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Smart Franchising With Fransmart

Episode #9: From Distribution to Franchise Dominance with Bill Gellert

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Smart Franchising With Fransmart - Episode 1
May 28, 2024
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From humble beginnings in food distribution to becoming a franchise king with over 50 Five Guys locations, Bill Gellert’s story is one of remarkable transformation and savvy business expertise.

Learn about Bill’s early days selling Cinnabon franchises before he and his family took a chance on a then-small burger business called Five Guys and discover how Bill leveraged his experience in food distribution and his keen sense for great locations to build a franchise empire

It goes back to focusing on what’s important and not getting distracted. It’s easy to find excuses. Instead, you should be focusing on the system and just executing it at a high level.” –  Bill Gellert

This episode is packed with unique insights from a leader who knows how to grow a business from the ground up while maintaining a commitment to quality and community.

Tune in for an insightful discussion full of practical tips and firsthand experiences that reveal how simplicity and consistency lead to business success.

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.

Read the transcript

dan rowe (00:02.422)
All right guys, welcome back to Smart Franchising with Fransmart and today we’ve got one of the most successful Five Guys franchisees that we’re gonna be talking to, Bill Geller. I think when I first met you, you were a Cinnabon franchisee and then lucky for us, your family also became one of the original Five Guys franchisees or early on in Five Guys. And now you’ve got.

over 50 locations and I read your bio, you’re you’ve moved up the ladder. You’re the president of the Cinnabon franchisee council, the Five Guys franchisee council. And you’re about as target a franchisee as any franchise or could have. So appreciate you sharing your secrets of success today. So really appreciate it. So with that real, real quick, I mean, I think people, I think people should only get into franchising if they really want to get wealthy,

it’s just not worth it otherwise. Like unless you’re building a business big enough to become a company, like buying yourself a job, it’s a lot of financial risk, a lot of contingent liabilities, but the people who really build it into a company, that to me is the target. And you guys have done it, you’re over 50 locations. So with that, Bill, can we hear a little bit about your story and about how you got started and a little bit about your journey till now?

Bill Gellert (01:23.022)
Sure, Dan. I was in a food distribution business. I had recently sold the business family business that I had operated and was working with another company. Uh, when, uh, one of my uncles called me and said, you know, I think I have something to be really interested in. Uh, it took a little convincing, but, uh, went and looked at it. Um, we formed a partnership with his children, my cousins.

Uh, and we started out in Cinnabon, which is back in the days when we first met, uh, you know, we started out with just a few stores. We built that up, uh, at our peak, we had 16 different bakeries. Um, and at some point we started looking to get more center of the plate. We had, uh, ventured into Quiznos, which, uh, at the beginning was a great investment. But, um,

It just shows you that things can also turn south quickly, sometimes on the other side of things. And in between that period, we started looking and Andy, actually, one of my cousins, I think he had lunch with you to be precise. And you were the one who introduced him to Five Guys. So I guess we should thank you as part of our journey for sure. So we did that and we grew pretty steadily.

dan rowe (02:34.668)
Yeah.

dan rowe (02:39.874)
Hmm

Bill Gellert (02:47.226)
I had a director of operations and what really fueled our growth is I had a great guy, worked for me eight years, he left for another position, gave me three months notice. So I have nothing to be grateful and wish him the best. But I turned around and there was another smaller franchisee in Indiana who we were very friendly with and I thought highly of. I called him literally the next morning and proposed us working together.

You know, in short, that’s worked out great. It gave us the courage, if you will, to expand geographically. So we’re in 10 states now. And, uh, you know, we nearly doubled our size in those four years.

dan rowe (03:36.995)
And you also bought out my wife’s best friends locations, Lori Lowe’s locations, some of them.

Bill Gellert (03:42.17)
I did buy some of them, but I’m hoping that Lori will at some point decide that she wants to move on from the others.

dan rowe (03:50.478)
That’s all there is. Yeah. What? So, how many five guys do you guys have?

