Decisions: Making the Right Ones, Righting the Wrong Ones by Treliving Jim

Author:Treliving, Jim [Treliving, Jim]
Language: eng
Format: epub
Tags: Business
ISBN: 9781443411837
Google: rUldL9MUvIgC
Amazon: B00851M3NI
Barnesnoble: B00851M3NI
Goodreads: 15820973
Publisher: Harper Collins Canada
Published: 2012-02-15T00:00:00+00:00

Splitting Focus Stunts Growth

On February 1, 1983, papers were signed officially making us the owners of Boston Pizza. It was time to take stock, to decide what kind of company we wanted to helm. We looked around at other successful franchises, in particular McDonald’s and Kentucky Fried Chicken. Both companies were and are a combination of corporate stores and franchises. Boston Pizza was too, at the time. George and I soon realized we had to decide exactly what kind of business we were in and what kind of company we wanted to build. True, we had just bought a restaurant chain, but it was clear to both of us that to grow, we had to get out of the restaurant business.

When Ron sold the company to us, there were 38 stores, a healthy blend of corporate and franchises. We often made more money from our corporate stores than we did from franchisees. A successful store generates about a 20% profit. If you own the store, that’s your money. If you are the franchisor, you’re getting only 7% of the food sales, but you’re not spending valuable time actually operating the store. Someone else is doing that. Franchises and corporate stores are two different businesses. To do both, you have to wear two different hats, and that can hamper your business’s development.

To become the best-franchised restaurant in the world, we realized that we had to do one thing and one thing well. We had to become franchisors. That’s all. In a year, we sold all the corporate stores. It wasn’t difficult to do. In most cases, we had operating partners already running the stores. We just had to negotiate a price with them or help them get financing to buy us out fully. Boston Pizzas were money makers, and everyone who knew anything about restaurant franchising was eager to buy his or her own.

After that, we hired a guy named Bruce Fox to head operations and sent him on the road to do an inventory of all the stores. Every one of them. We called it “solidifying the base,” which meant we had to ensure that each of our current stores was sound and profitable before we opened another one. George and I got on planes to meet franchisees, people we didn’t know, people who had worked under Ron Coyle, or Gus before him. At the time of our takeover there was one store under construction in Edmonton. The franchisee, Gary Simmons, was close friends with Ron. After Ron sold the company to us, Gary called to say he had changed his mind. He wanted his franchise fee back. He no longer wanted to become a franchisee under our leadership.

We flew out there to meet him. We knew the only problem was that he didn’t know us well. He had a personal relationship with Ron, not us. Today, he’s still one of our best franchisees. He just needed to meet us, to hear what our vision was and how, under us, Boston Pizza would continue to thrive and grow.

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