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    How a Franchise Mogul Reached 1,000 Locations

  • Guillermo Perales won't forget where he comes from, no matter how big Sun Holdings becomes.

    Sun Holdings, Inc.
    For Guillermo Perales, it all started with one Golden Corral.

    In the street fight that is restaurant franchising, Sun Holdings, Inc. recently hit a milestone few ever reach. The company, started in 1997 by Guillermo Perales with a single Golden Corral, the company debuted its 1,000th location July 10 when it brought a Popeyes to Dallas.

    Sun Holdings is now one of the five largest multi-unit franchisee organizations, and has developed a portfolio of diverse brands, including Burger King, Taco Bueno, Arby’s, Cici’s Pizza, Krispy Kreme, and more.

    Additionally, Perales says he’s the largest Latino franchise operator in the country. He took some time to chat with QSR about his journey to the four-digit mark, and what’s next on the path to continued growth.

    Let’s talk a little bit about the journey. What led you to the restaurant industry in 1997?

    Sun Holdings, Inc. was founded with one Golden Corral restaurant and funded by an SBA loan. We’ve come a long way in the last few decades, growing to 1,000 locations in eight states and employing more than 15,000 individuals! We remain primarily a restaurant company with 80 percent of our holdings in restaurants and a number of development rights for future restaurant sites. I firmly believe that restaurants bring people together and as such, am quite bullish on looking for new ways for people to connect. 

    I do believe that some of the ways we have set ourselves apart is that we think like a start-up. We run a lean organization and are always challenging ourselves to do better, whether that be with guest relations, speed of service, or in funding initiatives to help Latino students stay in school. It’s not just about opening more locations, it’s about doing more as a result. Every time we open a new restaurant, we are employing people right in the trade area we serve. And with every meal we serve, we are that much closer to providing free hot meals to underserved children and military. This business has been extremely good to me and my organization. I have never forgotten where I came from, nor will I ever take for granted the community of people who helped me and my organization get here.

    Sun Holdings, Inc

    "I do believe that some of the ways we have set ourselves apart is that we think like a start-up," says Guillermo Perales.

    Twenty years ago, did you think you’d ever approach 1,000 locations? Was that idea even on your radar?

    The principles are the same today for me as they were more than 20 years ago—be the best you can be and ask the same of your people. And when the fruits of that hard work pay off, do it again and again. A successful franchisor will tell you that they define success by year over year growth and sale of franchises. Franchisees need to look at the business the same way—how do you grow organically, and when you have maxed out your throughput, you must invest in more locations. Growth was harder to come by in the beginning, but as you continue to grow it becomes exponentially quicker. In the last three years we have had our best growth years yet, building over 200 new locations and remodeling over 100 in that time period. We have doubled in size just in the last five years! This overall growth mindset is what has led us to be the third largest franchisee in the country, and only the third franchisee to reach 1,000 locations.

    What has been Sun Holdings’ strategy for growth? What would you credit as being the main reason the company has been able to scale to such a large unit count?

    Sun is focused on an opportunistic growth strategy that is comprised of acquisition, as well as development and organic growth. Those three things mean grabbing stores that are available to me, building more stores, and increasing sales at the locations I do have. It’s about being a company that grows.

    Not only have we grown to be the largest franchisee for multiple brands, but we have also won multiple development awards for building locations, which not a lot of franchisees can say, particularly in today’s market. Our goal is to grow in every direction and in any way we can.

    These years of experience as a FZ have taught us many valuable lessons and have led us to becoming a franchisor for the first time with Taco Bueno, which allows us the opportunity to partner with other franchisees and help them grow. We are very excited about owning an entire brand for the first time, and it is our goal to continue to acquire others in the future. We plan to immediately invest in remodeling all of the older Taco Bueno locations to make them more modern and a place where consumers want to hang out. We have a prototype complete and will be releasing it to the public soon! We are also investing a significant amount of money in the food we serve so that we can go back to cooking the same high-quality, fresh Tex-Mex that we did when the brand first opened 52 years ago, and so that we can continue to be on the forefront of Tex-Mex innovation with exciting new products.

    "I believe that all businesses need to do a better job of being honest and open with employees. If competition is forcing margin crunch, employees are mature enough to understand that, but we, as businesses, need to find other ways, through volunteering or showing our teams how our food can help our communities and our own families in a meaningful way." — Guillermo Perales.

    Talk about the multi-unit approach. What are some benefits and challenges of developing that way?

    Most people focus on the economies of scale when discussing multi-unit growth, but for me, it’s not about economies, but opportunities. The more locations we have, the more places we have for our best and brightest to grow into leadership positions. And with our size, we can also help the communities we serve in bigger ways. 

    But the challenge is staying true to our north star of growth, finding the right opportunities to grow, and balancing the needs of our employees, guests, and businesses that we support.

    What is the biggest lesson you’ve learned over the years?

    I never forget where I came from—ever, and I know that with the opportunities I have been blessed with, I must ensure it benefits others.

    The industry is always evolving, but these last three years have been among the most disruptive in the past three decades. What would you say is the biggest topic right now facing franchise operators?

    Balancing the priorities of the business with the needs of team members … the economics of it all is key. Rising business costs are escalating at a rate that hasn’t been seen in a long time, but the prices we charge have been held pretty flat due to competition. So, trying to balance profitability while balancing the needs of our employees remains everyone’s challenge today. 

    How have you approached the labor challenge?

    The goal is to create an environment (in the office and in the field) that is appealing beyond just money. We want to ensure our culture reflects our true appreciation of all the work people are putting in, but that also lends itself to balancing the economic situation. We know that labor is a challenge and that labor costs, food costs, real estate costs, and construction costs are all going up. I believe that all businesses need to do a better job of being honest and open with employees. If competition is forcing margin crunch, employees are mature enough to understand that, but we, as businesses, need to find other ways, through volunteering or showing our teams how our food can help our communities and our own families in a meaningful way. We are very much focused on finding new ways to engage with our employees so they do feel like they are part of something bigger.

    What does it mean to you to be the largest Latino franchise operator in the country? Do you hope to set an example for other entrepreneurs to follow?

    It’s a big responsibility but I am proud of the strides we have already taken in helping fellow Latinos pursue an education through our scholarship efforts and providing a career to thousands of our loyal employees. The bigger we get, the more we hope to do, so stay tuned!

    What advice would you give a franchisee just getting started?

    Work in your business every day. You need to get your hands dirty to understand the problems and identify the superstars. And, as you start to grow, groom talent from within that has that same get-in-the-trenches mentality. Also, to learn what the franchisors do and how they do it well, as well as knowing what franchisees believe works in the areas you are developing. If you don’t think your business’s survival depends on your active involvement, it will become a self-fulfilling prophecy.