Bill Gellert (03:56.45)
We’re at 56.

dan rowe (03:58.294)
56. How, uh, just roughly, how many of them did you buy versus how many of them did you build?

Bill Gellert (04:04.83)
We have, we purchased a…

20 of them and the others we have built.

dan rowe (04:13.518)
Okay. Yeah, that’s okay. And how big was Five Guys? How many locations were they when you guys signed up?

Bill Gellert (04:17.218)
So we’ve done a warm mix of it.

Bill Gellert (04:23.181)
90 stores. 90 stores. Oh yeah.

dan rowe (04:25.354)
Okay, so less than 100 stores. Okay, so still a little rough around the edges. And, but compared to Cinebond, that probably had a lot of stores. What made you guys comfortable going with an emerging early stage concept?

Bill Gellert (04:38.326)
I think there was a commonality. What attracted us to Cinnabon was the guests or customers passion for the product and how the product was clearly a leg up on the competition from a positioning standpoint, as well as the product itself. And we did this crash course of going to a bunch of different hamburger joints and a bunch of five guys. And the thing that was remarkable was the people’s passion for

that product and for that brand. And we felt like that was just a winning combination and that they, at that time, they, they had a unique niche and their focus was also very similar to Cinnabon in the sense that it was a narrow product line, clearly focused on what they do, do few things and do them really well.

dan rowe (05:34.121)
And so,

How like with five guys, because I know from my experience with five guys, some franchisees thrive, some franchisees struggle. What’s what’s the big reason that you see is any sort of I mean, I’ve even seen franchisees that struggle corporate takes them over builds them back up, flips them or another franchisee buys a struggling store and within no time they’re strong stores. But what like what do you make of wise in a group like five guys or any other brand you worked with?

succeed.

Bill Gellert (06:07.522)
I think it’s largely a case of focusing on what’s important and forgetting about all the rest. You know, it’s really easy in a fran relationship to get distracted of what’s important. So a lot of the struggling franchisees would look at the corporate structure as, you know, these guys are in my way, they’re just nothing but policemen, and there’d be this negative

feeling and our feeling was let’s involve them. Let’s try to direct their efforts and make them part of the process. Uh, and I think that may, that, that attitude shift makes a big difference. I mean, besides just focusing on financials, picking the right sites, um, you can’t, that’s the other thing you can’t rely on corporate to do all these things, they will help you and they may provide sites, but you just can’t take that.

blind like that. So I would say that’s probably the second key.

dan rowe (07:09.57)
How about following a system? Like, do you see, I remember when I was at Five Guys, some franchisees were, you know, why can’t we add chicken? Why can’t we add this? Why can’t we do that? Like they focused on all the things that Five Guys didn’t have where I found the people that were thriving were the people that just executed every day. Like you bought a system, execute the system. What do you think about that?

Bill Gellert (07:31.178)
No, that’s absolutely true. But again, I think that goes back to that fits under the umbrella focusing on what’s important and not getting distracted. You know, it’s easy to find excuses, what you don’t have or what you’re lacking or what should be or what shouldn’t be. And I think to your point, focusing on the system and just executing it at a high level, um, but I think also within that. You have to take a look at it and say, how can I operate within that system?

And maximize each element of it. You know, it’s almost like if we look at a store and of course we have tiled floors, right? So I look at each tile and say, Hey, how can I get a return on that? Well, I take each element of our business and do the same thing.

dan rowe (08:19.926)
Wait, see it, you cut off, see it again?

Bill Gellert (08:22.034)
I apologize. I, so, you know, to me, it’s not only just following the system. And I do believe that you’d have to do that. So, uh, you, you don’t want to focus on what you can’t control. You’re not going to, we don’t control whether we’re going to add products. We don’t control whether there’s going to be a marketing campaign or whether we’re going to put up ads with fancy, you know, uh,

labels, et cetera, but what we can focus on is the day-to-day operations, the systems that we’re given, but then within that, take a look at what we’re given and how can we maximize that? How can we break that down further and excel? Because I think where we try to separate ourselves as an operation is getting involved in the minutiae of the business, of each element.

dan rowe (09:19.586)
So what do you think are three things that you guys do better than other people, or as well or better, but to have the results? Are there a couple of things that you can point out that you guys do differently to have? To get to 50-plus locations, that’s a game. That’s generational wealth kind of a company. So what do you guys do that so many people don’t do, do you think?

