Welcome to the Eventual Millionaire podcast. I’m Jaime Tardy and today we have Doug Guller back on the show. I am super excited. I asked him back on because I saw that he bought a town and I really was interested in learning more about that. When we talked last time, he had told me he went from 0 to 600 employees in five years. Now he is up to 800 employees not too much later. I am really excited to talk to him. Thanks so much for coming back on the show today, Doug.
DOUG GULLER: You got it, Jaime. Thanks for having me on.
JAIME TARDY: So the very first question I have to know – why did you buy a town? I saw it and I was like I know Doug. I can’t believe he bought a town. That’s awesome. No idea why. Tell me the story.
DG: Sure. The real story goes like this – back in ‘98/’99 I was living in Philadelphia and there was a company called Half.com. They sold books online and I remember reading an article because they were based in Philadelphia that they had convinced the town of Half, Oregon to change their name to Half.com, Oregon for a period of time and when that hit the press there was a little bit of a frenzy and I would say six months to a year later they ended up getting bought by eBay for whatever the amount was and I thought wow that was just an awesome PR stunt.
I kind of tucked that away in the back of my head. There is no towns named Bikinis right now. That was my only challenge that I had to solve so I figured well let’s look for a town that used to be and found some ghost towns. There’s actually online you could find a ghost town. There’s probably thousands upon thousands of them just in the state. Maybe that’s a little excessive, maybe hundreds in a state. You go through the listing and we were trying to find one within a two-hour radius of Austin and found this one. I actually found probably about ten and ironically one of the towns was being listed on Craigslist and my broker responded to it and we talked about the details of it and when it could happen and voila we own a town.
JT: So they listed a town on Craigslist? I didn’t even know you could do that. What does it mean? Did you buy the land and therefore you own the town? How does that work?
DG: We bought the land where the town is or used to be. It’s an unincorporated town. To make a little bit more sense out of it, there is a town in Texas, which happens to be about five miles from Bikinis, Texas now, but it’s called Luckenbach. Luckenbach became famous down here and some people know it. A lot of folks know it in the south because Waylon Jennings and Willie Nelson sang a song about it and it’s a place where folks gather to have fun, listen to music, etc.
I looked at that town and again similar nature – unincorporated, used to be a town years ago. A guy named Hondo Crouch bought it in the ‘70s and has just kept the unique nature of it intact and similar to that, that’s what we did. It was a plot of land that has a post office on it and a general merchandise store, the original back from the early 1900s. It actually has its own weather system on it where the National Weather Service wants us to routinely call in the weather from Bikinis, Texas. Of course I told the guy while I was talking to him, I said, “Would you like us to continue reporting the weather on a routine basis?” and he said, “Yeah.” I go. “Well it’s always going to be sunny in Bikinis, Texas.”
That’s how it happened. We’re super excited about it. I’m actually meeting with a firm later today to discuss the development, the overall design of what we want to do with this town. We’re not going to do anything; we’re not building the Taj Mahal there. We just want to make sure it’s a fun destination for bachelor parties, to come three to four times a year or reunions. It’s not going to be open seven days a week like the rest of our stores are.
JT: Interesting. When did you buy it and how long has it been? What’s happened because I saw an article about it, which is why I learned about it? Tell me about the press and what sort of happened since buying it.
DG: Sure. We bought it I think beginning of June and there was some tenants there in the town and they have since moved on. We released the press release that we had purchased a town actually on July 17, which is our national holiday, National Bikinis Day, which we invented.
JT: Inventing holidays, buying towns, my goodness it’s good to be you, right?
DG: Jaime, we expected or we hoped to get some local, maybe some regional news but I certainly didn’t think that Anderson Cooper would be talking about it on his ridiculous or on the Kelly Ripa show. That was just obviously a big added perk that it was trending on Yahoo! I think, as I said to a reporter from Fox Business, he said, “Is there a point that you were trying to make with this, you know, a serious point?” There’s really not. It was just the fact that there’s a lot of serious stuff in the news and we wanted to just do something that was fun and create a place that would just put obviously a lot of smiles on people’s faces.
