Industry News | March 30, 2011

Pal’s Has Got a ‘Golden Opportunity’

As the credit crisis continues to hound franchisors looking to expand their brand in a sea of potential franchisees, one burger chain is using a no-money-down alternative to expansion.

“We don’t sell franchises,” says Thom Crosby, CEO of Pal’s Sudden Service. “We make all the capital investments and take the right leaders and place them in business for themselves, but not by themselves. All they need is a desire and the skills to run a world-class operation.”

The Tennessee-based chain of 23 quick-serve restaurants recently launched a campaign to attract store operators with the right mindset to take control of their own destiny and the opportunity to be the CEO of their own Pal’s unit.

Termed “Pal’s Golden Opportunity,” the campaign seeks highly motivated individuals to hear the Pal’s story and enter a rigorous evaluation process before being accepted into the company’s leadership program.

“Our program will provide a future owner/operator with a complete leadership curriculum comparable to a college’s school of business that is focused on our performance excellence model,” Crosby says. “Our management system has proven its worth in driving superior customer satisfaction and profitability for our company and its store owner/operators. A person who successfully emerges from our leadership program is handed the keys to a Pal’s restaurant with no monetary investment. They’ve proven themselves worthy of some rich rewards based on their personal commitment to our mission of delighting every customer.”

Aaron Johnson had no restaurant experience when he entered the Pal’s Leadership Program, but proved himself as a self-motivated leader willing to dig in and learn. “Aaron had the right stuff and the dogged determination and leadership qualities we were looking for,” Crosby says. “We handed him the keys to a brand new store in Virginia.”

“The day that Pal’s became mine was a great day,” Johnson says. “Yet, I have all of the support of the company and other store operators when I need help.” That help was needed quickly for Johnson as store traffic volume set new records overnight. “Our CEO saw that we needed extra support just to meet the customer demand and sent me some members of the leadership team to work along side me to make sure I succeeded,” he says.

Johnson’s Pal’s unit continues to be one of the chain’s highest volume units nearly a year after its opening.

“The tools and resources we have from other owner/operators all the way down to our CEO is great,” he says. “There’s just a wealth of information and a very strong backbone to always help with any questions that you have or problems you encounter along the way. There’s always someone who has seen that before, and you can lean on those people.”

“We’ve looked at a variety of franchising models,” Crosby says. “We’ve had more than 4,000 requests for franchises. We feel that our Golden Opportunity system of giving a motivated individual the knowledge and ability to truly be their own boss is superior to franchising for our company at this time in our history. We are destined for growth, and we are loading up our leadership program now to assure we have the right person for every unit.”

Pal's markets for growth are Northeast Tennessee, Southwest Virginia, Western North Carolina, and Southeastern Kentucky. The company employs more than 900 people with a turnover rate that is less than one quarter of the national average in the quick-service business.

“Our motto is to delight customers in way that creates loyalty,” Crosby says. “I think our Golden Opportunity model is truly the secret to our success.”

Comments

Pal's piggybacks off the locations chosen by other quick service players. Their niche is not a growth story in markets they have been trading more than 5 years in though. When they have roamed away from their Kingsport/Johnson City base they have only a couple of success stories. With Pal's marketing just their service and not pricing to compete with the other QSR's it has seen in the last 3 yrs a slowing of cars piling in their units compared to the growth by the other QSR players nearest their locations. The dollar menu has pulled people to the other competitors. Their food while prepared quite a bit of time before being served is not their forte, it is their tea reputation which now the other QSR players have also piled on to and taken quite a bit of that business. They choose not to franchise out because of an ego-driven hierchy, and an abundant of mid-level management people available looking for a profession that won't be impacted by market consequences and is considered recession proof and more labor secure.

Pal's piggybacks off the locations chosen by other quick service players. Their niche is not a growth story in markets they have been trading more than 5 years in though. When they have roamed away from their Kingsport/Johnson City base they have only a couple of success stories. With Pal's marketing just their service and not pricing to compete with the other QSR's it has seen in the last 3 yrs a slowing of cars piling in their units compared to the growth by the other QSR players nearest their locations. The dollar menu has pulled people to the other competitors. Their food while prepared quite a bit of time before being served is not their forte, it is their tea reputation which now the other QSR players have also piled on to and taken quite a bit of that business. They choose not to franchise out because of an ego-driven hierchy, and an abundant of mid-level management people available looking for a profession that won't be impacted by market consequences and is considered recession proof and more labor secure.

I couldnt disagree more with that post. The Pal's in Elizabethton, TN is not even a good location and certainly wasnt piggy backed off of another QSR. Without an inside knowledge of the numbers, I would all but guarantee that Pal's units opened for at least one year have a higher unit volume than any other QSR in their markets. Their accuracy and speed is heads and shoulders above other similar QSR's. It is laughable that anyone would suggest that Pal's has built their reputation on their tea. They dominate their markets and do so by executing with a consistency and a level of service that I have never seen in a franchised restaurant. They clearly understand that franchising, while growing the business quickly, would deteriorate the model that has given them so much success.

pals in my opinion executes better by far than mcdonalds burger king wendys krystal taco bell for one simple reason they have a limited menu of good items and dont add a bunch of lto or seasonal or new items that would just mess up pals and of coarse pals people are the best plain and simple trained the best!

Love Pal's big pal cheese burger. What is the process to apply for their training in order to open a restaurant.
Thanks in advance for your reply.

Ray

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