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Smart Franchising With Fransmart

Episode #6: From Single Store to National Staple with Freddy’s Scott Redler

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Smart Franchising With Fransmart - Episode 1
May 7, 2024
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Scott Redler, the co-founder of Freddy’s, joins us on this episode to share his incredible story, from starting out at 15 in the food industry to opening the 500th Freddy’s location.

This episode dives into the secrets behind Freddy’s success, from its unique frozen custard and steakburgers to its focus on customer happiness and team care.

Scott discusses the importance of choosing the right franchisees and creating a culture where managers think like owners. He emphasizes the role of passion for the brand, the impact of treating employees well, and how these factors contribute to a franchise’s success.

To be successful as a franchisee you have to be passionate about the brand. You can’t go anywhere else if you don’t have that component. If you don’t love the brand that you want to build and grow, it doesn’t work.” – Scott Redler

Whether you’re dreaming of starting your own franchise or you’re an existing franchisee looking to expand, Scott’s insights provide valuable lessons on growth, culture, and the power of a positive, people-first approach in the restaurant industry.

Episode transcript

Dive into the text transcript of our insightful conversation where we uncover the strategies and stories behind successful franchise brands. Explore at your own pace and gain valuable insights to fuel your franchising journey.

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Dan Rowe (00:40.65)
All right, welcome back to Smart Franchise with Fransmartt. And today we have Scott Redler, former NRA chairman, co-founder of Freddy’s, which just opened its 500th location. So to some, starting out, five locations is a ton. 50 is amazing, but 500 is rare air. But it doesn’t just happen. So today we’re gonna find out how it all happened, uncover some secrets of success and maybe just a few useful nuggets for any aspiring franchisor or franchisee. So Scott, welcome. Thanks for joining us and let’s jump right into it. Tell us your story. Give us your background and tell us the story of Freddy’s.

Scott Redler (01:20.298)
know, longtime restaurateur started by accident, which is typical at 15 years old. As we know, one out of three people start working in our industry. And I was one of those and worked every concept from five star dining and barbecue and deli and everything. And Freddy’s really came by almost as an accident or a craving that we had for a concept that wasn’t in our market.

So we ended up, at the time we had steak houses called Timberline Steak Houses, similar to Outback and Lone Star. And we, one of my partners came in one day and goes, hey, I wanna do frozen custard. I go to Lake of the Ozarks. We don’t have frozen custard in Wichita, Kansas. And I go, well, you know, I’m from St. Louis. I grew up on Ted Drew’s and Steak and Shake and my partners grew up on Winstead’s and Steak and Shake. And we started talking. I go, all right.

And my partners were both CPAs by trade with restaurant ownership. And, uh, we had a lot of fun with that. And I go, you know what? I’m great with custard, but we got to do food. Now I grew up on steak and shake and I missed that style burger. And, um, and so we ended up, uh, opening the first one by accident with never having the intention of opening a second location. Most people don’t do that.

dan rowe (02:44.322)
Just a one off.

Just a one-off. Was the first one a drive-through or what did it look like?

Scott Redler (02:50.886)
It was a drive-through. It was an old bagel shop. And the funny thing is that we had a little bagel in wood over one of the doors that was there for 10 years. We finally took it off. It was on the west side of Wichita, Kansas. And I grew up in St. Louis and have lived in Minneapolis and DC a couple of times. Wichita is a small town for me. And we live in east Wichita, as do my partners. And our first Fridays was in west. Well, west Wichita, to get there,

dan rowe (03:00.398)
So.

Scott Redler (03:20.026)
is 18 minutes. So 18 minutes in Wichita is almost like you need to get shots and a visa. And so a second location became available in East Wichita about five minutes from our house without a drive-through. We opened that and that one was really the one that sparked the interest from potential franchisees.

dan rowe (03:43.418)
Nice. Well, speaking of your franchisees, so I saw an article last week about all your franchisees that keep opening up more stores, right? There’s so many headwinds or you hear about all these headwinds in the industry. So we’re going to get into that. Um, I want to, I mean, I want to hear from you about what, what you guys think that you do, even with all the industry headwinds that your franchisees are so happy that they want to keep opening.

Scott Redler (04:07.178)
Well, you know, first start with selection of franchisees. I think it’s critical. And we’ve always had, I’ve always had the four rules of franchisees, financially, the wherewithal to do what they say they’re gonna do. Second, operational expertise or the ability to hire it. And if you’re coming in as someone with wealth that wants to open Freddy’s, please make your operator a partner. Third is a territorial region that makes sense for all parties on a reasonable scale, that’s a doable scale.