Bill Gellert (09:44.566)
I think we focus on, first of all, we focus on lead measures rather than lag measures. So I think that’s really a big factor. So you look at a financial statement. Yeah, financial statement is a lag measure. You look at COGS and you say, oh, my COGS are too high or my COGS or whatever. My labor’s too high. That’s a lag measure. What you really have to do in the case of COGS is say, hey, how am I performing versus recipe versus ideal?

dan rowe (09:53.682)
What’s an example of that?

Bill Gellert (10:14.378)
Do I have waste? Am I following recipes? If I do that consistently, and then you break that down further, and that comes down to having good projections that are broken down, not by hour, by quarter hour, that you back that up with labor that fits what those projections are, and then give your people the tools of how to watch that. They’re all building blocks. It’s like building a foundation, if you will.

Uh, and your cogs will come out fine. You will maximize what you’re able to achieve. If you follow those recipes and that is without sacrifice and quality, of course, to your guests, labor is the same thing. If you’re diligent about tracking, if you want to lower your labor rates, it’s not always about how much you pay people. It’s about how much they’re able to produce. So having position charts, putting ACEs in their places. Um,

dan rowe (10:54.658)
Yeah.

Bill Gellert (11:14.498)
giving them, showing them how to do something so that they’re efficient at that activity and then making sure you have the right talent in the right place at the right time. So you anticipate what you’re gonna do for business and that means paying attention to trends, weather reports, et cetera. So I think that’s probably, if there’s one thing that truly separates us, that’s probably as much as anything.

dan rowe (11:34.166)
Yeah.

dan rowe (11:41.858)
So of your 57 stores, how many shifts have you run? Like how many times have you actually been on the schedule running shifts?

Bill Gellert (11:52.019)
In the last year, I’ve probably only done about a handful. To be honest, I’ve run shifts. But probably in the first few years, I’ve ran several hundred shifts. You know, you know.

dan rowe (12:04.878)
Okay. So, so you’re really hands on. So, but no, but you get to 57 stores or 50 plus stores and growing with a good team. You’ve got to have, I mean, you’re here doing a podcast with me while someone’s, you know, like your restaurant’s going to open up shortly. And so any thoughts on hiring and recruit and retaining really good people? Like, like how do you find them? How do you comp them? How do you treat them so that really good people stay and that they actually want to help you build your business?

Bill Gellert (12:34.446)
Yeah. Look, you asked me for three points earlier. I’d say the second part is that we’ve been very fortunate and managed to hire a lot of really good people who have similar values, who buy into the systems, both that five guys has and that we have, cause that’s that buy in and you referred to it before is truly important. You know, we give you a system follow it. If we’re all rowing in the same direction.

we are much more likely to be successful. Matter of fact, I’d almost say the actual direction is a little bit less important than getting everybody to work in sync. To use a sports analogy, do you think that it’s always the most talented teams that win? No, it’s the teams that everyone is pulling in the same direction with the same goals and they’re properly aligned. So I think that’s a big key. How we get them, I think it’s the way we treat people.

Um, I’m really fortunate. I have still several people from 1998 when we first started. Uh, I have probably of my, our management team. I have 30 or more people that have been with me over 15 years. And they started, you know, some of them have started out as teenagers and they’ve just developed over time. What we get there though, is a lot of buy-in.

And then when people see their growth opportunities for, they see those people that set an example and they say, hey, this is someplace I can have a career at.

dan rowe (14:14.326)
Yeah, because you hear all these stories about, you know, it’s tough to find people, it’s tough to get labor.

