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Imagine the know-how and experience you would have after building 1,500 restaurants.
Would you then have the Golden Touch?
In this episode of the Restaurant Rockstars Podcast, I speak with Kevin King, President of www.donatos.com. Kevin’s long career has taken him some of the most successful franchises in the business including Dominos, Papa Murphys, Smoothie King and others.
Listen on as Kevin tells us:
- The Fundamental Elements of Restaurant Success
- How Donatos is dealing with labor, inflation and the supply chain
- Why piled high edge to edge toppings still make sense with rising food costs
- Why Donato’s is unique and their extraordinary, continued growth during the pandemic
- Necessary technology and other critical operating systems
- His best advice to operators now
And the learnings and experience that come from an illustrious career.
Now go out there and Rock YOUR Restaurant!
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In the pizza segment more than any sales skyrocketed. So do we have the staff and team to in place to take care of how do we take care of our team? How do we keep them safe? How do we protect them from the Coronavirus and so on? How do we motivate them? So, they are working long hours hard hours. So what can we do for them during the pandemic and that was huge.
Roger Beaudoin 0:34
Welcome back to the podcast rockstars. My guest today has literally been involved in building 1500 restaurants across the US and abroad. His work includes stints with Domino’s Papa Murphy’s and Smoothie King as well as others. He’ll be telling us the true foundational elements of restaurant success. His best advice to operators right now, as well as the labor crisis, rising costs, supply chain issues everything affecting us right this moment. Don’t miss this episode. Stay tuned.
You’re tuned in to the restaurant rockstars podcast powerful ideas to rock your restaurant, here’s your host Roger Beaudoin.
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Roger Beaudoin 3:21
Welcome back, everyone. This is the restaurant rockstars podcast with me today Mr. Kevin King. He is the president of Donatos Pizza. He’s got a long hospitality career. We’re going to talk all about that Donatos is a 58 year old brand with 240 Plus locations. Clearly it’s a powerhouse. But it’s not just about pizza. It’s about substance salads. It’s about salads and desserts, and a whole lot of good times for guests. So welcome to the show. Kevin, how are you today?
I’m doing great, Roger, thanks for having me.
I’m really excited to have you we can learn so much from you because your experience is so extensive. But let’s start where it all began for you. Take us back to the beginning and tell us how you first discovered the restaurant business.
Sure, Roger. You know, it’s it’s strange. I think there’s so many of us in this business that are like this. My first job in I was in high school, I worked in a local pizza shop in Columbus, Ohio called Tony’s villa. I started there just before my 15th birthday. And I actually worked for that same company until I graduated from college. So I did go away from college, but if I needed to come home for the weekend and work, I was able to do that. So you know, I did everything in that restaurant from washing dishes to waiting tables to even managing that restaurant whenever I was around. So it was a great way it kind of exposed me to the business. So I went to college. I thought that would be the end of it. I graduated from college and went to work for Domino’s Pizza in the 80s and I don’t know how All the pizza things stuck with me but it really did. I spent about five years at Domino’s, it was a fantastic time I was young and mobile and moved around a lot. But I got exposed to a lot too. So that was great. And I came back to Donatos. After my, after my Domino’s career, I came to Donatos, I came back to Columbus. And Donatos was a small regional chain had 25 stores at the time, all in Columbus. And I was a part of its growth. I worked on our initial franchising program, and was with an autos all the way to 2003. And it was a, it was a tremendous run. In a great ride. We built about 200 stores in that period of time. We went through the acquisition with McDonald’s and some growth there, learned a lot learned a lot about leadership a lot about values. To Nautilus is a very valued or values based organization. We’ll talk about that in a bit and what influence that had on my career. But it was it was a great time. But that’s when I really got into both operations, which I had been in and Domino’s, but in restaurant development, franchising, and what that was like, you know, I was left in autos in 2003. And said, I’ve had enough of the pizza thing I thought. And I went to chase the bank, and what worked in reach retail branch development, so building new bank branches. I liked it. And I learned a lot. And I met some great people. But I missed the pace of the restaurant business. It’s one of those things that that until you’ve really worked in IT known and you get used to that pace, you don’t really you don’t really leave it. I went to I left Chase and went to Papa Murphy’s as a senior VP of development. And later the I was both Senior VP of ops at one point and the chief development officer. And that was also a great experience was my first time working in a private equity environment and understanding what those nuances were. And part of a great expansion program. While I was there, we built over 1000 stores across the country and experienced a different brand, a different part of the country. And I was still young and impressionable and learning what’s really important in my own leadership style. And so there was a lot of that there. I left Papa Murphy’s in 2006 and went to Smoothie King. And Smoothie King was another great brand. It is a great brand. It has a tremendous leader guiding one can. And it’s also a very values based organization, very focused on its mission and its vision. And I knew that was super important to me, in my leadership style at the time. I spent five and a half years there. It was a it was a great, great time. But then last fall, Tom Krause and Jay naval, the CEO and the chairman reached out to me about coming back to Donatos as the President, and I was excited about the opportunity and I needed to be because I really loved my time at Smoothie King. So it was a tough decision for me. But this is a great organization and a great family based values based organization with a tremendous growth opportunity ahead of it. So super excited to be back into NATOs and excited about what the future is going to be.
