Fast & Serious: 11-20
Kona Ice founder Tony Lamb still has passion but less time.
11. Kona Ice
Kona Ice is riding a wave of indulgence in the treat segment. The brand has grown sales an impressive 146 percent from 2014 to 2016, far ahead of the brand’s unit growth of 33 percent. Founder and CEO Tony Lamb said it all comes down to two things: franchisee satisfaction and innovation. Because the company operates on a fixed royalty instead of a percentage of sales, Lamb and the team don’t spend a lot of time measuring performance. “As a company we never talk money,” said Lamb, who has little incentive to push sales. “I have franchisees that don’t work as hard, but they’re just as happy and sometimes happier. So I don’t want to be upset with them for not making the company money from this percentage standpoint. So I focus on the one thing that I think drives the growth, which is franchisee satisfaction. Then they buy more and have more sales points.” Then it’s all about truck technology and flavor innovations. In the past few years, Kona Ice has added solar panels, efficient LED lights and brighter menu boards. The brand has also invested heavily in new flavors. “We have a flavor scientist on retainer,” said Lamb. “Cincinnati is this mecca for flavorings. I’ve got a flavor scientist that won all these flavoring awards, all she does is create new flavor lines.” Digging deep into one segment has been a big help, too. For Kona Ice, that means getting cozy with schools via a series of programs from special fundraising cups to a cup emblazoned with the Star Spangled Banner that has sold well during football games—especially in this politically charged climate. And when Lamb found himself with 10,000 Kona Ice soccer balls, his franchisees were ecstatic, scooping up the stock in just eight days and giving them to schools in their markets. He said the biggest challenge has been staying connected with his growing franchisee base. “The early guys used to be able to call me up and say, What do you think about this?” said Lamb. “Now I’m much busier, and I hate that but my team has the same passion I do, so I don’t think anything is lacking.”
CEO Jeff Bevis of FirstLight Home Care.
12. FirstLight Home Care
Home healthcare provider
FirstLight Home Care is growing sales fast. At 142 percent sales growth over the past three years, it’s more than 100 percent ahead of the brand’s 42 percent unit growth over the same period. Founder and CEO Jeff Bevis said there are three things driving that sales growth. “The three keys are staying 100 percent focused on franchise owner selection, relentless pursuit of even higher quality in both our services and caregiver retention,” said Bevis. “And remaining very nimble to enhance our services to better address increasing demand of disease-specific populations.” That last point is big in the home care industry. As more and more families seek out care specific to cardiac issues or specialized care around joint replacement, they are seeking brands with a specialized focus. Bevis said to keep up with that sales growth, FirstLight Home Care has added significantly to the support team and added a bevy of tools for franchisees. The human resources and recruitment department has also been built out to help find and keep those specialized home care professionals. While finding people is certainly tricky with such low unemployment, Bevis said it wasn’t the biggest challenge. “Our biggest challenge in growing our brand has been staying true to our selection requirements for new owners—which we have done—and not being tempted to cut corners to simply plant flags,” said Bevis. “The result is seeing many flags fail, close and hurt the brand integrity. We have not had this occur and have overcome this by giving continually more focus to both new and existing owners for greater support in the initial six to 18 months in business, as well as adding new tools and programs to increase existing owner differentiation vs. competition, owner profitability, unit economics and success.”
Bryon Stephens stays disciplined at Marco’s Pizza.
13. Marco’s Pizza
Marco’s Pizza President Bryon Stephens said there is one word that drove the brand’s three-year growth of 44 percent in sales and 36 percent in units. “It’s all about staying disciplined. That’s my No. 1 word for growth, especially around site selection and franchisee selection,” said Stephens. “And we’ve added elements to be very disciplined around the operations experience, about delivering a five-star experience to guests.” Real estate has been really tough, he said. Construction costs have risen as much as 30 percent in some markets, but maintaining discipline is possible by watching every single expense and working franchisees to get valuable landlord contributions in new developments, especially. It’s hard to be disciplined about everything, however, when the competitive giants in the segment are in the midst of a price war. He said they’ve had to fight soft same-store sales with their own value messaging to drive traffic, but discipline around the brand differentiators helps them stay slightly above the fray. High quality ingredients and daily fresh dough made on premise means they can charge a little more and still do the discounting that consumers are used to. Constant negotiations on the supply side also keep costs from rising sharply as cheese and flour tick up. “While we emulate what the big guys are doing and charge a slight premium on our offerings, we maintain about a 15 percent price premium. That bodes well for us,” said Stephens. Last year, 80 percent of Marco’s Pizza locations were built by existing franchisees who appreciate the culture of discipline at the home office.
