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SEPTEMBER 2024
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One thing I love about being a lawyer is that I am always learning. At one point, I was working with a 50-store Burger King franchisee who taught me a lot about what it takes to succeed as a fast-food owner. I was helping this client buy out a partner and evaluate some of his leases. We were examining store-level profit-and-loss statements to compare his occupancy costs with industry standards, and I was struck by two insights. First, this franchisee’s food costs as a percentage of total costs were really low , based on averages for his type of restaurant. When I remarked on that fact, he was so proud to tell me, “Hey Nate, you come out here for a visit and we’ll go into my store, and I’ll show you how to cut a tomato. And it will save you $1,500 a year per store!” At that moment, I understood the level of attention to detail, patience, and consistency of execution required to be a successful fast-food franchisee. Not only did this owner have to look at the tomato and figure out how to cut it up to get the most out of it, but he had to teach all the people who managed and worked at all 50 of his stores how to Driven by Detail How to Cut a Tomato, and Other Keys to Success
cut the tomato, then he had to follow up and make sure they were all cutting the tomato right. Then he had to do the same thing with the onions, and the ketchup packets that were going out the door … you get the picture. In this franchisee’s case, the level of precision was unbelievable. I have never seen better margins. At that moment, I realized I would be a terrible restaurant franchisee. Whenever people ask me why I don’t become a franchisee myself, I reply, “Because I won’t put the necessary level of care into how to cut the tomato.” Of course, different franchisees bring other strengths to the challenge. Another skill is the ability to form good partnerships. Successful franchisees are able to separate key business functions and decide, Hey, I’m going to be the one who grows the business, and you’re going to be the one who runs the stores. And the smart operators don’t place more value on one over the other. They never get sidetracked by ego battles. Also, successful franchisees understand the importance of what’s going on in the world. I was sitting next to one of my clients at a meeting, listening to a franchisor go on and on about how sales were up because the franchisor was doing all of these amazing things. And my client leaned over with a skeptical look on his face and whispered, “Cheap gas!” He knew a basic fact about consumer behavior that the franchisor was glossing over: A recent drop in gas prices had freed diners to spend more on eating out. No one needed to explain to him that a shift in one sector of the economy resonates in others. I mentioned earlier that I gleaned two insights from that Burger King franchisee about the importance of cutting the tomato. Here’s the second one: I realized at that moment, studying his impressive store-level P&Ls, that while I could analyze his restaurant business in depth by looking at those statements, I didn’t have the same grasp on key performance indicators in my own business. Surely there must be similar metrics for a legal business, I thought. What the hell are they, and why don’t I know them?
As it turns out, there are comparable metrics for law firms, and I found out what they are. Now, I’m cutting my own tomatoes.
– Nate Riordan
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Hometown Hero Jersey Mike’s Founder Outpaces Rivals
Why Every Car Needs a Dashcam Eye Witness on the Go
The annals of fast-food founders include some legendary entrepreneurs, from Colonel Sanders to Ray Kroc. Based on a recent Forbes profile, Peter Cancro, founder of the sub-sandwich chain Jersey Mike’s, might be a worthy addition to that list. Cancro started working at a local sub shop on the Jersey Shore as a teenager, with plans to move away after high school, play college football, and become a lawyer — until the sub shop went up for sale. He persuaded a local banker, who also happened to be his former football coach, to lend him $125,000 to make the purchase. The rest is history. Today, Cancro is worth nearly $6 billion, Forbes says — more than Mark Cuban or Steven Spielberg. Jersey Mike’s growth has been stratospheric, averaging 20% annual sales increases over the past five years to $3.3 billion in 2023. The chain has outpaced all but four other U.S. food chains, according to Forbes: the fast-casual restaurant Cava, the chicken chain Raising Cane’s, and two coffee chains, Scooter’s and Dutch Bros. Although Jersey Mike’s has 3,000 locations, Cancro still wants people to see his stores as the local sub shop. Every sub is made fresh, while customers watch. And Cancro is not done yet. He intends to open 5,000 more U.S. stores over the next five years. An advertising push features fellow Jersey Shore native Danny DeVito break-dancing and traveling to his mental “happy place” as he watches Jersey Mike’s employees prepare his sub. Cancro is “a Jersey guy, through and through,” Forbes reports. Trainees take a course in New Jersey history. His wife, three of his four children, and his brother all work for the company. Nearly all of the 185 people working at the chain’s Manasquan, N.J., headquarters are from the area. One executive jokes that joining the company “was kind of like getting in the mob.” Whether Jersey Mike’s can retain that hometown feel remains to be seen. Two of his biggest rivals, Subway and Jimmy John’s, sold out to private equity firms in recent years, and another competitor, Firehouse Subs, was bought by Restaurant Brands International. Cancro acknowledges that he has talked to numerous wannabe acquirers, but he is telling no secrets. “I worked my whole life,” he told Forbes, “to be right where we are right now.”
Imagine cruising down the street, enjoying your favorite song, when suddenly, a car swerves into your lane, causing a crash. In all the chaos, it’s your word against theirs, and it can be challenging to prove whose fault it was — unless you have a dashcam! This little device can be your trusty witness, especially in injury cases, and it ensures you get the justice you deserve. So, buckle up as we explore why a dashcam is essential for every vehicle.
