Sacco says a disconnect between the brand’s new ownership and franchisees was festering. “There was just a lot of things aligning in ways that created some anxiety, created some animosity. Created hostility between the franchise community and the parent company,” he says.
One example, which Sacco refers to as “a boiling point,” was the company’s proprietary supply. It was making franchisees pay a surplus for the products that differentiate the brand, he says. And it was getting it given back in the form of a rebate.
So not only were operators paying a franchisee fee, paying into an advertisement fund, but they were also paying for the right to use Happy Joe’s trademarked product.
“My head nearly exploded,” Sacco says.
He adds Happy Joe’s wasn’t doing anything dishonest or illegal—the company disclosed the agreement. It was in the FDD.
“However, from a practical, ethical, business relationship standpoint, that’s toxic,” Sacco says. “Particularly at a time like now when everyone is struggling to stay afloat.”
Coupled with pandemic realities, it was “like rubbing salt in an open wound,” he adds.
Sacco started as CEO, in earnest, at the beginning of October. By the second week of January, “all that s*** was cleaned up,” he says.
“I stopped it all,” Sacco explains. “I told all these vendors, ‘we’re not going to do that. If that’s a problem with you, then I’m going to replace you. We’re not going to do that. That’s not the way Happy Joe’s is going to conduct business.’ Our franchisees are our business partners. If we can’t make a great living off the royalty that we charge, then we’re in the wrong business.”
“We don’t need to also charge them money for the groceries that we make them buy,” he continues. “That’s just philosophically wrong, and I’ve been doing this for 30-plus years.”
Clearly, the point struck a nerve for Sacco. He says Happy Joe’s had to adopt a long-term mindset, especially if it wanted to grow. They were trying to squeeze as much blood out of the rock as they could.
“I only operate the business like it’s my family business. … Is this the way I’d treat my family? The answer is hell no,” Sacco says. “And I think the franchisees respect that.”
After speaking with every franchisee face-to-face, Sacco put together a six-month action plan and got after it. He hit the mark on April 5. Why he’s hopeful and able to toss 1,000 restaurants goals into conversation is because he reached all those metrics, including returning Happy Joe’s to growth and cleaning up its franchisee-franchisor sore spots.
He’s at a much more enviable stage now—finding ways to get the word out.
And on that note, Sacco isn’t any less fiery.
The brand, he says, got in his veins the moment he saw it in person. He promises the same will be true of new guests and potential franchisees.
What he often calls, Happy Joe’s “fairy dust.”
“It’s got all these positive, magical memories that have been created in this brand over the years. But nobody outside of six Midwestern states has a clue as to who they were,” he says.
Sacco says Happy Joe’s is a “family utopia where wonderful, magical memories can be created.” Is it Chuck E. Cheese? No, although there are some games. Is it Farrell’s Ice Cream Parlour. No, even though there’s a dedicated ice cream section. California Pizza Kitchen? BJ’s? Pizza Hut? “We’re not like anybody because nobody does what we do, and if they do some of the things we do, they don’t do them as well as we do them,” Sacco says. “And that’s the difference.”