You know, you can’t buy 90 Freddys and I’m going to open them in three years. We all know that’s not going to work. Um, start with what’s reasonable. Fourth and, and Dan, what I think is most important is I call it the no jerk rule. You know, we got to dinner with someone, um, life too short to do business with people you shouldn’t do business with. It just isn’t worth it. So let’s start with that. And what are passionate about the brand. We had a group come in one time, um, with three bags of money with them.

dan rowe (05:00.363)
Yeah.

Scott Redler (05:06.966)
and they’d never been to a Freddy’s. Well, passion for our brand is critical. You’ve got to go into Freddy’s and enjoy it, experience it, and become what we call a Fredhead. And when you turn into a Fredhead, you know you want to open Freddy’s. You want to make other people as happy as you are when you’re eating a freshly made steak burger hot off the grill, or fries right out of the fryer, or fresh custard made throughout the day with hot fudge and hot caramel and…

toasted pecans and whipped cream and a cherry turtle sundae. And you get to make people happy and take care of your team while you’re doing that. And that’s a critical component.

dan rowe (05:44.562)
Yeah, I’ve been in your kitchen. I went in the Kyle’s kitchen in Colorado Springs. That’s a real kitchen. You guys are actually cooking food. It’s not microwaves and, uh, you know, uh, everything coming in frozen in a bag. You guys are really actually making it. So what, I mean, what, like, what do you look for in a franchisee that is going to be able to operate a concept like that? Like part of the reason you guys are so successful is because you’re actually really making food and it tastes really good, but it also makes it complicated.

Scott Redler (05:48.394)
Yep.

Scott Redler (06:13.958)
It does. So I’m going to start with the reason why we do it. Food credibility throughout my whole restaurant career has been a critical component. At Freddy’s, you notice you can see just what we want you to see. Look, you can see our fryer, but you don’t get to see the not attractive part of a fryer, right? You can see us cooking burgers and working down the line. And you can see that things are fresh, made to order. And we all know that we shouldn’t eat a burger, fries and custard every day.

Right. But when you do it, you want it right. And so we want exactly right. And we want people with that passion as franchisees. So as potential as our franchisees, we need to continually have the mindset. And it’s done by doing the three pillars of our business, which are similar to most restaurants with, you know, food, hospitality, sanitation. But we need to be the best ROI for someone to put their money in. Cause there’s a lot of places to invest.

dan rowe (06:46.742)
They’ll be good.

Scott Redler (07:13.75)
And we’ve got to have that mindset that we’re here to make our franchisees as successful as we can.

dan rowe (07:20.682)
You would be surprised how many franchisors haven’t glommed onto that yet. Sadly, I know too, too many franchisors that don’t get that. Your franchisees have to be successful. You think about it like all the, everything it takes to run a restaurant and build your teams and do all this stuff. Franchisees have to want to do that. Right. And so they have to want to do that. So the business has to be financially successful enough for them to want to keep, um, re re-investing in that. Hey, you said something a second ago about,

Make your operators part of it. What do you mean? What’s the secret there?

Scott Redler (07:51.466)
So you know what, so our Freddys at the beginning and even our Timberline Steakhouses, we made our general manager. I believe the general manager is the most critical person in any restaurant company. It’s not guys like me sitting in an office and going to restaurants every now and then. And to reward that and to really get that working, when you get a general manager that thinks like an entrepreneur, that understands long-term business success and what it takes in

All elements, you win. So how do you get that? And we used to have a program that a general manager was on a three tier bonus program, including monthly, every three months, as if they were an owner and they actually got to buy in to the restaurant, got complicated. And we’ve had to make some changes as we grew with our, with our corporate locations. And then we had a five year bonus plan. So.

If you looked at data from any restaurant and saw a general manager turnover and the impact of that on a restaurant, it’s significant. It’s five figures at least and probably five figures or higher and everything you can do to let the general manager own operate their restaurant. And look, I’m not that smart. I copied it from Outback. Outback did it. Chick-fil-A does it. A lot of great operators use programs similar to this. I’m a big believer in them.

dan rowe (08:57.812)
Yeah.

dan rowe (09:16.662)
Yeah, but it’s making your employees want to do it, right? You hire someone, they’ve got a job, they got to wake up in the morning and they’re either in it or they’re not. They’re either into what they’re doing or they’re not. They have to want to, and you know, you have 500 locations and you can’t be in every one of them every day. It’s like, how do you create an atmosphere where people want to do that? And so do you have any other secrets or any other tricks about maybe some examples where some of your managers just thrive because of these programs?

Scott Redler (09:46.718)
You know, I think the I think you’ve got to find the people that first of all, our Fred has their big believers in the brand. And you know, it’s a very fortunate. I get to talk to a lot of pro star kids and I was with a group last week in Missouri and the you could feel the passion in the room. You could tell and it’s that gut feel when you meet someone that they are a leader and they are passionate about the brand and they’re excited to execute at a high level.