Roger Beaudoin 8:55
Will you have had an or continuing to have an illustrious career by anyone’s standards. And clearly restaurants and hospitality are in your blood but some would say pizza as well you’ve got a certain spot in your heart for pizza. And I would say the same you know I started my first pizzeria it was a woodfired oven concept and that’s that was in my blood for 20 plus years before I sold it so I get it you know it’s there’s such a history there and it’s such a solid concept. But again, let’s let’s talk about your experiences in building these restaurants now. 1000 Plus restaurants. You were right in the middle of growing these you know different locations What was a typical day in a month like in your life back then you must have traveled quite a bit. You are working hands, you know hands on with franchisors franchisees, I should say getting the concepts off the ground, but you had a bigger picture role. I’m sure so could you tell us a little bit about you know what a typical day or month might have been like back then?
Yeah, it’s hard to describe a typical day because yeah, I don’t know that day but you You know, I spent a lot of my time in both at Papa Murphy’s and at Smoothie King. On the recruitment side, the lifeblood of growth is attracting great franchisees and franchise partners, and getting them excited about that. So I spent a lot of time on that piece. But not only just who we are going to grow with, but where so what markets were focused, where in those markets, where are we going to be successful? Where do we have everything working for us? So I spent a lot of time on that the real estate side comes into play, yes, restaurants are are about location, you have to be where the guest is in order to be successful. And, you know, I spent a little less time on the construction side. But what what are we building is that attracting guests? Is it fulfilling our mission, whatever that is for that brand. And in that piece, but over the course of my career, I’ve spent a tremendous amount of time on the franchise recruitment side, because you got to get the right people. And if you have the right people, the rest gets pretty easy. If the brand has the right economics. So that’s the other piece, you know, in, in my role I’ve spent time on is is one of those brands, economics? And how is that attractive to a potential franchise partner? And what do you need to do to to kind of show them that path and, and help them along the way, it can be incredibly rewarding to put someone into business and watch them grow and be successful, where they’ve really achieved their life’s goals and ambitions, through that connection you made with them so that that does give you a huge amount of satisfaction is watching people do that. And I’ve been able to see that so many times it’s, it’s really, that’s one of the most rewarding parts of the job.
Now, the concepts were different in the way they approach their franchise model. But would you say that, you know, there’s obviously there has to be a certain stringent sort of a, you know, evaluation process of potential franchisees? And what type of experience are you looking for now? Versus then? And do people need to have more hospitality or restaurant experience a certain amount a couple of years? Are you looking at, you know, people used to be restaurant managers that now can get the funding to take on a franchise and grow to the next level? What do you specifically look for?
