The people of Riverside County, California have come to love Marco’s Pizza, a fast-casual franchise with 5 locations in the area. Owned by 32-year restaurant vet Leo Thomas, Marco’s is poised to grow by leaps and bounds in the coming years, with another 25 stores in both Riverside and Orange County by 2024. Along with these locations, Thomas owns 74 T.G.I. Friday’s restaurants located in six midwestern states as well as in Florida with business partner Adil Yadav. Black Enterprise recently caught up with Thomas to talk about Marco’s Pizza, its success, and how other people looking to make their way with franchises can do the same.
One thing to note is that Thomas is part of a growing group—multiunit franchisees. Reports from FRANdata, a franchise advisory firm in Arlington, Virginia, show that as of the first quarter of 2017, there were 43,797 multiunit franchisees, owning more than 217,170 units in the U.S. “We see franchisors encouraging their current franchisees to keep growing, because multiunit franchisees have the infrastructure, financing, and experience to open additional units faster and more efficiently than newcomers,” says Anya Nowakowski, a FRANdata senior research analyst, to Black Enterprise. “We also see a growing number of multiunit owners diversifying their business by owning multiple brands across different business types.”
Thomas notes that breaking into the business was not easy, needing to use $400,000 in savings he built up from the corporate world to open the first stores and set up his franchise territory. Even with this capital, and a skillset that drew from past experience at McDonald’s, Starbucks, Boston Market, and Denny’s, it would take two years before Marco’s started to draw profits. As a result, he recommends that anyone looking to try and make their way into multiunit franchising have proper capital stashed away, and be prepared to open several stores instead of one.
There is also working with your franchisor, which differs for each business but can have huge effects on how you operate. For example, some brands put a limit on how many stores you can open, and others may allow other franchisees to expand into your area without written exclusive rights.
When it comes to the day-to-day running of a business, Thomas says that you not only need passion, but knowledge of all the different ways businesses function. These include handling the development of new stores, understanding profit margins, and bringing on new employees.