The Business Secrets of the Largest Hardee's Franchisee in Florida
Franchise Players is Entrepreneur's Q&A interview column that puts the spotlight on franchisees. If you're a franchisee with advice and tips to share, email firstname.lastname@example.org.
Jack Kemp may have gone to Harvard Business School, but he believes he learned his biggest business lessons prior to grad school. As a young lieutenant in the Army, Kemp learned and lived by the motto "make it happen." Today, he is the largest Hardee's franchisee in Florida. Here is what he has learned.
Name: Jack Kemp
Franchise owned: With 40 Hardee’s restaurants throughout Florida including Tampa, Gainesville and Jacksonville, I am proud to be the largest Hardee’s Franchisee in The Sunshine State.
How long have you owned a franchise?
In July 2013, I moved from Boston to Florida to purchase 10 Hardee’s restaurants. In just two years, I have gone from owning none to owning 40 individual Hardee’s restaurants. My goal is to build the business to 100 Hardee’s restaurants for Phase Three Star, my company, throughout the state over the next 20 years.
I knew I wanted to own a business and was looking for a career that would allow me to leverage my skills from both my time at West Point and in the Army, as well as my time working in finance. Basically, I was also looking for something that combined the team-based, exhilarating and challenging environment in the Army, along with the intellectual challenges of pulling together financing and managing a business. I discovered that franchising was the perfect combination of the two for me!
I also feel like I am contributing directly to the community, by offering not only a great product at a great value but also by also providing jobs and upward mobility to people. To me, it’s just as rewarding from a service perspective as my time in the Army.
What were you doing before you became a franchise owner?
My prior ‘business life’ was really three distinct phases: the Army, business school, and finance. Immediately before embarking on my Hardee’s franchise adventure, I served as vice president and CFO for a $600-plus million segment of a public financial services company. Prior experience in the corporate world included M&A work in both corporate development, and in investment banking. Before that, I was fortunate to have been accepted into and attended Harvard Business School, where I earned an MBA and transitioned into civilian life. But the foundation for my career was my five years in the Army as primarily an infantry officer. I had the opportunity to serve in Germany, and deploy and serve in both Kosovo and Iraq. My experience in the Army taught me the value of leading by example, setting and enforcing standards, and frankly just getting stuff done. I think the combination of my finance experience after business school, and my leadership experience prior gave me the confidence to make the move into the entrepreneurial world of franchising.
Why did you choose this particular franchise?
Ironically, when I first started looking at franchises, one of the first things I said to myself, was “anything but restaurants.” As I learned more about the business, the more I realized it was a good fit for my skills and what I was looking to do. Once I settled on the burger business, it really became about the food.
Here’s a secret: food is very important in restaurants! I happen to think that Hardee’s has the best food in quick service burgers; our taste and flavor is comparable to sit down restaurants, but we serve it quicker and cheaper. I also really liked the direction of the brand. We’ve been very innovative: the first burger chain with an all-natural beef burger, as well as being edgy and interesting. Finally, the overlap of the brand and the growth opportunity in Tampa was too much to pass on. There’s lots of room for growth for this brand in the area.
How much would you estimate you spent before you were officially open for business?
I bought an operating business, so there was cash flow on day one, so there was not a great deal of hard dollar pre-opening costs. My biggest expense was really human capital: my time pulling together financing and putting the deal together. Well, that and lawyers!
Kidding aside, one of the things that was very attractive to me about buying an existing business in the franchise space was the transparency on transaction values; you generally know you should be paying between four to five times earnings before interest, taxes, depreciation, and amortization, and putting between 20-30 percent down. With my M&A background, I spent a good deal of time 'kicking the tires' on the cash flow I was buying, and ensuring I thought I had a credible plan to grow it.
Where did you get most of your advice/do most of your research?
For more than two years, I did extensive research on quick service restaurants, speaking to bankers and brokers, and people in the industry, and evaluating tons of data and information from industry trades, conferences and materials. In fact, I looked at 74 different fast-food burger chains before settling on Hardee’s. I think there’s no substitute for just talking to as many people who are doing what you want to be doing.
What were the most unexpected challenges of opening your franchise?
Part of the reason I spent so much time on the front end was to avoid nasty surprises! Having said that, we had our share of unexpected challenges in the first few days from unruly guests, to employee issues. But, I’d have to say the biggest challenge was remembering to stay balanced. As much as I love the business and what I’m doing, I have to remember the whole point is to provide for the kids!
What advice do you have for individuals who want to own their own franchise?
If it’s something that you are passionate about, and you’ve done the appropriate diligence, do it. You are never going to be 'perfectly ready' and nothing will ever fall into place as planned. One of the great things about franchising generally is that you can find the right fit for what you are best at -- trust yourself and make it happen!
That’s a lesson I learned in the Army as a young lieutenant: make it happen. Said differently, Harvard Business School was great, but I firmly believe that it was my time in the Army that best prepared me to take risks as an entrepreneur. Other than possessing a strong work ethic, I encourage people to take away valuable lessons from all their endeavors. Everything is a learning lesson that can be applied to business.
My advice is to do your research, go with your gut and persevere. Trust that you have the business acumen and skillset to be successful and lead your team in the manner that you would want to be treated. I believe that my willingness and aptitude for leading from the front, 'getting my hands dirty,' coupled with my ability to think strategically and analytically have helped me to be a successful franchisee.
What’s next for you and your business?
I am looking forward to continued growth and rapid expansion throughout Florida. We are taking it one restaurant at a time, but we are looking forward to restaurant number 100!