And it’s not that it’s not tough, but there are some people that are working through it. There are some people that are able to do it. And so, yeah, I mean, so you’re the way that you guys treat people. You mentioned something you said it’s not just the franchise or its culture, but it’s our culture, too. How do you guys as a franchise co is your own family office or your own franchise company? What like what sort of a culture, what kind of atmosphere is that? And how’s that maybe different or how does that kind of work?

with, you know, like you’re both trying to figure out what the franchise or culture is, but then you’ve got your own too. So talk about that.

Bill Gellert (14:56.934)
Yeah, no, I would say the franchise or has a culture, but ours is very different in many respects. There are some shared similarities. Um, the first thing is that we are all a team of equals. We may have different roles, but if I visit a store as a rule, I don’t stand in the dining room and direct or sit at a desk and talk to people. I’m typically on the line even now.

Um, I feel that’s the best way to communicate. It shows that I have some understanding of the tasks that they’re up against. I, at this point, I’m probably not as quick as most of the people. So when the rubber hits the road, I try and not get in the way, but, but I’ll work alongside them. Um, I will talk to them. I attempt to develop relationships, um, whether it’s calling managers on their birthdays directly, or whether it is.

dan rowe (15:35.918)
Thanks for watching!

Bill Gellert (15:52.586)
maintaining an open line of communication that people feel comfortable, texting me, calling me, et cetera. Um, I think that those are all really important. You know, it gets harder as we get bigger. We’re over 1400 employees and maintaining that contact is really important. At least now it probably shifts more of the management level up on a regular basis. And below that, it’s a more intermittent basis, to be honest. Um, perhaps one of my frustrations, cause it used to be that, you know,

If I go back 15 years ago, I knew everybody in their whole life story. Um, but we’ve tried to continue that philosophy of culture. So even our regional managers take a similar approach, um, that they’ll roll up their sleeves, they get in with the people, they work with the people, even though they are directing them. Um, and, and then I think that we show them in many ways how we are committed to their long-term success.

and their long-term health and prosperity.

dan rowe (16:56.694)
Yeah, that’s great. I mean, I can imagine a general manager, you know, in the weeds, going through what they normally go through in a regular, uh, you know, week and then all of a sudden getting a call from you on their birthday. Like the fact that you remember them and care enough to do that is, is definitely something that separates you from most, cause most don’t do that. Most, most barely even know most franchisees barely even know their employees names. So, I mean, I talking from experience without one.

But what, like going back to what it takes to have above average performing stores. So whether, you know, like any, any secrets of success that you know of, like, like why are your stores better than most people sales profit? Like any tricks there you can share.

Bill Gellert (17:44.13)
You know, again, it’s just, it starts always with the people, uh, you know, uh, if you don’t have good people, that’s like having a bad foundation on your house. Um, so at the end of the day, that will drive it a lot, obviously picking locations is perhaps another aspect because

you can overcome it, but then that’s something that you literally have to do that. You have to overcome it. Um, and then as I referred to before, I think that the other big aspect for us is, is really focusing on a, what we can control and B driving into those lead measures in a very minute and precise fashion.

dan rowe (18:35.766)
That’s the first time I’ve heard anyone, that’s the first time I’ve actually heard lead versus lag. So I like that. What, how would you explain that to someone, I mean, how would you explain that to another franchisee that you’re not looking at the P&L as much as you’re looking at these lead measures and like, why is that better?

Bill Gellert (18:57.39)
I think, you know, I think of this as building blocks. Um, so let’s, the P and L is the end result and the beginning is setting a schedule, ordering product, picking a place. And so if you start at the beginning and work forward, uh, take it from the seed to what you have on your plate, so to speak, um,

you’re gonna probably be more successful. The key is at each stage of that growth or development or process that you’re breaking that down to see how you can do that best and getting your people to buy into that philosophy.

dan rowe (19:45.57)
That’s good.