Well, first, you look for their energy and their drive. And their reason why I think that’s so important, because the restaurant business, it may not be hard, but it always takes effort. So building a new brand, and a new market takes a lot of effort. And the franchisee needs to be up for it needs to be excited about it needs to love what they’re doing. And that’s, you know, a lot of people in your career tell you do what you love. And I would say in franchising, it’s so important, because you can separate real quickly, the person who’s just making an investment from somebody who loves the brand. And those people who love the brand, they’re going to be way more successful typically, than a person who’s just looking for an investment because because the restaurant business is hard. You know, if you think about pizza, putting another pizza shop in a trade area, you’re never the first. So people are getting pizza from somewhere else. So you’ve got to steal, share. And so you’re looking for people who are going to be able to do that. The second part is, I think people who are active in their business, or have an operating partner who’s going to take that ownership is vital to the success. So you look for that quality, who’s going to run the business? Are they cut out for it to have the skills and the abilities and the talents that they’re going to need? And then I think the third thing that’s super critical is are they properly capitalized? Do they have enough money? Are they going to borrow the right amount of money so that they don’t overly burden the business but have plenty of capital in order to get it done? So you look for that drive and motivation? You look for the the hands on person who’s going to run the business day to day? And do they have the right capitalization, ever raise capital and equity to do it, those? Those are the three main things that I look for in the people. And then the overarching thing that’s true about all of that is do their values share, do they share values with the organization is what’s important to them important to the company. And it needs to be in order for them to be happy long term. So that’s in a nutshell what I look for in people when you’re evaluating whether they’re a good fit for the brand or not. I’m
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Roger Beaudoin 16:27
Let’s talk about locations that came up a moment ago. And of course, you know that old adage, location location is everything. And it really is. But there’s a big, wide spreading difference of space available today. And there’s so much space available, I don’t need to tell anyone that you know, the pandemic has wiped out 100,000 Plus restaurants, a lot of those were lease situations. And now there’s a lot of space out there, some of which already have fit ups and hoods and equipment, and furniture and all that sort of thing. And it’s probably the easiest and less expensive time to you know, to get into this business right now, as opposed to having a lot more need for capital, when you know the spaces have all this stuff. Are you finding that opportunity? And?
Yes, I would say
to a lesser extent because as you said, location is so important. If you think about the real estate world today, the best locations have tenants in. So you know, the first restaurants that fails, you know, they fail for a lot of reasons. The the restaurants that fail because they were undercapitalized didn’t have the right operator, but they had a great location those get back filled really quickly. And yes, those are, those are attractive opportunities. And there are some of them. But there’s a lot of restaurants that really failed because they weren’t in the right location. And those those opportunities we want to pass on. You know whether it’s, you know, for Donatos today, we want you know, a location that matches the image of our brand, which we sell abundantly top high quality pizzas. So we want to be in a trade area or shopping center that matches that description. So I wouldn’t say we’re finding great locations more readily. There’s a lot of bad locations available today. But great locations are still super competitive.
How long does it take to build out a store once you identify a space? And you know, obviously make it reflect the brand and you’ve done all the market research and the traffic counts? And all the things that go into determining this is a great space. There’s anchor tenants that are a draw. There’s high traffic, there’s high visibility, and then you you pull the trigger on a lease and then you say, Okay, from start to finish, is it a three month process? Does it take longer lesser than that to get it ready to open?
Yeah, sure. There’s a couple key things in there is if if you don’t have to go through the planning or the zoning piece, the timeline is pretty, pretty regular. And I would say generally, it’s a six month timeframe timeline, you got to get your architectures done. You got to get in for permit and then you got to build it. Typical restaurant fit out you’re doing in around 80 days or less. You know, the big variable in there is how long is it going to take me to get a permit. But I would generally say six months from signing the lease to getting open is a pretty good timeline. If you don’t have to go for zoning, if you go for zoning, you know it depends upon where you are. It could be year and a half it could be two years. So you know that’s that’s the wildcard in it. If you’re building a freestanding building, you probably add 60 days to that timeline. So maybe closer to eight months from getting at least executed until the cash registers ringing on the other end.
Let’s talk about getting a new franchisee up to speed in the operation. What type of training do you offer?
At Donatos we have a pretty long, long training period. The biggest part of our, our training is really about mastering the skills. They’re not hard, I could teach you how to make a pizza, you know, in about 20 minutes. But I can’t teach you how to make it fast our restaurants are, we have a great operating system, but we’re throwing a lot at you. Because we do, we do dine in carry out. We have pickup window and a lot of our stores and delivery. So you have a lot of customer touch points in the restaurant, you’re managing a pretty complex environment, our average unit volume is over a million dollars. So we’re doing some sales. So it’s we really build an engine. And that engine, you have to fine tune it as a as a manager or franchise partner. So our training takes a little longer than most people, we do about eight weeks of training on our store operations and about, you know, when we get down to your store opening, there’s a good couple of weeks, that we’re there with you. And we’re working on all those systems right now. The operating system is easy to teach you how to make a pizza. But there’s a lot of complexity there. The pizza business is super peak oriented, you’re going to do the bulk of your sales on Friday, you’re going to do that in a couple hour window. So that Friday rush is the most important period of the day, and you got to be ready for it. And so that’s what we spend a lot of our time and training on.