JT: Tell me about the aftermath. I talk about press a lot and getting on Yahoo! and all that stuff. What actually did that get you? Did that get you more people into your restaurants? It’s funny, I didn’t even say one of the restaurants that you own is called Bikinis and girls walk around in bikinis and stuff like that. That’s why you named it Bikinis, Texas. Tell me about what sort of actually happened for either revenue or just sort of getting your name out there or what the results actually were.
DG: We try as much to quantify the things that we do from a marketing perspective mean to the store. I think we generally saw an uptick in all the stores. Maybe I could say somewhere, if I had to with a gun to my head, I’d say maybe it was around a 10 percent uptick during that time period, maybe July to August that was different than the previous year’s sales and I think the biggest thing it did for us is it literally made us a part of every conversation when you’re talking about that category. That’s what we really hoped for.
When we started out there’s really one big competitor being Hooters and there had been several that have started up like Bikinis. When some national articles were being written, even though at certain periods of time we might have been larger meaning number of stores, we were not being mentioned in the article and I think this certainly made sure that we were going to be mentioned in everything going forward. I think that was one; it was a nice win on our side and then two, even until today, I meet random folks, whether it’s in Austin or maybe outside.
I was home recently in St. Louis and some folks had mentioned oh yeah I heard about Bikinis, Texas. What are you going to do with that town? It’s so out there that people envision us creating our own currency and having our own rights. Are we going to secede from Texas? There’s all these fun things that kind of come into play.
JT: That’s awesome. That’s why you want to buy a town. Like you could do that. It’s really, really cool and that’s what I thought was so cool is seeing that article. I was like wait, wait, wait, I know Doug and this is really weird. It’s something very different that you normally don’t see, which is funny, because it has been done before. I know Google talked about renaming towns trying to get the high speed internet there and stuff like that. But to have just some guy, no offense you’re just some guy, right, some guy who owns some restaurants to buy a town is just an amazing really cool thing. So I am really glad you’ve gotten a lot of success and especially all the press from it. It’s a really cool thing plus who doesn’t want to own a town, right?
DG: Right. I was named the de facto mayor of the town and I think I might pass that off to a random donkey that we’re going to put on the town or a tortoise or something of the like. So we’re going to have a lot of fun with it I’ll tell you that. We’re going to kick off sometime in April. So right around the time that you’re going to be down in Austin, it might be done before and time permitting maybe we’ll take you out there. It’s about an hour and a half from Austin.
JT: We’ll have a big party out there. That would be so funny. That’s awesome. Tell me a little bit about how you deal with your marketing with your restaurants because this sounds like a great marketing idea, especially if you saw a 10 percent with all your restaurants. And first, how many restaurants do you have out there?
DG: There are 12 Bikinis. There are 10 other restaurants and venues but there are 12 Bikinis.
JT: Okay. I knew you had a ton of restaurants. What do you do as far as marketing them, because they are all different brands too. You’ve got the Bikinis brand but you also have other restaurants and stuff like that. What do you do when you are trying to learn more and really find marketing that works for you?
DG: We try to stick with what worked from the beginning. We have, our company overall, like the parent company name is ATX Brands – Austin Texas Brands – and we started out back in ’06 with the one store and really doing a lot of grass roots marketing whether it was online or going out and visiting the businesses, the hotels, all of the folks within a 1-3-5 mile radius and we really haven’t changed that. With the exception of buying the town, we don’t do any traditional marketing. We really try to make sure that every person that’s coming into the store or one of the live music venues is having an awesome experience because we believe that’s the best way to market yourselves is making sure that if they’re having a fantastic time they’re going to go out and tell 5 to 7 folks.
JT: See I thought of you actually. I was just mentioning this before. I was out in Connecticut at a conference and I love UFC and I went to UFC with a whole bunch of the speakers from the conference and we had already eaten because we just came from the speakers’ dinner so we had already been there and people were getting a couple of drinks and the manager comes over and goes, “Are you guys going to eat here because we might ask you to make some more room for other patrons.” We’re like wait, we’re here for the UFC fight. They were going to ask us to leave unless we ordered more food, which is hilarious because the speakers that were talking, at that conference, were talking about customer experience and trying to make your customers love you and we’re going this is horrible.
