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Episode 9  |  59:25 min

S2:EP9 - Dan Rowe, Restaurant Franchisor Extraordinaire

Episode 9  |  59:25 min  |  12.14.2020

S2:EP9 - Dan Rowe, Restaurant Franchisor Extraordinaire

This is a podcast episode titled, S2:EP9 - Dan Rowe, Restaurant Franchisor Extraordinaire. The summary for this episode is: In this episode, I interview Dan Rowe, the CEO of Fransmart and Co-managing partner of Kitchen Fund. Dan Rowe specializes in finding the next big thing and for over 20 years has discovered and grown many major brands including: Five Guys, QDOBA Mexican Grill and The Halal Guys. Under Dan Rowe’s direction, Fransmart’s current and past franchise development portfolio brands, they have opened more than 5,000 restaurants worldwide, and facilitated franchise investments that have cumulatively generated over 1-billion in revenues to date. Dan definitely knows how to spot a winning restaurant brand and this episode we’ll explore some of those winning restaurant qualities. So let’s dive in!
Takeaway 1 | 02:25 MIN
Marketing Budget for a Restaurant Franchise
Takeaway 2 | 01:31 MIN
Restaurant Revenue Streams

In this episode, I interview Dan Rowe, the CEO of Fransmart and Co-managing partner of Kitchen Fund.

Dan Rowe specializes in finding the next big thing and for over 20 years has discovered and grown many major brands including:

Five Guys, QDOBA Mexican Grill and The Halal Guys.

Dan definitely knows how to spot a winning restaurant brand and this episode we’ll explore some of those winning restaurant qualities.

Brett Linkletter: In this episode, I interview Dan Rowe, who's the CEO of Fransmart and the co- managing partner of Kitchen Fund. Dan Rowe specializes in finding the next big thing, and for over 20 years, he has discovered and grown many major brands you may have heard of before including Five Guys, Qdoba, and The Halal Guys. Under Dan Rowe's direction, Fransmart's current and past franchise development portfolio brands, they have developed over 5, 000 restaurants worldwide. It's pretty incredible. And they've facilitated franchise and investments that have accumulated over$ 1 billion in revenues to date. Dan definitely knows how to find a winning restaurant, and in this episode, we'll explore some of those winning qualities, so let's dive in. Hi, my name is Brett Linkletter, CEO and founder of Misfit Media, the best damn restaurant marketing agency on the planet. Here at Misfit, we help restaurant owners grow and scale their business through strategic online marketing practices. Right now, you're listening to our podcast, Restaurant Misfits, where we'll discuss all things related to restaurant marketing, management, and everything else in between growing a restaurant business. This podcast is also brought to you in collaboration with Total Food Service. For over 30 years, Total Food Service has provided the restaurant and food service industry with exclusive interviews to the latest news on products, trends, associations, and events. You can sign up for a free monthly subscription by visiting totalfood. com today. And from all of the misfits over here, we hope you enjoy the show. Cheers. Hey Dan, how are you doing?

Dan Rowe: Doing great, thanks. Thanks for having me.

Brett Linkletter: Absolutely. Thanks for joining us. Thanks for joining us. Dan, you have such an amazing background. You have over 20 years of experience in the restaurant space. How did you first get into this space overall?

Dan Rowe: I was a franchisee. Well, I mean, I washed dishes at Carvel ice cream. I was a short order cook at one of those beach concession stands down on Huntington Beach. So I've been in the restaurant business, but when I was 23 years old, I bought a franchise. I bought a restaurant franchise and didn't know what I was doing, but it was my first foray. And really, the way that that went was I used to sell software and fell in love with this... I went out to DC from Southern California all the time and fell in love with this little bagel bakery shop. I'd never seen one out in Southern California where I was from, so I wanted to bring it out there. I wanted to buy the franchise and bring it out there. I was going to go in on it with a buddy of mine, and he and his wife wanted to move to Denver. And so I said, " Great, we're going to open up a bagel shop in Denver," which we did. So we opened up the bagel shop. This chain only had six stores, so little did I know at the time that a six- unit franchise order doesn't have a lot of support, doesn't have a lot of service, had no name recognition in Colorado. But we were on our own, and we were super successful. I made a deal with those guys and I said, " Look, if I help grow this chain outside of Denver and I prove that it's successful, I also want to do your franchising." And they said, " Fine." So I grew them from six stores to 200 locations and sold. We sold to the people that owned Popeye's and it was a nice little payday at still in my 20s.

Brett Linkletter: Wow.

Dan Rowe: Yeah. And then we found our store in Denver, one of them was across from the original Chipotle, so Chipotle won. We couldn't talk those guys into working with us, but Qdoba copied them. You ever heard of Qdoba Mexican?

Brett Linkletter: Absolutely.

Dan Rowe: Qdoba copied them and they each had one location open. Chipotle was about to open up two more, but Qdoba had one. We teamed up with Qdoba, put some money, helped them launch franchising, and grew those guys and I think we sold the first 300 or 400 franchises and then sold that. Got them up to around 100 stores give or take and then sold that company to Jack in the Box. And so-

Brett Linkletter: Wow.

Dan Rowe: Yeah. So at that point, I was two for two and thinking I was a lot smarter than I was, so I went out and figured any brand I touched, I could make it another couple hundred- unit chain. Went through some rough years of realizing that that wasn't the case, but then got smart and in 2000, I created Fransmart. And so instead of doing one company at a time, I did more of an incubator, smarter approach to it, and one of our first brands was Five Guys. So back when Five Guys was still mom, dad, five sons, they had four locations. He signed the lease for his fifth, and then he wound up actually assigning that location to our partnership. So we wound up becoming one of the first franchisees. Fransmart launched the whole national franchise program for Five Guys.

Brett Linkletter: Wow.

Dan Rowe: And so that really became our niche. So our niche was these early stage emerging brands. A lot of people get nervous about that because it's early stage. It's sort of like a IPO or whatever, getting into a tech early. I mean, it's a high risk, much higher reward when they hit, and that's kind of the space that we found for ourself. We get into these brands that no one's ever heard of. Usually, we get traction in them because their economics are so compelling that it sort of makes up for the fact that they seem risky because they're not as well put together. But I had a lot success with growing early stage emerging brands by following a couple of tricks...

Brett Linkletter: Got it.

Dan Rowe: ...and it seem to work. We've sold over 5, 000 franchises around the world until now.

Brett Linkletter: Wow. That is incredible. Oh my God. Wow, thank you for that awesome intro, Dan. I love it. Okay, so obviously, early on, you had a lot of success. You said just in your 20s. You said you got your first franchise at 23, which is fantastic. Amazing. You say that you have a couple tricks. I mean, how do you spot out the winners from the losers? What makes a restaurant appealing to you?