Hey, let’s talk about franchisors for a second. So pull from any experience that you’ve ever had with good franchisors, bad franchisors, or even, even other stories that you’ve heard other people, you know, when there there’s no money having single unit franchisees, if you’re a franchise or it’s no sense having single unit franchisees as that’s like being in quicksand having big multi-unit franchisees is the key you want big, you know, multi-unit franchisees. Do you have any advice for franchise or is like, what can franchise or do?

to prioritize the success of their franchisees and keep people like you growing versus looking, like you keep building five guys instead of going and doing another brand. Like you stay focused, that’s money for a franchisor. So what can franchisors do to stop frustrating their franchisees and actually make franchisees happier, more successful and wanna grow?

Bill Gellert (20:39.622)
Yeah. So the very first thing, if we start at the beginning of the process, is making sure that you have a really fine mesh about selecting franchisees. Cause we are each as strong as the weakest link in our system. Um, and so to me, that’s the first is to take people who have, that will buy in, that have the right commitment, the right focus, the right set of experience and the right assets behind them.

Um, then to me it’s utilizing that franchise community as a sounding board. You know, the five guys set up is rather unique in that they operate at a third of the system. So when we’re cut, they bleed. So to speak. And so that puts a sort of in this much more in the same boat than let’s say a franchise model where there are no. Um,

There’s no operations really by the franchisor. And what it has enabled us to do is they use us as part of the process. We’re more involved in the process earlier on. And again, so it gets back to your statement about using their systems, but we help make their systems even better by providing input, whether that is on purchasing or whether it’s on operations or it’s talking about HR issues or common problems.

There is more collaboration between the two. And ultimately if we’re successful, it’s easy for them to sell more franchises because if we make money, we’re going to want to build more stores and more people are going to want to get in the system, which increases the enterprise value of our operations. So it’s that, it’s that shared mission that I think is really what the

dan rowe (22:17.918)
100%. Yeah. 100%

dan rowe (22:29.606)
Yeah. Nolan, I’m surprised that they’re…

Bill Gellert (22:34.262)
The key is to embrace that, not to treat them as.

employees or you know, actually in some sense it’s how we do treat our employees, but it’s not how most people look at their employees.

dan rowe (22:50.05)
Yeah, no, I know franchisers who look at their franchisees as news, new nuisances, like, you know, necessary evils or whatever. And it’s like, are you crazy? These people prepay you to come in the system, they pay you to stay, they’re building your brand and brand new markets. And someday when you sell the company, they get nothing for that. Right. And so it’s just bizarre.

Bill Gellert (23:09.734)
Yeah. Well, there’s another factor too, is that you get people from a lot of different backgrounds. I mean, if I look along the franchise advisory council and look at the range of experiences each of us bring, we each make the others better. That collaboration is not just franchisee to franchisor, but it’s within the franchisee community, sharing best practices, sharing challenges. And competing.

to be better as well.

dan rowe (23:41.494)
Yeah. What are some things that franchisors do that they might not realize it, but what are some things franchisors do that frustrate the hell out of franchisees?

Bill Gellert (23:52.306)
virtually everything, probably. No, just kidding. I think that the most common thing is when there are edicts handed down that have not been filtered through the franchise community first. You know, if you think even just within, and I made the comparison before between employees and franchisees, if you filter things through and say, Hey, I’m considering doing this. I want your thoughts on it.

Or do you have ideas in regards to how to improve in a particular area? You get buy-in before you even made the announcement of what you’re going to do. If you get buy-in, we go back to that rowing in the, in sync with each other and you’ll get a higher level of execution. So I think just not handing things down as blind edicts, thinking, you know, at all, you might, by the way, you might have the right answer, but if you.

dan rowe (24:38.099)
Mm-hmm.

Bill Gellert (24:49.71)
take the time to get by and ahead of time, everything will go smoother and it will probably operate at a higher level. It’ll filter further down through the system.

dan rowe (25:00.43)
They’re going to trust it more too if they know that fellow franchisees have also helped vet it. Right. So, yeah. Yeah. But I mean, I can think of a franchise or right now who literally just comes up with stuff willy nilly and half of it’s good, half of it’s terrible. And the franchise franchisees cringe when they see the emails from these guys.

Bill Gellert (25:05.474)
That’s correct.

