The Life of a Serial Franchisor
Learn how to invest your IRA or 401k into a franchise penalty-free. ($50k min)
Martin Sprock talks at about the same speed at which he does business--100 mph. He's only 40 years old, but he has already established himself as an unstoppable force in the world of franchising. As the founder of and mastermind behind Atlanta-based Raving Brands--parent company to nine fast-growing fast-casual brands, including Planet Smoothie, Moe's Southwest Grill and Mama Fu's Asian House--Sprock is the definition of the term "serial franchisor." And even with nine established brands under his belt, he can't sit still. He is in the process of developing more and expects his franchise empire to bring in sales of at least half a billion dollars in 2006.
Recently, we managed to snatch a moment of his time and catch a glimpse of the man behind the brands. We found out, for example, he once worked in restaurants himself, doing everything from washing dishes to stocking salad bars. We discovered how he earned the nickname "You're Fired, I Quit." And we learned about how he built his ever-growing empire and what he sees for the future.
Franchise Zone: How did you get involved in the restaurant industry in the first place?
Martin Sprock: I grew up in North Carolina and went to school at UNC in Chapel Hill. I graduated in political science, which led me nowhere. Then I jumped into a skiing year in Aspen, Colorado. I had to support my skiing habit somehow, so I went into the restaurant industry as busboy, dishwasher, filled up the salad bar, whatever. I lived with a group of guys and girls, and we all were in the restaurant business and all came home and shared war stories and horror stories of how bad we were treated that day and how little we were paid and how ridiculous the management was.
[My roommates] called me "You're Fired, I Quit." That literally was my nickname. I just never could seem to find anybody who cared about the employees, treated them that well, really respected any of the ideas they came up with. So basically, I got fired from 17 different jobs within a year. I learned the restaurant business, but then decided that's not what I wanted to do.
So I got into the real estate business in Atlanta back in the late '80s for about five years. My third year in the business, I dreamed of owning my own business--I really wanted to make my own decisions, to create opportunities for other people. I started looking around and talking to some friends, and they all said, "You're only good at two things: eating and drinking." I suffer from a disease called "buffet eating disorder." I love to be around food, to cook, to eat, to drink, to have fun.
So I called up this guy who had been in the bar business for 25 years, and he said, "I want to reopen this bar. I'm looking for somebody to do it the way I want to do it." I said, "How about if I put the money in, I run the thing and I give you 50 percent of the business, and all you have to do is give me the bar, the memorabilia and teach me a little bit on the backside of the business?" He called me after 24 hours and a background check and said, "I think I'm going to do this with you."
We were a smashing success out of the gate--500 people in the parking lot begging to get in. I built up another 12 or so bars after that in the Southeast. I realized pretty quickly that I didn't need to be counting money at 4 a.m. while drinking tequila. I realized I needed to get into something that was more cookie cutter, more of a chain situation, so I looked at franchising. I liked the idea of franchising. So we created a concept called Planet Smoothie.
Did you always envision that you would one day create so many brands?
Sprock: No. It's just like going to an ice cream shop. The problem is they have 32 flavors. I don't know how we ended up with this many. We started off with Planet Smoothie. Then it made sense to buy another concept called PJ's Coffee in New Orleans. They were a similar franchise style. We were overlapping a lot in space; we needed a little bit bigger square footage so we could get the end caps. As a 27-year-old company, PJ's had wonderful coffee. My wife loved it, and we thought we could spin it and do much better with it. Then Moe's Southwest Grill came along. We invented that one. We loved Southwest/Mexican fare and thought it was a good business to be in. Then, all of a sudden, I started thinking my favorite food is pan Asian. So we built Mama Fu's Asian House. Shane's Rib Shack came about when [the owner of the business] wanted to franchise his concept. Then we said salads, sandwiches and healthy meat--three all wrapped into one--need to be put out there, so we had Doc Green's Gourmet Salads.