Working the line at Tropical Smoothie Cafe, where management tries to adjust resources offered to the needs of operators.
14. Tropical Smoothie Café
Smoothie and food chain
When Tropical Smoothie Café blows up the numbers, it’s all part of the plan that has pushed the brand to 50 percent sales growth and 31 percent unit growth over the last three years. “Don’t ever get comfortable, you can’t settle. Push for what others think is impossible. I know that sounds like pie in the sky thinking, but if you want to grow and you want it to be sustainable growth you have to do those things that other people can’t wrap their head around,” said Tropical Smoothie Café CEO Mike Rotondo. That means constant innovation on the product side, but also investing heavily at the supporting level of the company and in franchisees. What exactly that means is different for every franchisee. “Some people come in and open a café and they need financial resources because they don’t have a big backing, so we have a financial arm that people can apply for before they might be able to apply for an SBA loan,” said Rotondo. “We’ve helped several franchisees become multi-unit operators through that program.” And for those with financial backing but who don’t have an operational mindset, Rotondo said they can help them too. “If you’re not a true operator, we can help partner you up and we’ve got several situations out there where people have merged as franchisees and brought talent together to really grow their portfolio,” said Rotondo. “So it’s a process we’re going through to identify ready-to-grow franchisees. If you’re ready to grow, what is it that’s holding you back and how can we help you get over that hurdle?”He said helping his current franchisees means that more than half of new-location development has come from the ranks—something he remembers every time an enticing multi-unit operator comes to discovery day. “It’s easy to fall in love with the new, the new franchisee that owns 50 Little Caesars or is a big franchisee and you’re like, ‘Wow, these guys have backing, they are great operators,’” said Rotondo. “But I like to say, ‘Dance with who brung ya.’ We’ve grown to 629 locations, and it’s by the grit of our franchisees, so we think a lot about how do we show love to the new but also help the people who have helped move this brand along.”
Scott Deviney replaced the founder at Chicken Salad Chick.
15. Chicken Salad Chick
Fast-casual chicken restaurants
When looking at a three-year unit growth rate of 100 percent and sales growth of 156 percent, the phrase, “But it’s just chicken salad,” may come to mind. But for President and CEO Scott Deviney, chicken salad is plenty. “We’ve had a nice little run. The growth of new and existing ‘zees in infill markets and in new markets has been really fun,” said Deviney, who added it all comes down to location connection. “It sounds a little cliché. We have 74 stores, but it’s like we operate in 74 different communities so we operate like a non-brand community restaurant.” The biggest move lately has been a full point of sale upgrade that allowed them to give fervent customers an easier way to connect with the brand. “We recently changed our POS system to allow for efficient loyalty app connection, so we can have online ordering fully integrated into our POS,” said Deviney. He said above all the growth avenues, the POS upgrade was the most important because Chicken Salad Chick fans are extremely loyal and there are a lot of them. “We have about 130,000 in our loyalty program,” said Deviney. “It’s nothing like Starbucks, but for the size of the brand, we have really loyal customers.” Making it easier for loyal customers to connect and for new customers to get integrated into the program helps with that strong unit growth. By tapping into that fan base, he said they can push for extremely strong openings because the hype machine starts about 13 weeks before a new location opens. It also helps with franchise sales; Deviney said many franchisees are loyal fans who want to bring the concept back to their own community. The brand has also found itself well positioned for the trend toward convenience. It does about 25 percent of business off premise with one-pound and half-pound chicken salad to go. And where possible, it partners with strong third-party delivery partners as well.
