Multi-Unit Franchisee Magazine Issue II, 2013 | Page 23

M U L T I - B R A N D

he says. “In Omaha, for example, our
population has increased 2 to 3 percent
since 2000, but the number of restaurants
has increased by 500 percent. The good
news is that it does force us to get better
every day, and more people are eating
out than ever before.”
Cutchall says he hopes to consolidate
in the near future and reduce his num-

You learn to
operate smarter
during tough
times. It’s not all
bad if you survive.

bers, so he can focus more intently on
fewer, more centralized locations—but
jokes he’s been saying that for years. “I
don’t measure growth by the number of
locations anyway,” he says.
Just because he hopes to scale back
doesn’t mean he’s getting out of the restaurant business. “I’ll own and operate
restaurants until I die,” he says.

BOTTOM LINE
Annual revenue: $55 million
Growth meter: How do you measure
your growth? Bottom line, not number of
locations.
Vision meter: Where do you want to
be in 5 years? 10 years? Fewer locations/concepts, but with higher volumes.
How is the economy affecting you,
your employees, your customers?
Being diversified really helps us during tough
times. Our casual dinning was affected, and
the 99-cent burger wars hurt at Sonic for a
while as we wisely decided not to participate,
but our fast casual division continued to grow.
I think the worst is over and all of our concepts are up again; and now it’s more competition or over-building on our part that can hurt
our sales more than the economy.

“I think the worst
is over and
all of our concepts
are up again.”

What did you change or do differently in this economy that you plan
to continue doing? Everyone had to learn
how to tighten their belts; many moves should
have been already in place but were not. You
learn to operate smarter during tough times.
It’s not all bad if you survive.

Have you used private equity, local
banks, national banks, other institutions? Not for me at this time. I tried it once
at one location because the investors lived
there and approached me to do the deal. They
will lose money on that deal and so will I, and
I do not like that. I have mostly used local/
regional banks in the last four years.
What are you doing to take care of
your employees? Our key people all share
in profits. As far as benefits, we are competitive but I wish we could do more. Health
insurance is out of control. And because of
heavy government regulations we abandoned
our 401(k) plan a few years ago, but I would
like to bring it back as I understand it has
gotten more employer-friendly. But all new
benefits are on hold until we understand the
full impact of the Affordable Care Act.
How are you handling rising employee costs (payroll, healthcare, etc.)?
Unlike many other companies, we are not
rushing to drop our longer-term, hard-working
loyal employees to under 30 hours a week to
avoid the healthcare cost coming in the future.
However, we will not be hiring any new parttime employees for over 30 hours a week.

Is capital getting easier to access?
Where do you find capital for expansion? The financing options have improved a
lot recently. We have been doing a lot of refinancing, getting all our loans in the 4 percent
area. When building my company the first 10
to 15 years it was always FFCA, GE, and Irwin,
and I appreciate that they were willing to take
a chance on me. In recent years they have not
been competitive or as aggressive as our local/
regional banks. We are now exploring a one
loan, one bank with credit line option with Wells
Fargo and some other regional banks.

What kind of exit strategy do you
have in place? I will own restaurants until
they bury me. I will, however, reduce the
number of different concepts over the next 5
to 10 years. Whenever possible, I try to find
ways for my long-term managers and supervisors to buy restaurants from me. I have done
this several times in the past, and all but one
succeeded. It’s very rewarding for me and for
them. It requires some financial help from me,
but I am okay with that if they also have skin
in the game.

Multi-Unit Franchisee Is s u e II, 2013



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