We said we're full, we're not going to do any more deals. Then I had a South African partner come to me and say "I have a great idea on piri piri chicken," and another deal came to me, which is grilled fresh fish. Nobody was doing that--we merged those two concepts, which led to Boneheads Grilled Fish and Piri Piri Chicken. After that, we said, "We're absolutely done; we're not doing anything more." Then this thing called Jump n Joe's caught my eye. My kids love these big inflatables, so we branched out and did that one and renamed it Monkey Joe's. We're off and flying with that one. And then a breakfast group comes to us. We're going to change the name and a few other things, and roll out a breakfast place. That's nine, and we have pizza and a wine concept idea on the brain, and I hope that nobody comes to me with any great ideas or I don't come up with anything great in the next year or so, because we've got a lot to digest.
We've never sold a brand. We love having the brands, and it makes perfect sense to have them together, because now I go in there and take 10,000 or 14,000 square feet in these big lifestyle centers, and I can buy a package site. I've got the power of real estate. My food purchasing has gone straight up and has helped all the brands out. Our co-marketing dollars have been huge. It has been a great advantage for competitive reasons, for marketing, for franchising sales. We don't have to sell up a bunch of territories now. It's been huge for us to have this many brands that are noncompetitive with each other. They're completely different. We don't co-brand. We don't merge them. They're completely separated out, and it has worked very well for us.
What does the future hold?
Sprock: We think pizza can be done better, healthier, with more gourmet toppings. There are a lot of ideas we have in the pizza world. We might find an existing chain--we've looked at a couple--and modify those and rework those. We're looking at different ideas.
We've also looked at different wine ideas as far as retail wine retail shops. That's about it. We're trying to be the best in each of our categories, so that takes up a lot of our effort and time. It's not about how many more things we have. We don't need any more. We just need to do better at what we have. We want to be in 50 states, and we want to have the best presence in every single state in every single category. That's a tall order, so you have to work pretty hard on that.
You're so well known in the franchising world. Has it gotten to the point where people are approaching you with ideas and wanting to partner with you?
Sprock: There's definitely a lot of that. Truthfully, we haven't gone to anyone else since PJ's Coffee. People have been coming to us. It's not that we haven't thought of our own ideas. With Boneheads, we merged our own ideas when another person came to us.
What are your keys to success?
Sprock: Being frugal and being fair. You've got to fight for your [franchisees]; you've got to fight for what you believe in. We don't blow our money on first-class tickets and big fancy rides and big fancy corporate office space that the franchisees pay for. We're all in a cubicle. Not one person, including me, has over a $50,000 salary. We all do everything we possibly can to save money for the company, which ultimately is good for the franchisee.
It's about building something that we're all so proud of. The customer wins, franchisee wins, our vendors don't get beat down to the null. We've had a lot of the same vendors for years.
Has it ever reached a point where it just felt overwhelming?
Sprock: How about this afternoon? How about yesterday morning? I would say we're probably overwhelmed quite often. If you're not overwhelmed, then you're probably not working as hard as you could. We've actually gotten good at being overwhelmed. My big thing is, if you're sitting on the bench, then you can't score, so get in the game--overwhelm yourself a little bit. When I get a [franchisee] who doesn't do as well with being overwhelmed, we take a load off of his plate, and talk a lot and e-mail each other a lot, so you never really feel like you're overwhelmed by yourself.
Does it get easier with each franchise you open?
Sprock: It was hard in the beginning. We were trying to convince franchisees to come in with us. We were trying to get real estate for 1,200 square foot of space, and we were competing with Starbucks for the end cap. We signed guarantees, we battled through and we risked our houses and put everything on the line for the franchisees to get their stores off the ground. Now more sophisticated [franchisees] have come in with more experience and longer track records, coupled with the young guys I had early on who know the brands better. So we're a more seasoned group; we've got money in the bank. We have real estate prowess all over the country. We have some of the most talented salespeople. We have great support guys who understand the business side. The functions that we do every day--the real estate, sales department, support system, food purchasing--has gotten easier and more fun, but at the same time, we've got more of it. We're no longer in two states--we're in 45 states--so that has gotten harder to put systems in place, to scale up. There are always difficulties and challenges, but the main functions we were working on in the early days seem a lot easier.
For my [franchisees], this is the American dream. Some days, we make half of the money or a fifth of the money that other people do; some days we have twice the frustration. It doesn't matter. We're not here just for the money--we're here to build something great that we're all a part of, and it's a great feeling. It's like having a second family.