Franchise Players: How This CEO Manages 170 Franchised Locations Across 6 Brands
After emigrating to the U.S. from Lebanon when he was 17, Tony Lutfi began working as a cook at Jack in the Box while attending college in Northern California. After moving up through the ranks, he then took on management positions at Rax and Arby's. In the early '90s, he became an Arby's and Long John Silver franchisee, with five restaurants. Today, he has grown his company – Marlu Investment Group – to nearly 170 franchised location with six brands in eight states. Here's how he manages it all.
Name: Tony Lutfi, CEO and president of Marlu Investment Group
Franchise owned: Owner operator of nine Sears Outlet stores, 17 Sears Home Appliance Showrooms and 3 Sears Appliance & Hardware stores located in California, Missouri, Kansas and Texas. Additionally, we own and operate 53 Arby's, 47 Church's Chicken, five Sizzler, five Little Caesars and 21 Jack in the Box restaurants in California, Arizona, Washington, Oregon, Texas and Nevada.
How long have you owned the franchise?
I started franchising in 1997 and have grown our company to 170 franchises that are owned and managed.
Franchising is a true partnership between the franchisors and the franchisees. The franchisors invest in marketing the brand, creating programs that help deliver to the needs of the consumers, and developing product through innovation, testing and researching consumer trends. A franchisee does not have the necessary resources to be effective or efficient in gaining the necessary knowledge about the industry and the trends.
What were you doing before you became a franchise owner?
I was a vice president of operations for a large Arby's franchisee in California.
Why did you choose this particular franchise?
Since we have several franchises, we have a filter that we use to select the brands. We want to be a part of a brand that has:
- been around for 25 years or longer;
- faced failure at least once and survived;
- a strong value proposition;
- open territories in large metropolitan areas where population is growing; and
- a strong and committed management team.
How much would you estimate you spent before you were officially open for business?
Depending on the size of the business and the scale, but generally it is an average of $10,000 per location in doing the necessary research. We typically do not acquire single businesses and in doing so, we become much more efficient in our investment prior to starting the business.
Where did you get most of your advice/do most of your research?
I had a great mentor and a partner years ago. I owe the deceased Bill Brusslan a great deal of gratitude as he was a great teacher and a dear friend.
What were the most unexpected challenges of opening your franchise?
Raising capital is always a challenge. The hardest time was during the recessions after 2001 and 2007.
What advice do you have for individuals who want to own their own franchise?
I would suggest that the candidate does the necessary research, including asking current franchisees about management and industry trends. I would also advise them to develop some guiding principles that they and their teams believe in. These principles should assist in making better decisions for their businesses. When we make strategic decisions, we consider the brands, the employees, the customers and the profit as the main pillars for our businesses – all being very important to the longevity of our business and the satisfaction of the internal and external customers.
What’s next for you and your business?
I owe a great deal of gratitude to the many individuals in my organization who have repeatedly sacrificed for the benefit of the company. It is my duty to continue to grow the organization so to create more opportunities for all the key people who have helped get to where we are today.
My duties now are focused on:
- Creating opportunities;
- Managing against risk;
- Developing future leaders;
- Inspiring current leaders; and
- Removing obstacles.
Kate Taylor is a reporter at Business Insider. She was previously a reporter at Entrepreneur. Get in touch with tips and feedback on Twitter at @Kate_H_Taylor.