And you pick that up within a couple minutes of meeting someone. And I always go back to when you met your best friend, it wasn’t a six year. And now you’re my best friend. You met someone, something happened and all of a sudden your best friends, right. And a lifelong relationship. It’s the same thing. So I would say trusting your gut feel. Yes, they have to have all the other basic experience components. I get that. Um, they have to be a nice person and passionate about the brand. You have to hire right. It’s never going to.

If you can’t hire right, you’re never gonna win.

dan rowe (10:49.09)
Yeah, you think about too, I mean, the amount of lives that you can change in our industry when you’re growing to concept from one to 500 units, like you need good people. You need good people staying and growing. Like when I grew five guys or even whole all guys, like we had line level hourly wage people and whole all guys, we had guys that worked on the carts in New York City because you grow, you change the course of their life because now they become.

store assistant managers, regional managers, and VPs. And you take someone that’s making basically minimum wage and no benefits, and all of a sudden they could get hired tomorrow for $200,000. Right. So talk, talk about some of the folks or talk about some of the stories that you have where you’ve taken some folks and just, you know, change the course of not only their lives, you changing their generation’s lives. Like what that

Scott Redler (11:39.526)
You know, it’s great. And this is, it’s not money. This is the most rewarding thing to me to watch people’s lives change. And we had a gentleman who came in and I remember when he came in with ratty jeans and if his friend was getting a job and the manager in the restaurant goes, well, do you want a job also? It was a new restaurant opening. And he goes, yeah, I probably need a job. And he started working for us, became, you know, line cook, custard, supervisor.

manager, general manager, general manager of our training location and now is a franchisee with five or six Freddys. What a great story. Or Chris from West Wichita, general manager of one of our busiest, most profitable Freddys in the country. And he started, I met him when I talked to a class and I always go up to the teacher, I go, tell me your top three students. And then I go meet them.

dan rowe (12:21.036)
Yeah.

Scott Redler (12:39.342)
and give them a card and when they connect, we need grab lunch. And I hired Chris years ago. He’s doing phenomenal. But, you know, I got to watch him grow up, not only personally get married now as four kids, but also I got to watch him grow up financially. Lives in a great house, has nice cars and he works hard. He works smart. He’s passionate about the brand and truly thinks like an entrepreneur.

dan rowe (12:55.455)
Yeah.

dan rowe (13:05.324)
Yeah.

Scott Redler (13:06.182)
You know, going into that, you know, if I walked into his restaurant today and granted my position is bored only since we sold the company three years ago. But, um, if I walked into his restaurant three years ago and said, all right, buddy, your restaurant’s eight years old, we want to spend a hundred grand. It’s going to affect you negatively on your bonus for a couple of months, but long-term you win. He’s going to go, let’s go. What are you waiting for? Versus someone who thinks short-term would go, Oh, I don’t want to spend that money.

dan rowe (13:33.67)
Yeah, I had a, we had our, at Five Guys, we were one of the first franchisees and our operating partner, I don’t think he’d ever even been an assistant manager was the highest he was ever before we, we hired him and he ran our Five Guys and then eventually we had six and sold back to corporate and I stay in touch with the guy like that guy. He’s one that used to make hourly wage. He has a family had no benefits and came to work for us, had a comp plan bonus program and benefits for his whole family, right?

So that was really great. But now I stay in touch with him. He lives in Dubai of all places, running the entire country of UAE for one of the major US brands. I think it’s Popeyes, I can’t remember. But he’s running an entire market, probably making $300,000 a year. But you think about his kids, his kids trajectory if he were still just an assistant manager that never had benefits and that sort of life. His kids…

vision his kids outlook on their opportunities completely changed now that they see that their dad went from doing that to doing this right so i don’t know it’s like we have an ability to really change a lot of lives in this business so hey go ahead

Scott Redler (14:49.13)
Well, like I say, you know, one thing that’s critical, we are absolutely the industry of opportunity. And we’re the industry of opportunity if you didn’t finish high school, if you did finish high school, if you finished college, if you have a master’s degree, it doesn’t matter. There’s levels that you can get to. And we are the one that if you work hard, work smart, have the right attitude and passion, you are going to win. I started with nothing, you know.

dan rowe (15:02.646)
Yeah.

dan rowe (15:12.267)
Yeah.

Scott Redler (15:14.662)
My dad was out of a job in high school. It wasn’t fun. Looking back at times, our family was actually food insecure. We had our grandparents bringing us food. And you’ve only known me for a limited number of years. But would you ever have thought that? It’s not a privileged upbringing. You do not need to start with, if you are smart, work hard and get it, you’re gonna win.

dan rowe (15:28.523)
Yeah, no, never.

dan rowe (15:36.51)
Yeah. Hey, let’s go back. So how long did it take from the time the first Friday’s open until now? How long ago was that? So 23 years, you went from an idea for a concept because you liked, uh, what do you call it? Steak and shake. You like steak and shake. So you did a, yeah.