Dan Rowe: I mean, a lot of it is the unit economics itself. So are the sales high? Do customers like it naturally, organically? You go to any food court, you go to any strip center, any food hall, and some restaurants are busier than the others. And so we look at a concept that is just busy. So when we found Five Guys, Five Guys didn't even use a point- of- sale system, they never did inventories. They couldn't really tell you the business side of the business, but they had a line out the door every day. When I got to Qdoba, I mean, they'd only been around for 90 or 120 days when I got there, but there was a line out the door every day. So that's customers voting with their wallet, telling you that they like the concept. I can figure out how to write a manual or to improve food cost, improve labor cost. I can set up national pricing as well as anybody, so I know that that's just a way to sort of put more structure in place. But the one thing that we look for is are the unit economics there. If we brought this to a franchisee... the franchisee be so compelled to jump in early? But I think a lot of it starts with financial. They just have to be profitable. And then beyond that, we look at things like can the management team handle it if I go grow this thing to 100 units? Are they going to be able to grow with it? Are they going to implode? Were they open to bringing in outside people, some other people? Do they have the capital? If they don't have the capital, we have capital, so would they make a good investment for us? We look at real estate. That's really important, too, because you could come up with an amazing burrito concept today, but it's like you're not going to put one anywhere because there's a Chipotle and a Qdoba and Moe's and two or three other people in all the best sites. I think right now is not the time to come up with another fast casual burger guy because they're just oversaturated.

Brett Linkletter: Got it.

Dan Rowe: We look from the real estate perspective, like, what are landlords dying for, what have really good unit economics. We have a big batch of franchisees. We have over 100, 000 people in a database and we're constantly sampling them for what they're looking for.

Brett Linkletter: Got it.

Dan Rowe: So a lot of times, whenever we take on a new brand, we already know where our new franchisees are coming from. Have you ever heard of Halal Guys?

Brett Linkletter: Absolutely.

Dan Rowe: Yeah, The Halal Guys. We got involved with those guys when they were street carts, and my premise was just there's a billion and a half Muslims and there's no brand, so there's nothing. If I go to the average Starbucks and I ask any customer in there to name Muslim actors or singers or apparel brands, nothing. You have a billion and a half people and there's no brand. And I love Middle Eastern street food...

Brett Linkletter: Got it.

Dan Rowe: ...so we just figured that's going to be a big thing. We looked at economics. We went out and sampled a bunch of real estate, a bunch of landlords, and we're like, " What do you think about this concept if I make the Chipotle of Middle Eastern?" And so we got green lights all the way. Then I went to a couple of my internal folks and people that were already in our ecosystem and I said, " We're going to start franchising this," and bang, right off the bat, we had some big franchise groups step up and they opened the brand and proved that the concept would work. We opened up in Chicago and in Southern California, and those stores were just as successful as New York, so we knew. So there's a lot to it, but you kind of have to know. No franchisee wants to be the only franchisee of a chain. They want to know if they get into a brand that it's going to be the next big thing so that they can build it, and then they can even resell it. That's how you get rich in the franchise business.

Brett Linkletter: Absolutely.

Dan Rowe: crosstalk build one or two.

Brett Linkletter: But let's go back to... Obviously one of the first points you mentioned was you obviously need to be profitable, right?

Dan Rowe: Yeah.

Brett Linkletter: I think for so many restaurants that we speak to, profitability and margins they look for... I mean, there's a wide range, but for you guys specifically, I mean, what is profitable to you guys? What's the margins you guys might be looking for on food cost to everything else?

Dan Rowe: Well, really, we go past that and we say, what's the ROI for the franchisee? Because at the end of the day, all that matters, but not really. I mean, you can have a low food cost but a high labor cost and it doesn't really help the ROI. We look at four- wall ROI, and so we like the fact that a restaurant concept that costs$ 500,000 can generate$ 200,000 a year of free crash. That's a 40% ROI and that sells. And so that same$500, 000 concept that generates$ 200 grand profit, now what if you can go do some conversions and build those things for$ 400,000, $ 300, 000.

Brett Linkletter: Got it.

Dan Rowe: All of the sudden, you've got a 60, 70% ROI. That's the kind of numbers, I think, that an emerging brand has to have right now. You've got to have 40 or 50% four- wall profit for people to jump in right now.

Brett Linkletter: Got it.

Dan Rowe: And especially with conversions. Where you live in LA, it's no different than DC. I'll be New York City tomorrow. There's prime home- run locations that are just sitting there vacant that someone could go into a build a conversion. They could manage-

Brett Linkletter: When you found something like The Halal Guys... I mean, you said you found them when they were literally street carts. How are you gauging that they're going to be something really profitable like that to get you that 40, 50% four- wall profit?

Dan Rowe: crosstalk

Brett Linkletter: I mean, if it's so early on, or...

Dan Rowe: Yeah, we engineered the model to be... We basically stacked the deck. The first store was a cart, so we knew that we weren't building 3,000 or 4, 000- foot stores. The first store we built in Chicago was 1, 000 feet and did over$ 2 million it's first year in sales.

Brett Linkletter: Wow.

Dan Rowe: And so when you're only crosstalk 1, 000 square feet, you're spending a couple hundred thousand dollars, means a$2 million store makes that back in a few months. And then Southern California, they're famous. There's pictures of that store that had lines around the block down Bristol. That was an inline, reasonably inexpensive store to build and it did... I mean, gosh, maybe 10:1 sales to investment ratio, 8: 1. And so we know. You've got to engineer your stores. You don't want to spend any more money than you should spend opening up a restaurant because everything impacts your ROI. And so many times, franchise owners get that wrong and they build these vanity projects, these sort of trophies to themselves on franchisees' money and they ruin the economics and franchisees don't want to keep building.

Brett Linkletter: Yeah. So it sounds like for you guys, I mean, you're not just finding a great concept that you believe can scale that you think you can help, but you're also obviously providing a lot of... Are you guys helping on the brand side, too? The brand, the marketing side, all those other things as well? Talk to us about that.