Bill Gellert (25:18.806)
But you know, the challenge there, unfortunately human nature, we remember the ones that don’t work way more than the ones that do. And we tend to hold on to those. And again, maybe at the beginning of this, I said, you know, focus on what you can control because that’s where the downward spiral can also just accelerate.

dan rowe (25:26.42)
Yeah.

dan rowe (25:40.31)
Yeah. No, you’re giving us good nuggets, man. I appreciate it. Hey, what, talk about like when you had mentioned earlier with Cinnabon focus menu, five guys focus menu. I mean,

I think that’s another place to give advice to franchisees or just like there’s, you know, when, when things aren’t going the way you want them, you don’t have to add more stuff on your menu. You guys have highly focused menu, but talk, I mean, talk about why with five guys, it was okay. You guys have packed restaurants, same store sales growth and the menu is highly focused.

Bill Gellert (26:10.85)
Yeah. You know, it’s interesting coming into the brand was a little bit of a culture shock at first, uh, because. You know, they don’t truly advertise in the sense of advertising, you know, they will not use adjectives to describe themselves as an example. Jerry Morrell would cringe if I walked up to somebody and say, how’s your meal? He he’d be of the philosophy. I should know how their meal is before I ever walked up to the table.

dan rowe (26:39.044)
I like that. That is a jerryism.

Bill Gellert (26:42.346)
That is a very jerryism. You know, they dropped the word, when we first signed on, it was five guys, famous burgers and fries. And then he had this epiphany to say, you know what, who are we to call ourselves famous? You know, people determine whether we’re famous or not. You know, so right about then, I think we were about 140 stores and he drops that. Everyone has to change their signs and look now, you know, there’s a few thousand stores all around the world. So you know, it’s almost reverse logic in a way.

dan rowe (27:08.482)
Yeah. And he, yeah, he always resisted the idea. People were saying there should be chicken on the menu and there should be salads on the menu and blah, blah. And he was just relentless about like, I’m not doing anything else until what we do is perfect every single time. Like he was really, really relentless about a couple of things. But having said that, you guys eventually added milkshakes.

Bill Gellert (27:26.242)
Yeah.

Bill Gellert (27:33.302)
Yes, we did.

dan rowe (27:33.502)
And you got a big, you got a big smile on your face about that. So how did, how did it go where a franchise or work collaboratively with the franchisees to introduce a new item?

Bill Gellert (27:36.778)
I do.

Bill Gellert (27:43.396)
That was not that smooth. But they came to their credit. They changed their opinion because you use the reference. We shouldn’t be doing anything else until we can do perfect burgers and perfect fries.

Bill Gellert (27:59.23)
On the day that we presented, our group sort of led the effort to get milkshakes. And we had put this whole program together, which I knew they were going to have major issues with because they, they said, well, if we consider it, but only if it’s hard packed, they put all these restrictions on it, which we ignored all of the restrictions. And we spent, but we anticipated their objections and put together a program.

with that in mind, we spent six months, several franchisees, employees, relatives, friends, you name it, we brought people in, we brought suppliers in and we were prepared. So we’re on the day of our presentation to the family and senior corporate management. And Matt Morrell comes up to me and says, you know, look, I’m going to keep an open mind and he’s wagging his finger in my face. I’m going to keep an open mind, but just not so you understand.

that we have no business selling milkshakes until we can make perfect burgers and perfect fries in every location on every day. And this woman from Electro Freeze, the milkshake machine, she just starts crying. She’s like, why did we waste all our time even coming here? Because then the next thing out of his mouth was, and I’m just gonna tell everyone how I feel, but I’ll keep an open mind. Like, what do you mean? So.

dan rowe (29:20.099)
Yeah.

But there’s a reason that they have thousands of stores around the world. And it’s because they’re relentlessly focused on the guest experience. Like they have they I mean, relentless isn’t even a strong enough word. Like they’re fanatical about the.

