Anand Gala grew up in the restaurant business, hanging out in his parents’ franchised locations of Jack in the Box in the afternoons and during summer recess in grade school. It wasn’t the typical childhood, he admits, but it fostered his love of restaurants and hospitality. Today, he oversees Gala Corp., the Los Alamitos, Calif.-based operator of 27 restaurants in Southern California and Phoenix, including Applebee’s, Famous Dave’s and Del Taco.
His company has launched a consulting and management service for franchise operators. In its new role, Gala Corp. will help investor groups without an operations background and other franchisees navigate the changing business landscape brought about by the recession. Gala has been drawing on his 30 years of industry experience not only to consult with others in the ways of operations, site selection and training, but also to remain viable in an environment unlike any he says he’s ever seen.
How has the widespread lack of credit and available financing affected Gala Corp.?
I have personally never seen a scenario [like the one] we are in today. Whether you’re a fiscally conservative operator or a distressed operator, there’s nothing available at all. But there’s a tremendous amount of…extraordinary opportunities. That would include [real estate]. Previously [landlords] wouldn’t respond to our inquiries, or they’d ask for obscene prices for real estate or leases.
Opportunities are abundant, but there’s still very limited financing. You’re almost better off doing a lopsided, 50-to-70-percent-equity deal, to smooth out cash planning and paying it off quickly in cash flow.
What aspect of foodservice do franchise operators need help with the most?
FAST FACTS HOMETOWN: Los AngelesEDUCATION: bachelor’s degree in biology from University of Southern CaliforniaPERSONAL: Married, two daughtersHOBBIES: anything outdoors, playing with his children
It’s really determined on the point in time that an operator or a concept finds itself. There are brands that don’t have the operations or marketing issues that others face today, but they do face challenges of sourcing real estate to satisfy their growth.
Finance is a concern, whether you’re growing or not. That’s where I find the greatest number of clients looking for assistance. Lease negotiation is one [tactic] few people are exploring, but it’s one that can provide great benefits to cash flow and the bottom line. There’s not a landlord who isn’t accepting a call from tenants, but they’re not going to willingly present a discount. They want somebody to call and go through the motions.
As an operator in California and Phoenix, how do you think restaurateurs in especially hard-hit areas can get by?
A lot of it is going to depend upon how much work they want to do and how willing they’re going to be to look at options to modify their business that they weren’t willing to consider [before]. A lot fall into the trap of outsourcing a lot of things. There have been scenarios where we looked at their P&L and their vendors, and they had hired people to come in and water their plants for them. These were brands with cash flow with $1 million per unit a short time ago, and they made the business a little absurd because they were awash with money. Get your people to do those things, and cut those costs. You’ve got to be willing to do more with less. Your work will be harder, and your hours will be longer.