Dan Rowe: Everything. We basically start with the end in mind. I looked at Halal Guys and I saw that it's a thousand- unit chain and I said, " Company's going to need a couple of corporate stores," so I helped them with that. I said, " Franchisees are going to be building all these territories, and so I'm going to help the franchisees hunt everything it takes, from real estate to people planning, and then on the franchisor side." It's like you just never stop having these conversations about scaling the franchise or/ and scaling the franchisees. But we're advisors, strategists. We've kind of seen it all. We've made every mistake in the world. I mean, we've got dozens of brands we work with, plus we're also investors in a whole bunch of other brands through Kitchen Fund, and you just sort of see these best practices. Somebody's doing something better than everyone else that we mosaic in our best and own way and then we share that with the brands. And so we're constantly advising our franchisors and our franchisees. A lot of the things when you sell a franchise, we sell... We never do mom- and- pop deals. We always sell territories. And so in the beginning, you're really talking about a franchisee opening up a new store in a brand new market, which has a lot of supply line and training implications. Then at some point, you have to teach that franchisee how to run a multi- unit business, which is completely different because they now have to build an organization that does everything. They're not thinking that. Originally, they're thinking like an entrepreneur, " I'm hands on," and then they've got to be hands off in order for the wheel to turn right. Then at some point, the funny thing is, franchisees, after four or five years, start to get bored. They start to think about doing other things, or they start to feel like, " Gosh, I'm paying all this money to the franchisors. What am I getting for my money?" And so that on top of this sense that you're just not the shiny new toy in the toy box anymore, these restaurants after four or five years start to atrophy and the relationship starts to atrophy. And so you have to know that that's coming to plan for that.

Brett Linkletter: Absolutely.

Dan Rowe: And so we have a lot of tricks in our book that basically help that. But it's like we always start with the end in mind and we just know. Over 10 years, here's how all of these different relationships are going to go, and based on what's happening this year, we already know what's going to transpire next year from that. So we're constantly staying in front of what our franchisors and franchisees are going through.

Brett Linkletter: Got it. Got it. Wow, that's incredible. I mean, you guys, obviously, you've had so much success over and over and over again. You mentioned, okay, you always sell territories. You obviously never sell mom- and- pops. If you're selling a territory, what's the numbers you look for in a specific territory? I guess it's kind of dependent, right?

Dan Rowe: So-

Brett Linkletter: I mean, if you're looking to sell to someone, what's the number of units that you're looking for?

Dan Rowe: An ideal franchisor, let's say that they have 500 franchise locations. We really only want them to have 50 franchisees, maybe 100 franchisees. So five or ten units each is perfect. So we basically start off, we give all of our franchisors these models and we say, " Look, what happens if we sell one deal a quarter the first year, one..." And they're all five units or ten units. " What happens if we sell one every other month? And then the third year, what if we sell one a month?" And we start to build this model and we just show, because you think about, I've got restaurant experience, I've got some money. Somebody sells me their franchise from LA and I'm out here in DC. There's still a lot of handholding because I've never opened that restaurant before. So there's still a lot of handholding on my first unit. Then, my second unit, it's like half the handholding, then the third unit, half again. So, I mean, you've got this sort of shrinking list of handholding. The franchisees and the royalties go up, but the effort per dollar goes down. So that's where all the profit is. So we show that to franchisors and we sort of say, " Look," and we're really jumping on our franchisors when we sell a five to ten- unit deal and the franchisees are not feeling the love after one or two stores. They don't want to keep building more stores. It's like, you're ruining your model. Your ability to build this business and sell it for a lot of money really is your development schedules and the development schedule integrity and your royalty rates. We do the same thing for franchisees. There's this book I read, first book on business, still the best book on business I've ever read, called The Richest Man in Babylon. It talks about this idea of build something that creates free cash, use that free cash to build more things that make more free cash, and on and on and on. And it really, in this stage, helps you get that snowball effect of compounding returns. And so we give a financial model to our franchisees and sort of say, " Look, try to delay your gratification for a year or two. Build your store, make your profit, reinvest that plus a little less money out of your pocket and reinvest that, a little less money out of your pocket in your third store. At some point, you're going to hit that critical mass where you can self- fund your growth. You can self- fund your growth, and then as a franchisee, you're going to want a bigger runway." And that also helps that issue of franchisees getting bored with you after four or five years. If a franchisee knows that they're on pace to open one or two, or they're going to put up the money for two or three stores and those are going to get them to 10 stores, they're going to get that cashflow from 10 stores, or they've just gotten an asset that's just several times bigger than they originally thought of to sell.

Brett Linkletter: 100%.

Dan Rowe: Yeah. All the money I have in the bank has come from selling something. It's not come from I crosstalk or something. And so we really work with our franchisees to say, " Look, I don't care how much money you have today. Tell me your vision. How can I help you get to this place two or three times bigger than you were originally thinking." Now you've got their attention longer, so they stay more engaged with you longer. So we give the models to the franchisors, we give the models to the franchisees.

Brett Linkletter: Interesting.

Dan Rowe: Frankly, that helps a lot. And then it builds this...

Brett Linkletter: But that's-

Dan Rowe: ...interdependency between the franchisee and the franchisor. They both need each other and they tend to fight a lot less knowing that the franchisor ...

Brett Linkletter: Wow.

Dan Rowe: ... andthe franchisee need each other to get there.

Brett Linkletter: That was my next question. How do you build this trust between the franchisee and franchisor? I mean, no, that's great. I mean, that's brilliant. Obviously, they do need each other, obviously. That's the goal. They're supposed to work together. My next question is, how do you build that trust? Because, I mean, I'll tell you right now. As an ad agency serving restaurants, one of the biggest pain points that we deal with is just the conflicts between their franchisees and franchisors. The back and forth, the fighting over, " Well, they won't let me do this kind of marketing. They don't let me do this with my menu. They don't let me do this X, Y, and Z." There's constant battle, I feel like. But it seems like for you guys, I mean, having the end in mind, recognizing that they need each other to get to this point... I mean, that's incredible what you guys have done.

Dan Rowe: Yeah. It really helps because we've had those issues that you were mentioning. Those are really small things. In the big scheme of things, they're small things, but they're huge. And so there are people spending so much of their energy and really losing brain cells over something that small, and it's a symptom of a bigger problem, is that that relationship... those guys are not synced. They're not synced, they're not balanced, they're not both trying to get to the same place, they're not trying to help each other. In franchising, you only get rich helping other people get rich. The franchisors have to realize if you're not helping your franchisees get wealthy, you're never going to get there. You're basically going to be in quicksand.

Brett Linkletter: Yeah. Got it.

Dan Rowe: And same way with franchisees. The franchisees have to understand, too. It's like, " Hey, this is not my company. I don't make all the rules. I bought into the system. I'm not always going to like everything every year, but as long as me and the franchisor are on the same page about getting there." I mean, because you've got franchisees... we've had them, too... who say, " The franchisor sucks. I want to do it this way." We've let them and they were wrong, right?

Brett Linkletter: 100%.

Dan Rowe: So it's like, they crosstalk We're not always right.

Brett Linkletter: 100%.

