It’s been said that the success of a restaurant, be it fast casual or fine dining, comes down to location, location, location.
Roland Spongberg, an El Pollo Loco franchisee and CEO and president of WKS Restaurant Corporation, knows the old adage well, having worked as a real estate developer since 1980. Spongberg continued with that profession for a decade even as he opened two El Pollo Loco locations in 1988 and one more in 1990. On top of running those franchise units, he also owned the real estate they operated in, and when his four business partners got skittish about a recession in 1990, he bought them out and charged forward. Since then, he’s focused solely on the quick-serve business, building a portfolio that includes 59 El Pollo Loco units, 22 Denny’s, 22 Krispy Kremes, and two Corner Bakery Cafés.
While most of his El Pollo Loco units are located in California, Spongberg’s other concepts are spread across Arizona, Utah, New Mexico, Illinois, Missouri, and Nebraska. His nose for good real estate and contributions to El Pollo Loco’s growth won him a Heritage Award from the chicken chain.
Spongberg shares tips on how to scout out good locations and create the best experience for both employees and customers.
1. Invest time and research into real estate
When you’re in real estate, you realize what a good location is and the elements of a successful retail location. You learn how to go through the process of actually developing a restaurant from the ground up and go through the process of entitling it with the city and government agencies. You learn how to finance it and analyze the economics of the real estate and the restaurant by itself. If you’ve ever read the book McDonald’s: Behind The Arches, the claim behind it is that McDonald’s is simply the largest commercial real estate company in America—and oh, by the way, they sell hamburgers.
You try to find a good area where you have the elements of population. You look at the daytime population: Who’s around that will come during lunch? You look at the traffic patterns: Is it going home or is it on the going to work side? How’s the access? You look at the visibility. It’s not complicated, or I probably wouldn’t be doing it.
2. Understand your commitment to people, including employees and customers
We say we’re in the restaurant business, but we are really in the people business, and that goes from being at the restaurant with the crew taking care of guests to the senior employees taking care of district managers and general managers. I’m in an office in Lakewood, California, which is about 7,500 square feet, with probably 42 people that work here, and I often say that in a support center, we make no money; all we do is spend money. We make the money in the restaurants, so when somebody walks in or calls in to the support center, we need to treat them like royalty, because they are; they pay our salary. The work is done and the money is made in the restaurants.
We work really hard to try to take care of their issues and problems and supporting them with the things they need. We then try to get our general managers to take care of our crew—give them time off when they need it, work around their school schedule and their family schedule—so that the happy crew members will take care of our customers, give them a good experience, and cause them to come back more often.
3. Build from within
We promote from within. We offer a crew leader class, for example, where we teach a crewmember how to manage a restaurant if they want to learn. If we think they have the capability of learning and having some of the skills necessary to run a restaurant, we’ll teach them and then put them in the restaurant and let them work their way up.
I have a lot of managers who have been with me for over 20 years. If you look at our district managers, almost every one of them started as a crewmember. Even a vice president of operations at El Pollo Loco started out as a crewmember. They see that mobility and see there’s opportunity. We have a lot of managers who come to us from other companies because there is either no opportunity or they weren’t treated well. We also have paid vacation for the crew after they’ve been here for a year.
4. Get your hands dirty
New franchisees sometimes look at it like an investment and don’t go into the restaurant. They don’t know what’s happening. They buy it, build it, hire someone, and hope it does well. If you look at your employees, it’s a very young set. They need supervision and need guidance, and if they’re not getting any, then things can go amok. I’m in my own restaurants almost every day to some extent. We like our district managers to stay in the restaurants longer than four hours, because when you go in for an hour, you can keep something together, but if you’re in there for four hours or more, you’re going to see a good sampling of what’s going on in the restaurant.
5. Accentuate the positive with employees
People like to be treated well. When the district manager comes in, we always like to find some positive things going on. You can always find negative things in restaurants, but you should also look for the positives while working on things that need to be worked on. People are motivated by being treated properly, trained properly, and paid according to their job skill.
