Victor Haydel, president of Hank Aaron’s 755 Restaurant Corp. of Atlanta, left a financial career nearly 10 years ago to become a restaurant franchise owner.
His 20 Popeyes Louisiana Kitchen units now employ more than 700 people throughout Georgia.
Haydel’s roots in Southern food extend back to his grandmother, Leah Chase, and her Dookie Chase restaurant in New Orleans, where he began working at age 13 by peeling shrimp and helping with other chores. Although he started his career in finance, a conversation with his father-in-law, the legendary baseball player Hank Aaron, led him to open his first Popeyes franchise in 1999.
Haydel recently took time out of his schedule to discuss franchise operations in these challenging times.
What do you look for in a franchise opportunity?
There are two key factors that my team considers when looking at a franchise opportunity. First is support and guidance from the franchisor. I have seen new franchisees open an operation with little support from corporate and no required training or in-restaurant operations tools. Usually, they don’t last longer than a year. The franchisor should do everything possible to support the success of each franchisee, including training, periodic inspections, local marketing assistance and ongoing operations support.
Sales potential is also very important. In this business, the threshold people in the industry try to achieve is $1 million a year in sales. All sales concepts can’t offer you that type of return. The potential may be there, but the average system sales are not. You can work just as hard in a store making $400,000 in sales as you can in a store making $1.5 million. So sales potential will make a difference to your bottom line.
What suggestions do you have for creating a team to build a profitable business?
The most important factor is that the general manager and the management staff have the desire to want to do the job and want to be there. Even if someone is trained or has a degree in hospitality, finance or accounting, that doesn’t guarantee success. This is a business in which you have to relate well to people and work hard.
When I hire, I like to get a sense of how successful the person wants to be. If they are motivated and they have the desire, they can overcome a lack of training and, in some cases, a lack of knowledge. In this business you need people who are willing to roll up their sleeves and get the work done.
We like to develop people; to grow them from crewmember to management staff. If we have a management opening, we’d rather put in a person who has been working with us for a period of time, someone with a proven track record that has been there through the good and bad times. We look at employees who were willing to come to work when the weather was bad or when others didn’t show up or when it was really busy, versus someone who worked in a different industry and I have to hope that they like it and that they will perform well.
What opportunities does this economy offer franchisees?
Even in this economy, there are bright spots for those who want to open or expand a franchise. For instance, real estate is becoming cheaper and the cost of construction is down.
My team likes to develop by converting existing buildings. It is less expensive to convert a building than it is to build from the ground up. In this economy there will be an increased number of businesses that will close. This will present an opportunity to gain access to good sites and areas for a lot less money than we could have one to two years ago.
On the flip side, credit has tightened and franchisees need to be more cautious about investing in new developments.
What are you doing to help your company weather this economy?
There are three key areas that we are watching carefully to help weather this economy: utilities, labor and food. We have reduced our utility bills significantly with the use of natural-gas fryers. We are increasing our staff training to help keep our employees sharp and working more efficiently. Lastly, with food we are constantly looking at ways to reduce waste, theft, pilferage and any other kind of shrinkage. Coming off of last year, where we saw record-high commodity prices, we are trying to gain as much of that as possible. Though commodity costs have eased tremendously, we still want to get more of that to the bottom line. Every day we analyze sales, labor and food cost, and customer response trends no matter how tedious or monotonous it can get.