Dan Rowe: A lot of it comes from the very beginning of the relationship. You have more hard, more heartfelt conversations with your franchisee. You say, " I don't think you have the right people. Here's the strategy. What's your outcome? I want to build it. I've only got the money for three or five, but I want to build 20 or 30." Think about how valuable a 20 or 30- unit franchisee is for the franchisor and what that says to the rest of the world, like the buyers, the investment bankers that are going to come buy that guy's concept if they're able to get 20 or 30- unit franchisees. Every franchisor should want these big franchisees. And so you have conversations more like you're friends, more like you're partners, not really a necessary evil. And I see that. There's a lot of franchisors that get into franchising. The minute that they sell the franchise, they forget about the upfront franchise fee. They got that money last quarter, they spent it literally the hour they got it, and a year later when they need to do the work for the franchisee, they don't still have that money sitting in accounts. So every time that franchisee needs something, they look like they're a pain in the ass. That's not the way to look at it at all. You have to look at the longterm value of a franchisee, which if you get a franchisee of a typical store does$1 million, they're paying you like 8 or 10% between royalties, marketing, supply line profit. You're talking about 80, 000 bucks a year. If it's a five- unit deal, he's paying you$400, 000 a year over 10 years. That's$ 4 million a year. It's like, stop looking at that guy like he's a necessary evil. Look at that guy as 100 of those guys helps you sell your company for$ 100 million. And for a franchisor, franchisees prepay you to come in, they pay you every week to stay, they follow all of your whims and all of your larks... and not all of them are right. They help grow the asset value of your company, and they basically get none of that upside. And so franchisors, I think, need to get their head on straight. But I do think that it goes both ways. You need to be part of your franchisee's success. You have to care that they get wealthy. They have to know that you care about them getting wealthy, and you have to have those conversations.

Brett Linkletter: I love that. I love that. There's another book I was reading lately. It's called The Diamond Cutter. It's really interesting. It's actually a book on business and life by the Buddha, which is really interesting. And one thing in the book they mention is just, hey, if you're low on cash or you're having issues money- wise, try to be more generous, try to be more giving, try to make everyone rich around you and therefore, you'll become rich, too. Like you mentioned yourself, right? What'd you say? You said you only get rich by helping other people get rich. I mean, you need to have that abundant mindset, so I think you're totally right. Creating this conflict between the two is just stupid and it's not helping anyone at the end of the day.

Dan Rowe: Well, and it goes with your staff. If you see a franchisor getting wealthy and then all of your staff that are helping you get there are basically being marginalized, you're going to have turnover. It's like, in the big scheme of things, why not pay people a little bit more? Why not give them a little bit of the upside, a little bit of the...

Brett Linkletter: 100%.

Dan Rowe: If there's going to be a liquidity event, so what if you get two thirds of a much bigger number than you were going to get on your own? You've got a whole bunch of people plus karma. Anyways, I feel that way. But we have a bunch of people in Fransmart been here over 10 years.

Brett Linkletter: Amazing.

Dan Rowe: We pay people well. We treat them well. We let them participate in the upside. It's like, who cares? Let's all make as much as we can. Let's all do really, really great work together and then get the upside. But same way with franchisees and franchisors. It's like, I just don't understand, but it happens all the time where they get so distracted with little teeny things and they forget the big picture goal, you know?

Brett Linkletter: 100%. Dan, you mentioned marketing and franchise fees and these things. When it comes to marketing for you guys, how do you guys typically budget? I mean, what percent of revenue typically goes to a marketing budget, and what do you guys typically do?

Dan Rowe: So a franchisee typically spends$ 15,000 or $20,000 upfront on the grand opening marketing, and then they spend 2% to a creative fund that goes to the mothership, and then they spend 1% on local store marketing. And then any vendor rebates or kickbacks, which there's always a ton of those. Those generally go into the creative fund, the worldwide fund.

Brett Linkletter: Got it. Got it. So one more time. You said$ 15,000 or $20,000, that's up front on marketing?

Dan Rowe: Yep.

Brett Linkletter: That's to start. And what typically goes for that? I mean, that's the launch, obviously. Do you guys have a typical launch strategy that you guys pursue, or how does that look?

Dan Rowe: Yeah, it's basically your grand opening. So it's the couple weeks before you open to the couple weeks after you open. It's to generate trial. So in the restaurant business, there's only three ways to generate revenue, which is brand new trial, repeat or your frequency, or driving your check average. That's it. There's no other ways to make money. And so all of your marketing in the beginning needs to generate trial, brand new people coming to try your concept. Then your second two things, building your check average, all comes from training. So when I was at Five Guys, it's like I would sit there and watch... and this is early on. But I'd watch how many people ordered a burger and then weren't asked about fries or a Coke. And you assume people want burgers, fries, and Coke. Or any brand... I mean, I could take it to a sandwich example, or any other example. But it's basically suggestive selling, menu engineering... there's so much strategy in menu engineering. Then the last part is the repeat and the frequency. Do people want to come back? Do they need a coupon or a Groupon... if you remember those... to come to the restaurant, or did they go and they like it and they want to come back? Well, those two are operational things. So the first thing is trial. So usually, the first 30 days, it's all about generating trial, but the four- walls marketing, the marketing that's probably the most important is, " Okay, I spent all this money and all this creativity with influencers and social media and PR and all these other levels that we pull to get people to come try. How was their experience?" And so more energy needs to be put on making sure that the experience is right so people want to come back.

Brett Linkletter: Got it.

Dan Rowe: And then the ongoing 2% and then the 1% local, it's usually continues to do trial or limited time offers or those kind of things. But then people so many times forget about suggestive selling or things that really just getting the operations right... I mean, think about In- N- Out Burger or Starbucks. It's like, well, there's lots of other coffee concepts. Why do people keep going to Starbucks? There's a lot of other burger places, but there's something about In- N- Out Burger that just sort of does a little bit better than everybody else.

Brett Linkletter: Absolutely.

Dan Rowe: Those are it, but I'm sure you've got all the tricks in the book for marketing, too, driving people to return.

Brett Linkletter: 100%. No, but I like how you mentioned up front the trial marketing, because I think for us, for example, our policy is whenever you're reaching someone for the first time, whenever you're... It's the most expensive to acquire a brand new customer, obviously, right?

Dan Rowe: Yeah.

Brett Linkletter: If we're trying to get someone to come in the door that's never been there before, how do we get them to stop, take action, come in store, give your restaurant a shot? And oftentimes, giving away something for free, some kind of promotional offer, is an easy way to do it. A lot of people, though, have some kinds of issues giving away free items or promotional items or whatever the case to brand new customers. What would you tell them? I mean, what's your mindset on that?

Dan Rowe: We don't. We don't typically like to give away free food and we don't like discounts. I mean, sometimes you have to do them, especially where you've had a restaurant that's been in the market and not run well and you need to do some things to bribe people to come back in. But the truth is that these brands should have enough cool things about them to market that you don't need to market it on a discount. If you've only got customers coming to you because you've got a discount, I don't think that you have a model that's ever going to sell. So it's got to be something that people want to have. So for us, we put a lot of effort into awards and accolade and really sort of getting other people talking about us, and then that's stuff that we market, right?

