QSR magazine in May unveiled its first Franchisee Advisory Group. This newly formed board will help us direct content and tackle some of the franchise industry’s most-pressing issues. Importantly, it’s all going to come from the perspective of the operator. In the weeks ahead, we’ll introduce you to the members, what got them into franchising, their thoughts on what makes a great franchisor, and more.
Up next is Paul Tran. Tran is an entrepreneur and adviser in the franchise and restaurant space who cofounded his first restaurant in 2005 and was acquired in 2008. He became the largest franchisee of The Halal Guys (with nine stores in Southern California and $15 million in annual revenue) before selling in 2023.
Tran has also sold more than 1,000 franchises, jumpstarted the franchise program for a brand that ended up going public, and scaled restaurants in over 15 countries. Additionally in his career, he helped a one-unit mom-and-pop business get acquired by a public company and has enabled companies become more profitable and enjoyable. Today, he’s the director of franchising at Hot Palette Amerca/Pepper Lunch Restaurant as well as being a franchisee of the brand himself.
Let’s start with some background. How long have you been in franchising? And what got you into the space?
I’ve been in the restaurant space since 2005 (20 years!), and the franchising space since 2007 (18 years).
What got me into the space? Unmerited confidence, pure ignorance, and student loans.
I read a book (“Rich Dad, Poor Dad” by Robert Kiyosaki) and took a few business classes at CSULB, and really thought I could do better than what was currently in the marketplace. I had financial aid that I treated as free money to invest.
And I really thought to myself: “How hard can opening a restaurant be? I love food—that’s gotta be worth something.”
I’m glad my ignorance got me started; it helped me bypass barriers that were supposed to be barriers and help me fall in love with an industry I would’ve never considered on my own.
I’m also glad that work ethic and chance were in my favor, too; I understand that my story is an example of survivorship bias. Being unprepared, ill-capitalized, and unqualified should’ve wiped me out. But here I am. Waiting for someone to take my restaurant ownership license away.
What led you to your specific brand(s)?
The first brand I was franchised was The Halal Guys. I’ve loved The Halal Guys from the moment I first traveled to New York, got food recommendations from friends, and lined up at the OG carts on the corner of 53rd and 6th.
Love for the food was the main driver; but after that, the business case kicked in. Middle Eastern and Mediterranean food were underserved, unapproachable, and expensive. Here was a concept that had more demand than supply, the food was accessible to mainstream America the way Chipotle made Mexican food to the rest of the country, and it was an affordable, everyday meal. I knew it was a home run.
I also chose it because I had friends (who later became my business partners) who also loved the brand; had capital, and access to investors; and also had the same vision for the brand. So we dove in. Now that I’ve sold my nine stores and have gotten into Pepper Lunch—the checklist items remain the same.
I’ve loved the brand since 2017 when I first traveled to Australia and was recommended to try it from a friend. There was nothing like it; the low labor, experiential aspect were brilliant; and the demand was outpacing supply.
From your perspective as a franchisee, what are some of the most valuable qualities of a good franchisor? What do some get right and some get wrong?
Obsessed with hospitality, differentiation, and franchisees winning. And all actions and words reflect it. Someone who makes money from their own stores and royalties; and sees capital as a means to support franchisees, build infrastructure, and create competitive moat.
Franchisors who listen to franchisees and makes sure they’re heard; and ultimately decides on what’s good for the brand mission and values first, and what’s based on meritocracy.
If you were offering advice to a franchisee, one store in, who was looking to expand, what would you tell them?
Document everything. Work on systems. Always develop leaders. Hire more than you need, so that you can prune out the underperformers and appreciate the over-performers. Remember that when you scale, you are amplifying everything in your first store—are you amplifying excellence or problems? And hire a virtual assistant, leverage tech, make it easy to follow the system, delight guests, and do the right thing.
There are a lot of challenges facing the franchising sector today. But if you had to pick one, what’s been most pressing on your mind of late?
Franchisors who are short-sighted. They see franchise fees as profit, instead of earning it through their own store economics and royalites. They chase vanity KPIs (likes and impressions); content that goes viral (instead of content that educates and converts); and easy wins—as opposed to culture, differentiation, consistency (why is Chick-fil-A where they’re at?). They don’t think about stakeholders—like consumers, vendors, etc.
What’s your outlook for the industry for 2025?
It’s a mixed bag. But for my industry—people will always need to eat, and there will always be money to make. It’s more about being the most value-packed choice; creating experiences that differentiate, delight, are more valuable than the money consumers will spend. You need to stay top of mind.
