always know exactly when to buy and sell," he laughs. When that exact time comes is anybody's guess, but Bruckman does know one warning sign: "When a franchisor's goals, objectives, and strategies begin to differ from your own personal approach to running a business, take note."
Bruckman says he plans to keep his company's growth limited to the Southwest he is so familiar with. "It's possible to expand too far and lose control," he warns. "I see us staying within the food business. What I hope to see is for us to have a diversified base of four or five different food concepts-maybe two franchises and three restaurants that we launch ourselves." He says he would like to see this all come to fruition over the next 10 to 15 years.
"In this business, you have to be disciplined, but you also need to have a sense of intuition," says Bruckman. So far this approach has worked, and today has led Bruckman to what he foresees as a bright future with Tin Star.
Sinkers and Subs on the Rise
When asked "Why consider a new franchise concept?'" Tom Burke doesn't miss a beat in replying, "Why not? We have the history of being successful in the food service business with Dunkin' Donuts, and now we can complement that existing track record with D'Angelos," says the Albany, N.Y-based multi-unit operator.
Tom and his brother, Jerry, along with Eddie Binder, a former Dunkin' Donuts executive, have teamed up to open 31 new D'Angelo Sandwich Shops in the Hartford, Conn. and Albany areas over the next six years.
Burke says it makes sense for them to add another food concept because they already own property-a significant expense when considering growth and expansion-and can combine brands in a complementary way, maximizing real estate and dollars.
Their first D'Angelo shop is scheduled to open this spring in the Albany suburb of Colonie. In an unprecedented move, Burke's group will operate Papa Gino's restaurants under the same roof as several of their D'Angelo shops, marking the first time Papa Gino's locations will be operated by someone other than Papa Gino's Inc., the parent of both brands.
Burke says they did consider going outside of franchising, but in the end stayed with it. "We've been franchising for 28 years. It's what we know, and it offers a lot of advantages that we're familiar with and like," he says.
"A multi-unit operator like us is pitched new concepts all the time. And we're always looking, keeping our eyes and ears open as well," he says. For Burke, the key to a successful concept is the quality of the product. "In our area, a franchise must have quality food, that's what generates customer loyalty. Beyond that, you need things like a great operating system and a consistent development of new product offerings."
Burke and his partners "kicked the tires" of D'Angelo by doing a thorough financial evaluation of the company, visiting stores and sampling the food, atmosphere, and service. "You want to know how they operate," he says. "Does it fit your model and how you do things?" It did. Burke was impressed with the management team at D'Angelo. He says they were positive, professional, and excited about what they had to offer.
But there was more they considered.
"I think you have to be really honest with yourself, look in the mirror and identify what your strengths and weaknesses are, and really identify what you want to be involved with," he says. "For example, if you're considering franchising in the restaurant industry, are you ready to work seven days a week and put in the long hours that are necessary in this field?"
It's also important to identify a franchise concept's "point of differentiation," he says. Does the concept have a competitive edge? If so, what is it? Is the product or service better than what the competitors have to offer? It better be. "You want to be the best, not just one of the pack," says Burke.
Look at the growth plan for the concept you're considering, he says. A franchise's desire to grow should not interfere with the quality of its products. "You want to go at this as a long-term investment, so you want someone dedicated to great products, not just rapid expansion."
Finally, says Burke, keep an eye out for a franchise organization that is truly interested in feedback from its owner-operators. "Are they interested in your recommendations and ideas for change and improvement?"
Choosing a new concept is exciting and challenging. Burke spent almost two years evaluating his options before signing on with D'Angelo. Doing your homework and asking the right questions is a necessity, the benefits of which can be measured for years to come. For Burke, "We think D'Angelo has the best quality sandwiches available, and that's really all we need to know."
Kerry Pipes is a Texas-based business writer.
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