The Heart of Franchising: Team Care and Business Acumen
My latest podcast session of Franchisee Wisdom was packed with back-and-forth sharing of experiences and learnings. I had the pleasure of interviewing Eric Danver, a 63 Multi-Unit Franchisee from Hand & Stone and also a former Papa John’s Franchisee & corporate employee.
Eric and I have a very similar background. We both worked for Domino’s Pizza, so our bases are pretty much the same. However, I stayed in the corporate world, moved to Domino’s International, lived in many countries, and had a great career there.
On the other hand, he became a Multi-Unit Franchisee, first for Papa John’s and then for Hand & Stone, which gave him an interesting mix of experiences, learnings, and business perspectives.
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From Cable Guy to a Pizza Regional Manager
Eric had an entrepreneurial spirit from a very young age and did some of the typical things kids do to earn their own money, like deliver newspapers. He even hustled sodas and golf balls (and some hidden beer) at a golf course when he was about 13.
Once he was finished with high school, he immediately started working. Over the years, he climbed the corporate ladder at a couple of cable companies.
By 1989, when he was 26, he decided to change gears and joined Domino’s Pizza as a manager-in-training (or MIT, as they call it), making $5 an hour. Even though the move was a risk and meant a pay cut, he decided to do it because he was intrigued by the restaurant industry and attracted by the fast-paced kitchen dynamics. Plus, he had heard about the brand’s good reputation and how its managers made $1,000 a year if they worked hard, so he took it as a personal challenge and a way to support his family.
“Domino's was the kind of company that, if you worked hard and were able to drive results, you were gonna move up very quickly because of the phenomenal growth they were having at that time.”
Another plus was that, due to the company's explosive growth in the mid to late 80s and early 90s, they were investing heavily in their people. It made sense: they needed future general managers, not just someone who could run shifts.
But to become a manager, the MITs (like Eric and me back when I was also working at Domino’s) had to go through extensive training, attend classes, and achieve specific milestones and results to eventually move up to the store-ready level.
By the way, I have worked with many franchisors, franchisees, and brands, and I have not seen that level of training, discipline, and consistency among managers and leaders at the store level in any other franchise brand. I have to say that a lot of the basis of our knowledge comes from that type of structure on the leadership and management side.
“The classes and all the different education that Domino's taught young guys like myself who were managing their units, on how to run a business from the ground up, were incredible. I learned so much with them!
Being able to take those learnings and pass them on to others really helped me achieve the success I've had. I really attribute most of that to Domino's, and I just had nothing but the most admiration and respect for their systems in place and how they structured things.”
The Business Owner Perspective
Within four months, Eric was managing his first unit, although it was not what he expected… While other managers were getting high-volume stores and being promoted, his was, in his own words, “a dog store that was doing next to nothing and at a terrible location.” However, thanks to his father's advice, he began to see things differently, caring about the business and the people in it. Soon, the store took off.
A year later, he became a Regional Manager in charge of Staten Island, where, again, he had to deal with underperforming units. However, he was also able to turn things around there, through hard work and dedication, carving out a reputation for himself.
“My secret was that I always treated the business like I owned it. I guess it's old-school mentality, but I just felt like I owed the company, so I gave them all I had. I worked for six and a half days there, but not by force; I just wanted to succeed.”
Another one of his secrets was learning how to make money for the company. Eric had monthly calls with his assigned accountant, and they would run through every line item in their P&Ls (Profit & Loss Statements) with a fine-tooth comb. “Domino's taught me the value of pennies and nickels and dimes, and how those little things add up to big things over time”.
I agree with him 100%. Working at Domino’s was the fun part, but making the profits was like winning the game.
By the way, giving “dog stores” to new managers was a strategy to help them demonstrate their ability to turn things around.
It happened to me, too! When I became manager, they gave me the Northwest Highway store in Dallas, Texas, which was losing money. The first thing that my District Manager did on my first day as a Unit Manager was sit down with me and teach me how to calculate the break-even point.
He said: “This is the sales you have to achieve, this is your labor cost, this is your cost of goods, and you’ll break even, and your goal is to break even and start making money”. C.W. Wilder, wherever you are, thank you. I love you!
Becoming a Multi-Unit Franchisee
Eric spent about five and a half years as a Regional Manager until he decided it was time for his entrepreneurial dreams to step in again and franchised for the first time.
Leaving Domino’s wasn’t an easy decision for Eric. He had four kids at the time and had a strong sense of loyalty to the company. However, he had always wanted to be an entrepreneur, and he had the opportunity to become a Franchisee as an Operating Partner. So, even though it was hard and scary, he took the risk and became a Papa John’s Franchisee.