Scott Redler (15:43.618)
23 years.

Scott Redler (15:53.05)
and Ted Drew’s and Brandy’s frozen custard and Winstead’s all the brands that were in that smash bag burger.

dan rowe (16:00.29)
So, yeah, so little over 20 years, you go from a concept to 500 units and having a crazy liquidity event.

Scott Redler (16:10.146)
It’s, it, you know, it still feels surreal. Um, the liquidity event was, it was so anticlimactic actually. I mean, we’re sitting in and we’re sitting here, you’ve worked 20 years, you know, I, you know, the first hundred openings, I went to 97 and, you know, all this hard work went into it and our liquidity event because of COVID was a zoom call. And we get on the call. I get there work early cup coffee, nice Freddy shirt on all ready to go.

dan rowe (16:19.086)
Hahaha

Scott Redler (16:39.882)
And okay, bankers ready, financiers ready, lawyers ready, buyers ready, sellers ready. Okay, the deal’s done. Literally a three minute discussion and they go, let’s move money. But my most rewarding day in my career has been the day after we did that, we did what we call deal bonuses for our team and giving back to the people that made the brand a lot of money. And…

dan rowe (17:06.678)
Wow.

Scott Redler (17:08.182)
I still remember my wife walked in the office and I was in the office with one of my VPs at the time and she was crying. And Betsy goes in, what did you do? Oh, go negative right away. What did you do? And the reality is I just told her the amount of her deal bonus and it was enough to pay off her house. So we are, it was amazing. And I got to have probably 15 conversations like that, that day, best day of my career.

dan rowe (17:26.03)
Wow.

dan rowe (17:35.914)
Yeah, yeah, it’s I mean, because of what you did for other people, right? The best day of your career. You even said getting doing the deal was anticlimactic climactic, but the best part of that day was the lives that you change with those big bonuses. That’s fantastic.

Scott Redler (17:50.77)
I’m sure what they did for us. I mean they were they were passionate loyal You know, I’m a big believer that if you want to walk in my office and go Scott you’re being a dumb You can do that. I want you. What do you think of you knucklehead? I’m okay with that and our team Felt comfortable enough to do that appropriately and That we got better results

dan rowe (17:52.886)
Yeah.

dan rowe (18:13.374)
Yeah. Hey, so along the way, like, tell me, tell me how it went from going from one to 500, what are some of the things you did right? What are the, some of the things that you guys did wrong? Like something that you wish you could have done over again and like how, how in hindsight you might’ve been able to even do it bigger, faster or better, whatever.

Scott Redler (18:35.09)
You know, we did not go fast at the beginning. We had interest in it. We waited, you know, right or wrong. We could have started a year earlier probably, but I’m not sure that would have been that significant. I think over the time that the issues have always been with who the franchisees are. And when we’re meeting with them, and there’s some we said, there’s a couple in there that we should not have allowed to be franchisees. The good news is they’re no longer in the system. But.

You know, you’ve got to get, it’s all about people and the opportunity that we’re able to present for them. And everybody has this with them. What’s in it for me? And as a franchise or if we think what’s in it for them, we’re going to win. And I’ve always believed that attitude does work.

dan rowe (19:14.284)
Yeah.

dan rowe (19:23.442)
Yeah. What, what do you think’s the difference between some of your better franchisees and some of your worst franchisees? It’s got nothing to do with capital.

Scott Redler (19:31.922)
You know, I think it’s the, we have franchisees that see things and fix them and run right. We have some that, that get a, put the rose colored glasses on, especially when you start growing. It’s very critical for a leader to be able to make sure what they think is happening is happening. What do I mean by that? Well, I could talk to somebody who owns eight restaurants and they’re going to tell me how your restaurant is going. And on a one to 10, they’re going to give me the story of

nine when in reality it’s seven and they have some sanitation issues or whatever. I think it’s so critical to get the right leaders that truly understand where they are and can make the appropriate decisions to make their operations better.

dan rowe (20:18.034)
Any, uh, anything else that separates good franchisees? Like what are the kind of the reoccurring themes that you see in some of your best franchisees, what do they do different? Cause like again, at five guy or any brand I’ve ever had, there’s been struggling stores and it’s not always the store. Sometimes you put those in the hands of corporate or another franchisee takes them over the results are completely different, but what do you think it takes?

