How These Sibling Franchisees Built an Empire
Learn how to invest your IRA or 401k into a franchise penalty-free. ($50k min)
Franchising was destiny for brothers Joe and Allen Hertzman of Louisville, Ky., and one they've taken to award-winning heights. But their success--the two own six Long John Silver's, 13 Rally's and 24 Papa John's Pizza units--is tempered with pragmatism.
"I'm not 100 percent comfortable bragging," Joe says. "The restaurant industry can turn on a dime. You never know what's going to happen next year."
Despite that caution, it's a good bet that one of the Hertzman brothers soon will be earning some kind of award. Joe, who runs the Rally's and Long John's side of the business, has been named Rally's franchisee of the year and was its first franchisee to earn the Legacy Award for sustained commitment to the brand. Allen, who is in charge of the Papa John's units, has been named franchisee of the year twice and been nominated three other times.
Franchising is in the Hertzman blood. The two grew up mixing coleslaw and mopping floors in their father's Long John Silver's units. After graduating from college in 1978, Joe joined his father in the business, while Allen got a master's degree in entrepreneurship and began developing Papa John's units in San Diego and Columbus, Ohio. (He sold those in 2005 and returned to Kentucky.)
We caught up with the brothers to find out what's in their secret franchising sauce.
What's your best advice for franchisees?
Allen: First and foremost, surround yourself with good people. People are what make a business, and it takes strong leaders to deal day in and day out with fast food. If you have good operating partners, that will trickle down to other workers in your stores. A lot of franchisees falter because they say they can't afford to get the right people. That decision will come back to bite them.
Do you two have different management styles?
Allen: This is very different than most family businesses, since I run one franchise and Joe operates the others. We may disseminate information differently and have a little different style, but we have the same message and culture. We're two people with two different personalities, but we have the same objective.
Joe: I think the common denominator is culture. We have created and maintained a very good culture. We try to take good care of our people, and we have very high standards. We have a saying: Operate each store as if it's our only store.
Did growing up in franchising give you any advantages?
Joe: It's funny--we learned how to do everything in these stores when we were kids. But if I walk into a store now, there's not much I can do to help. My managers usually tell me to just stand out of the way. But I can tell in a hurry if someone is not running a store properly or if they're trying to pull the wool over my eyes, because I've been there. We grew up in operations, and it was a great foundation for being business owners ourselves.
"We have a saying: Operate each store as if it's our only store." -- Joe Hertzman
What do you do to generate employee loyalty?
Allen: The better we get, the better people we get. Joe and his operating partner set goals each year, and if our managers hit that goal, we take all of them and a spouse or friend--that's about 66 people--to Cancun [Mexico]. They appreciate it so much and talk about it all year. Then we have an annual awards dinner, parties, gifts and recognition throughout the year. We may spend more on the human side than others, but we think it pays dividends.
Joe: At Rally's, each year they recognize the top 20 managers and take them on a cruise. We have managers on that cruise every year. Recently we had eight managers in the top 20 and four in the top five. We're really proud of that.