Yeah, PrEP is so important to have enough fun, you know, and anticipate what the volume is going to be on any given day. I mean, there’s so much there’s so many details that go into this. Let’s talk about the elements of success. What makes Donatos stand apart from the competition? What do you think the elements are of true restaurant success? And how do you maintain that?
Yeah, that’s a great question. I, you know, I think about that a lot about what what are we trying to replicate. The first is we got great people in our stores, we got great franchise partners. And it takes great people to run a great restaurant organization. So we’re, we’re very focused on our people and our teams. The second thing is huge is everyone loves our pizza. You know, we put over 100 pieces of pepperoni on a 14 inch large I was lucky that all of our pizzas are abundantly topped, we use great ingredients, our pepperoni pizzas, you know, I’d stack that up against anyone’s anywhere in the industry. So we have great food, great products that we can make consistently. Day in and day out. And then the the third leg of that is just that engine I just talked about is we have a high capacity, high volume pizza making system unlike anybody else’s in the industry. So we can pump out a lot of pizzas very consistently every time in every store. So you know our people, our product and our system are the three keys of success in a in a in a Donatos it’s it’s really great if you haven’t had our pizza, you got to come to one of our markets. We’re in 11 states now. So we’re also have a partnership with Red Robin. We’re in 200 Red Robin restaurants across the US. So you can get a Donatos Pizza on the West Coast now. California, Oregon, Washington, Arizona, Connecticut, Colorado. So we got a great presence across the whole country. So if you haven’t had a tinnitus pizza, you got to give it a try. And I’d start with a pepperoni.
Roger Beaudoin 23:48
Yeah, you know, like I said, I was noticing I was looking at all the pizzas on the websites and you’re known for pile high toppings and edged edge you call it with that said have you had supply chain issues. We’ve all seen rising prices on product have you had to adjust prices significantly to sort of compensate for that?
Sure. Great question and really two parts right so supply chain has been super challenging. We’ve got a great team of people here who have been able to keep our restaurants stocked for the most part, but I will tell you every week it’s a different it’s a different item. So right now water out of a branded cup but in a lot of our stores today they’re blank you know we got souffle cup issues. I will say for our stores, we haven’t had any major product issues on our core items like pepperoni and our family recipe sausage, or our our thin crust dough and stuff like that we’ve done really done really well on but those smaller items in our stores, you’ll see some product shortages. We’re going through a lettuce issue right now. So you know if you’re in one of our in stores today, and they say they’re out of lettuce bear with us. We’re working on it. But so we’ve had tons of those issues. But we got a great team behind us supporting us on the supply chain side. Pricing. Wow, that’s a different topic. But yes, labor labor issues, wage inflation has been a big barrier for us, which has affected our ability, our pricing power, that, you know, we definitely had to adjust prices based on that. And right now, it you know, we’re really getting hit on all fronts. You know, the price of proteins have gone up dramatically, chicken wings. pork products, for sure have gone up the war in the Ukraine who, who really thought about how much that would impact supply chain, but Russia and Ukraine is the second larger largest exporter of wheat. And obviously, you don’t have most of our pizzas. Without wheat, we do have a tremendous cauliflower crust, but wheat is a huge part of it, for sure. And then, but they’re also a huge grain supplier, and that that’s going to impact impact the price of proteins. You know, cows eat grain to generate milk. And then all the pork products that we use are definitely impacted. So we’re seeing huge, huge pressure, and then the price of fuel. So getting those products to our store is impacting pricing. So yes, that’s been a major challenge for us. We’ve definitely had to adjust prices more than we like. And I think the consumer has been pretty accepting of that so far. I know that’s going to come to an end about their willingness to pay. And so we’re trying to do everything we can to minimize costs without sacrificing that tremendous quality pizza that we make every day. But it’s definitely impacted menu pricing.