I hate them now because of this. I’m talking about them, it was Buffalo Wild Wings. I’m talking about them on my show which is bad press for them but how do you not do that? I understand being in their perspective and going okay we’re paying for these UFC fights, we really need to make sure we’re making our money back, but how can you sort of deal with that better? How would you deal with something like that?
DG: Are you asking particularly with UFC or just in general?
JT: Just in general. I mean you guys probably pay for a lot of stuff.
DG: Sure. UFC fights, I’ll talk about that specifically, it’s a hard thing for, at a store level, from an employer/manager perspective, because what the public sees or thinks is that the store, that particular restaurant is being charged $40 or so to show the fight which is what you’re charged basically at your house and the reality is unfortunately it’s that restaurant’s load card, how many people they can actually seat in the restaurant so let’s probably take Vegas, they probably sat 350 and then they’re charged 350 times $45 or $50. So you have a few dollars to make back even before you open the doors. That’s why generally there’s a cover. It’s just to cover the cost of showing the fight and then you serve food and drink and hopefully you have a good night.
We don’t, in that particular instance, we don’t monitor anything. Once our fans, our customers are inside, after they’ve paid a cover for UFC, they can do whatever they like. They can have a Coke, they can have a burger, they can have drinks. We’re fine with that, that’s part of being a restaurant and assuming some risk on your side. I think just in general you work in a very, like you mentioned before, we have 800 employees and with that there’s a lot of different personalities and a lot of things that you have to manage and so mistakes will be made all the time. The goal is just obviously to minimize that and make sure that you have a rock star, what we call coaches, management staff we call them all coaches. You have a rock star coaching team that is hiring the right people and coaching actively to make sure that you’re minimizing those types of things that are happening on the floor like your particular example.
JT: Awesome. That sort of leads us into employees because that’s sort of the thing. I loved what you said too because I did know that it was more, it’s not 50 bucks for the whole fight. You wish it was 50 bucks for the whole entire fight and the funny thing is the place I went didn’t have a cover charge. So I understand completely why they really paid attention. I wish they had a cover charge, that would have made me feel better. I would have totally paid a cover charge instead of having someone make me feel crappy because I had already eaten and didn’t really want to buy more food so that’s huge.
Let’s talk about employees because you have 800, which is ridiculous. So you really have to make sure you have systems and the right people, in the right spots, in order for you not to have as much of a headache. I mean 800 employees you are going to have a headache anyway I think. Why don’t you tell me some of your tips? How do you deal with employees? What’s the best way for you to hire and then we’ll talk about working with them after.
DG: It has been a challenge. We’ve been growing at a pretty fast clip and with that you’ve got to put in a lot of process for sure. I think we’ve done an okay job doing that. We have it split out. I have a head guy who is our Chief Operating Officer and then it splits up into districts and different job responsibilities outside of that. There’s three districts, then there’s a marketing arm, the IT franchise arm and an HR training arm. To me, Jaime, those are the most important people that you are bringing onboard. We take a lot of time trying to find who they are and a lot of them have grown up through the ranks.
We’ve promoted everyone on the executive level from a general manager spot or an assistant manager spot. They know our culture well. They know what we’re trying to achieve. They certainly have a sports mentality meaning we want to win versus not winning. It kind of goes down from there. Those are the biggest things that I focus on is kind of top down making sure that if I have the right district chances are that he or she is going to hire the right general manager or head coach. If that’s done they’re going to hire the right assistant coach so on and so forth.
I know we say that we are slow to hire and fast to fire but the reality is that we, I think we do a little bit of that, but we focus most on the top side of it making sure that my best people are always getting what they need. We don’t spend a lot of time with the low performers at all. I give all my top team members all the time and attention they need.
JT: That’s what I was going to ask you too – how involved are you with everybody? Do you see them every day? How does your schedule work with them? How involved are you?