CEO Chris McCuiston of Goldfish Swim School with ...
... Jenny McCuiston, co-founder and Olympic qualifier.
16. Goldfish Swim School
Swimming lessons schools
What is behind the meteoric growth (151 percent in sales and 105 percent in locations in three years) at Goldfish Swim School? Hint, it’s not arm-floats. “We’re such a service-based industry, but the technology is so, so important. It’s becoming so much more powerful in how we operate, in how we hire and also to the parents that communicate with us,” said Goldfish Swim School CEO Chris McCuiston. He said technology has already revolutionized how franchisees run the business. They can push out information, find and talk to substitute instructors and enable employees to request time off all without being anywhere near the school. It’s drastically changed how the brand markets as well. “Each location is spending about $1,000 a month on social media, on top of marketing through our system of phone calls and emails,” said McCuiston. He said that digital framework is about to get more robust by pulling all those disparate digital parts together. “We’re looking to improve the software we have or by building our own. We have so many things that go through Salesforce and they all communicate through APIs, so we’re able to make better decisions around all that,” said McCuiston. He doesn’t tarry on the past results—it’s all upward and onward. He said his motto is about finding the next best franchisee, the next best location and the next best technology upgrade. “We talk a lot about people processes and partner. Our goal is first and foremost bringing in the right people as franchisees, then having systems in place to make sure that we’re all doing the same thing and doing them in sync. We’re really, really good at teaching students to swim—that’s our bread and butter, but we need good people for site selection and technology and marketing. So we’re partnering ourselves up with the best and the brightest,” said McCuiston. Like others, the biggest challenge is real estate, but for one particular reason at the core of the concept. “We have a unique challenge, that we’re putting pools in a space. So if we don’t own a space the landlord gets nervous about having a hot pool with lots of humidity in there,” said McCuiston. He said a new partnership is on the books that will help expedite those leases so future growth is more efficient. “If we know everything ahead of time, we can start checking boxes very quickly,” said McCuiston.
Gene Simmons, left, and Paul Stanley of KISS fame are front men for Rock & Brews.
17. Rock & Brews
Music and food restaurants
Rock & Brews has enjoyed a three-year sales growth rate of 90 percent and unit growth rate of 111 percent. That’s no small feat, but co-founder and managing partner Michael Zislis says he still gets razzed by some of his franchising peers. “Driving sustainable growth, that’s key. Some people will say, You only have 26 stores in five to six years?” said Zislis. “I’m always amazed when I see a brand come out of the ground and all the sudden there are 1,000. That’s not sustainable. I think the 25 to 40 percent growth is sustainable. I’d rather stay closer to 25 percent because you have enough people in the back ready to go out.” He said the best fuel for future growth has been finding key people for the corporate staff. “We brought in a president and CEO, Michael Sullivan—that was mandatory, you start getting all these stores and there is a lot of communication, daily and weekly promotions. There’s just so much to do so you really have to expand the team. We also hired a marketing director for the first time. Before we did our marketing in house but the franchisees wanted better marketing,” said Zislis. He said the brand also brought in a new training director to tackle one of the biggest challenges across the restaurant industry and one the longtime restaurateur and entrepreneur takes very seriously. “I guess the biggest challenge is controlling the same quality everywhere. That’s the fight, that’s why you give them more information, you give them more support,” said Zislis. “The last thing I want to hear is, ‘I was at store Y and the mac and cheese was better at store X.’ That’s the thing we fight day to day.”