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Yeah, I was I was I spent most of the pandemic at Smoothie King, and but the lessons are the same. And you really captured all of it. I think the key in the in pandemic reaction was, first of all, assessing the challenge and the problem and creating solutions really quickly. So what do we need to do? You know, I remember in the early days of the pandemic, it was all about getting restaurants open. It was about telling our guests that we were open, and what what can we do to support our franchise partners out in the field to get their restaurants open. And And the same was true at Xanatos. To learning what what they did. The second big thing was communication. Everybody was scared, everybody didn’t know. So communicating with everybody regularly was a huge part of what we did. When I was at Smoothie King and what Donatos did for his partners here. More often than ever franchise partners, were relying on the company to give them information what what are we allowed to do? What do we have to do? What funds are available PPP and all those other things or franchise partners were looking for guidance more than they have ever in their career because things were changing so fast. So that communication was so important. As the pandemic wore on, it was educating our guests about how we were service servicing them in the pizza segment, more than any sales skyrocketed. So do we have the staff and team to in place to take care of how do we take care of our team? How do we keep them safe? How do we protect them from the Coronavirus and so on and how do we motivate them? So they were working long hours hard hours. So what can we do for them during the pandemic and that was huge. So then and then you get into the kind of the are we going to live with this virus forever? And what do we have to do as the pandemic wore on? And the the peaks and the spikes? So certainly in 2021, it became a staffing challenge. There was COVID fatigue, people retire wearing masks, maybe I don’t want to work here anymore. I’m overworked. And I’m tired. So what can we do to energize our teams, keep them excited, keep the store staffed, was huge. And what can we do to handle the business as it was coming at us? So those were huge parts of what we’re doing and now is, as we move into kind of a post pandemic, what do we do in our restaurants? How do we bring people back into dining rooms? How do we get stores back to regular hours? How do we take down the barriers that we’ve had between us and the guests for a while. So it’s, it’s really those same principles is quick evaluation of the situation that you’re in, and communication to all the stakeholders, the guests, the franchise partners and our team members out in the field. So that those have been the keys that I’ve seen through the pandemic, be nimble, be smart. You know, you can be nimble and smart at the same time, so you can make quick decisions based as much on the facts that you have, dig deep into your business and know where where things are. But those are the keys in the in this pandemic world we’ve been living in for the last couple of years.
Roger Beaudoin 31:34
You know, I think restaurant technology, Kevin has become more and more important. During the pandemic, things like online ordering have become essential. Everyone pivoted their model to curbside pickup and delivery, which you mentioned, what technology is critical to your operation today in each individual location.
While technology is a huge part, today, more than ever, in running any restaurant in the pizza segment, online ordering is enormous. So we’re approaching 59% of our sales from our digital channel today, that’s going to be in the middle 70s soon. So do we have the technology backbone and infrastructure to handle that? Do we have the right website and apps to that attract and keep guests and customers? So we’ve been working on that at Xanatos. extensively, we, we a huge part of our investment, in both time and money in 2022 is around our digital platform, and what we’re doing, but technology’s never been more important in that role. And the guest gets higher and higher expectations because they get better and better experiences and other brands. And you certainly have to keep up. So you know, I think the pizzas segment has led the lead the way in online ordering and the restaurant category. You know, Domino’s is really the gold standard for us to look at and what they’ve been able to do on their digital and online platform, and how they’ve managed that delivery piece. So what can we learn from them? But what what can we capitalize on our own brand and our own image that we need to portray in our in our online environment? So that that’s an enormous piece. But even beyond that, there’s loyalty? There’s tracking our guests behavior? And what can we learn from them? How do we reward those who are super loyal to us? How do we attract new guests? And how do we influence them on what they buy? And how often so if I look at, you know, the number one priority for us, it’s our digital experience with our guests. It’s how that translates into our store environment. And then what can we do to reward and keep our guests. And then the other part, what I’ll call technology and innovation? Is the role that third party delivery companies have played? What will oral DoorDash Uber Eats, and how they’ve really changed the model in the restaurant business? Restaurants that never thought of delivery before? are now able to do it and do it well. So we got increased competition. And I think one of the important parts for us to figure out is what role do they play in our, in our system? How can we capitalize on it? And how can we embrace them? Because they’re a force in the restaurant business like never before. And I, you know, the pandemic was a curve jump for those players in the business. And I don’t think it’s going to go away. I think so many customers value convenience. And to them, that’s what DoorDash and UberEATS GrubHub are all about. So we got to embrace them. We got to, we got to bring them into our system, we got to figure out how we take our great delivery operation that we have today and use DoorDash or UberEATS to make it even better, and that’s what we’re working on.