Scott Redler (20:41.354)
Well, take a guy like Kyle, a person who you know, and Kyle is focused on people. And he does a wonderful job with that. And for that reason, he’s a great operator. So I think someone who truly focuses and understands that the general manager is the nucleus, the catalyst, whatever, all these terms that they’re the person that are going to make it happen or not make it happen on a daily basis. And that’s how you judge. That’s how you see.

dan rowe (20:51.671)
Yeah.

dan rowe (21:08.45)
Yeah. Kyle has a whole program. He’s a franchisee, but his business philosophy is figuring out with every single employee what their trigger is. Somebody wants to make more money wants to get a car, whatever their thing is, he wants to tie getting that to doing their job. And so, you know, again, you think so many franchise or really so many people running restaurants are just trying to fill shifts.

He’s actually trying to have a fulfilling staff and staff who actually feels fulfilled doing their job, which is like a whole other level, which is why he’s having the success that he’s having.

Scott Redler (21:42.442)
long term that attitude towards we’re only about our employees it’s not in it for us if we forget worrying about us we’re going to win. Kyle has that servant attitude servant leadership attitude and he’s going to win big because of it he is in the short term but long term he’ll win bigger than most.

dan rowe (21:49.451)
Yeah.

dan rowe (22:00.438)
Yeah. And I’ll tell you, I know a lot of your franchisees, they like you. Like they like you. Uh, I, I know a lot of franchisees, some of our brands even that the franchisees don’t like the franchise or, but you like, what do you think that you do different so that your franchisees like you? I mean, you still are running a tight shift. You still have to run everything to standards. People still have to invest money. They’re doing all that and they still like you.

Scott Redler (22:26.39)
You know, I think we do a good job of listening. And the other thing is telling them the truth. This isn’t a game. We’re not trying to put a different message out there than what’s really true. And I believe in that. I mean, if I walked in and you and I could be friends, but if you weren’t running your restaurant correctly, I’m gonna be honest with you. Hey, Dan had a great dinner with you last night. It was a lot of fun. Hey, can we talk about your location on Main Street for a minute? Because…

dan rowe (22:48.459)
Yeah.

Scott Redler (22:55.182)
I walked in there and your door thresholds and your this and you know your staff, your staff acted like they didn’t care. But I’m going to be honest with you and then we’re going to help you come up with a plan to fix it. You know, we’re there to support and I think the supporting attitude of a franchise or is so critical. You know, it’s funny franchise or is that like the nickel and dime franchisees and I get that. And sometimes, sometimes it might make sense. Sometimes it doesn’t.

depending on the service. But if long-term we’re focused on franchisee profitability, franchisees are going to open more restaurants. So a little more on the three you have or do everything the right way and take care of you and you’re gonna have 10 in three years. I know which one makes more money.

dan rowe (23:33.387)
Yeah.

dan rowe (23:40.718)
Yeah. Well, and, and think about for, for you as the franchise or is like, you make more money with a 10 unit franchisee than 10 franchisees with one each, right? So it’s in your best interest and help your franchisees want to keep doing that. And it’s surprising. Like that just doesn’t happen that much. Let’s like, back to the, the advice to a franchise or like, I, like right now, I’ve got something that I’ve, I just witnessed. We have a brand, not, not one of our brands, just a brand I know about where the franchise or

the franchisees are struggling. The franchisees are struggling and the franchise or keeps layering in re vendors with rebates. And it’s like, these guys hate you because I mean, they all know what you’re doing. They’re struggling and you just keep trying to milk them for more money when all the money is in the backend. All the money is when you eventually sell the company or when you eventually get franchisees with 10 plus units and these guys do everything it takes not to have liquidity event or not, you know, not to have 10 unit franchisees.

Scott Redler (24:39.538)
You know, I agree. I mean, I’m a term I use a lot as BBM, basic business model. The basic business model has to work for a franchisee. And even if someone’s not growing, they are still representing your brand and talking to other potential franchisees. So that attitude, I mean, there’s one company, I’m not going to mention the name that we know, that was known as the worst in the industry, and they failed big. And I believe it’s a short-term gain.

dan rowe (25:02.305)
Yeah.

Scott Redler (25:07.79)
and future pain that’s going to occur if someone has that attitude. You can’t win. No long can you. And it’s no fun either.

dan rowe (25:12.638)
Yeah. No, but I mean, yeah. That the secret of a franchise or is making franchisees want to open more stores, right? Because if they want to open more, then they’re thinking about everything else. Right. They’re thinking about running stores to spec claim building teams. Like if they’re thinking about taking their money and they keep investing, then everything else goes.

Uh, well, the minute that franchisees start thinking, and I see it too, like you get franchisees that, that then start diversifying with other concepts. They’ve checked out franchise or lost them. You’re not going to get them back. Any advice how to keep that from happening.

