Works Hard, Plays Hard: This Multi-Concept Operator Knows How To Mix It Up And Make It Go

When Steve Foltz graduated from Eastern Oregon University in 1985 he thought he might be interested in city or government work. To bide his time and help pay bills while he was interviewing for jobs during the day, he took a night job at Rax Restaurant in Portland.

"It was tough finding that first job," says Foltz. "Seemed I either didn't have enough experience or I was not qualified in some other way." Meanwhile he was excelling as assistant manager at Rax and gaining an understanding of the food business. He did so well, in fact, that as time went by he began to consider a future in the restaurant business.

"I worked my way up to district manager at Rax and was a part of the company for the next three years," he says.

Then one day in 1989 he was working out at the gym with his friend Tom Whittaker. "Tom told me that he and his brother John were looking at getting into franchising with a concept called Cinnabon," says Foltz. They asked Foltz if he would be interested in being a part of the endeavor. Within a year they had opened three Cinnabons in the Portland area and Steve and John had become partners.

Things blossomed, and today their company, The Cinnamon Bums, operates three Cinnabons, seven Jamba Juices, and one Seattle's Best Coffee. The company also runs one Rainier Roaster and one Good Dog Bad Dog under operating agreements. They've even created their own concept, Tenemos Tacos. All of the locations are in the Portland area, with the exception of one Jamba Juice across the state in Bend, and one just across the border in Vancouver.

"Franchising has been a great tool for us," says Foltz. Multi-concept franchising has been an even better tool, he says. "We've been able to take the resources of all three brands--things like conventions, training, marketing--and combine them to create a best-of-all-worlds approach that helps us run all the concepts effectively," he says.

The company takes a savvy approach to development--like the time they leased side-by-side space at two area malls so two different units could share back room space, reducing their leasing costs. One location is a Cinnabon tagged with a Jamba Juice; the other is a Cinnabon alongside their Seattle's Best Coffee.

Foltz says the company has also created its own, unique financial spreadsheet that cleanly combines all stores' ordering, tracking, accounting, and payroll. He says two employees handle all of the company's finances and accounting.

Their franchise brands--Cinnabon, Jamba Juice, and Seattle's Best Coffee--are conveniently complementary to be sure, but there's more. "The Cinnabons work better in the mall where there's a lot of traffic, fresh faces, and it's really busy from November to December," he says. And three of the Jamba Juice stores are in strip centers and one is a standalone location. These, he says, provide a steady income during the warmer months of March through August. It's a strategy of leveraged brands, location, and income.

Foltz describes himself as someone who "loves to be around other people." And he's amazingly close to operations. If you visit one of the stores, he says, you might just find him "mopping floors, doing dishes, or sweeping up."

As for that Rainier Roaster, Good Dog Bad Dog, and their own Tenemos Tacos, Foltz cherishes those as places to channel his creativity and try new things, like fresh menu offerings.

For Foltz, growth and expansion will always be slow and systematic. "No more than two per year," he says. It's a way for him to maintain his company's culture, which fosters input, and to keep the need for additional investors at bay.

With annual revenues around $10 million, for Foltz, taking it slow is the way to go.

Name: Steve F. Foltz
Title: Vice President/Owner
Company: The Cinnamon Bums, Inc. (aka, "The Bums")

No. of units: 7 Jamba Juices, 1 more on the way; 3 Cinnabons; 1 Seattle's Best Coffee. Also, 1 Good Dog Bad Dog, 1 Rainier Roaster (these two are operating agreements, not franchises); and 1 Tenemos Tacos Mexican Grill, our own concept.

PERSONAL

Age: 45

Family: Married to Jan since 1984. Two daughters: Krista, a sophomore at Linfield College, and Megan, a senior in high school who will be attending the University of Portland this fall.

Years in current position: 19
Years in franchising: 19

Key accomplishments: My partner John and I have worked together since 1989 and made this partnership not only successful, but also fun! We have a great group of people with three district managers who have been with us an average 10 years each, and who are on our board of directors and share company profits. We have one large annual fundraiser with our local Meals on Wheels chapter that raised over $100,000 last year, and our goal this year is $150,000. It is a one-day event on Valentine's Day and we bake over 8,200 Cinnabon rolls for the event. Our whole company gets behind it, and 100 percent of the money raised goes to feed homebound seniors in our area.

Biggest mistake: Thinking that Cinnabon was such a hot concept in 1994 that we could open anywhere and they would come! Downtown was a costly mistake, and a venture into Utah was not as successful as we had hoped.

Smartest mistake: Opening Cinnabons in Utah, which led us to a concept in Utah called Zuka Juice that sold great smoothies. Even though our Cinnabon bakeries never took off, we opened our first Zuka Juice franchise at Washington Square in 1998 (which Jamba later purchased in 1999), and we now own seven very successful locations.

