Multi-Unit Franchisee Magazine Issue III, 2013 | Page 34

2013 MVP
Legacy Award the first year it was
given to a franchisee. “With Rally’s,
we’ve really tried to stick to brand
heritage, which is great, bold tastes
within the value niche, and with Papa
John’s, which my brother heads up, for
its great quality and competitive pricing,” he says. Two years ago, Joe won
Rally’s Franchisee of the Year Award
and Charles won Papa John’s Franchisee of the Year Award.
Even as the business continues to grow,
Hertzman still considers the company a
family affair. With a sister with a Ph.D.
and a brother with an MBA, he jokes
that he’s the family member with the

“M.O.P.” degree, referring to his early
days cleaning stores—although he did
earn a B.S. in business from Miami of
Ohio University.
Hertzman, who opened his first Rally’s
28 years ago, is quick to add that none
of the success his family has enjoyed
would have been possible without their
operating partners: Darren and Dawn
Haggard, at Rally’s in Evansville, Ind.;
and Charles Burris at Papa John’s in
the Ohio office. “We are so lucky to
have these people on our team,” says
Hertzman. “When you know you have
great operators out there, you can sleep
at night.”

MANAGEMENT
Business philosophy/management style: My business philosophy
is not a lot different from my personal philosophy. I believe in treating people
with respect in life and in business, but holding them to necessary accountability. We’re not too big yet to still operate more as a family business.
Greatest challenge: Macro: how do we keep our brands current? As
franchisees, we don’t make a lot of those decisions, though I enjoy being a
member of Rally’s FAC where I can offer input. Micro: we just want to continue
to find good people and develop them properly.
How I give my team room to innovate and experiment: Through
collaborative decision-making. It’s seldom that we say no to what our operating
partners want to do. We’re usually on the same page.
How close are you to operations? I don’t deal with operations day-today, but I’m in regular contact with operating partners because my background
is operations.
What do you rely on/expect from your franchisor? Outstanding

leadership, innovative marketing, menu innovation that can create both traffic
and higher check average, and fairness in the relationship. I’ve never seen a
fairer franchise agreement than Rally’s.
What do you need from vendors? Quality service.
How is social media affecting your business? In the pizza business,
which my brother heads up, we’ve seen a growing percentage of online ordering every year. I don’t think we’ve cracked the code yet on translating social
media to immediate sales in our other two concepts, but we’ll continue to learn
better ways to tap the potential out there.
How do you hire and fire? I don’t do too much of either anymore. However, I recently had to replace our director of operations for Long John Silver’s.
We were happy to be able to promote from within.
Fastest way into my doghouse: Don’t lie to me. I’m a straight shooter
and I appreciate others who are. I don’t have a lot of use for folks who aren’t
honest.

BOTTOM LINE
Annual revenue: With both Rally’s and Papa John’s, we’ve had year-overyear-over-year increases. Last year, we received the Sustained Sales Growth
Award from Rally’s for achieving 41 percent sales growth over the last four
years.
2013 goals: To continue to fine-tune our Rally’s operations with continued
sales growth and transaction growth, and in Long John Silver’s to see significant
brand development while improving store operations. (My brother is doing a
great job with Papa John’s.)
Growth meter: How do you measure your growth? Year-over-year
same-store sales.
Vision meter: Where do you want to be in 5 years? 10 years?
I love what I do and the people I get to do it with. But there’s been so much
change in the industry that it’s hard to project where I’ll be next month, much
less in 5 or 10 years.
Are you experiencing economic growth or recovery in your
market? Yes.
How do you forecast for your business? We use a combination of

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Multi-Unit Franchisee Is s ue III, 2013

historical trends, business pulse, and cost of commodities.
Where do you find capital for growth/expansion? Through traditional banking relationships.
What are you doing to take care of your employees? We offer competitive wages and benefits and try to provide a culture in the stores where employees feel appreciated and have an opportunity to develop skills and move up.
How are you handling rising employee costs (payroll, healthcare, etc.)? Cost of labor is always a very sensitively managed item. We’re
not sure of the impact of the Affordable Care Act as there’s still so much to be
determined over the next 18 months to two years.
How do you reward or recognize top-performing employees?
Rally’s/Checkers has a great culture whereby the franchisor recognizes the top
10 percent of all managers in the system with a five-night Caribbean cruise for
managers and their spouses. On the last night of the cruise,