Growing the concept

The first thing E. Jay Myers wants to know when he’s talking about franchising is “How much money you got?”

One franchiser shares his nightmares

The first thing E. Jay Myers wants to know when he’s talking about franchising is “How much money you got?”

It’s not that the owner of Goodfellas is looking to sell, it’s just that in his own bid to franchise his pizzeria concept he learned the hard way about costs.

“Whatever you think it will cost, double it,” Myers says.

Through his own process he forked out over $80,000 just to trademark the name alone. It was through that process that a few important financial lessons came.

After filing to trademark “Goodfellas,” Myers ran into some objections. Not from the dozen or so other restaurants of the same name, but from the lawyer of the Sons of Italy in Washington. And the lawyer didn’t oppose the filing; he just petitioned the trademark office to delay his right to oppose it.

“His opposition was that the name was ‘disparaging to the Italian-American heritage,’” Myers shares with the audience at the International Pizza Expo who came to hear about his experience. The process lasted several months until it was settled – and cost way more than Myers expected.

“So how much capital is required? Anywhere from $25,000 to $250,000.”

And get the trademark first.

Myers was in Las Vegas to present some real life examples of the mistakes he made in the process and share the knowledge gained.

“We decided to franchise because it was the best way to go with our situation,” he says. In 18 months, 32 franchises were sold…and now there are nine.

In the process he and his partners learned that there are a number of key questions that must be asked – and answered – in order for the plan to work:

“You have to ask yourself, ‘Who is going to do the jobs?’ Who is going to do your job when you’re out doing all this other work? You also have to ask yourself ‘Do I have the wherewithal to be an executive?’”

The reality is, he adds, you might be a great restaurateur, but how much will those skills help when you find yourself sitting with lawyers, accountants and potential investors?

Myers believes that in order for a franchise concept to truly succeed, the plan must include no less than 10 locations, each with solid sales and a commitment to maintaining the culture.

“If you’re only looking for two or three stores, don’t do it,” he warns.

The primary launching point is developing what Myers calls “the bible.” The written plan of how to operate the new location so that its policies and procedures are identical to the original location.

This is vitally important because that written plan is what will allow new locations to create the kind of culture, and not just the product, that has become a standard for the original restaurant. Myers says it’s about going beyond “how to make the food.” The plan helps transfer the philosophy of how customers are treated, employees are hired and rewarded, and the restaurant’s role in the community.

“This is one of the most important things we learned over the past six months. If you don’t bring that culture with you, you won’t be successful,” he says.

“You have to be prepared to have a team in place that can go out and continually train and help maintain the standards you have set.”

Which, in turn, will lead to the ability to make very difficult decisions. Myers warns that operators who worry about offending someone – staff or suppliers – in their bid to be successful may not be ready to make the franchise leap.

“There are some very tough decisions to make. The franchisees will love you in the beginning … in six months you become the bad guy.”•