I was gonna ask you if you had your in store delivery or if you use third party delivery? So you’ve answered that question. Let’s talk about at the store level, I asked you earlier what the training was like for a new franchisee, and how they get up to speed and running the store. And now they’re running their store and they need to onboard their own people, is there a sort of template they follow? And what is the training program like to develop, you know, to develop the certain mission that you have for the company to deliver the best guest experience possible. Courtesy is part of it, service is certainly a big part of it. And then product knowledge, of course, you know, knowing the menu inside and out knowing what makes Denardo special and just imparting that on a customer, as if they were a regular customer, even if they’re a first time visitor, it’s like that guest interaction is so pivotal to our business.
For sure. And, you know, that’s, that’s one of the big advantages of joining a franchise system is if you’re starting your own restaurant, you’re creating every bit of training and every program from scratch, and, and frankly, creating great training programs, not all of our core core competency. So at Donatos training is a huge part of it, we have a great operating system, but we got to show you how to take advantage of it. Making a pizza is not the complicated part, doing it quickly. But in a complex restaurant operation, there’s so much at coming at you that you got to do it. Well, we have we have really good training programs. And we’re constantly improving those programs. You know, today’s restaurant workers going to learn mostly on a tablet or on a computer in the restaurant with some hands on training to and that onboarding experience of a new associate is so important on whether they stay with you. And we see it in our restaurants across the board. Those who onboard great have low turnover. And those who don’t, is there’s constant churn, and we got to work with them to make that onboarding experience just fantastic for that new associate on our team. So we’re investing a lot of time in selection of who we pick and why. But what their onboarding experience is like, and how we get them trained, how we bring them into our family, how we make them feel comfortable. Those are the keys to whether or not people stay. And, and people stay. It’s a old, old phrase, but people don’t quit jobs, they quit people, you know, so you got to give them that, that you got to embrace them right from the minute they walk in the door and make them feel comfortable. And a lot of that’s about giving them great training. So we do some hands on of course, we got charts and checklists, and all those things and great videos. But the key is making that human connection with people because that’s the reason they’re going to stay or leave.
Roger Beaudoin 37:51
Of course, what’s your best advice to operators that are still open, they’ve been through the pandemic, now they’re just struggling with the labor crisis, everyone’s been beaten up badly, their staff are overworked, some restaurants have to shut down certain days, close hours, because they just can’t staff up and businesses literally booming again, it’s got to be incredibly discouraging. I know that from my own experience, because after selling numerous restaurants years ago, I got back into business just before the pandemic. And then I went through all the challenges that everyone’s gone through. And I was fortunate enough to sell my operation a few months ago, and now I’m out of the restaurant business, but I understand it. And you know, these are unprecedented times, and there is a light at the end of the horizon. And you just got to dig deep. But what would you say to operators that, you know, what would you say would be your best advice to those
this is? It’s an old, another old adage, but it’s I’ve heard it a lot recently from our CEO Tom Krause, and you have to step back and work on the business rather than work in the business right now. Because you got to come up with a solution. So if staffing is your challenge, how are you going to get staffed, and when you’re working in the business day in and day out, you might make a decision that, hey, I’m just gonna close. But you’re so exhausted, that closing a day or opening late or closing earlier those things, they’re not going to solve the problem because you got to you got to identify the underlying cause of what’s causing your staffing challenge right now. And so my advice is step out a little bit to work on the business rather than that day to day. I don’t know who’s going to open today and I don’t know who’s going to close today. So I’m just going to muddle through it. So think about what your your true challenge is. And I think this one’s hard for operators is the the associates expectation on pay has changed, and we have to get over that. And you have to pay that wage that’s competitive. And then once you’re paying a competitive wage and you’re getting the application flow, then you’ve got to really work on the onboarding. And you got to be realistic, you can tell them, hey, the next couple of weeks are going to be tough, but I guarantee you, we’re gonna get through this together, you got to give them the hope and you got, you got to do that. So don’t be so focused on that day to day operation, that you’re not addressing the underlying issue in it. So that’s the first part. And the second is Be realistic about what you need to pay people today, because the expectation has changed. And that’s hard for me. You know, when I first heard people talking about $15, an hour minimum wage was easy just to say, oh, that’s ridiculous. And that’s not going to happen. But we’ve gone on probably five years, maybe longer, where that’s the mantra, $15 hour minimum wage, minimum wage, minimum wage. And no matter what the federal minimum wage is, you can’t find people at 725 an hour today. So you got to you got to realize what that pay needs to be. And you got to get yourself there. However, that’s going to be and it’s hard, right? I mean, because you’re like, well, they’re not worth it. Well. I’ve heard people say that. But the reality is, is the world’s changed fast. You know, the the greatest thing about the internet is what it’s done for how fast we can change how fast we get improvements in our business. But that information flows exponentially quicker today. And so that that’s how I look at the wage inflation is the team members expectation is just hired today.