Brett Linkletter: Got it. But when you mentioned trial, what stuff goes into the trial stuff? I mean, especially someone who's early on, before you have any accolades. Maybe you're starting out, maybe it's your first couple locations.

Dan Rowe: I can tell you. It was a lot of PR. Like at Halal Guys, we'd open up in a new market. All we talked about was these long lines at the carts. Then as soon as we opened Costa Mesa, we talked about the long lines at the carts and the store that was in Chicago. Then every time a store would open, we would just keep talking about these ridiculously long lines and, like, " What is going on?" All we did was marketed the lines and the people lining up, and the nuance of that line was that very few of the people in line were Muslim. A lot of those customers were just across the board, just basically the same people that go to Starbucks or Panera or anyone else. It's right in these lines. And it was really sort of between our awards, our accolades, these long lines. You basically just want to show people... We never had to discount to get customers. You just show people, " Oh my God, this thing that's really happening just opened. Go check it out. Look what other people are saying." If you noticed at Five Guys, their entire marketing décor at Five Guys are all the awards that they've won. Best burger, best fries, crosstalk

Brett Linkletter: 100%.

Dan Rowe: They do very little advertising and no couponing it all, and it's all getting full- fare paying customers into your store. The idea that you're going to spend marketing money to discount a customer who's only coming because you bribed him to come, you're not really... Like you just said, the most expensive customer's the first time, but the most profitable is a repeat customer.

Brett Linkletter: Absolutely.

Dan Rowe: So if you're really fishing in that pond where you're only getting people that you have to spend a bunch of money to bribe with a discount to come in, they're probably not going to convert anyways. So anyways, yeah, we want foodies, we want people that care about a better experience. That's typically our kind of brands.

Brett Linkletter: Yeah. I-

Dan Rowe: But even if I had... I'm looking for QSR concepts right now. I think the fast casual pond is overfished, so we're looking in other markets.

Brett Linkletter: Interesting.

Dan Rowe: And I'm looking at value lower cost concepts. But there's still, I mean, without having... They're already inexpensive. They're already low cost. crosstalk

Brett Linkletter: Well, no, because I hear what you're saying, and I hear this all the time, obviously. But, I mean, we have numbers to show that 100%, if you get someone their very first time they come through... Let's just say it costs you $3 in food costs and $5 in acquisition, and that's an $8 customer acquisition cost. Call it whatever, easy example. And that customer ends up spending 20 bucks, well, you're looking at, let's say, a $12 profit margin minus food costs, right? Well, now if you have that person's contact information because they came in or whatever the case and redeemed some kind of offer and you have the ability to re- market to them and you can track them coming back month after month after month, the profitability on that customer... You spent in the beginning, was$ 8, for this example. But the lifetime value of that customer now month after month after month over the course of the first year could be hundreds of dollars potentially, right?

Dan Rowe: Yeah. Yeah, I think it's-

Brett Linkletter: So that's what we're looking at.

Dan Rowe: Yeah. As long as you're targeting the kind of customers that are likely to be repeat customers, then yeah. I think then that's fine. But you're not going to get it all. You guys are really creative. You're really good at marketing. If you do a promotion for one of your clients and you drive a bunch of brand new trial because of something that you guys came up with that resonates with people... You drive all this new trial into a restaurant and they have a crappy experience, it's like, they're not coming back. Right?

Brett Linkletter: 100%.

Dan Rowe: And that's not your fault. That's the operator's fault by not making sure...

Brett Linkletter: 100%.

Dan Rowe: ...every single customer has to get it 100% right 100% of the times, no excuses. And they have to have that high of a bar. 100% is the only number to shoot for. If you shoot for 100 and you come up short, you're still in the 90s, which, remember from school, that's still an A. But if you get these franchisors that aren't really thinking about what their target is anyways... But it's got to be 100% perfect guest experience every single time, and then you do some things to generate new trial, you're going to have a big conversion rate. And then you're right, the longterm value, the lifetime value of that customer makes sense for eight bucks. Yeah.

Brett Linkletter: 100%. Yeah. And the big thing, too, you mentioned Groupon. I mean, Groupon, I thought, was... I think in the beginning, everyone loved it, but then quickly everyone started beginning not to like it so much and I think the reason for that is you see these customers that they're seeking out this deal. They're going to Groupon specifically looking for, "What can I take advantage of? What's available to me right now?" Right?

Dan Rowe: Yeah.

Brett Linkletter: They're going to it. But for instance, you and me, we're well off people. We don't need to get a deal. But, hey, if all of a sudden, I saw something come across through social media, whatever the case, and I was... I don't know, never been to the restaurant, looked intriguing, we might want to take advantage of it. We'd be curious potentially. I think that's what you mentioned. It's about the targeting. It's how can we reach the exact right kind of customer that will continue coming back? And I think that's why people get it wrong so many times. They do some kind of deal and they give it to the same people over and over and over again and you create these habits of these deals where the majority of time, it comes down to the targeting, like you mentioned. Hey, how can we reach the right person at the right time and the right moment to get them in the door? And then that's that. Hey, let the restaurant do the rest. Right?

Dan Rowe: Yeah. That's-

Brett Linkletter: That's what we're looking for.

Dan Rowe: Yeah, that's tough. I mean, there's so much to marketing. But yeah, I mean, that's... I think about Five Guys. It's like they don't advertise, but every time I want a burger, that's where I go. I mean, I'll walk past two other places or drive past two other places to get something at Five Guys, and it's just like I just know it's going to work. I just know that the brand's going to work. Usually, I find that the people that get into... Now, doing coupons in the beginning for a grand opening, I don't think that that's necessarily a bad idea to do that in the very beginning with the grand opening. But to have to do that for a restaurant that's five years old, 10 years old, if you're really needing to use that, there's other problems at that restaurant that need to get fixed.

Brett Linkletter: Got it. Got it. Yeah, I mean, I like that you mentioned about the PR stuff. I love that you mentioned it. You're marketing, you're writing these articles about the lines. " There's these lines, there's these lines." That's really great. I mean, that's incredible. Okay. And so obviously, this year through COVID, a lot of people have a lot of bad things to say about the situation. A lot of people have lost their businesses. There's been a lot of terrible things because of this, obviously, but I think for your business, for what you guys are doing, and obviously, for most restaurateurs who are looking to expand, this is kind of a good opportunity, right? I mean, it's a great opportunity. Talk to us about that. What are opportunities that you see now because of COVID?

