MULTI-BRAND
uity / operating partners . He also doesn ’ t move employees across brands . “ Each brand has a different culture and I want to keep those pure ,” he says .
He has an interesting approach to risk , owing partly to his modest upbringing and to his experiences with brand fluctuations . “ When I go into a business venture , I don ’ t ask how much money I can make . I ask , ‘ If it doesn ’ t work out , how bad can it hurt me ?’”
Honored as Jersey Mike ’ s 2016 Franchisee of the Year , he says his next challenge with the brand is exciting . “ We ’ ll open the first Jersey Mike ’ s store in Canada on April 19 in Kitchener , Ontario . It ’ s a joint venture with the founder and CEO of Jersey Mike ’ s , Peter Cancro . We ’ ll do the first six , and then I ’ ll become the area director , helping to oversee and grow Jersey Mike ’ s in Ontario . My goal is to have 100 stores there in 10 years with mostly franchisees .”
Also ahead , Middleton and his partner and brother-in-law Bill Biga III , are committed to growing their Jersey Mike ’ s in Michigan to a total of 28 over the next five years .
Middleton , who describes his recent honors and awards as humbling , insists that these belong to “ everyone I work with ,” he says . “ We ’ re always looking to make sure we ’ re protecting the people in our company , that we ’ re doing things right . In today ’ s world , if you have more than a couple of units , you really do need to understand the rules of the game , so we ’ re very sensitive to doing our best to run a great company .”
His older son Ryan , with a finance degree from Michigan State and an MBA from Wayne State University already is part of the company as manager of business processes — and as a franchisee in Middleton ’ s Jersey Mike ’ s Grand Rapids company and also in one of his Little Caesars companies .
His other son , Zach , who currently attends Central Michigan University , will soon come on board . “ Both of my sons have always wanted to work in the business . I didn ’ t go to college so they ’ re both going to be more educated than I am ,” he says with a characteristic grin .
BOTTOM LINE
Annual revenue : $ 29.8 million . 2017 goals : Open 7 to 8 new restaurants . Growth meter : How do you measure your growth ? By same store sales comps , same store transaction comps , same store income comps , EBITDA ( cash flow valuations ), and unit counts . Vision meter : Where do you want to be in 5 years ? 10 years ? My vision is a leadership team that continuously develops our people , with a focus on growing our brands profitably to create more opportunities for our best GMs to become franchisee partners with us . During the next 5 years , I would like to keep growing all the brands we operate , adding units when it makes financial sense . My biggest focus will be bringing Jersey Mike ’ s to Canada in a joint venture with the parent company . In the next 10 years I hope to have helped grow the brand to over 100 units in Canada , operated by franchisees . How is the economy in your regions affecting you , your employees , your customers ? I have been doing this for a very long time . What I have observed is that it is a hard business to be in , and it has always been hard . But the political environment over the last decade has made things so much harder for all the people who work in this industry — the owners , the managers , and the hourly employees . The best way I know how to get through difficult times is to focus on the customers , the team members , and the company . Be as financially responsible as you can and try not to get too distracted by all the noise . Are you experiencing economic growth in your market ? In Michigan yes , mainly because of the auto industry . However , in Ontario it is flat . How do changes in the economy affect the way you do business ? It is a double-edged sword . When the economy is hot , it is harder to attract talent to this industry . When the economy is cold , the top line is challenging and it increases discounting . How you manage both of those scenarios can determine how well you do long-term . How do you forecast for your business ? We use internal financial models we have created , based on what the unit economics look like for each brand . We look at the sales and customer count trend lines , project the estimated inflationary pressure we believe is coming , and consider what price increases we would consider taking , if any , and then input all this information into our financial model and plan our budget accordingly . We make adjustments to the forecasts as needed . What are the best sources for capital expansion ? I have a great partner , Carl Chandler , who is our CFO and a CPA . He has been very successful at working with our local banks to secure our financing needs . Experience with private equity , local banks , national banks , other institutions ? Why / why not ? We like having long-term relationships with all of our business partners , including banks . So we have a track record of sticking with the ones we started with . We keep them honest by bidding out the business periodically , but our partners value us as much as we value them . So far that approach has served us well . What are you doing take care of your employees ? We take care of employees the most by being financially strong and growing . Because we grow most of our talent organically , it creates a lot of advancement . We take the best care of our GMs . We have a unique profit-sharing program designed to give them deferred compensation that they can use one day to get into business for themselves . Carl and I are proud to have helped at least 15 of our past general managers become franchisees . How are you handling rising employee costs ( payroll , minimum wage , healthcare , etc .)? All of this is a challenge . We are paying close attention to what everyone is doing and relying a lot on what others are doing in the brands we operate in . There is no simple answer . The rules are changing and things are very inconsistent in the industry right now . How do you reward / recognize top-performing employees ? We celebrate success at every opportunity we can . Our monthly manager meetings and our year-end celebrations are the most obvious way . What kind of exit strategy do you have in place ? I am working hard on succession planning . I have family in the business and do not plan to exit for a very long time . I love what I do , and I am focused on developing the current leadership team to carry on long after I ’ m gone .
22 MULTI-UNIT FRANCHISEE ISSUE II , 2017