The trading floor is the epicenter of the financial world, and where Freshii franchisee Jon Blob used to spend his days. Blob worked in equity research on Wall Street for years. While there, he got firsthand exposure to restaurant financials, as well as broad exposure to global retailers’ financial and brand-building strategies.
Blob would later move to the buying side of the exchange floor and manage a portfolio of global consumer stocks, of which restaurants were a major focus. Meeting Freshii founder and CEO Matthew Corrin fueled his interest in the company and his own desire to run a business. After research and in-person store visits, Blob bought territory rights in two Connecticut counties and now owns and operates three locations.
Blob shares the financial advice he’s learned between the trading floor and the restaurants.
1. Start with a sound concept
Freshii’s positioning was the No. 1 factor when it came to choosing a brand. Fast casual is the segment of the restaurant market to be in, and I expect healthy fast casual to be on-trend for the foreseeable future. I was and am continually impressed with the brand progression, from my initial conversation with [Corrin] to the time I joined, and continuing to present day.
Given my background, it is no surprise that numbers were important. I was very comfortable with restaurant P&Ls and knew that there were lots of good concepts that weren’t necessarily good businesses generating acceptable ROIs. I believed Freshii was a well-positioned concept with a good product and financially viable model.
Make sure you like the product you are selling and are passionate about the business and brand. Then, ask a lot of questions. Try to piece together a full P&L based on various sales scenarios once you’ve nailed down a territory.
Don’t handcuff the business with too much debt. Debt can really exacerbate a situation if the cash flow is not what you expected, making it all the more important to stress-test your assumptions.
2. Buy smart
The initial investment for your business is crucial. Make sure that your build-out costs are commensurate with your expected profitability.
Too often, a good concept is simply too expensive to build out and thus has far too long of a payback period. Really study your proposed location and make sure it fits with the brand positioning. Build a model with sales estimates based on how you see competitors in the area are doing. Adjust the model for seasonality of sales, variances by dayparts, and day of the week. Ask a ton of questions; try to nail down a range of expected food costs, labor, etc.
As a franchise partner, ask yourself if you believe in the management team of the concept to execute the brand vision and provide assistance to help you grow your business. Even with 300 stores around the world, the Freshii corporate office supports my territory growth. Having studied a variety of public/private restaurant concepts, I knew what a well-managed P&L should look like, as well as how difficult the foodservice business is.
3. Work hard and you’ll be rewarded
Coming through investment banking, I wasn’t a stranger to 80–100-hour workweeks and a maniacal focus on the smallest of details. This has served me well as a restaurant owner of a concept open seven days a week in an industry that requires tight and consistent daily operations to survive.
Be in the store frequently. While mastering the numbers will allow you to see issues arise fairly quickly, it’s no substitute for being in the store and watching the operations and making sure that the tools you’ve put in place are being executed appropriately.
There is no better way to gather guest feedback, prevent mistakes in the moment, and reward your team for their hard work. If you are a multiunit operator, realize that you cannot be in every store at all times, so learn to trust and rely on good managers. So far, I have been lucky to find great teams who put the guests first and run efficient, clean stores.
4. Control your cash by appointing the right people
Always assess and analyze frequently. While owning a restaurant is more of a marathon than a sprint, it is easy to get off track quickly. I look at my purchases at least biweekly and check labor daily and weekly. Having a focused manager and empowering him or her to manage the business is the best way to capitalize on the good times and run efficiently during the slower times.
Make sure your managers are incentivized to be an extension of you and to put their own stamp on the business. Assembling a team that can execute on your vision can be challenging. On Wall Street, I was always lucky to be surrounded by good people who made my job easier. The same is true, and perhaps even more critical, in the restaurant world. It is impossible to grow without honest, hard-working, devoted managers and team members.