In the latest episode of Hospitality Hangout, Michael Schatzberg “The Restaurant Guy” and Jimmy Frischling “ The Finance Guy” chat with Dan Rowe, CEO of Fransmart, about the benefits of multi-unit franchises, and the importance of landscape when considering new brands.
Fransmart CEO, Dan Rowe and the guys chat about how Rowe got started in the industry.
He talks about deciding as a teenager that he wasn’t going to go the traditional route and attend college to find his career path. He says that he wanted to figure out how to become successful, and while at a motivational seminar, he was faced with the question, “What do you want to do with your life?” His answer was, “I want to get wealthy helping people get wealthy.” He shares that his goal for attaining riches was not to be at the expense of others, and that’s something that drew him to the franchise space. He says, “What I like about franchising is that basically the model is that, you know the franchisors only make money if the franchisees are making money, franchisees are only making money if they’ve got a good team and their people are making money.” He adds, “Honestly, I find a lot of joy in this space. It’s the kind of job that even if I wasn’t getting paid, this is exactly what I’d be doing.”
Rowe, who was also a successful multi-unit franchisee, shares his insights on why it’s better to invest in multi-unit franchises rather than just buying a single unit. He talks about the Fransmart formula for success, that includes finding the right emerging franchise opportunities, which are less expensive to build and are more likely to be able to leverage conversions. He says, “It’s the ultimate wealth builder to me, when you get into a brand when they’re young, they’re just less expensive to build, you get your money back fast and then you roll that into another store, and at some point those self-fund multiple locations, making millions of dollars.” He adds, “You’ve got an asset now that you can sell for a life changing amount of money. Frischling provides some data, sharing that Fransmart has sold over 5,000 franchises worldwide.
Schatzberg talks about the company’s current restaurant portfolio which includes, The Halal Guys, Brooklyn Dumpling Shop and Savannah Seafood Shack. He asks Rowe what Fransmart looks for when considering an emerging brand. Rowe shares that it involves a lot of unit economics, because high volume indicates that customers like the restaurant. He says, “High volume tells you customers like the concept, you know customers vote with their wallets. So if they’ve got really, really good sales, that’s a good indication.”
Rowe talks about the importance of landscape and the tremendous success of The Halal Guys, largely due to the huge opportunity he saw there. He shares that while opening more that 50 American brands in the Middle East, he found himself falling in love with the local Mediterranean street food, and he realized that no big brand in America was offering this concept. He says, “It dawned on me. You’ve got a billion and a half Muslims, Middle Eastern food, Mediterranean food is amazing and I just saw there’s a huge opportunity if somebody gets this right, you’re going to have a monster on your hand, and that’s exactly what we did.” He adds that the chain is already at 100 units and on its way to 500.
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