Multi-Unit Franchisee Magazine Issue III, 2012 | Page 46

MVP 2012
enough to enable him to keep his head
above water as he grew.
In 1991, he approached then-fledgling Penn Station East Coast Subs about
buying development rights for three
counties of Greater Dayton, since Cincinnati was filling up with the popular
sub shops. “When I bought Dayton, I
didn’t have any internal competition
so I went in and cherry-picked the best
sites. It made things a lot easier,” he says
today. “When you develop a market, you
learn not only to pick the right sites but
to do it with an eye toward developing
the whole market.”
Osterfeld says his life during early
years in franchising consisted almost
exclusively of work. Now married and
father to three daughters, he sees his
younger self in many potential recruits.
“Twenty-five years in, it still surprises me
how many people get involved having no
idea what they’re getting into. They’re
no different than I was. More often than
not, they don’t understand the time commitment or the capital needs.”
And he notes one major shift in franchising since he bought his first store.

“With such a
fabulous and
sought-after
product,
my focus only
needs to be on
the guest.”

“Twenty-five years ago, it was onesies,
twosies. Now, franchisees who have been
around and had success don’t want to
open one unit. They’ve got their eyes on
a bigger prize,” he says. “My own franchisor would prefer to sell to multipleunit franchisees. If you’re going to have
a franchisee as a customer, it’s easier to
have one customer with five units than
five customers with one unit each.”
Craig Dunaway, president of Penn
Station, Inc. describes Osterfeld as a
worthy recipient of the MVP Influencer
Award for all he does to mentor new
and potential franchisees. “Kevin and
his team have a long history of excellent operations, local marketing, and
business practices that have made them
the ‘go to’ organization for other franchisees to follow. Through his leadership, his company has become the sales
leader among Penn Station franchisees
in larger, established markets.”
Today, Osterfeld, who views franchising as a business model that greatly
enhances one’s chance of success, offers the following general advice to
newbies: (1) Don’t be shy about asking

MANAGEMENT
Business philosophy: Pay people well, give them some rope and expect a
lot from them. And, be vigilant with every detail every day.
Are you in the franchising, real estate, or customer service
business? Why? Strictly customer service—if you win there, the rest will
take care of itself.
As an operator, what are the two most important things you
rely on from your franchisor? Buying power and quality products.
What gets you out of bed in the morning? The enduring chase to be
the best.
What’s your passion in business? My favorite day is the day we open
a new store and see all the research, effort, and expense begin to pay off. It’s
exciting to see if I was right about my hopes for that location.
Management method or style: Structure and follow up. I have learned
that if you develop the systems, require their use, and constantly follow up to
ensure their proper use, everything else will fall into place.
Greatest challenge: Not only finding and retaining great people, but
dealing with the ever-growing government hurdles associated with being an
employer.
How close are you to operations? Extremely close. In addition to the
daily interaction, I hold operations meetings every Tuesday morning for three
hours, without exception.
Have you changed your marketing strategy in response to the
economy? How? We’ve changed it very little. We have avoided the tempta-

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Multi-Unit Franchisee Is s ue III, 2012

tion to try to “coupon” our way to sales. I strongly believe that if we serve a
great product quickly in a friendly atmosphere, our guests will recognize the
inherent value.
How is social media affecting your business operations? The
primary effect is on marketing. Between email, our interactive website, Twitter,
and Facebook, there are infinite opportunities to reach out to people. Since
social media is clearly here to stay, we work diligently to incorporate it into our
outreach efforts.
Personality: Hard-working, detail-oriented.
How do others describe you? One word: controlling. I view it as an asset, but am aware I often need to let go more than my gut tells me to.
How do you hire and fire? We rarely fire. In our system, we are always
traveling at the speed of sound and those who can’t keep up inevitably jump
off. Hiring is where we spend all of our effort. Our interview process for GMs is
extensive—a minimum of four interviews plus a full day’s working interview.
This is by design because when we encounter those who find this process too
exhaustive, we know they wouldn’t fit in.
How do you train and retain? Training too is exhaustive. For GMs, it’s
three weeks of in-store hands-on and then a test. And the ongoing training
never stops. Retention is achieved through paying my GMs almost solely on
profit. They have great motivation and do extremely well financially.
How do you deal with problem employees? Quickly, consistently,
and definitively.