Multi-Unit Franchisee Magazine Issue III, 2012 | Page 28

MVP 2012
BOTTOM LINE
Annual revenue: Our target this year is at least $4.5 million in sales revenue. We are on pace to meet or beat this target.
2012 goals: We plan to open at least one new location, while growing
sales in current locations by at least 8 percent over 2011. Our enduring
goals are to complete our yearly development plan and operate within our
annual budget. Other goals include: 1) solidify and strengthen our management team: a strong GM for each store and a training mechanism through
assistant manager roles to provide upward mobility for key employees
within our system; 2) systematically strengthen our customer service culture,
training, and operations: Service Leader awards, Rookie Book training and
testing, an internal Fire Report, and development of a training orientation
program for all stores and a few key trainers in each store.
Growth meter: How do you measure your growth? We measure
it on the bottom-line performance. We are always asking two questions:
Are we growing sales—opening new stores or growing revenues in existing
stores? Are we controlling costs well enough to run an ever more profitable
company?
Vision meter: Where do you want to be in 5
years? 10 years? 5 years: operating at least nine
stores, with at least nine certified GMs; add three salaried positions to our existing infrastructure (an assistant
manager of operations, an assistant manager for catering, and an assistant manager for training); and move
the day-to-day management and operations of our
business increasingly under the leadership and direction
of our director of business development. 10 years: possibly expand our inventory to 11 to 13 Firehouse Subs
stores; and possibly add another brand. Our key people
today will be better business people who are better
off financially, have better skill sets, and have brighter
prospects for growth. Expand our business ownership
and infrastructure to enable us (the present owners) to spend less and less
time in daily management and operations and to ensure the continuation,
health, and growth of our company beyond our lifespan.
How has the most recent economic cycle affected you, your
employees, and your customers? Ironically, from our business point
of view, it has been good for all parties mentioned above. We have heightened our attention to financial management and vastly improved operations; we better train and invest in our employees; and we’ve increased our
expenditure of marketing dollars. Our customer gets a better experience and
expects more of the Firehouse brand because of our improvements and because of headquarters’ commitment to growing our brand.
Are you experiencing economic growth/recovery in your market? Yes, to the tune of 18 percent positive comp sales over 2011, up 7
percent from 2010 and 3 percent over 2009.
What did you change or do differently in this economy that
you plan to continue doing? Don’t throw coupons at customers or rely
on discounting to build the business. Instead, we will build customer loyalty
by improving service and operations, thereby continuing to increase the value
of dollars customers spend in our restaurants.
How do you forecast for your business in this economy? We
know the ins and outs of every line item of each store’s P&L. We build a

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Multi-Unit Franchisee Is s ue III, 2012

comprehensive budget based on all of these factors. The biggest and most
difficult variable to forecast is sales. This year we worked with each GM to
set sales targets based on our goals for each individual store.
Where do you find capital for expansion? We’ve developed an
open, mutually respectful, and long-term relationship with our bank. They
have partnered with us to pursue a sound, incremental development plan for
expansion in the Columbia market.
Is capital getting easier to access? Why/why not? Capital
acquisition is easier than two years ago, but still somewhat difficult. The
amounts loaned and terms are somewhat better, but considerably more
documentation, analysis, and evaluation are required to secure necessary
capital. A proven track record of performance that the bank knows firsthand
is invaluable. The additional scrutiny is not unwelcome. It is an inevitable
consequence of changes in bank regulations that, in the long run, may prove
best for all of us.
Have you used private equity, local/national banks, or other
institutions? Why/why not? We have only used local banks. Our
investigation of other sources has typically found them
to be too cumbersome. We like working with local
people who know us and who know our business at a
personal level.
What kind of exit strategy do you have in
place? It’s an evolving one. We’re presently putting
an infrastructure in place that can support the management of key business functions. We’re grooming
several key employees to assume ever-increasing
responsibilities for growing and running the business as
we move toward full retirement. We want our business
to continue on sound footing, with a bright future after
we’ve departed. We anticipate our increasing disengagement unfolding over the next few years.
What are you doing to take care of your employees? We are
going to introduce some form of health insurance for our management staff,
hopefully this year. We provide a bonus program for GMs and always try to
promote from within to fill positions. Within the next few years, we hope to
have a tuition support program for key leaders in our company. Many of our
employees are students. We do everything possible to accommodate their
schedules. We consider successful pursuit of their studies as a priority we
support.
How are you handling rising employee costs (payroll, healthcare, etc.)? So far, by scheduling tighter and training better. We have a
higher average payroll and lower average staff size than two years ago, by
about one dollar more per hour worked and one less employee per store.
Like nearly every small business owner, we are extremely concerned about
how the new health care and labor laws will affect our ability to operate a
successful enterprise.
How do you reward/recognize top-performing employees?
Our Service Leader Program recognizes our most valued attributes in employees, that is, genuine he