You know, consistency is super important in a single location, as well as in 240 locations. And you know, that movie The founder comes to mind, which sort of tells the story of Ray Kroc and McDonald’s and one of the funniest parts of the movie is when, you know, he’s got some new franchisees running, and they’re trying to sell chicken out of the burger place. And I think he just about goes bananas when that happens. But you know, people sometimes think they have a better idea or a better way of doing things. And a franchisors main role is to maintain consistency and not deviate from the formula that works that they’ve spent years and years proving in the field. Some franchises will allow certain flexibility, and you know, new ideas are open, and some aren’t. Where do you stand on that issue? And tell us how you maintain that consistency across 240 locations?
Yeah, so that’s a great, great point. And it really dives into the what a franchise model is all about. First of all, we have a core operating system, that if you implement it, you’re going to make great pizza. And when you make great pizzas, you’re going to be able to sell it and charge a little bit of a premium price for it. And so we try to stick super close to that. And that’s where we direct our partner’s energies to is you’re not, we’re not going to all of a sudden, pepperoni is, you know, went up 20%. So let’s cut back on the pepperoni on a pizza. That’s not going to happen in our system. We’re not going to allow that. And those are the guardrails that I think you’re talking about with Ray Kroc and in franchise systems are really important. The second part of a successful franchise system is still encouraging innovation and listening those two pieces so we still want and value franchise partner innovation, what are your ideas? We just want to put guardrails around it? So what are you allowed to do on your own? What do we need to suggest what do we need to test and making that super clear, but every successful franchise system listens to their franchise partners. And if you don’t, you’re not going to run a successful system for long because good operators are going to leave. So we have to listen to you. We have to involve you in the decisions that we make. But we also owe it to you to keep a consistent path so that we don’t mess up our formula for success. So there’s a fine balance, you know, a franchise system doesn’t succeed when it lets every franchise partner do whatever they want. Of course not a franchise franchise system also doesn’t succeed if they think they have all the answers because you know, what, the why do why do companies franchise? They franchise primarily because they want to accelerate growth by using other people’s money, but also other people’s people. And if you forget that second part, there’s a lot of ways to get money in today’s world. But that’s not why you franchise you don’t franchise because you want other people’s money, because you can get money other ways. You franchise because you want to leverage other people’s people and that you have to remember that. So you have to communicate, you have to listen. And you have to involve them. So those are keys for us as we move forward. They’re keys for any franchise system.
That’s beautiful advice. And that is the foundation of any successful restaurant right there. Well, Kevin, I can’t thank you enough for being a great guest on the podcast.
Oh, you’re welcome. Roger. I enjoyed it. And, again, if you haven’t been to Donatos, whether you’re a listener or for you, Roger, please give us a try. Let me know what you think. Love to hear it.
Well, I’m a huge pizza fan, as you know, so I’m going to try and do just that. That was Roger. Thank you so much. That was the restaurant rockstars podcast. We’ll see everyone in the next episode. Stay well. Thanks again, Kevin, for sharing your inspiring insights and experience with us on the podcast. If you haven’t already, why not head over to restaurant rockstars.com I’m giving away three ways you’re killing your restaurant profits. It’s more important now than ever that you maximize every single sale and most importantly, maximize profit on every sale in your restaurant. So go check that out. It’s free. I’d like to thank the sponsors of this week’s episode pop menu Smithfield, culinary Davao and serve. Thanks again for our audience for tuning in. We’ll see you all in the next episode.
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