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Early to Rise

These entrepreneurs jumped at the chance to be franchisees while they were young--and their determination and drive are paying off.
August 1, 2008
URL: http://www.entrepreneur.com/article/195716

Gifted with the passion, drive and energy to go out on your own, yet told over and over again that you're just too young? Don't lose hope. Youthful naiveté and reckless abandon may well be the keys to your success--at least that's what we were told by three highly successful business owners who are younger than 40 but already have a lifetime of experience.

With a lot of foresight but not much hindsight, Jerry Heath of Hungry Howie's Pizza, Steven Taylor and Chris Smith of Moe's Southwest Grill, and Gina Schaefer and Marc Friedman of Ace Hardware embraced the unknown and successfully nurtured their respective businesses into fruition. The end result? More than $3 million in annual sales each and more locations than they ever dreamed possible. Young and naive? Sure! Down and out? Far from it. Wisdom might come with age, but sometimes it takes one huge leap of faith when you're just too young to know any better to create a legacy that will last well beyond your years.

Gina Schaefer, 37, and Marc Friedman, 35
Ace Hardware
Gina Schaefer doesn't exactly fit the profile of the average Ace Hardware owner. She's not a male, she's not in her 50s, and none of her stores are located in a suburban area. She didn't even have any hardware or retail experience when she decided to quit her job with a technology company and open her first Ace Hardware with her husband, Marc Friedman, in 2003. But there was logic to her reasoning. She lived in an up-and-coming neighborhood of Washington, DC, and knew that it was in need of a hardware store. And, although most Ace Hardware stores are 12,000 to 14,000 square feet, Schaefer couldn't find--or afford--that kind of space in the city, so she sized down and crammed as much as she could into a 6,500-square-foot space. "From the Ace perspective, we were certainly unique," says Schaefer.

That uniqueness has worked in her and Friedman's favor. With projected 2008 sales of approximately $9.5 million and the opening of their fifth location just a couple of months ago, their level of success is higher than Schaefer ever imagined.

Being completely hands-on with the business has helped Schaefer and Friedman achieve such success. They make it a point to know their customers and the significant details of their lives, which adds friendly familiarity in the middle of a big city. Their effort has paid off big time: Twice they received tips from customers about vacant buildings in other parts of the city, which are now home to their second and third locations.

They have also been hands-on with corporate, serving on committees and voicing their opinions on the rollout of new programs. As of press time, Schaefer had even been nominated to serve as a member of Ace Hardware's board of directors, where she would help ensure that Ace Hardware's business model stays viable in the changing economy. This level of involvement at the corporate level has not only kept the couple up to speed with the company's objectives, but has also exposed them to other, more experienced owners with wisdom to share.

So what lies ahead? Schaefer used to joke that she'd be retired by 40. But with five Ace Hardware stores under her belt, she's too busy to retire. Says Schaefer, "It has grown from an absolutely adorable mom-and-pop hardware store to something much broader, with lots of experiences for all of us, and it's really cool."

Jerry Heath, 38
Hungry Howie's Pizza Inc.
Jerry Heath was only 12 years old when he had his first serious brush with pizza. Heath was invited to go to work for a day with his neighbor, Steve Jackson, the president of Hungry Howie's Pizza Inc., a pizza delivery and carry-out franchise. It was on that day, as he watched the dough being rolled and the pizzas being tossed, that his slice in life was cut out for him. He was infused with a love for pizza that remains with him to this day. Baby-sitting Jackson's children throughout his teens and later managing a Hungry Howie's location for nearly a year whet his appetite for the business.

So at the age of 23, Heath finally embraced his destiny. With financial backing from his dad, some work convincing those in Hungry Howie's corporate office that he was ready to open a franchise, and a good deal of courage, he left his hometown of Detroit in 1993 to open a Hungry Howie's in Jenison, Michigan, a city two hours away with loads of potential. Young and eager, he was far from alone as he embarked on the journey to business ownership. "[Corporate] offered quite a bit of support," remembers Heath. "If I had questions or problems, I'd call them and they would help me out. Being young and moving away and starting a business, I learned a lot."

While some doubted whether he would be able to pull it off--and many patrons couldn't believe that he was the owner--it was actually Heath's youth that got him through startup. His boundless energy sustained him during the first year, when building his franchise required him to work every single day. His youthful attitude enabled him to engage with and better understand the needs of his employees. "In the pizza business, you deal with a lot of younger people," says Heath. "Being younger [myself], I kind of related to a lot of my workers."

Now Heath is all grown up, and so is his business, which has multiplied to 11 locations in the Grand Rapids area and is estimated to bring in total sales of about $4.5 million this year. He has a team of managers and a supervisor to help him run his various locations, which is crucial now that he has moved to Milford, a city near Detroit. But even though he may be a couple of hours away from his stores and is only able to visit his locations twice a week, he's never too far from a good slice of pizza. "I have a little pizza oven in my basement," he says. "I can cook my own pizza at home. When I'm here, I'm eating pizza. I've never gotten sick of it."

Steven Taylor, 33, and Chris Smith, 35
Moe's Southwest Grill
At 29, Steven Taylor was in sales and running out of time. He had a life goal: to own his own business by age 30. But with less than a year to go, he still wasn't sure what type of business to start or how he would actually make it happen with only $30,000 in the bank. He did know, however, that he could get a head start by purchasing a franchise. "I was smart enough to know my own limitations," he says. "I couldn't just go out and start my own business without having exper-tise in some arena. I had read and learned about franchising; I knew the power behind it."

As an avid fan of Moe's Southwest Grill, a quick-service fresh-Mex restau-rant that he frequented on his lunch breaks, Tay-lor had a starting point, but he made sure to do thorough research by calling franchisees of various systems--including one Subway franchisee with 45 locations. That cold call to find out more about the Subway franchise system turned into a jackpot when the Subway franchisee was so impressed by Taylor's drive, eagerness and ambition that, incredibly, he loaned him $400,000--the amount needed to open a Moe's Southwest Grill location. And just like that, Taylor was well on his way to meeting his deadline.

In 2004, Taylor opened his first location in Columbia, South Carolina, with Chris Smith, a friend who has since become an invaluable business partner. Together they've opened four more locations and been recognized by corporate with the Market of the Year Award in 2006 and the Customer Service Award in 2007; four of their locations have been ranked within the top 50 in the Moe's system.

While their locations brought in a total of $6 million in sales last year, Taylor and Smith act like anything but young millionaires. Taylor sports a Casio watch from Wal-Mart, drives a 2000 Ford Explorer with 250,000 miles on it and describes himself and his partner as "workhorses, not show horses."

Humility keeps them focused. But they also credit their success to the way they treat their employees and run their systems. Taylor and Smith keep employee motivation up and turnover down by paying more than minimum wage and offering vacation time, health benefits, 401(k) plans and bonuses. Meanwhile checklists, time and temperature logs, and food cost and labor calculators are just a few of the internal controls they have in place to ensure a well-run store. "In the same way the franchisor gave us the system to run, we in turn create systems that we expect the managers to run," says Taylor. "And as long as they're running the systems, we're running an A+ store."

These franchisees wouldn't have reached this level if not for a certain feeling of invincibility inherent in youth. Having seen many other restaurants come and go during the four years he has been in business, Taylor now realizes the full extent of the risk he was taking. "Naiveté [was an advantage] early on," he says. "Being overconfident and young [and feeling] I could take on anything--could take on the world--really helped us out."

For more thoughts from our young franchisees, click here.