DG: If you ask Curtis, my head guy, he’d probably say very. I don’t think he’d say too much but, for example, we just had an offsite. Quarterly we go somewhere in Texas. This time it was almost all of the managers in the company which was close to 60 and we go somewhere in Texas and for two and a half days we go over presentations, reminders about our mission, our core values, everything that matters to us and basic blocking and tackling as we call it. So there’s that during the day and we certainly have a good time in the evenings just to make sure that everyone is building a relationship and there’s a lot of camaraderie.
I think that’s important. I make sure that we pick a different place in Texas whether it’s a ranch this time, a hotel here. We’re golfing one time. We’re playing paintball in another activity. Just to give the team something different and they realize that we’re trying to make an impact in their lives. I think that from a maybe macro picture is a good way that I stay in tune with all the team members but I would say on a day-to-day basis I am in 100 percent of the stores in Austin every week. I’m just not in 100 percent of the stores outside of that but that’s why I’ve got a great team in place and they’re making sure that they’re very visible. For instance, a district coach is in that particular store twice a week whether they’re supporting, training, praising and moving on.
JT: That’s awesome. How often do you do those retreats with your guys?
DG: Every quarter. They are January, April, July and October.
JT: Nice. You just had yours recently. What have you seen has been the impact on that? I know some of the stuff is intangible. Reminding people of core values and stuff like that is very difficult to sort of quantify. How do you deal with that?
DG: That’s a great question. I think it has been really hard for us to find some tangible results from that. I think partly you can look back at it in retrospect and say okay well there’s not a lot of turnover at all from the GM level and up. I think we’ve turned over three GMs in six and a half years. We don’t look at it necessarily from a sales standpoint but I look at it from maybe a 10-year spot and I know that each time someone is picking up different points that they may have forgotten or even better yet they’ve developed relationships with some other stores and it creates some sort of competitive environment, which is the best thing that you can do. We play fantasy football with all the managers. There’s always smack talking going on. Now they are smack talking about my labor percentage is at X yours is at Y.
JT: You must love that, as the owner.
DG: Love it. Love it!
JT: That’s great.
DG: You can’t really quantify those things but I think those are probably the biggest measurables I can take from it.
JT: I have clients and they have quite a few employees and it’s hard because you take a half day off, you take a day off, all you can see is the numbers going okay I am paying them this much and there is no revenue coming in and it’s hard, especially for a business owner that’s only been in business for a few years or someone who can’t quantify the results. They go well let’s try it and they try it and they’re like I didn’t really see any immediate amazing results or anything. Should we do it again? What advice do you have for someone like that for continually doing that?
DG: I would think, we say a lot, in our business, it’s marathon not a sprint. We try to look at a lot of the decisions that we’re making long term because we believe in our gut and from our research and what the fans are saying or what the team’s consensus is that it’s the right thing and we just try to give it some time to make sure that we see results and so far it has. I guess it goes back to what you asked about marketing is if it’s not broke keep on doing it and try to enhance the experience, because I know that in a fast growing company one of the things that we constantly talk about is hey we’re not training as well as we should and we are night and day from where we used to be.
We still say we’re a tall midget. We’ve got to get better at it. Just something like an offsite gives us the opportunity to train in a kind of an unorthodox way that isn’t the classroom training or something that is more traditional.
JT: And they feel like oh my employer likes me. They’re going to take me places. They’re going to do stuff for me. It makes it more interesting than just going to a job every day and banging out work and coming back. That’s awesome.
JT: Now you talked about gut. I want to actually talk about how you make your decisions because you guys have grown like crazy. You said 800 employees in six and a half years and you had like some restaurant experience but not like business owning restaurant experience beforehand, which is kind of crazy. I was really interested in that you talked about gut. How do you make decisions and sort of mitigate that risk, especially with your crazy amount of growth?
DG: Yes. What came to mind, when you said that, is my past experiences are somewhat of a mutt and since you said gut I thought it was funny.
JT: I like that.