Scott Redler (25:52.106)
Well, I mean, I think all the things we’ve talked about with focusing on the franchisee win is what keeps franchisees building restaurants and both sides when it turns into a double win. If you’re going to build more restaurants with my brand on it, I’m going to make more money, but I’ve got to make sure I’m doing everything I can in my power to help you be as successful as you can. And I would call it air on the side of the franchisee is a term that I’ve used for years.

if we can help, if there’s something we need to do, if there’s an issue, we’ve got to offer our expertise and more if needed.

dan rowe (26:29.662)
Yeah. Do you, do you, did you ever have a case where a franchisee just didn’t follow your system? They wanted to add new things. They, they sort of bucked the system, had really bad results. Like, like you got any examples like that?

Scott Redler (26:45.286)
do. And so I want to start with it was so funny. Mark Shore, who is used to be vice president of franchising, a very dear friend of mine, I work with him today in another company. And he’s great. But we went to a seminar one time on franchising and the speaker said, All right, somebody comes in, they drink the Kool-Aid, they love your brand, they want to do everything right. And then they sign your franchise paperwork. And then two days later, when they start building, they want to start making changes.

And we did have a franchisee like that, who’s one of our most successful franchisees today. And understanding and getting the attitude and the culture and culture’s critical too, that work in a restaurant, this person absolutely learned that the way they did it with another brand wasn’t gonna work for Freddy’s. And when they started making changes, one of our best franchisees in the country now.

dan rowe (27:45.554)
Yeah. Oh, good. No, we had people like at five guys. They’re like, let’s add chicken. Let’s add salads. Let’s add different colors. Let’s add this. Let’s add that. And Jerry was fanatical. He’s like, no, because we’re not doing anything until we make every single burger and fry that we already make perfect. 100% of the time. Like, and it would just, you know, like the relentless focus of doing one thing well. And you know, those, those guys blew up. So

You know, the same thing here is like, I just seen franchisees that come into system and try and change it. It’s like, why do you even sign up for the franchise?

Scott Redler (28:17.022)
We’re protector of the brand and a great example that would been one of our, you know, at the beginning we were learning to, I mean, Oh, Scott, you’ve already built a company to 500. Well, not really. Um, you know, I was learning and making mistakes along the way. And we allowed a franchisee to put salads on the menu. Didn’t work, you know, bringing in 22 new items for salads. And one of the, another franchisee came in and said, Scott, I want to put salads on you’re allowing them to do it here. I go stand right there. And I ran to the, uh, storage room in our office.

and I grabbed a handful of pens. And I stood across from him and I threw a pen at him. He caught it and threw it back at me. I did it again. He threw it back at me and gave me the look like, you’re crazy. Then I took the whole handful of pens and I threw them at him. And he goes, okay, I get it. Do what you do and do it well and go. Yeah, you can’t be everything to everybody. And what is Freddy’s? We make the absolute best steak burgers in the country.

dan rowe (29:04.266)
Yeah. What a great lesson. I like that.

Scott Redler (29:15.186)
We make them fresh, we make them hot. They’re craveable with a great team that loves being at Freddy’s for the most part, the majority of the country and in clean restaurants. And we’ve been recognized for that. And what do we wanna do? Let’s put on a pork tenderloin. It doesn’t matter. We don’t need that. We are the best at burgers. We have strategically engineered the way we cook French fries because we know when you’re in a drive-through before you even pull away, you’re eating a fry.

And we know when you’re grabbing your tray on the counter, if you don’t grab a fry before you even move your tray, you’re grabbing it when you put it down on your table. And if you get a fresh hot French fry, we win. Yeah.

dan rowe (29:53.526)
Yeah, there’s nothing like it. Like when it’s made, when it’s made exactly right. Any advice that you have for a guy who’s thinking about getting into franchising? So first time person is thinking about entering this space in the first, you know, for, for the first time, any, any advice for helping them think about how to be successful and build a business that they could sell for a life changing amount of money, it doesn’t matter the brand, it kind of applies to any, any brand.

Scott Redler (30:17.546)
I’m not a franchise or somebody wants to be a franchise or

dan rowe (30:20.93)
Franchise, let’s start with the franchisee. So if someone comes to you and says, Scott, I’m thinking about buying a franchise, give them some advice.

Scott Redler (30:27.418)
Well, first of all, you have to be passionate and like the brand. That has to start. You can’t go anywhere else. If you don’t have that component there, if you don’t love the brand that you want to build and grow, it doesn’t work. And then just really getting into the over hire at the beginning. If you’re not going to be the operator, your first general manager should be a regional manager from another company. And that’s going to be the GM of one and the GM of your second location.

and third location, they’ll be regional again. And they’re part of your business. Just getting people to think long-term. But the other component, and you brought it up, as a franchisor, we’re here to make you successful. We’ve made the mistakes. If somebody said, hey, you know, if you paint the inside of a Freddy’s purple, sales will go up by 5%. But we’re the ones who should try that, not a franchisee. And then if it doesn’t work, we repaint it back to our custard color and move on.

