Success stories don't come much sweeter than Tony Conza's. In 1964, he and two high school friends came upon a brilliant new idea: selling submarine sandwiches. Granted, it wasn't a new idea, but it was a recent-enough restaurant industry development to prove a unique and popular concept when the trio opened their first store in Hoboken, New Jersey, with $2,000 borrowed from a neighborhood businessman.
Thirty-six years later, Blimpie International has roughly 2,100 franchised stores in 15 countries with total annual sales of $350 million. It hasn't been an easy road-Conza has experienced setbacks as well as great successes-but through it all, he's maintained his passion for Blimpie. Conza recently completed Success: It's A Beautiful Thing (John Wiley & Sons Inc., $24.95), a combination of memoirs and lessons he has culled from his lifetime career as an entrepreneur. We've asked Conza to share some of the business wisdom he's gathered from the experience of growing a multimillion-dollar enterprise.
Entrepreneur.com: When you began your business in 1964, did you imagine Blimpie would become such a large, successful chain? How did that goal develop?
Tony Conza: We knew we wanted to be more than single restaurant operators. Our immediate plans were to have a small chain of these restaurants, but we never really imagined the scope of what the operation is today, to have a presence in 15 countries. That was beyond our imagination at that time.
Entrepreneur.com: Why did you choose franchising as the expansion method for Blimpie?
Conza: Well, everything we did in those early days we kind of just did, without planning too much. We opened the first store in Hoboken, and people immediately loved our sandwiches and lined up to buy them. After about three months, we borrowed some more money to open two more locations. And again, customers lined up and they loved the sandwiches. Then, friends, relatives and even strangers started coming to us and saying, 'Hey, this looks like great concept and product. How do we do this?'
At the time, there were no franchising laws like there are today, and no one really knew that much about franchising. Some of the old companies like McDonald's and Dunkin' Donuts had been franchising, but it wasn't something there was such a consciousness about. So we went to a lawyer and quickly put together a franchise agreement and we started awarding franchises. After we did that, we began to realize that this was a good way to expand and have a lot of development going on by using other people's capital.
Entrepreneur.com: What other expansion methods have been instrumental in your growth?
Conza: What we started to call nontraditional venues happened many, many years later. In fact, that only happened about six years ago. Up to that point, all our stores had been in traditional locations. And then we got together with a convenience store, and it just seemed like a great idea [to] put our location right inside the store. [Because of] that, we ended up developing a whole department just to deal with these nontraditional locations. A large number of them are in convenience stores, but they're also in hospitals and on college campuses. We currently have an arrangement with Canteen Corporation of American where we're putting our sandwiches in their vending machines.
The nontraditional venue area of expansion is [fairly] unlimited, although I think the big rush for convenience stores to put in branded food is over. I think there will always be a need to do that, but the major push in that direction is over at this point.
Entrepreneur.com: What setbacks did you encounter while Blimpie was growing? How did you avoid letting the failure of some ventures get to you?
Conza: One major failure was when we got into operating these full-service Mexican bar restaurants called Border Café. It happened in the early 1980s. After we completed a small public offering for our stock, we decided to diversify instead of expanding the Blimpie chain nationally. So we started learning a lot about tequila and forgetting about bologna.
I think the worst thing that happened to us was that the first Border Café we opened became very successful. So we did what we always did, which was open more. Well, the rest of them weren't so successful, and soon they were taking our time and our money and our energy. And we [finally] reached the conclusion that this was a failure and that we had to close these operations and get back to focusing on our core business which was Blimpie.
Accepting a failure isn't always the easiest thing to do. For us, in our early years of business, we struggled through so much and we were able to survive because of our tenacity and our perseverance, and eventually create a success. When we were into these Border Café restaurants, [we kept thinking] if we persevered long enough, they'd become successful.
But what we eventually came to realize is there are two things about failure. One is you lose money of course, but the other is that you get set back in the time cycle. All the time you're expanding something that really should be declared a failure and ended, that's time you could be spending with something much more productive. But the thing about failure is to not let it debilitate you and to understand that the best thing that can happen from failure is that you learn. Failures can be more important than successes because you often learn more from a failure than you would from a success.
Entrepreneur.com: You discuss a concept in your book called "the 20-store syndrome." What is this? How does it apply to all entrepreneurs?
Conza: We discovered that when we have a new subfranchisor take over a territory, they will have initial successes in opening their locations. And then what generally happens is they get to a certain point-it could be 15 stores or 25 stores, but it's somewhere in that range when things start to happen. The franchisees lose enthusiasm or lose their passion, maybe they weren't properly financed to begin with, or maybe the location selection wasn't the best. So if [problems] are gonna happen, that's generally when they start happening. That's why we actually gave a name to it because we've seen it happen so many times. So what we try to do is prepare a subfranchisor for this. We tell them, 'This is what's gonna happen so you have to be prepared to deal with it when it does happen and once you get through it, then everything's gonna be fine.'
I use that as an analogy for people to anticipate what might be called their own 20-store syndrome: a problem that might occur. It's like when you meet someone, fall in love, get married, and it's great, but you know, it's not always going to be that way. There's going to be a certain point in the relationship when [problems will occur] so you need to be prepared and not expect everything to be wonderful throughout your relationship.
Entrepreneur.com: What are some other challenges of growth?
Conza: The most important thing-and it's something I harp on very much in my book-is having passion and maintaining your passion for success. I've had the passion, I've lost the passion, and I've regained the passion. And I can tell you that when you don't have it, the chances of your succeeding are lessened substantially. When the Border Café thing was happening, I also was feeling very unfulfilled internally. I kept asking myself, 'Why, when I started this business in 1964 with no money, no training and no experience was I able to create a successful enterprise, and now why am I feeling like a failure?' I couldn't figure out the answer to that question for a long time, and then one day it hit me: I had lost something. I had lost the passion for success and the passion for Blimpie.
My first reaction was that I had to get out of the business. Then of course I realized I would have to do something else, whether that would be to start another business or another career of some sort. I would have to get the passion for that, or that wouldn't be successful. Wouldn't it just make a lot more sense to regain my passion for Blimpie?
And once I had made that mental decision, I realized I could then accomplish anything I desired. There are four main reasons why businesses fail, and the first one is negative attitude. And that applies not just to business but to every part of your life. If you go into something thinking, 'This is not so great. This isn't going to work,' you're going to fail just because you'll create a self-fulfilling prophecy.
We have a franchisee in Atlanta who owns a couple of stores and her name is Vicki Sheldon. A few years ago, Vicki won Franchisee of the Year, the award we give at our annual conventions. I was at the front of the room giving out awards, and when she got to the front of the room to receive her award, she leaned over to me and said, 'Tony, I love Blimpie.' That's passion. How could she not be successful? If she loves it so much, she's gonna be really, really successful. And that's what I believe more than anything: Whatever is important to you in your life, get the passion for it and you'll be successful at it.