DG: I had the opportunity to do several different things prior to and I think one of them you would look at and go I had the ability to hire a lot of folks really fast for a publicly traded company and manage people that manage managers and that is sometimes a lot more difficult than just managing employees. You have that experience. I had another experience, which we talked about last time you and I talked of selling to the government and what were the things I took from that. I think with the background that I have along with the strong restaurant bar, background and live music backgrounds that my team has, it was the perfect blend.
To make it a little bit more store specific, I talk to the team a lot about having the right blend in their store. We focus on five P’s at the store. The five P’s I may have mentioned are People, Profit, Product, Promotions and Physical and some guys are really good on the first two and not on the last three or they’re good on the last two and not the first three. It’s about complementing your staff. I want to make sure you’re not hiring someone that if you’re only good at your first two, you’re not hiring someone that’s also is strong just in numbers and product. You need to kind of round that out.
I think from an executive team we are fairly well rounding in terms of people’s strengths and weaknesses. My head guy Chris is really strong on operations and that’s not my forte. We can kind of go down the line where Dave Mackey, another guy who heads up HR and training, is really detail oriented. He can sit and look at papers and read our financial disclosure document until the sun goes down and that’s not me or Chris, as well. When we talk about going with our gut I think a lot of decisions that we’ve made thus far have turned out to be fairly positive. We’ve won more than we’ve lost. We tend to act on that. We know it has, there’s history with gut. There’s experiences there, it’s not just a fluke decision.
JT: Okay. That’s huge. You talk a lot about experience which I think is huge because your whole life experience had led you up to the decisions that you’re making now. It sounds more like almost an art though. It’s kind of funny. Actually you said that most of the people came up through the ranks so you probably know that’s how they are a detail oriented person and that’s probably why you pulled them from the ranks, right, I’m assuming.
JT: Were there any pivotal moments like in these six and a half years you’ve grown and grown and grown? First of all, what made you decide to go 22 restaurants? Why didn’t you stick with 5 and what were sort of the pivotal moments, as you were growing through this that really made an impact and things that you sort of learned that maybe you could share with the viewers?
DG: There are a lot of pivotal moments. I think we see them all the time. We don’t really recognize them when they are happening. It’s something where you go wow that was a big decision; that was great or not so great that we made that decision. One pivotal moment I think about back in the beginning with Bikinis is we decided to open our second store in San Marcos, which is about 30 minutes south of Austin, a big college town. That was a pivotal moment in the sense that we learned pretty fast who our market was because it wasn’t necessarily San Marcos.
San Marcos is run by college students, for the most part, and they’re looking for dollar drinks on the square and we are not that. So that taught us a lot in terms of where to go for our third and our fourth, our fifth, our sixth, etc. We love the fact that we went there. It does well for us. It might not do what another market does but from a branding perspective, it’s right there right off the highway. Everyone always seems to talk about that store. It’s a drive by location and heavily trafficked so no regrets there but that was a first pivotal moment.
I think a pivotal moment that went beyond the Bikinis was taking over the first live music venue, The Parish, in Austin. That just happened because we were in the right at the right time. We happened to be the tenant below and The Parish is above us and the landlord wanted a new direction and the old tenant it wasn’t something they were going to be successful at. I think if you put yourself in good positions in business or such as life, right, good things will happen. I think that’s just been our mantra. We stay focused on the prize of winning at both lunch sales and dinner sales and then we’ve won for the day and we look up and there’s an opportunity that is presented and we say hmmm let’s go for that.
The most recent one was a historical bar. It has been open for about 150 years called The Scoot Inn. It’s fantastic. I mean it is a dive, dive bar on the east side in Austin but everyone knows it. It has been around for 150 years. It has a great capacity which will add to our live music offering and three weeks ago I knew The Scoot Inn, I had gone there several times, loved it but didn’t even know it was on our radar and now we open it back up in two weeks.
JT: That’s crazy.
DG: It is and my team is looking at me like I have three heads sometimes.
JT: Yes. That’s what I was thinking.
