If founders, chefs and other creatives are the beating heart of the restaurant industry, then franchisees are the veins delivering their ideas to all corners of the globe. Franchising is critical to the success of the industry, allowing brands to quickly scale their big ideas using other people’s capital. And whether it’s a mom-and-pop restaurant owner with one or two franchised restaurants or a seasoned veteran whose influence in the industry is well-known, franchisees — with all their individual attributes, styles and personalities — make a huge impact on the success of a business.
In this week’s installment of Franchisee Spotlight, we’re speaking with Salem Najjar — a CPA-turned franchisee with a burgeoning portfolio of Tropical Smoothie Café locations — about the benefits of having a background in finance and his long-term goals of becoming the premiere Tropical Smoothie Café operator in the Midwest.
Store count: 21 Tropical Smoothie Cafes in Wisconsin, Illinois and Michigan, with another 30 in development; one location of Mici Handcrafted Italian in Michigan
Why he got into franchising
“My background is entrepreneurial and [I was a] CPA professional. I grew up in a very entrepreneurial environment-- my father had convenience stores and gas stations that I was involved in from a very early age. I decided to pursue public accounting since I really had a knack for numbers and enjoy digging into finances. […] After I got my CPA credentials, I was working with Deloitte full time in their tax division and then I opened my own accounting firm in Birmingham, Mich., and I was servicing a lot of franchise clients. As I was doing that, I was looking for a way to get back into retail business ownership, and was looking at different franchise agreements, because that piques my interest to grow and expand businesses in a scalable way.”
Franchise shopping by the numbers
“What I really look for in a franchise is […] a concept that I truly believe in: something that I would enjoy as a consumer, something that I am passionate about and has a good product, and that I can be proud of. Number two is obviously with me being a CPA, the finances and economics-- really digging into the numbers, making sure that the ROI is there from both a unit economic perspective with sales revenues, and also with profitability. Third, I take a look at the leadership, and making sure that the team behind the brand and the executives that are leading the franchise have a really solid vision and core values that they're committed to, and that they don't let people easily sway them into different ideas.”
Why Tropical Smoothie Café
“Tropical Smoothie Cafe was one of the first and only brands that I came across that checked all those boxes for me. […] When I met the CEO at the time in 2015, and really loved everything that he had to say about the brand, especially as I challenged him on potentially adding in product SKUs that have nothing to do with you know what their mission is, and he would shoot those down, which made me more confident that […] they were going to stay true to who they are and what their vision is.”
Tweaking the numbers so everyone wins
“It’s been a really solid benefit from the perspective of being processes and numbers-driven. We’re making sure that we grow and expand in a sustainable way. […] You need to have a good grip on your numbers so that you can continue to reward your teams accordingly, and make sure that they feel they can participate in the value and growth of the company. My CPA background enabled me to dive in and […] tweak the business in a way that will enable us to continue to grow. […] We’ve been able to offer some very great benefits, not only with our compensation and bonus structures, but also with great health insurance coverage and 401ks, because we're able to dial in our numbers to make the economics work.”
The secret to opening 21 stores in six years
“Infrastructure and vision. I did a lot of work in the beginning, building out my infrastructure when I was much smaller than I am now. […]It was very hard in the beginning to build out the infrastructure because you're not seeing high number of cafes or high unit economics yet. But I did a lot of work in the beginning to make sure that I had the right resources implemented, the right team, software, and technology, as well as the right vendor relationships and brand partnerships so that I could grow a lot more rapidly in these more recent years.”
Long-term goals
“We're very focused on being one of the highest-performing, if not the best Midwest operator […] We're very focused on aggressive growth in the state of Wisconsin, the northern Chicago area, Northern Illinois suburbs, and we've pretty much wrapped up all of our new store development in the metro Detroit market.”
Expansion into Mici brand
“Mici was one of those brands that checked my three boxes […] We are looking for superior franchises that are family friendly restaurants that we’re proud to operate. I love the brand, I love the unit economics, and I liked the people behind the brand. We were really sold on the product, and we got the rights to be one of their larger franchisees. And so now we've opened our first location in Troy, Michigan, and the customer sentiment so far is really good. […] Detroit is a very big pizza market […] and there’s definitely a lot of competition, but having authentic Italian eats definitely fills a white space in the market. […] I feel like they spent a really long time perfecting their craft, their family recipes, and their branding, and now it's a matter of getting through the technology piece and coordinating their strategy in the right way to have execution in a brand-new market.”
Challenges of franchising multiple brands
“I would be careful to not devote my time and attention on too many different brands. It’s important to stay focused on just a few things, whether you're operating a small business or a franchise portfolio, you have be laser focused on what your goals and objectives are. I would be concerned with bringing on more brands without first perfecting operations in these existing brands.”
Contact Joanna at [email protected]
