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When franchisors create opportunities for franchisees, they keep them for a lifetime.
Just ask Bob Singh. All he’s ever wanted was opportunity. That’s why he’s signed a second 20-year agreement with his franchisor, effective today.
Nowadays it’s not unusual to hear about franchisors losing their long-time franchisees. Many franchisors blame it on the economy. But the truth is, many franchisors fail to create opportunities for their franchisees. That’s one of the worst mistakes a franchisor can make.
Another 20 year stint?
Since 1979, Bob Singh has been a franchisee of Pizza Inn, based in The Colony, Texas. For the last 20 years, he’s also been the company’s area developer in Mississippi. Since he joined the company, Pizza Inn has changed its leadership – five times! That’s not been a good thing. Singh says it hindered the company’s overall growth: With only 310 locations in 17 (mostly southern) states, Pizza Inn is sometimes the forgotten brand.
So why would a 56-year-old franchisee, who could easily retire, agree to another 20 year stint as an area developer with Pizza Inn?
Opportunity!
Singh likes the opportunities recently created by Pizza Inn’s leadership team, headed up by President & CEO Charles Morrison, who joined the company in 2007, and COO Madison Jobe, who’s been on board since 2009. Both executives have extensive restaurant experience, and they understand the franchisor/franchisee relationship. “Those fellows in the corporate office get it,” says Singh.
Applause for corporate stores
When Morrison decided to open corporate stores, which previous CEOs at Pizza Inn had refused to do, Singh applauded the decision. “Now they’ve got to make a profit just like franchisees,” says Singh, who owns six units and oversees another dozen. “It’s important that (the leadership team) understands what the franchisees go through day to day, because that puts them in a better position to help us.” Which means: help the franchisees benefit from more opportunities.
Singh says that Pizza Inn is in better hands today than it was just five years ago. “Back then, this brand just didn’t know what it was in the marketplace. Franchisees built different types of units, some with carry out only, some with 100 seats, some with delivery. But now the current leadership has given us a prototype that’s a home run.” The prototype includes a buffet, 150 seats, carry out and, where it makes sense, delivery. Most importantly, some of these new units, including some owned by Singh, are producing sales in excess of $1-million annually.
A business that now works
“With our new systems in place, the business now works (financially),” continues Singh. It took some time, but “the company’s leadership has created new opportunities for the benefit of all the franchisees.” (Of course, franchisees still have to step up and do their part, which includes converting to the prototype at a cost of $75,000 to $100,000. But Singh says that’s a given. “If you want to be a successful franchisee, you’ve got to get on board.”)
Fortunately, Singh is a patient man, and patience has rewarded him repeatedly as he’s sought opportunities. A native of Punjab, India, he moved to England and studied to be a metallurgist with British Steel. However, he says England offered “a lot of job security, but no opportunity.” He wanted to go where there was “tons of opportunity,” even if there was no job security. And that’s how he arrived in Mississippi in 1974, when he was 21.
Got his start with Sonic
While other young men – especially if they’d worked at a desk as a manager – might not have thought flipping burgers for 80 hours a week at a Sonic® Drive In was an opportunity, Singh did. A friend of the family was a Sonic franchisee, and he gave Singh his start in the food industry.
“During the first two weeks on the job,” Singh recalls, “I found out (how much money) the manager was earning and it was pretty good. That’s when I decided that I had to prove myself and move up the ladder.” Gradually, Singh progressed from trainee to manager to area manager, and as his boss acquired additional franchises, including some with Western Sizzlin, Singh became a shareholder in the franchisee’s business. “I’m just fortunate that someone was there to offer me the opportunity,” he adds thoughtfully.
Three years into his career, now in his mid-20s, a greater opportunity appealed to him. “People loved Sonic, but they wanted some variety,” he explains, “and that’s where Pizza Inn came into play.” In 1978, he opened a Pizza Inn in Greenwood, Miss., and the next thing he knew he was the director of operations for 18 additional locations throughout the state. Even more opportunity!
Opportunity to be a franchisee
But the best opportunity was still to come. By 1980, he had saved enough money to buy his own franchise. “I decided to risk everything on a restaurant of my own,” he explains. “I told myself that if I didn’t make it, I could always go to work for someone else again.”
He shivers remembering how close he came to that reality!
“Three months into my own business, I almost went broke,” he recalls. “We started out great, but then all of a sudden the (restaurant’s) newness wore off and sales hit rock bottom. I remember writing a check to pay my utility bill on a Friday, knowing I wouldn’t have the money in my account to cover the check until after the weekend. I came close to losing it all.”
All was $80,000. Every penny he could spare.
Advertising creates opportunities
Fortunately, he had a franchisor to lean on. “I called and got some advice from the marketing department, and they told me I needed to advertise. They put me in touch with a (direct mail) company, and then they designed a mailing piece for me. It helped to be part of a franchise network.”
Except there was one problem: He had no money!
Importance of track record, brand
But he had a track record, and a brand behind his name, and that was good enough (at the time) for a local bank to give him a $10,000 loan. “Without that loan,” he emphasizes, “I was out of business.” He used the money to launch a direct response campaign, which immediately bumped sales. He repaid the loan and 60 days later launched a second campaign. “I doubled my business in 120 days,” he explains. “We got (sales) to $8,000 a week, and at the time that was enough to pay the bills and make a profit.”
Nearly going broke taught Singh an important lesson: Franchisees must advertise consistently! “The franchisor may have told me that when I bought my franchise,” he admits, “but when you don’t have the money, you’re stuck. Today, we look for deeper pockets to open our restaurants. When you’re a franchisee, you need money to advertise.”
Why area development?
By the late 1980s, Pizza Inn had developed nearly 30 units in Mississippi, but one day a competitor (also keen to opportunities) bought 25 of the locations. Shortly thereafter, former customers started calling Singh, asking, “When is Pizza Inn coming back to our town?” That’s when the young entrepreneur saw yet another opportunity: area development.
“When we lost those locations,” he explains, “customers still wanted their Pizza Inn. These are small towns, and people appreciate our way of doing business” which means serving high quality, innovative products (have you tried a “pizzert” pizza for dessert?) and personal customer service. So Singh decided to replace those units by recruiting franchisees who would restore the company’s presence in Mississippi. As an area developer, he pledged to build 12 units in five years. He did it in three!
And now he’s going to do it again. Or something similar. “I’ve got two sons who like the business,” he explains. And even though Pizza Inn can’t take credit for his sons, they create yet another opportunity for Singh! “I want to pass something on to them,” he says, “so I’m going to help them get up to speed and eventually take over the business.”
What happens after that he’s not certain. But as long as Pizza Inn continues to lead him to opportunities, the Singh family will likely continue to be part of the Pizza Inn network.
Creating Opportunities For Multi-Unit Franchisees
Texas Franchise Leadership Forum will help franchisors create opportunities for their multi-unit franchisees at the next forum session, Thursday, Sept. 30. Details here. The topic: What Multi-Unit Franchisees Expect From Their Franchisor. Two multi-unit franchisees will tell their stories and explain how they benefit from interaction with their franchisors.
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