Dan Rowe: I mean, look, I'm not tone deaf and I know COVID is... COVID sucks. It's bad for everybody. That aside, on the business side, or the economy, or the restaurant business, everything goes in cycles. We were ready for another cycle. Think about what people were bitching about last year. They couldn't find good people. They couldn't afford people. They couldn't find good locations. They couldn't afford good locations. There seemed to be too many restaurants. There just was so many options. Every time you went to go look for a site, five other people were looking at the space, driving up the cost. All these things. So last year, we were at this sort of bubble anyways. And I've been here. I've been doing this, again, for 30 years, so... Do you remember Planet Hollywood? Remember Boston Market?

Brett Linkletter: Yep.

Dan Rowe: These cycles. Those were once hot things...

Brett Linkletter: Absolutely.

Dan Rowe: ...that go through cycles. COVID just made the cycle spin again and happen. But what you've really got right now, the gift, I think, that's going to come out of all this, is you've still got... I don't know, how many people are in America? 300 million people. You've still got 300 million people. They're all waking up hungry tomorrow. They're going to eat somewhere, and now you've got a third less people feeding them because of all these restaurant closures. You're probably going to get another 10 or 15% closures. And so all the sudden, you've got this supply and demand shift in your favor, in the operator's favor, for really, really good locations that are dirt cheap, really good conversions which make it... I mean, the real estate itself, you can get access to great real estate. The terms haven't been this good in over a decade. The amount of tenant improvement money, the amount of incentives we're getting, the amount of free rent that we're seeing is... I haven't seen this in a long, long, long time. Conversions.

Brett Linkletter: You said free rent. It's free rent.

Dan Rowe: It's free rent. Free rent. I mean, free rent. We told a landlord, we're like, "We want $400, 000 in tenant improvement money. In 2021, we're only paying you CAMs. And then 2022 on, we're only paying this percent of rent that includes CAMS," and the landlord took it. They took it.

Brett Linkletter: Wow.

Dan Rowe: And it's like, you couldn't make that deal a year ago. You probably can't make it next year. You better make these deals right now. It's like anything, right? The stock market goes down, some people panic and freak out and sell into a down market while the smart ones are buying because they know over time, the market goes up. It goes up and you just have to have the guts to do that. But the supply and demand shift I'm talking about... So you've got this supply and demand shift for really good locations, really good terms, really good conversions, access to more and better employees than you've had. The unemployment rate that we've got right now is... We haven't seen this in our lifetime, right?

Brett Linkletter: Yeah.

Dan Rowe: And so it's an opportunity. And then you've got this customer supply and demand imbalance where you've got all these people with just fewer places to go eat. It's sort of like you go to a Dodger game, and during the intermission, everybody's rushing for the few hot dog and beer stands and there's a huge line. I think next year, I think you're going to see this crazy spring fever bounce back. People are just so tired of being pent up and they're tired of being afraid. Customers want to feel smart, they want to feel safe. That's going to start happening with the vaccine and when the news starts to report about that. I think you're going to see a surge of customers going back out to restaurants and there's only going to be about two thirds of the options out there. All of those guys' sales will be up. They're all going to seem high, and so all of the sudden, the restaurant business is going to seem hot again. So to me, if I sold you today a Halal Guys franchise today, let's just say, you're not going to open for a year. So by the time you get a site, do your drawings, get your permits, build your team... maybe nine months. And so if you believe like I believe that the world... I think that the economy will be really good. I mean, like right now, our restaurant sales at our fast casual, all of them are up. We don't have one chain that has down sales because of COVID, because we're very on the front end of premise and delivery.

Brett Linkletter: Incredible.

Dan Rowe: Yeah, and so if you believe that this time next year is going to be better, right now is the time to plant those seeds. If you wait until next year, like, " Well, let me see, let me see, let me see," you're basically going to lose all that option, all that upswing, all that momentum. So that's what I think. It's like some people are, " I'll believe it when I see it." Other people are, " I'll see it when I believe it." This is a case where you have to believe this time next year's going to be strong and you'd better plant your seeds now, or you're going to just watch other people do it and get wealthy in the process.

Brett Linkletter: Got it. Got it. I love that. I love that. And I'm glad you mentioned this because, again, there's been a lot of negative news, and I think people need some positivity because, hey, when there's a crisis, there's opportunity. Straight up. I mean, that's just how it works. I mean, I'll tell you... which it was really insane for us. When COVID first hit and in March, April, we lost half our clientele. I mean, it was brutal. We had literally half of our restaurants just gone. I'd say half of those half aren't coming back at all. It's really unfortunate. It's sad. I mean, we've seen it and it's awful. But again, like you mentioned, there's this now imbalance. People still need to eat. People still need to go out. There's less restaurants available now, and so the restaurants that are still in business, there's opportunity, of course. You mentioned your guys' restaurant sales are... You're still up. You're still doing well, right?

Dan Rowe: Yeah.

Brett Linkletter: Which is great. You've shifted towards online ordering, delivery. That's something that obviously we've had to do as an agency as well. I never personally pushed online ordering at all until COVID hit, which was insane. But now looking into it, it's become a huge part of our service offering. For you guys... and you're looking at, let's say this next year or so in the restaurant space... is online ordering going to become bigger and better and stronger and going to continue moving forward? What are your thoughts on that? And how big of a part of the business is it going to be for you guys?

Dan Rowe: Oh, it's just starting. It's the new normal. But the truth is, success leaves clues. And so if you look at Domino's, whose stock just went wild the last decade... It went wild because of all the energy that they put into building their delivery plan, basically trying to be the Uber of pizza delivery. Or you look at Sweetgreen. Sweetgreen's last round of capital was like a billion seven. They've only got 130 restaurants, and so that's a ridiculous amount of valuation per restaurant.

Brett Linkletter: It's incredible.

Dan Rowe: It's like, okay, what are they doing different than everyone else? It's their focus and their investment in digital, in off premise, in letting people feel smart and safe using the brand and basically making Sweetgreen pervasive. So do you want to eat it there? Do you want to walk in and get it to go? Do you want me to drop it off at these drop off nodes? Do you want me to deliver it to you? How do you want it. Look at some of these guides and it's like, well, they tell you what to do. You just go follow the most successful people and they're already telling you where the business is going and how their numbers are. I mean, Sweetgreen's sales are two times, three times an average Five Guys.

Brett Linkletter: Wow.

Dan Rowe: Yeah. And so it's like they're ridiculous numbers. So it's like, okay, well, that's customers voting with their wallet to go there. And so if you see that and if you know that, it's like, well, you can get a lot of clues watching that. But there's a lot of ways through it. I mean, you see this week Jimmy John's announced that they're now starting to use... They swore forever, " We're not going to use the third party guys. Screw the third party guys." Now they're at least using the third party guys to capture leads, capture customers, but they're going to do their own delivery. So those kind of things will change and ebb and flow a little bit, but the truth is, you need to meet customers where they want to be met, how they want to be met. You better feed them where they want, when they want, how they want or else somebody else is going to. And off premise is easy, and so you just have to engineer your model to make it work. See, people cry and complain about the third party delivery costs. It's like, you got to work with it. I don't really believe... I think that there's going to be a big fallout in all these ghost kitchen, dark kitchen things.

