Login  |  Register          Free Newsletter Subscription
Zibb
FREE subscription
Email
Print
Reprint
Learn RSS

How Growing Chains Are Laying the Groundwork

Operators discuss how small chains should go about building corporate infrastructure.

By Maya Norris, Managing Editor -- Chain Leader, 1/1/2008

Corporate infrastructureCorporate infrastructure is the foundation for any expanding restaurant concept. But small, growing chains often don't have the resources or funding to develop all aspects of their company as they expand. Chain Leader spoke to several operators about how small chains should build up their infrastructure and where they should invest their limited resources.

Peter Barli, president, Lee Roy Selmon's, Tampa, Fla.

Your management and your team-member training infrastructure is the most important piece. Bar none, it's that training piece and having the right people to go out and develop your culture.

Bricks and mortar and even getting cash is far easier than replicating a concept's culture. And ultimately the reason why we have the confidence, for instance, in Lee Roy Selmon's being able to go where people don't know who [retired Tampa Bay Buccaneer Lee Roy Selmon] is, is because if the culture's strong enough, then the deliverables on the soul-satisfying comfort food and the heartwarming hospitality will be there. And that is what will bring people in for second, third and fourth visits and turn them into regulars—the culture and the people. The building won't do it. The building will only get them in there once. The people will keep them coming back.

Jim Frye, founder, chairman and CEO, Italian Oven Cafe, West Palm Beach, Fla.

One of the best ways to save one's very, very valuable capital when you are small and just beginning to grow and yet provide the necessary services and personnel to grow is to outsource a lot of the work that you need done, for instance, for stock options. Also look to hire somebody on a part-time basis to do your marketing, to do your construction, to do your design work. People will understand that you don't have a great deal of money. And if they believe in your idea and your vision, I think that they will work for stock, which at the time is not expensive capital. You hope to create value in that stock, and you hope to make all those people that do take that stock as remuneration and make them wealthy by holding those shares.

As you get into the 15- to 20-store range, then the first people that you need to put on board are a chief financial officer and a full-time training and human-resources individual. Those are the two most important people that you need within the confines of the company early. Others can be outsourced until you get enough to play with and to offer good competitive salaries and benefits.

Kenny Lao, founder and CEO, Rickshaw Dumpling Bar, New York

First off you need to assess what your skills are. Here are the things that we're really, really good at and here's how we're going to break it out. Now out of these skills, what are things that only [co-founder David Weber] and I can do? For example, I do investor relations. I do new store openings. He does financial, operations standards.

First things that we want to consider is do you [hire] a higher up, expensive, C-level type of guy? Or do you hire someone below you? What you want to do when you look at first hires is you want to see what you need. For us right now, the first thing that we need is a great bookkeeper. We don't need a CFO right now at two units. We want to stay really, really nimble. You want a part-time bookkeeper and a part-time assistant, because even at two units, we can handle what's going on.

I think the next key hire that is either an equivalent of us or a higher up is going to be a district manager, where they oversee a couple of units in Manhattan to allow us to be able to move down to D.C. to do the new openings down there.

Steve Kishi, chief operating officer, Super Mex, Long Beach, Calif.

We brought in our shining stars that are doing well at the restaurant level to expand their contributions—give them a lot more special projects and try to identify the future leaders of this company. So we picked and chose certain managers who are very strong [in areas such as] community relations. Another one is very strong in operations. Another one is very strong in menu preparation. And we use them as a task-force team. They'll meet here in the corporate office with the ownership, and we'll work on special projects together. And it gave us the benefit of having their knowledge to help us accelerate our infrastructure.

Steve Stoddard, president and CEO, Restaurants Unlimited, Seattle

You have to look at it as a timeline of when you're going to need what. So, for example, for us to open new units, the first thing you start dealing with are design, real estate, construction—those are the things that come at you first, a year prior to even opening the doors on that first restaurant in a new growth strategy. So to start adding infrastructure in accounting or marketing, for example—well, you're not going to need that until you're opening those units. So you have to look at it in the flow of how departmentally you're affected by growth, which departments are affected first and when do you need to add things on.

And you've got to be disciplined to make certain that your overhead is based on the number of new units you're able to make arrangements to open and what your forecasted sales profiles for those restaurants would be.

Martin Mayer, chief operating officer, The Loop Pizza Grill, Jacksonville, Fla.

You need to have systems in place to foster training and education, which is very, very important. A lot of small companies make the mistake by not investing in those resources. At The Loop one of the things that we've implemented is a program called Next Steps. It's literally training that takes place the day they sign their franchise agreement. It's literally a step-by-step process in chronological order that walks them through what their next step is as far as getting the restaurant open. And then, moreover, identifying the parties that are responsible for completing that particular task. And that keeps them on track to get their restaurant open hopefully within the 300-day time frame that is outlined in the franchise agreement.

It's also an understanding of when you need to hire the appropriate human resources to support and facilitate the growth of the concept. In our case, for every 10 restaurants that are opened, we need to have another franchise business consultant. Now understanding the time frame and when those restaurants are going to open will trigger when we need to hire that next person and get them trained to the point to where they can conduct their responsibilities accordingly and help that franchise business partner succeed. You're always trying to think anywhere from 12 to 24 months out with regards to projection and growth and when the restaurants are going to come on line.

Times Grill's Kelly Harris pinpoints 10 areas chains should invest in to support their growth.

Email
Print
Reprint
Learn RSS

Talkback

We would love your feedback!

Post a comment

» VIEW ALL TALKBACK THREADS

Related Content

Related Content

 

By This Author

Sponsored Links

 
Advertisement

More Content

  • Blogs
  • Podcasts

Blogs

  • Vaughan Lazar
    Organic Growth

    August 22, 2008
    Training a New Franchisee
    So you've developed a beautiful business model that's demonstrated its value and consumer demand. Now you want to expand your business by franchisi......
    More
  • David Farkas
    Dave's Dispatch

    August 4, 2008
    Big idea: street food
    In search of ideas to boost sales in this miserable economic climate? Here's one: tasty street food. A 37-year-old Washington, D.C., e......
    More
  • View All BlogsRSS

Podcasts

Advertisements





NEWSLETTERS

Get restaurant industry news, trends and business-critical information delivered directly to your inbox!

Chain Leader Executive Briefing (Twice Monthly)
Newsfeed (Daily)
Quick Service Reporter (Monthly)
About Us   |   Advertising Info   |   Site Map   |   Contact Us   |   FREE Subscription   |   Useful Sites   |   RSS   |   Help
© 2008 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
Use of this Web site is subject to its Terms of Use | Privacy Policy
Please visit these other Reed Business sites