18. AtWork Group
Temporary staffing is perhaps one of the few parts of the economy that doesn’t mind the very low unemployment rate. In fact, Jason Leverant, president and COO at AtWork Group, said it’s helped push growth further. “It’s been a wild ride. If you go back to the recession, that impacted the temporary staffing industry drastically,” said Leverant. “But because we’ve seen such a rebound—the unemployment rate is the lowest in years—that’s helped us tremendously.” Nearly full employment will likely drive growth further, from sales growth of 78 percent and unit growth of 35 percent over the last three years. But while it means more clients, that low level of unemployment does change the balance for franchisees. “It’s very much like a tug of war. One side is your client development and the other game is the talent pipeline. So with the swings in the economy there’s always going to be one side winning that tug of war,” said Leverant. “So we have to put more of our branch focus on building that pipeline. The advantage we have over a widget company, that’s what they do, as a staffing firm that’s all we do is recruit. We adjust our operations and change our strategy to find that talent.” He said they’ve turned to more technology than ever before. Adding new customer relationship management tools has been a major benefit to keep recruitment efforts efficient, and Leverant said they’re even looking into some machine learning tools to see if artificial intelligence can help move the needle. He said the mission “At Work, For You” translates to franchisees as well. “I’m new to the franchise industry, but I’ve always been service oriented,” said Leverant. “That’s what wins you business and helps you grow business, so we want to make our owners as successful as possible.”
19. Wayback Burgers
For William Chemero, executive vice president at Wayback Burgers, there is one big thing behind the brand’s 58 percent sales and 48 percent unit growth over three years. “It’s all customer service. The brands that are going to stay healthy and grow through the next phase in development are going to be the ones that focus 100 percent on customer experience because there are a lot of options. And if they don’t feel good about their experience, they can go somewhere else,” said Chemero. “Then you run the risk of losing that customer you spent so much getting because marketing is not cheap.” He said that’s been a major push lately and will continue to be so, creating that wow factor. He believes in wowing customers with more products beyond the standard burger, wowing them with a new beverage program and wowing them as it all gets put together. “Our new design is renewing our brand. We are emphasizing a whole refreshment bar that you can sit at, a counter to watch your new concoction being made,” said Chemero. “People like to watch things, so we make it an interactive order.” He said one of the challenges has been financing, but he said the brand has addressed that by bringing banks right into the discovery and sales process.
“Even before we ask them to be a lender, they go through the whole process. After that, if they want to do financing, we’ll go to the bank and sit down with the powers that be to get to know the ownership group,” said Chemero. Real estate is another challenge, but Chemero said they have some unique ways to get around the problem. Non-traditional is getting a much closer focus, and he said the brand has “perfected” small-format convenience store locations, signing up with Walmart for in-store locations and just starting to grow on military bases—all of which tap into transient or captive audiences and don’t require the same 2,500 square-foot box everyone is fighting for. And then there’s the Wayback Wagon that is just rolling out now. “I just pull it behind a car. Level it, set up and start cooking, said Chemero. “It’s all solar powered, EPA friendly, compressed gas so there is not a lot of fumes. We tested this in Manhattan from 11 a.m. to 2 p.m. on a downtown street and did $1,300 in sales, so the line is down the block.”
20. Berkshire Hathaway Home Services
Residential real estate services
Berkshire Hathaway Home Services CEO Gino Blefari has been a student of business culture since his earliest working days. And he continues to make his mark as CEO at BHHS to further the three-year 64 percent sales and 25 percent unit growth. He said growth comes down to setting goals and hitting them over and over. “Growth only occurs when goals are clear, measurement is systematized and insufficient efforts are responded to and results are appropriately reinforced and rewarded,” said Blefari. “This is at the bottom of my email: ‘Don’t join an easy crowd, you won’t grow. Go where the expectations and the demands to perform are high.’ The bottom line: the challenge creates the muscle to become better, wiser and more unique.”That quote from storied entrepreneur and motivational speaker Jim Rohn is one of many guiding principles Blefari has put in place since taking the reins at the top of BHHS. There are accountability partners. He’s implemented the Four Disciplines of Execution (also known as 4DX) and he journals—for Blefari, it’s all culture all the time. And in the real estate business made of so many self-made stars with their own way of doing things, getting everyone to buy into that culture is a big challenge. “My job is to hire eagles, but then to get them to fly in formation when they’re not wired to fly in formation,” said Blefari. “As soon as everyone really understands, it’s all wonderful.” How does he maintain that cultural push? “Going on the road doing it live, leading by example and creating systems for our companies to use,” said Blefari. “It’s a constant, constant never-ending thing. You’re talking about it all the time.”