Brett Linkletter: Oh really?

Dan Rowe: I think some people make a bundle, but the majority of the people, I think, are going to falter. I think where there's a real opportunity for change is to do sort of a clicks and bricks. So to go basically do more of it on their own. These ghost kitchens don't want brands because they... These ghost kitchens remind me of these airport companies or the concession areas at colleges or whatever.

Brett Linkletter: Interesting.

Dan Rowe: They own these pipes into the airport or the college and part of them getting the pipe is they're saying, " Well, I've got Five Guys and I've got Starbucks," but they don't want to pay those fees. And so the way that they offset it is they come up with their own Chinese or their own something, pizza, and that tries to normalize the fees that they're paying Starbucks or Five Guys. The same's happening with these ghost kitchens, is that these ghost kitchens are approaching us and they're saying, " Look, I need this brand. I need this brand, but we're also doing a whole bunch of our own brands." What that tells you is that they're really trying to do their own brands. Otherwise, they would be 100% branded, but they're not. They're trying to do their own brands. They're going to use you as long as they need to to build their own ecosystem. And all these other problems I have with that. You use a ghost kitchen, you don't own the customer data. I mean, that's just terrible. If you use a ghost kitchen... If I'm a restaurant and I outsource all my delivery or whatever to a ghost kitchen, it's like there went all that customer data, there goes my chance of ever actually building that on my own. So I think-

Brett Linkletter: They don't let you capture that data?

Dan Rowe: No. No, no, no. No. It's a big problem. But I think what'll happen is sort of like any other idea, the ghost kitchen was a good idea for a few people. But it's sort of like any other idea where someone spends a dollar to make 10 bucks. Soon it's followed by all these people spending$ 10 to make a dollar, right?

Brett Linkletter: Right.

Dan Rowe: So I think just like the food... Remember food halls? Food halls were sort of this novel, neat idea that are starting to close down like crazy. Remember the power centers or whatever, lifestyle centers? There's a lot of good ideas that are good ideas, but then just too many people get involved crosstalk

Brett Linkletter: So you're saying the ghost kitchen concepts, you think, are going to completely fizzle out.

Dan Rowe: Nope, nope, nope, nope. I think some of them are going to make a ton of money. I think the majority of them will fizzle out.

Brett Linkletter: Got it. Interesting.

Dan Rowe: And then I think some of them will make a lot of money. The smart restaurant concepts aren't going to use the ghost kitchens. They're going to do their own click and bricks.

Brett Linkletter: Got it. Got it.

Dan Rowe: Keep all that crosstalk

Brett Linkletter: But it sounds like you're not opposed to third party apps, which most restaurants we speak to absolutely hate them. But it's one of those things where they say they hate them, yet everyone's on it so there's something there. Obviously.

Dan Rowe: crosstalk Well, see, I like the third party apps. You have to engineer your model so that you can make money with it, because there's no reason doing it to lose money. But I like it as long as you're also converting those to your own customers. And there's other ways to do that, too, even if-

Brett Linkletter: How do you guys do that, by the way?

Dan Rowe: You can stick a menu in a... I get these all the time, whenever I get an add for a drop off from Uber Eats. The food comes from the Uber Eats guy, but then there's something that says, " Save 10% next time by ordering direct off of our website," right?

Brett Linkletter: Exactly.

Dan Rowe: So people are basically doing that, and so there's all those kind of tricks that you can do. But I like the idea of a ghost kitchen or a third party. If I have a brand new brand in a brand new market, I'm trying to build awareness, then that's actually serving sort of a marketing function.

Brett Linkletter: Totally.

Dan Rowe: It's selling my food, too. I just don't like the idea that you would do anything and lose money at it.

Brett Linkletter: Got it. Got it. But so you like it as a way of reaching people, maybe a marketing resource. But hey, the moment you can get someone to order direct, that's obviously what you want. That's the goal. 100% of yourself.

Dan Rowe: Yeah. And I know this because I've seen them. I see brands that aren't succeeding on their own, so what they do is they say, " I'm just going to start working with ghost kitchens. I'm going to work with ghost kitchens." You may as well just light your money on fire.

Brett Linkletter: Yeah. Dan, that's interesting. I mean, no, I'm excited to hear that because to be honest with you, I've seen all this hype about it. For us in general, we've worked with a few ghost kitchens here and there. It's not exactly my favorite, to be honest, but I've never heard this perspective, so this is interesting for sure.

Dan Rowe: A lot of them, it's funny because we would get hit on by these sales guys of ghost kitchens and six months later, they're at another ghost kitchen, six months later, they're at another ghost kitchen. Then the next time you hear from them, they're selling insurance or they're doing something else. It's like this musical chairs...

Brett Linkletter: That's so funny.

Dan Rowe: ...and we're in them. We are customers. I speak from experience. We are customers in these ghost kitchens, and it's like it's not as advertised. It's just not as advertised.

Brett Linkletter: What do you think about restaurants making their own apps? Obviously, okay, you look at someone like Sweetgreen and they're crushing it. They're the epitome of someone who's really made it work. I mean, I would really consider them more so a tech company than a restaurant company. They're obviously both, but it's incredible what they've done. Just like Domino's you mentioned earlier, right? Now, for a restaurant, let's just say under 10 locations, do you still recommend them building out their own app? Or what are some online ordering solutions that you'd recommend for them?

Dan Rowe: It depends. If their plan is to only be 10 units, probably not. I would probably just use something. I mean, the only reason I would ever get in this franchise business or get in the restaurant business is to build something to sell, right?

Brett Linkletter: Yeah.

Dan Rowe: I would get in it with the ... Because I love feeding people. I like the charge I get from feeding someone. I give someone food, they pay me, and then they say, " Thank you." Immediate gratification, I love everything about that. But I'm still a business guy, and so I still like the idea that you're going to get into the restaurant business and you're going to start growing and building something and compounding your returns and grow them quicker, franchising, whatever, the whole thing, and then sell the company. If your plan is to do that, then yeah, you need to take technology serious. You need to have something. I don't know that you need to own it and actually be in the game of coding and own code and all that other nonsense. I'm not sure you need that, but I think that you have to take it serious. If you're just a sort of 10- unit guy and you're happy being a 10-unit guy, or if you're a single- unit guy and happy doing that, I probably wouldn't spend a ton of energy on that. I would just use the third party guys and just engineer your brand so that ...

Brett Linkletter: Yeah. I just-

Dan Rowe: I'd engineer the brand so that it could handle those fees.