DG: I think at the same time although they might be stressed to some degree getting it opened and lining up the bands and making sure the bathrooms work, I think they are super excited that we continue to tackle some things and create opportunities because we took a guy that was at The Parish, a junior guy, and a junior booker and gave them the opportunity at The Scoot Inn and they are stoked. They are running a massive business that two years ago they were a security guard.
JT: Let’s talk about this because you’ve had a ton of new opportunities come your way. That’s what it sounds like so far and a lot of business owners have that. But how do you know whether it’s a distraction from your main business, especially you having a bunch of Bikinis stores, and going out and going yeah I am going to buy a live music venue. How do you know and evaluate whether it’s a good idea or not because usually there’s some risk involved. You’re having to stretch probably a little bit more thin than you would have and hope that this is going to be a good idea. How do you sort of go, what’s your thought process through that?
DG: I think you have to take each one and look at it individually. This one, in my opinion, didn’t have that much risk with it. The price was very attractive and I think low for what they had. Like a stock, right, someone who really wants to sell a stock and, at the same time, someone is dying to buy it. This opportunity I think was just at I see a lot of value in The Scoot. So I looked at where it was. It was on the east side. We had never gone to the east side although we’ve looked to add a venue there so it gave us some credibility around town because a lot if indie music is on the east side and that’s certainly one of the genres that we play and probably follow the most.
So the fact that we didn’t have a venue there was a little bit of a head scratcher and so we solved that equation or that question. There’s metro rail right there so you can get in and out easily. It’s literally a half a mile from another store that we have so it’s easy to kind of keep tabs on. You just kind of run down that checklist and do it fast and make sure that, you know, it goes back to the gut is if it kind of passes that test we go for it. On the flip side I’ll give you another one that was more challenging was we opened a Tex Mex restaurant called Pelon’s. That was about 120 days ago and it was a Tex Mex restaurant that before had been there for 80 years. Pelon, which if you don’t know it means bald guys.
JT: No I did not know that. Perfect.
DG: I was asking my head guy what we should call it and he said, “Well call it what the kitchen guy always call you” and I’m like hmmm Jefe? He was like, “Yeah they call you Jefe but they also call you pelon.”
JT: You’re like I didn’t know that.
DG: I googled it and voila now we have a restaurant called bald guy. With that one, I probably didn’t, not probably didn’t I definitely didn’t understand my risk going into it as well as I should have and could have. It was your classic restaurant example where you get involved in something and generally in restaurants you hear this phrase a lot. It hadn’t happened to us yet and it happened on this one where it takes twice as long to open and it’s three times as expensive. We overshot budget by 3X and that puts a strain on you. You react accordingly and again we love what it came out and it’s successful and it will continue to do well over time we hope but that’s one that where you put your list out and everything checks off it’s not an exact science, right.
JT: Yeah, 100 percent sure thing not on everything and that’s sort of what’s interesting to hear from you because when we hear success stories we’re like oh well that did really well, that did really well, oh you’re batting 1,000 right and you’re not. Sometimes there are things that sort of go wrong and all that sort of thing. Were you more cautious at the beginning than you are now? You’re probably in a much better position financially and all that stuff with your whole business so that you can mess up on some risks a little bit more especially than in the beginning. Were you more cautious then and now you’re not as cautious? What do you think?
DG: I would say that I am probably fairly even keeled on that end and even keel is very aggressive. I’ve always been very aggressive and I think that experience just helped make us smarter. I don’t think it deterred us from making aggressive moves because we got involved in three other spots after that. But I think we really thought, we added more to the checklist. How’s that? Everyone said okay worst case scenario let’s add in some more buckets here to make sure that we know those worst case scenarios. We might have had 3 items in the worst case scenario bucket and now we have 15.
JT: Now we know more.
JT: Just like you said, the more experience you have the more information you have the better decisions you can make. Tell me this, at the very beginning, since we’re sort of talking about this, did you always have the vision of having this many restaurants? When you were opening your first one were you assuming you were going to have 22 restaurants?
