Ben Adams’ resume is filled with finance and private equity experience. Such work ignited an entrepreneurial spirit in him, and about seven years ago, he started dabbling in the world of franchising with brands like Wetzel’s Pretzels, Menchie’s Frozen Yogurt and Mooyah Burgers, Fries & Shakes.
Wetzel’s, in particular, excites him as it was where he first cut his teeth in franchising. In late May, he opened a new location in Macy’s Dallas Galleria mall, part of the retail giant’s robust and growing foodservice program.
“I’ve had all sorts of permutations of the Wetzel’s store dynamics and love the brand,” he said during a recent interview.
Wetzel’s also has a simplified operating model, at least compared to other brands he’s worked with in the full-service and quick-service spaces, and that has made him want to pursue more such concepts.
“The restaurant space can be really challenging, and I’ve found the more quick-service-based the concept is, the more effort goes into it. You’ve got more food items, fryers, grills – it can get complicated real quick,” he said. “So, I’ve focused all of my efforts on simplified snack concepts. They’re just easier than a fast food burger chain with lots of employees, moving parts and lower margins.”
In fact, he sold all of his Mooyah’s locations and is now focused on expanding his Wetzel’s and Menchie’s portfolio and is “exploring a few other things,” like cookie concepts, for instance. As he explores, he’ll continue to prioritize the fundamentals – a good location, a good rent structure, good franchisor support, etc.
“I want to consider something in high foot traffic areas, like malls or outdoor lifestyle centers. They’re very attractive to me. Yes, you’re paying for that foot traffic, but if you have the right team, you can do decent sales volume and the rest flows through the P&L in terms of running a profitable store,” Adams said.
That’s his finance experience talking, of course. And as he looks for more portfolio adds, he is largely focused on acquisitions, though the Macy’s Dallas Galleria opportunity contradicts that approach.
“I promised myself 12 months ago that I’d never open up a new store again. It’s so much work and effort. But the Macy’s opportunity was a no brainer,” he said.
For context, the mall has been named one of the top retail experiences in the country and generates about 19 million visitors annually.
Like many entrepreneurs, the pandemic – and its ensuing challenges – changed Adams’ perspective about what he wanted from his business. He admits he may not have been as staunch about adding snack concepts over other concepts had an unprecedented labor crisis not manifested, for example.
“If you’re struggling to hire 10 people, it’s still easier than trying to hire 20 employees – just the degree of complexity and pain was different (at his quick-service locations),” Adams said. “There is definitely an element of when you’re talking to a future Wetzel’s employee who has worked at a fast-food burger place and telling them, ‘you’re not going to have to deal with fryers, or grills, or clean bathrooms. It’s just a lot easier.”
In other words, he believes having a simpler snack concept is an advantage in recruitment and retention.
“With the finite number of hours in the week, I would rather focus on the things I can control and optimize the store versus just being stretched too thin trying to chase too many problems in a bigger operation,” he said.
That’s not to say Adams doesn’t grapple with challenges in his business. In fact, quite the opposite. He makes it a point, for example, to note that the labor equation continues to be difficult, and he believes it always will be.
“Labor may have been cheaper in the past, but it was still hard to find really good, valuable team members and managers and I think that will forever be a challenge for anything foodservice-related because it’s not easy work and you’re paying on the low end of broader opportunities out there.”
Adams identifies inflation and adjusting/controlling pricing as his other main challenges.
“How much are people going to pay for a pretzel?” he said, adding that being a part of the snacking category insulates him somewhat as it is a relatively small ticket item category.
Finally, as Adams thinks about expanding via acquisitions, rising interest rates may throw a wrench into some of those plans.
“If you’re not just paying straight cash for everything, you’re going to be running at a lower profit margin because interest rates are so much higher,” he said.
That said, Adams has more confidence about running his business than he did when he first got involved seven years ago. He can look at the numbers and data pretty quickly now and know if something is right or wrong, for instance.
“But the biggest benefit to having more experience has been building a team of people who I now can trust and have proven themselves as really good leaders of the stores and system,” he said. “You can’t just post an Indeed ad and say, ‘I want a rock star manager.’ Having people grow with you and learn to run the stores more efficiently, that takes time and it’s invaluable.”
Contact Alicia Kelso at [email protected]