Bill Gellert (29:37.09)
fanatical. They truly are.

dan rowe (29:38.41)
Yeah. About the guest experience. And that’s why customers have so many other options. I mean, I remember Jerry, we don’t want to do delivery because the fries, we don’t want to do online ordering and stuff like that, but it’s like, you know what? He was protective of the brand and through any fad or any sort of short term thing that you would have chased. Yeah.

Bill Gellert (29:57.546)
You would really have to go through filters and, you know, but being in the system a long time at that stage helped us develop something that fits seamlessly into what the brand was about. And to Jerry and the family’s credit, even though, even when they approved a test, they were skeptical. They did it largely because they felt pressure at that point. At that point, the brand had expanded quite a bit.

Um, there were same store sales issues on the East coast cause there had just been a lot of growth. And franchisees were more, uh, you know, a little bit more revolutionary if you will, or, or aggressive in their attitudes. So this was a way to mollify them and prove them. They all didn’t know what they were talking about. But of course, with the target on our back and the tests, you just have to operate at a higher level. And then.

dan rowe (30:33.239)
Yeah.

dan rowe (30:49.878)
Yeah.

dan rowe (30:57.342)
Yeah, let me ask you this. So with all the headwinds 2024 and all the headwinds in the restaurant business now, labor, food, you know, interest rates, whatever. Do you still believe that it’s possible for someone to get into franchising today if they pick the right brand and do all the right things like pick, pick the right brand, hire the right team, execute the right standards. Do you still think it’s possible today for somebody to, to start off and then build dozens and dozens of locations?

Bill Gellert (30:57.398)
the end to it.

Bill Gellert (31:26.442)
Yeah, I think we’re look, there are times when it’s more difficult. Interest rates are higher. So cost of money is there. Uh, there might be other headwinds. I’m going to tell you, it’s always it’s same, same different pick a period. And I’ll tell you, there’s a different challenge. Um, the, you know, the trick is, um, can you be more efficient and can you operate at a higher level than the person next door to you? And at the end of the day, you can’t be afraid of headwinds, whether

dan rowe (31:40.705)
Yeah.

dan rowe (31:52.268)
Yeah.

Bill Gellert (31:56.662)
macroeconomic or they’re in your neighborhood. Because I’m going to tell you, if you do well, someone’s going to open right across the street from you. Okay. There is going to be somebody new that says, I can do what you do better. And, um, you know, you just don’t rest in this business, but at the same time there’s always opportunity, you know, you just have to, it’s just, it’s how you look at it. Is it half full or is it half empty? And.

dan rowe (32:16.716)
Yeah.

dan rowe (32:23.406)
So I mean, one thing I look at is there’s 8 billion people on the planet. Everybody wakes up hungry. They’re going to eat something. So all the people that are in your neighborhoods, they wake up every day. They’re going to eat something. You just have to be the option that they choose, that they default to. So hey, you mentioned you brought up something. And I didn’t originally write this down to ask you. But when we started growing Five Guys, all of a sudden, all these copycats start popping up. All these other.

Qdoba and Chipotle, you know, I was near Qdoba in the beginning. All these burrito guys came up when I grew five, got all these other burger places popped up and they’re gone. What do you think is the difference between why some succeeded and some struggle like, like you mentioned the guy going across the street from you. So I’m sure you’ve had those guys come in. They probably think that they’re going to come in and be the next five guys. And then they’re gone. Why do you think that is?

Bill Gellert (33:19.47)
Well, I think it’s, first of all, it’s just focusing on that execution. And, and again, to me, it’s about peeling back, trusting the system, having the right priorities. You know, you look at a lot of these brands and they’re just, you know, I love it every time one of my competitors adds a product, I’m like, yes, you know what? There I now own my niche much more clearly. Um, and.

The other thing is I think that they start worrying about what everyone else is doing and they start changing strategies. You know, they’re not con they don’t have that staying power to say, Hey, we’re going to do what we do and just do it better. I think that’s as a brand and as a company, that’s what we really strive to do. You know what?

We don’t have to do it because everyone else is doing. We just have to focus on executing at a really high level and making sure that four walls experience is exactly what it should be and more.

dan rowe (34:24.973)
Yeah.