DG: You know, it might come off wrong, but I did. I didn’t think they’d be other restaurants. I thought they’d all be Bikinis. At this point, I probably envisioned around, let me back up. Our B hag and taking it to an EO level, they talk about B hags and Rockefeller habits by Verne Harnish. Our B hag which is our big hairy audacious goal back in ’06 our 10-year goal for 2016 is 50 stores and doing $100 million. I don’t think we’ll hit 50 stores. We might settle in around, by 2016, maybe 35 to 40. We might miss it but tremendous accomplishment from the team.
I would be super thrilled if we hit that. I’m really excited that we’ve been successful thus far but those were all Bikinis thoughts back in the day. I think we started franchising and realized that’s a great model for growth but we want to do it more controlled because we really want to control the brand and not dilute it and finding the right franchisees is paramount. We’ve got a very good franchisee in Oklahoma that had no prior restaurant experience but they’re continuing to get better at it and learn the ropes. You take that experience and you go okay so for our next one do we want to do it the same or do we want to do it different? That gives you a little bit better idea.
JT: That’s huge. That really tells us and it’s good to know that you sort of started with the end in mind, like a huge goal. To hear how much you’ve done in six and a half years is a little ridiculous but then to hear well my goal was even bigger than that, that’s sort of an amazing accomplishment and really good for people, especially people just starting to be it’s okay if when you start your first store that you say you want 50 because that’s the only way you’re going to even get close so I think that’s huge.
I want to say one more thing about franchising before we need to wrap up. When you look for someone in a franchise, because I am sure there’s people listening that sort of have always wondered more information about franchising, tell me a little bit about what that process is, how much it costs to get a franchise for you, just for the people that haven’t heard about that side of things.
DG: Sure. They vary. You can, like anything in life, you can get the Pinto, the Corolla, the Camry or the Cadillac. It’s just depending on what you want to do and what your situation is. For ours specifically, I’d say to franchise everything, put all those legal documents together, the franchise disclosure document as it’s called and the operations manual and everything and have that in a box. That was about $125,000. After that, then there’s a lot more. There’s the ongoing marketing expense you’re going to incur depending on what rate of growth that you want. If you want 50 here’s what you should spend if you want 50, etc. It’s a highly regulated area and as it should be, as it should be to a certain extent I should say. Entrepreneurs hate regulations.
JT: How long was the process to start before you could actually start selling franchises?
DG: I would say about start to finish probably about six months so not that long.
JT: Better than I thought. So it’s highly regulated. What does it go; what does it take for a business owner to go okay we’re going to try and find the right franchisees and especially in different states and stuff like that? How many do you have first of all and how do you do that?
DG: I think the most important decision someone will make is finding the right company quasi consultant to guide you through that process. We found a really good one for us and they’re the ones that will help guide you to who you’re potential, what your potential franchisee looks like. There’s several different avenues models of franchising and you choose ABCDE and that will dictate to some extent your growth and who you go over and the dollars that you spend. I think the consultant or company that you choose is pretty darn important. The legal side of it probably carries, in my opinion, less weight. It’s just dotting I’s and crossing T’s and filling in blanks from previous templates, if you will.
JT: For one of your franchisees, how long does it take for them to get the store up and going? I know a restaurant has some lead time and also what do they get with that? I’ve talked to many different franchises and sometimes they’re like I thought I was going to get a lot more. They don’t get the systems in place like they’re supposed to and stuff like that. It’s a little bit different than they thought. So tell me what they get for you and how long the ramp up time for something like is.
DG: From the moment that they probably sign on with us and again I only have one experience but that took him about six months to open their doors. We say we try to supply them with Bikinis in a box, you know, just the model.
JT: That’s funny. I just picture bikinis in a box. Here you go, have some bikinis.
DG: Exactly. I think from our side I think we’ve been an average franchisor, at best. I think there’s a lot of room for improvement on our side, as we’ve talked about with the franchisee. Because it’s our first one you’re not going to be an expert in it. No way and you don’t have the economies of scale at your company in order to do that. I think we would become a better franchisor at 5 or 10. You give them all the tools that you would give another store. The bottom line is to treat your franchisee like a corporate store meaning give them all the love and probably more than you give one of your own stores.