Do what the franchisee tells you. If they’re thinking in your best interest and you truly believe that, listen to them. Follow their processes, procedures. You’re getting a bargain. As a franchisee, I believe a franchisor saves enough in purchasing a loan just to pay for the franchise fee. If a franchisor doesn’t save somebody four or five points on purchasing,

They’re not doing their job. So, ranchizing is kind of free. If you look at it that way, I do. And keeping that attitude, it does work.

dan rowe (32:03.206)
Yeah. Any advice to a franchise or someone thinking about getting into like taking their brand and turning it into a franchise? I mean, I can’t stress enough focus on your franchisee success. Like that’s it. But any advice that you have for, for new emerging franchise or

Scott Redler (32:19.41)
Well, somebody, if you haven’t started yet, you know, it’s, it’s interesting to me, the number of people that, um, will say, I’ve got this concept, I’m going to franchise it and they don’t have one of, you know, if we’ve seen the successes and failures there, uh, the goal would be, you know, get a few open, hopefully in two markets, and if you get all the right signals and financials and everything, then start working on franchising and just be as franchisee friendly.

dan rowe (32:28.278)
Yeah.

Scott Redler (32:48.314)
as you possibly can. And the document might not always say that by the way, but your actions speak so loudly, I can’t hear a word you’re saying. If you’re presenting yourself as truly there to help them win, and you truly are, I’m not saying to play a game, you truly are, you will win and they will win. And when they win, they’ll grow. And when they grow, you win. So it’s a win all the way around.

dan rowe (32:50.048)
Yeah, so.

dan rowe (32:53.954)
Yeah.

dan rowe (33:09.474)
Yeah.

dan rowe (33:14.622)
Yeah. And I, I like what you said about be successful in at least two markets, prove that the thing’s not just a fluke in your market, prove it’s successful in more than one market, um, and have financials. Like you have to, like nowadays, I feel like if you’re not showing somebody item 19, I think that’s, I think there’s a red flag, oh, bigger chains. It’s harder for, because you’ve just too much to have to audit. But, uh, I mean, I think for an emerging franchise, or if you’re not sharing your numbers, then you’re hiding some.

Scott Redler (33:42.898)
Yeah, I agree. And you know, the good news with a potential franchisee when you have other franchisees is they can talk freely. And you know, that’s an important thing to do the due diligence. But once again, if you’re not taking care of your franchisees, do they care about the next guy coming on board? Probably not.

dan rowe (33:59.298)
They’re not going to give you, they’re not going to give you a good reference. Yeah. I think you, you said it earlier too. Uh, that I think the best thing a franchise or can do, especially when they’re growing is to say no, like you have to say no to the wrong franchisee. You think, you think that you got this huge victory selling a franchise, but if that’s the wrong franchisee, wrong people do the wrong things, they pick the wrong sites, they cut corners, they don’t treat their people well, they don’t run brand standards.

Scott Redler (34:12.009)
Yeah.

dan rowe (34:28.566)
And bad things happen there. There’s, and they’re certainly not going to be referenceable. In fact, it’s worse because now people can find them online. Like you get an article about selling a franchise in Nashville or whatever. And then a year later, that franchisee washes out. It’s like, you can’t hide that person. He’s online.

Scott Redler (34:45.641)
got to make, I mean, you’ve got to make the good long term decision and, and put the value of people where it should be. And franchisees, whether it’s your team that’s selling franchisees in a corporate office, general managers, your team, you know, respecting and treating everyone well, the culture of the company. You know, it takes years to build up culture, the right culture in the company and everything you do, you put, put things in the plus or the minus column with every decision, right?

You can screw up your culture in a day. And you just got to understand how important that is, along with the financial component of the business model, to win.

dan rowe (35:26.442)
Yeah. Hey, so, so Scott, so you really are a rags to riches story.

Scott Redler (35:31.431)
Yeah, kind of. It’s so hard to believe. So I haven’t learned how to spend money yet. My daughters are trying to teach me. They’re better at it than I am. Yeah, thank you.

dan rowe (35:41.762)
I’ll help you. Hey, so, and you and I are both on the National Restaurant Association Board, and I wanna talk about that for a second. I mean, I believe everybody who should be involved in the NRA should be involved in the NRA, whether you’re a restaurant concept, an operator, or a potential sponsor vendor, right? If you’re a vendor that’s making money in this business, like we all need to be.

actively involved in advocacy to protect our industry. But, but, but beyond that, it’s like, there’s so much wealth of knowledge and so much experience sharing that we can do to share secrets of success with other franchisees. But what are your thoughts? I mean, you know, you’ve been very active. I appreciate that. Like what are your thoughts on the NRA and how to get more people involved?