They provide evidence in the event of a car accident. Dashcams are an excellent way to gather objective evidence of what occurred during an accident. Where human memory and biases can distort the truth, the cam catches an unaltered, unopinionated account of what happened before, during, and after the event. This footage helps determine fault and liability and shows the jury exactly what happened. Dashcam footage is beneficial when conflicting accounts arise, or police reports are unclear. They can protect you against insurance fraud. Car insurance scams are on the rise. From an at-fault driver trying to redirect blame to staged accidents, a false insurance claim can cost you. The evidence dashcams provide can protect you when dealing with a disputed claim. This footage could make all the difference in the outcome. They can deter theft and break-ins. The presence of a dashcam in a car might make a would-be thief change their mind. Many dashcams have a mode that allows them to record any motion detected by the rear or front cameras and any vibrations or impacts, even when the engine is off. If your dashcam and phone are linked, you will receive an alert when the camera has picked up motion. If your car is damaged or vandalized, your dashcam will provide evidence of the crime. A (moving) picture is worth a thousand words and can protect you if you’ve been in a car accident. So, drive safe, and let your dash cam do the watching!
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“Imagine this situation. You are new to franchising. You are presented with a unique deal on terms that are good for both sides, but you only have four days (including Saturday and Sunday) to lock it down. Oh ... and you’ve just come off a bad experience with an attorney who prioritized billable hours over all else. What do you think happens next? “That was my situation last year. What happened next felt like divine intervention. A friend introduced me to Nate Riordan. Nate stepped in and I picked up the keys from the seller that Monday. In the intervening four days, Nate had connected with the seller’s counsel, negotiated the finer deal points, navigated personalities and strained relationships, making it all look easy. Since then, I have reached for Nate on every legal question related to the business, and he never fails to give wise and calming counsel. In short, Nate is a rock solid superhero!”
The heat is on. Squeezed by weak customer traffic and rising costs, successful fast-food operators have no choice but to learn to track and interpret their key performance numbers in real time. Too much helpful technology is available to fall behind, John Hamburger, president of Franchise Times Corp., told members of a franchise organization in a recent speech. More than 60% of restaurant operators intend to invest in new technology in the coming year, according to a survey of 550 restaurant operators by Nation’s Restaurant News and Restaurant Business. The survey reflects growing confidence in tech platforms’ ability to capture and analyze customer, transaction, and operational data. Tech platforms were a central focus of attendees at a recent National Restaurant Association trade show. Here is a sampling of exhibitors: • Olo: This platform uses machine learning to predict when orders will be ready, improving accuracy by 20% and increasing digital sales. The tool also integrates orders with a payment platform and aggregates customer data to deliver targeted marketing messages. Customers include Denny’s, which nearly doubled off-premises sales by using the platform to send online orders directly to the kitchen. Tech-Savvy Tools Restaurants Boost Performance With Data Tools
ARATHA (RAY) JOHNSON — Pet Evolution Franchisee
• Flybuy: This product uses mobile location sharing and customer data to speed drive-through and pick-up service and deliver special promotions and loyalty rewards. The results include reduced customer wait time and increased sales. One customer, Taco John’s, credits the platform with a 20% increase in mobile orders and a decrease in delivery wait times. • Toast: This restaurant management platform integrates orders from online and third-party systems with kitchen operations, and also provides payment processing, drive-through and display technology, loyalty program promotion, and data analysis. One user, Velvet Taco, reports a 20% increase in order-fulfillment capacity. • Curbit: This capacity-management system serves as a throttle during busy periods on incoming orders from delivery services, online takeout, kiosks, and phone customers. The platform keeps staff workloads manageable, ensuring quality. Curbit also keeps customers and delivery drivers informed about delivery timing and provides data to analyze order flow and staffing. Customers include Smashburger, where a controlled test at 61 stores showed increased repeat customers and improved online reviews. Visit our blog for helpful franchise law insights & industry trends: westcoastfanchiselaw.com/insights
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In This Issue 1
What Makes a Successful Fast-Food Franchisee?
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Meet Your Vehicle’s New Best Friend
How Peter Cancro Turned Jersey Mike’s Into a Winner Cost Pressures Force Better Tracking of Performance Top Benefits to Attract and Keep Gen Z
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Soft Benefits to Attract and Retain Young Talent Next-Gen Perks
benefits as meditation apps, consider teaching employees the skills needed to reduce stress, such as responding to rude customers in a way that de-escalates tension. Chipotle has launched some new benefits to retain Gen Z workers. The company began offering a 401(k) retirement savings program, a Visa card that offers faster access to paychecks while building credit scores, and a tuition reimbursement program. One manager at Wendy’s, a member of Gen Z herself, says making young employees feel valued is important. “In my experience, simple, small, thoughtful changes can lead to big results,” the manager wrote in a first-person article in Nation’s Restaurant News. She cited several strategies that helped her attain the lowest employee turnover among 36 stores in her region. Offering referral bonuses puts cash in workers’ pockets and enables them to work with friends. Flexible scheduling is another high priority, so she posted schedules allowing employees to choose and trade shifts. Showing patience and kindness during training resonates strongly, too. Explaining why the mundane tasks they must perform are important to the business makes the chores more tolerable. Also, consider organizing light-hearted competitions. This manager created a leaderboard ranking different restaurants’ speed at processing drive-through orders. The fastest team earned a reward — and a boost in team spirit as well.
Fast-food employment is a revolving door, with estimated turnover ranging from 80%–140%.
Now that Gen Z workers make up 49% of the food-service workforce, recruiting and retaining “Zoomers,” as people born between 1997 and 2012 are known, has become a chronic headache for fast-food brands. Beyond financial incentives, some are succeeding by offering softer benefits that sync with Zoomers’ values and goals. Gen Z places a high priority on gaining skills and charting career paths. Expanding training beyond food-prep skills to instilling transferable knowledge, such as conflict resolution, is likely to hit home. Embracing socially responsible initiatives such as sustainability also aligns with Gen Z’s values. Young workers tend to be open and concerned about mental health, so recognizing and incorporating their emotional well- being into training and perks is likely to resonate. In addition to acknowledging high stress in certain jobs and offering such
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