I think that’s sometimes hard because either the franchisee is going to respond two ways. They’re either going to want all of your help and be treated just like another corporate store or they’re going to be standoffish and say, “I got this. Leave me alone and let me do my own thing.” In our case, we have a family that has it and they’re wonderful people and they’ve been really open to trying new things and being patient and flexible.
JT: That’s great. So the plan is to get more franchisees though? When you’re looking at the 10-year goal, how many of those stores are franchise stores?
DG: Ten years from today or ten years from when we opened?
JT: In 2016.
DG: You know, I think maybe we’ll have 5 to 10. Maybe not all of them are open but if we had 10 signed by 2016 I’m happy. I think we’re going to continue to grow from a corporate standpoint for a year, one per quarter and from a franchisee standpoint that would, I think we’d be able to support the franchises a lot better than what we do today when we have 10.
JT: Yes, because all the systems will be in place and stuff like that. But at least now they can get handholding if they wanted to instead of next time it’ll be sort of hands off probably a little bit more because you’ll have a lot more stores. You’ll be busy. Awesome. To wrap up, the question, I’ve already asked you this question before. I’m going to ask it to you again. Don’t worry if you don’t remember what you said last time. What’s one action that listeners can take this week to help move them forward towards their goal of a million?
DG: I think last time I said ask for help and that’s paramount. I would say this week or an action this week is write down, I’m a very visual person. Write down your goals and make them measurable for sure, something that you can attain that’s realistic and accomplish them and actually put your mind to it. Right now, I have a bet with a few members of my team. We started on Monday. It’s surprising that I am having a conversation with you and somewhat focused because it’s not caffeine. The bet we have going on right now is no caffeine, no carbs, no sugar, no alcohol for 30 days.
JT: I’ve been doing that for the past three months. No flour, no sugar, no alcohol, yes, it’s awesome. You’re going to do it longer I’ll tell you.
DG: Cool. It’s a new thing for us especially in the restaurant industry.
JT: Oh I bet.
DG: In the music industry it’s a little challenging because we’re always surrounded by it but whatever. We say the phrase if you always do what you’ve always done then you always get what you got. I think back on your question is just mix it up. Try to write down some goals and see how well you attain those goals then follow up with it the following week, month, year, etc.
JT: I love what you said. Number one, first you put it in a 30-day thing so you’re just trying it so it’s not that scary because you don’t have to do it forever but also that you made a bet so you have the accountability and you have all the rest of that stuff. We write down goals and then we forget about them. They’re like oh they got lost in the pile of papers or somewhere on my computer and I can’t remember where I put them. But to really put that much focus and priority on it, you’re going to be talking about this with those guys. You’re going to be like I don’t feel very good or anything like that and so it’s really top of mind for you. I think that’s a huge, huge thing. Thanks so much for sharing that and telling us your goal. Now I want to know in 30 days how you’re doing. I’ll email you and check in and see how things are.
DG: Sounds good, Jaime.
JT: Thanks so much for coming. Go ahead and tell us, like promote your stuff. See if we can find you on Facebook or anything like that, especially the people in Texas where you are. Tell us where we can find more.
DG: Sure. Website is Bikinissportsbarandgrill and we certainly have a Facebook page for the parent company and all the individual stores and for the other venues they are TheParishAustin.com; TheBealeStreetTavern.com; Scoot-Inn.com; Bar508.com and PelonsAustin.com.
JT: Good job remembering all of those.
DG: Thank you. What we’re going to try to make it under an umbrella here shortly so you just have to go to ATXBrands.com and then you can punch into the individual stores. It’ll make it a little easier for maybe our third call.
JT: That’s awesome. I definitely want to have you back. And everybody, I told Doug but I didn’t tell everyone else I’m probably heading out to South by Southwest in Austin. Maybe there will be a UFC fight and I can go to one of your places for UFC, gladly pay the cover charge and no drinking caffeine or sugar or flour so we’ll see. Thank you so much for coming. I really appreciate it, Doug.
DG: Sounds great, Jaime. Have a great day and I hope you feel better.
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