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3 Franchisees Who Tackled Adversity Reveal Their Secrets for Success

This story appears in the January 2015 issue of Entrepreneur. Subscribe »

Taking a chance on a community

Edward Barnett

Greg Shappell

Buffalo Wild Wings Grill & Bar, Los Angeles

Many businesses shy away from moving into inner-city areas like South Central Los Angeles due to concerns about market viability, vandalism and gangs, but when we were looking for a location for our Buffalo Wild Wings Grill & Bar franchise, my partner, Karim Webb, and I realized it didn’t make sense to look anywhere else. When you look strictly at the numbers, density and lack of competition, those areas have historically been underserved. 

So we got with the people in the franchise planning department. We understood the area and what was coming down the pipeline in terms of development in the next five to 10 years. Instead of going to another nonurban area to be just another among a plethora of restaurants, we’d open in Baldwin Hills and become the only national chain, sit-down restaurant in town within a three- to four-mile radius.  

From a business standpoint, we knew it was a winner, both from the competition aspect and because we knew and cared about the community. But we also knew we’d have to change people’s negative perceptions (real or not) of being on a certain street or in a certain area. Once you do that, and they realize the restaurant is the same quality and they feel safe, they’ll feel comfortable and will start coming in. 

That meant a bigger security cost than other restaurants might have. We had to evaluate whether we had the skill set to be able to engage the community in an appropriate way. You can’t just Google security companies in the area and go with the best price. You’ve got to find a company that has actually made inroads into the community and is familiar with the area and the people, and will respect all the different partners and stakeholders in the community. 

We’re very engaged in the community. We provide jobs for the people who live here. What many don’t realize is that we have 35 servers. We’ve got some young people who are in junior college and some single moms who are making upward of $50,000.

We’re committed to teaching and insisting upon integrity and a strong work ethic. We teach transferable skills like conflict resolution that will last beyond this job at Buffalo Wild Wings. We open the restaurant on Thanksgiving to serve meals to those in need, we raise money for scholarships, and we serve on the boards of several local community groups.

When Karim and I were childhood friends, we could never have envisioned that we’d be named 2014 California Small Business of the Year and create a successful model for opening inner-city restaurants. At our Baldwin Hills location—one of three we own—year-to-date sales are up 35 percent over last year’s. For the past two years, it’s had the highest year-over-year growth of any Buffalo Wild Wings location in the country and is still growing. One of our goals is to teach our employees to want more for themselves—even what they might have thought was not possible before they came into contact with us. 

Focusing on what matters

John Balkhi

Liberty Tax Service, Santa Ana, Calif.

My wife, Erica, and I purchased our first Liberty Tax Service franchise in 2007. By April 2013 we had grown to 14 locations. We had just gotten through a successful tax season when the unthinkable happened: The youngest of our three children, 4-year-old Nicholas, was diagnosed with rhabdomyosarcoma, a cancer of the connective tissue. 

We dove in to focus on him and the immediate needs he had. For me, everything reflects upon your family and the health of your family. So it’s really challenging to propel the business forward when you know that there’s such a tragedy going on within the household. 

Fortunately, the diagnosis was stage I. Doctors were able to go in and get the cancer out, and now there’s been no evidence of disease for 17 months. But that didn’t come very easily. Nicholas had to go through 48 weeks of chemotherapy, which was incredibly hard on all of us and also on the morale of the business. 

We were somewhat private about the situation, but we did share news of the diagnosis with our employees. I explained that this was an opportunity for us to reflect on what life really means and what’s really important. It changed the credo within our organization from “financials, financials, financials” to more of a healthy and collaborative environment where we help one another achieve our individual goals. When we heard that other employees had kids suffering from a cold or a challenge or any kind of illness, it resonated more with us. 

The whole experience has made us more connected with our staff. We have 16 locations, and we’re looking at opening three more within the next year. We’ll likely hire around 700 people over the course of the year. Now we get out there and make more of an effort to put faces with names. We want to maintain that personal touch that a small business has, even though we continue to get bigger every tax season.  

Facing down a downturn

Steve Alie

Salsarita’s Fresh Cantina,

I opened my first Salsarita’s Fresh Cantina in 2006 in Allen Park, Mich. I wanted a concept that was different from all the pizza, sub and coffee shops around, and the “fresh Mex” theme seemed perfect. It did well, and I had plans to expand. In 2008 I opened another restaurant right in the General Motors headquarters in downtown Detroit. Things still weren’t too bad as far as the overall

But within a year, things were different. In 2009 GM filed for bankruptcy. I had to hunker down and cut back as much as I could without sacrificing quality. Being in the headquarters building did help—we had a built-in client base. But many tenants were suppliers that catered to GM, and they started laying off people. Building occupancy dropped almost 50 percent shortly after I moved in. As the tenants went away, so did the retailers; many of the other restaurants in that food court didn’t make it. 

We didn’t make unnecessary cuts to food portions, and we emphasized customer service. I worked more hours myself and had to cut some employees’ hours, but not during peak times when it would affect service. I shifted my to vehicles that cost less, like social media. I talked to my vendors and explained the situation, asking for better or easier terms, and also shopped around and found better deals on some things. I talked to my landlord, and he agreed to drop my rent if my sales fell below a certain level. And the franchisor agreed to work with me on royalty payments. They were really there for me, offering support. 

I tried my best to provide quality food and service and to cut costs at the same time. I just stayed the course. It wasn’t the first business challenge I’d faced, and you learn from the past. You can’t lose focus on what makes you successful. If there was a demand for your service prior to a downturn, focus on the reasons people bought from you and protect those. 

When things started to stabilize, the cuts I’d made allowed me to get back on my feet faster. My business has been growing substantially. I’m having my strongest year ever, and I’m getting ready to open another location.  

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