How do you spend a day, typically? I make every day unique. I can drive to 13 out of our 14 stores in one day, so I spend Mondays and Fridays touring all of our locations and giving tours to our newest supervisors or leads. Tuesday through Thursday I'm in and out of the office and also in our locations meeting with our district managers. I like to be in the stores talking with our teams.

Work week: I'm an early bird from my days growing up on the farm, so I like to get started by 7 a.m. and be home when the day is done. My wife has been great over the years dealing with my schedule. If I say "I'll see you at 6 p.m.," she says, "See you at 8 or see you whenever." One of our company values is "no time like the present," so we work until we get it done. I like to be in the stores on one of the weekend days, and we work around the clock the last week of Christmas in the malls.

Favorite activity: Sturgeon fishing, salmon fishing, trout fishing, bass fishing, or just fishing in general.

Exercise: I walk with my wife and our 140-pound Newfie, Jake, as often as we can. I took up running last year and still try to run when my body is able. I ran a few events in the Jamba Banana Man costume, but my team has suggested I give it up--people were cheering me on to "Keep running faster, Banana Man," and since I'm a little competitive, I tend to overdo it.

What do you do for fun?: Anything with my kids and fishing.

Books/magazines recently read/recommended: Change the Way You See Everything; Even Monkeys Fall from Trees--and Other Japanese Proverbs; Crucial Confrontations.

MANAGEMENT

Management method or style: I believe in company values and great communications. We also believe that each value should lead to a company mission statement that everyone can understand and get behind. The Bums' mission statement is "Leave Your Mark." We break it down with each word. Leave means to "remain over time." Your means "belonging to and done by you." Mark is "to grade or rate." Leave Your Mark is "your lasting report card from your time with our company. It will be what people remember about you and your time with The Bums." We teach each person the saying, "If not me... who? If not now... when?" I tell everyone that comes to work for The Bums that we know they may not make this a career or may be here only a short time, but we still want to offer them as much as they offer us. It is a win/win situation.

How close are you to operations? I'm as close as the stores let me be. Each store knows where to hide me when it is busy. At Jamba it is pouring drinks or washing dishes; at Cinnabon it is rolling, and at the restaurants it's in the back doing prep, etc.

Greatest challenge: The biggest challenge is the financial piece. Knowing how much to give back to your teams, how much you will need for investments or taxes, and also that balance of how much you take home. I want to make sure my wife is comfortable about our growth, risk, and debt, and I also want to make sure we keep the company as healthy as possible.

Personality: I'm a talker and somebody that gets stuff done. I love public speaking more than anything and live for my "big" meetings twice a year. I play as hard as I work and figure you can never have enough good friends. I hate to be alone, even for 20 minutes.

How do you hire and fire? I haven't really been involved with much hiring over the past few years and haven't fired too many people either. We really try to look at people that seem to "play nice with others." We want a team at each location that the general manager can treat like family. We also believe that all written communications should have if/then statements attached, whether they are developmental or disciplinary. Example: If you continue to show up late for work you will be suspended for three days. If over the next 30 days you are early for your shifts, we will take this out of your file. It is always a win/win solution, and puts it all back to the employee to do the right thing. Terminations should never be a surprise.

Find good people? If you hire "A" players that enjoy working at your location, they will attract others. We also try to avoid "Now Hiring" signs as much as possible. They make you seem like a place that has problems hiring. Word of mouth has by far been our best source.

Train them? We use the "helping hands method" and really try to schedule time for training so that the trainer isn't part of the position chart for that day. We train all people in the "100 penny rule" of running a business. My pet peeve is calling a store and asking how we did in sales and they say, "We made $3,000 yesterday." I always correct them and say, "We did $3,000 in sales, but what we made is far less." If you teach everyone in your company where each penny of every dollar goes when it comes into your store, your costs will always be in line.

Retain them? We offer monthly courses for all of our leads, supervisors, assistants, and GMs. The classes cover training, hiring, interviews, profit-and-loss statements, inventory, eyes of the guest, repair, etc. We want to teach them how to run a business. We really believe in our 401(k) plan and encourage everyone to join. We are generous with our match each year to make it well worth it for our teams. And we try to surprise our teams with instant rewards for great accomplishments.

"Growth meter"--How do you measure your growth? I measure growth by how much each of our general managers has grown in their stores and communities. We want them to grow as individuals, and make sure we offer them support along the way. Growth in number of units is all about opportunity. We never want to open more than two stores a year, just to make sure we give each one the attention it deserves from a new store opening.

Annual revenue: We should approach $10 million this year.

2008 goals: My goal is to meet and get to know each person that works for our stores, and not just the ones that approach me.