Brett Linkletter: I find that funny because I spoke at a conference last year in Texas, and then there was another conference nearby that I went to, met a client at, which was called Future Restaurants. Went there, met with some really big brands, saw some really great speakers. I was in the room and the topic was apps, building an app for your restaurant. I think there was someone from Domino's that was there, which obviously, their app's been great for them. I think there was someone from Qdoba as well that was there, and a few other big brands. A lot of these other brands, they were talking about how proud they were of the apps they made and this and that, and I asked a simple question. " Hey, what percent of your revenue is coming directly through your app?" Then all the speakers laughed and nobody understood why they laughed. It was less than 1%. So-

Dan Rowe: Yeah. Yeah, yeah. Yeah, in that case then, it doesn't make sense. Yeah, doesn't make sense.

Brett Linkletter: And so you spend half a million dollars on developing this app, and like you said, they're not coders. This is not their space. They're not developers. I mean, I'll tell you right now, for our agency, we're developing an online ordering solution which will be hopefully launched in the next probably 45 days or so I'm really excited about. But I'll tell you this even for me. I'm a tech guy. I'm in the marketing and sales side of this technology and online digital marketing space, but hey, coding, programming, development, oh my God, that stuff is very difficult. Even for someone like me who's been in this space for many years now. But it's just it seems like there was such a hype around building your own app for so long and there still is, but in my opinion, it only makes sense for these massive brands like you're talking about, like the Sweetgreens of the world. But you're looking at these restaurants, five to 10 locations, maybe even under that, trying to develop and app and I'm like, " What are you doing?" I mean, it's just the time and attention and money involved.

Dan Rowe: Yeah, you have to see who in the company's making all the noise about the apps. Is it really the CFO? Chances are, the CFO's not making a lot of noise because they've already done that analysis to know, " Am I going to spend a dollar to make$ 10 or $ 10 to make one dollar?" It's like anything else. It sounds like you guys are going to be seriously in that business, so you have to plan differently than a 10- unit guy that's trying to get incremental customers. A 10- unit guy trying to get incremental customers, when you really look at what he should be spending to build that, the answer is, " I need to use third party."

Brett Linkletter: Absolutely.

Dan Rowe: "I need to use third party." You can always go back and build your technology. You can always go back and do that. But you don't want to build it and they'll come, that Field of Dreams movie. One way is you try it with third parties just to make sure it works. You sort of do the stress test that way and make sure that it works, that you work. You can always go back and get rid of those and build your own, but if you go front load all this capital to build something... I mean, now you're in the technology business, now you're in the marketing business. You're in a bunch of different businesses when you started off just to make sandwiches or just to make pizza.

Brett Linkletter: 100%.

Dan Rowe: Yeah, I don't know.

Brett Linkletter: 100%. Wow. Well, Dan, it's been really incredible today. I mean, most of our listeners... There may be a couple- unit restaurant locations and they're maybe looking for expansion. If anyone listening to this podcast now was just kind of curious... I'm sure they're all thinking, like, " Hey, what do I do as a restaurateur that's maybe three to five locations and looking to rapidly expand?" What would you say is the first step for them as of right now?

Dan Rowe: Every single chain of anything started with one. I mean, Five Guys had one, Halal Guys had carts, Sweetgreen had one. Anyone with three or five, if they've really got something good, I think that they should go for it. But a lot of it depends on what they want. I mean, I meet people all the time that have amazing concepts that just, like, " You know what? I don't want that. I don't want the extra work. I just want to do my thing." I've got a guy here in DC that's got an amazing 10- unit concept. He goes, " I'm making more money than I ever thought I'd make. I don't really need the hassle. I'll probably double the company in the next five years and sell it." And I'm like, " Man, I'll put up the money, I'll help you co- manage." He goes, " Mm." So that's probably the first thing, is if someone's got a really good concept, it's like, what do you want to do with it? What's your game plan? Do you really want to do it? Are you willing to jump in with both feet? And going back to this if you're going to grow, whether you're going to franchise or you're going to grow with investor money or grow with your own, it's all about generating your return. You've got to have a business that generates a great return. But if they want to do that, I mean, I'm happy to talk to any of them. So just dan @ fransmart is how you get a hold of me.

Brett Linkletter: Amazing.

Dan Rowe: If you need, I'm happy to talk to you. There's never been a time like this. This is a very unique time right now to be planting flags. If someone has something that people really like, there's a big opportunity right now.

Brett Linkletter: Amazing. Amazing. Amazing. Then just one more quick question. When you guys are seeking potential territories to seek for, how do you even go about finding your leads?

Dan Rowe: How do we what?

Brett Linkletter: How do you go about finding your leads for potentially new franchisees?

Dan Rowe: Oh. Most of them are already in our database. We have a database of over 100, 000 people that are either already franchisees of other concepts...

Brett Linkletter: Got it.

Dan Rowe: ...or at some point, they responded to some of our marketing material along the way and that kind of goes into our big database. Beyond that, we do a ton of PR. I mean, we really focus on making our franchisees successful. If that happens, lead flow comes in like crazy. And so we don't really run ads. We don't run ads.

Brett Linkletter: Really?

Dan Rowe: Yeah, for franchising. We get PR and buzz about our businesses. We use brokers. Every franchise broker in the industry we pretty much use.

Brett Linkletter: Perfect.

Dan Rowe: But really, the best leads come from our database. They're already people that own five of this or 10 of that and they're looking for non- competitive expansion vehicles. Like I said with Halal Guys, it was like we had the first six or seven franchisees signed up before the press release even went out.

Brett Linkletter: Got it. That's incredible. Wow, Dan. Well, hey, this has been really, really incredible. Thank you so much for your time today.

Dan Rowe: No problem.

Brett Linkletter: Again, for anyone who wants to reach out to you, is it dan @ fransmart. com you mentioned? Right?

Dan Rowe: Yep. Dan @fransmart. com.

Brett Linkletter: Awesome, awesome.

Dan Rowe: Anytime, man.

Brett Linkletter: Well, cool. So guys, what we'll do on this podcast is we'll put your guys' links below for your website. Obviously, if you guys are interested in learning more about what Dan does, shoot him an email at dan @ fransmart. com. Dan, again, thank you so much for your time and we'll be seeing you around. Thanks a lot.

Dan Rowe: Take care. Thanks.

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S3:EP1 - Ethan Falk, Virtual Restaurant Group

S2:EP23 - Peter Demos, Fourth Generation Restauranteur: The Journey To Impact

S2:EP22 - Abhinav Kapur, Turning Data into Dollars

S2:EP21 - Brian Lewis, Acclaimed Chef & Restaurant Owner

S2:EP20 - Ken McGarrie, The Surprise Restaurant Manager