Six of his managers followed him, not maliciously, but because they had formed a strong relationship with him. It’s valid: when you are a good leader, take care of your people, and do things the right way, they'll take care of you.
He was able to form a great team and, together with two partners, opened his first Papa John's store in New Jersey in April of 1996. At the time, Papa John's wasn't a big brand. The company wasn’t even sure they would become a national brand, let alone an international one. However, the franchise partners went all in and, 41 months later, they were operating 20 more units!
Eventually, they reached 53 restaurants, becoming one of the 10 largest franchisee groups in the system at the time. Then, the company went public. He sold his stores and, as part of the deal, joined the corporation to build out the rest of New Jersey. A few years later, he bought 10 stores in Delaware and then bought New Jersey back, along with the Philadelphia units.
Diversify and Selling
Many years later, another shift happened, this time driven by Eric’s wife. While the pizza business was doing well, he wanted to diversify, and his wife suggested exploring the spa industry, specifically with the Hand & Stone franchise, which they both knew as clients.
When he did his due diligence to study the franchise opportunity, he found a large, growing industry, especially in esthetics and facials, which are key focus areas for the brand. He also found the membership business model really steady, and a strong leadership team behind the brand.
“One thing you learn in franchising is how reliant you are on your franchisor and their leadership team. And I liked that they had a plan and they were gonna execute it”, he explained.
Fortunately, he had a strong team managing the Papa John’s stores, so he was able to focus on this new franchise venture. In 2014, he opened his first spa location in Chantilly, Virginia. Seven years later, Eric exited the Papa John system, selling his stores to some bigger franchisees who wanted to continue scaling their franchise business.
“It was bittersweet, but the timing was right. My business partners taught me a long time ago: when you have the right buyer, you take the money, you take the bid, and you go. And it worked out.”
Scaling his spa business was a big motivator for selling the pizza units. As of today, Eric has 63 units in eight states, making 95 million in revenue this year. “It’s a great brand, with great leadership. I love what I'm doing, it’s a lot of fun. And three of my kids and my daughter-in-law are all involved in the business, so it’s great for all of us”.
Keep learning: Best Practices For Aspiring MUMBOs (Multi-Unit, Multi-Brand Operators)
The Power of People
Even though maintaining healthy finances is critical for business owners and managers, Eric has never been driven by money. His priority, and another one of his winning strategies: always put people first.
Another key element is offering your team members growth opportunities. When his franchise experienced explosive growth, he ran ads for assistant managers and shift leaders, but recruitment was low. Eric knew finding the right people was critical, especially in the Unit Manager position, so he shifted the message to say his company was looking for managers in training, following the Domino’s model.
The results were much better because being hired and trained to become a manager was much more attractive to candidates. “The stores just take off when you put the right Unit Manager”, he said.
I agree. This position is the most important role in a franchise because it's the one that drives profits and operational consistency. But I also say that the most difficult position is that of a District Manager, because they have to inspire, coach, guide, and oversee multiple units and, most of the time, they don’t have the proper leadership and management training to do so effectively.
“When you try to manage things from afar, people think you don't care. That’s why I believe regional management is mainly about visibility and letting people know you're gonna be in this with them, because it's a team effort. If you show that you are here, you care about them, and you are committed, it just works! People buy in when you care.”
It's amazing how simple things, like being present in the stores, shaking hands with your people, and building relationships with them, can really make a difference!
Eric is also a big believer in sharing success with your people and providing additional benefits, such as a retirement plan, supplemental insurance, a 5% match on their 401(k), and PTO for all employees based on hours worked, to name a few.
“The name of my company is FGG Spa. The “GG” stands for “God's glory” because I want to be able to bless others with the blessings I've been given. But, while we give a lot, we also expect a lot.”
Eric and I closed the first part of our conversation with this message about being grateful. He mentioned how, while his dreams were big, he never dreamed he would be as fortunate as he has been.
“I realized a long, long time ago that money was never gonna make me happy. And also, that this was about relationships and caring about people. And there's no greater joy than seeing a young person that comes into our organization, works really hard, and then becomes a regional manager; it's really a beautiful thing. That's been the biggest joy in my life.”
Don’t miss out on the second part of this blog post, where Eric will share his best tips on what to look for when choosing a franchise brand.
And, if you are looking for resources to train your Unit Managers and District Managers so they can excel at their roles, you might want to consider the American Franchise Academy. We have two training programs specifically designed to provide these leaders with the knowledge, tools, and resources they need to be successful:
- LEAD, a Multi-Unit Leadership Certification Program for District Managers
- MANAGE, a basic & advanced Unit Management program
If you have any questions about our programs or would like to schedule a commitment-free call, feel free to reach out! We'll be glad to help you!
WATCH THIS VIDEO PODCAST INTERVIEW ON YOUTUBE:
