Franchising | November 2010 | By Sam Oches

The Dirty Work

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“I’ve got to constantly keep my priorities in line in my role as the company president,” Tortorice says. “If I find myself delving too far down into tasks, then I’m really misallocating my time. What I’ve got to keep first and foremost in my mind is positioning our company to take advantage of opportunities when they come about.”

For Tortorice, this means he has to “wear a lot of hats”—site selection, lease negotiation, construction coordination, legal, human resources, and financing all fall under his watch. When the company starts to lose money, he says, that means it’s time to hire more staff to take over some of the responsibility.

Mallet shares the administrative responsibility of PhaseNext Hospitality with Amy O’Neil, her chief operating officer who was once the senior vice president of operations for Caribou Coffee, where Mallet served as CEO. While O’Neil handles most of the in-store operational details, Mallet says she has to keep her eye on a lot of the big-picture elements of quick service, like real estate, franchisor relations, and financing.

Being able to hand over the control of a lot of the details to O’Neil, Mallet says, is crucial to their brands’ success.

“You can’t build a franchisee business singularly,” Mallet says. “One person can’t do it, not more than one restaurant, anyway. You have to have someone you can rely on who shares your values and your perspective and you both understand what the strategy is. You have to agree on where you’re taking the business.”

how to expand in the down economy
Growing the Business & When the Time is Right

For many, the idea of growth during the recession has been nothing more than a faded hope. The economic fallout slammed the door on many strategic growth goals, stalling quick-serve expansion.

Although his company put the brakes on expansion during the recession, Bertagnole says adding stores is what being a franchisee is all about.

“The purpose of franchising is to be able to duplicate yourself,” he says. “If you’re not a multiunit owner, you’re not taking advantage of the system that you paid for. You’re not taking advantage of the opportunity to multiply yourself.”

But expansion does not happen simply by having a successful concept. Mallet says a multiunit franchisee must have a development strategy, must build at a pace that maintains operational efficiency, and must have the right money and people that can back a new location up.

“Those are very, very important,” she says. “We can’t go open someplace until we’re absolutely sure that we have the financial backing and that we would be able to find the quality team that would execute the way we need them to.”

Mallet says businesses that grew for growth’s sake were partly to blame for the recession. PhaseNext plans to learn from those mistakes. “Brands got in the habit of opening restaurants just because they could,” Mallet says. “We don’t want to do that. We want to grow intentionally and have a long-term positive impact on our business. We have to say ‘no’ sometimes.”

Bertagnole says a franchisee who is interested in opening more stores must ask a number of questions before jumping head first into it: “Is my first store taken care of? Do I have good management in place? Can I walk away from this store for a month and not notice it? How am I financially? Can I pay for the majority of this?” he says. “It’s a juggling act. There’s no set of rules for it.”

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