Scott Redler (36:29.674)
You know what, we need to continually remind people of what the NRA truly offers them. First of all, we’ve got a great leader. Michelle is doing an amazing job. And the next 10 or 15 years, she’ll be doing an amazing job for the NRA. That’s my belief. But understand, when we went through COVID, if the NRA was not involved in advocacy for our industry,

I think a third of the restaurants in our country would have closed, if not more. And we need to understand that, but it’s also the little wins. And I was very fortunate. I went to a lot of different States this year, talking to a lot of state restaurant organizations, which are so critical to our partnership with the NRA. And understanding all the little stuff the NRA does that people don’t know. They don’t realize, you know, we’re fighting, whether it’s joint employer or, um,

tip credit or, you know, right now with credit card swipe fees and we’re there to educate, we’re working for them and we’re going to more than pay back what they pay for membership. I mean, let’s understand swipe fees in general. That in, you know, there’s a state next to us that’s under a half percent in franchise, in swipe fee, and there’s some that are 0.8 and 0.9 and we’re 2.44 and they’re trying to raise it. So we’re just looking for

As our association, we’re looking for fair and reasonable. We’re not trying to win on everything. We’re trying to get fair and reasonable for our members to give them a great chance to be successful in their business. And that’s our goal. And all things start local and the association does a great job helping local chapters fight what needs to be fought for the right reasons and funding because it can impact the whole country.

dan rowe (38:24.939)
Yeah.

Scott Redler (38:24.974)
I’m still playing with fast act in California. And I think it could have messed up the whole economy in California, because it doesn’t just affect somebody goes, everybody should make more money. I agree with that. Go work harder and get promoted, and be passionate about your job, you’re going to make more money than you ever thought you could earn. But I just raising it all it did was, it takes inflation up. And it’s not just the

dan rowe (38:45.262)
Mm-hmm.

Scott Redler (38:53.918)
group that they were specifying, it’s going to be all restaurants because if I’m hiring at a Freddy’s in California at 20 bucks an hour, you’re going to have to pay 20 bucks an hour. And so will the mom and pop independent restaurants. And so will every retail organization out there. Well, pretty soon the basic business model for those businesses and our country is made up more of independent restaurants and chain, even though chain seems to get more press at times. Independent restaurants are

equally as important and independent businesses are equally as important and basic business model does not allow wages to go up at that rate at that speed and allow someone to continue to make payroll.

dan rowe (39:40.228)
Yeah. Talk about the beauty of NRA with Serve Safe, Pro Start, and this whole effort of getting and keeping better people longer in our industry. I think most people don’t understand the NRA, like all the things the NRA does about that.

Scott Redler (39:58.146)
You know, so the NRA Education Foundation with Serve Safe, starting with that, let’s understand Serve Safe and the fact that go back 30 years ago and think for a minute of all the times you heard about foodborne illness in restaurants, a lot, right? How much you hear about now? Not much, why? I think Serve Safe has been a key factor in helping to eliminate foodborne illness in our country. Now, Serve Safe also has served success.

Surf Success is management training and hourly training, online programs to help someone better themselves. And once again, you wanna make more money, complete a Surf Success course, and you’re gonna be worth more to your employer or to your next employer. You know, a big passion of mine, I love ProStart. And when you think about it, we’re in 1800 schools in the country right now. And I think, I believe the number’s 18.

180,000 kids or something that are involved in ProStart in learning culinary and management skills that will help them further their career. And I mentioned earlier, I was with a class in Missouri and of the 28 or 30 kids in this class, I would have hired 28 today. And it was so exciting and so refreshing to see that. And the teacher there, Jen Turner, was a Missouri…

Teacher of the Year for Pro Starter, I’m not sure the exact award, but you could see it. And it was exciting to see, makes me feel great for our industry for the future.

dan rowe (41:31.878)
All right. Well, good. Well, Scott, you are one of the success stories, one of the biggest success stories in the industry. So I appreciate you taking time. Sharing your knowledge and, um, for, for everything you’re doing in the industry. So thank you very much for joining us and look forward to seeing you soon.

Scott Redler (41:48.978)
Thanks and my pleasure and really enjoyed it. And remember we are the industry of opportunity. We always have been, and I think a lot of people changing lives and families and future generations. What a great thing to be able to say.

dan rowe (42:05.674)
Absolutely. Thanks again, Scott.

Scott Redler (42:07.806)
Thanks.

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