Yeah, no, you’re right about that. The more things that they do, the more things that they’re likely to screw up. Right. And like, just like you said, the people only remember your mistakes. Like they expect you to get it right because they’re paying for you, but they’re going to remember the mistakes and you increase the chance you’re going to have mistakes, the more things you try to do if so. The last question I have for you. So if, if like, how should a franchise or think if somebody’s starting to come up with a new brand or somebody’s trying to franchise and they want to attract franchisees like you, what does a guy like you?

look for in a new brand? Like now that you’ve been around the block, like what are some things you’re like, I’m not even gonna consider that.

Bill Gellert (35:05.602)
Um, you know, I go back to what attracted us to five guys. I tell you, you want to see an emotional reaction to that product. I think, um, that to me is the, that’s that first cut because if it isn’t there, look, I can make money in a lot of other franchise operations, but I think both myself and our people all take pride in what we do.

And that helps us be who we are. So I’m not telling you that’s right or wrong, but I think for us, that’s really a critical element. So that first thing is the passion for that product where there’s clear differentiation. Um, the second thing probably from our own perspective is we want to see something that’s in more than one area. So a lot of brands started out. They’re great in their market. They built a reputation.

trick is how does that translate outside of that market? And that’s where a lot of brands tend to stumble. And, you know, there’s a whole list of reasons why, but to me, have they proven that they can go outside their home market? Um, when you have those two elements now we’re saying, you know, that’s, that’s a tempting target.

dan rowe (36:22.271)
Hmm.

dan rowe (36:30.006)
Yeah, because I mean, you’re going to want to talk to franchisees. Like the first thing that sales guys might get you on the phone, but then before you sign up, you’re going to want to talk to the other franchisees to see how they’re doing. So it’s important that they’re successful in more, more different markets.

Bill Gellert (36:40.051)
Yeah.

Bill Gellert (36:44.934)
Yeah, I think perhaps, and this would be go for an experienced person or an inexperienced person that’s just looking to get in for the first time. Do your research. You’re going to spend all this money. You’re going to, you’re going to commit to a franchise agreement, a development agreement, a lease. You’re going to pay contractors to build a store. You’re going to buy equipment. You’re going to hire people. And then you begin to have an idea of whether it was a smart play. Talk about gambling.

So if you put, just pick a number of hours, how many hours would you pick? And at what rate? And you say that investment is probably really minimal. I think a lot of people where they fall short, they don’t do that legwork, that research, they don’t put that time in. Whether it’s talking to people, looking at sites, looking at competition, understanding it all, get your doctorate first.

dan rowe (37:44.366)
Yeah. Hey, any on that, any mistakes that you guys feel like you made along the way or any way you guys course correct? No, but it’s important. Like what, uh, like anything you wish you would have done different to be more successful quicker.

Bill Gellert (37:49.653)
You don’t have enough time.

Bill Gellert (37:59.05)
You know, when we first got involved in Cinnabon, I should have done more research. I would tell you. I, we had six stores early on two were absolute disasters. And that’s all my fault. It’s, it’s because I did not understand that regional mall market well enough. I did not take the time to truly, truly understand the dynamics. Um, and.

And I’ve seen it repeat over and over again, not so much with us because we sort of applied that red hot stove rule. I touched that stove. I got burned. I’m onto a different stove now. Um, that, uh, I would say that’s probably the single biggest thing. Um, the other thing is really, really try to avoid hiring management from outside. You know, it.

dan rowe (38:42.317)
Yeah.

dan rowe (38:56.835)
What do you mean?

Bill Gellert (38:57.79)
It’s a longer process. It is a more tedious process to promote from within. At the end of the day, it’s more financially efficient. There is zero question and it is, it helps you maintain a better cultural consistency within your organization. So we have tried to take those quick fixes and the failure rates like 75%. I mean,

dan rowe (39:27.254)
Wow.

Bill Gellert (39:27.406)
It just, you know, it’s just staggering. It’s like, uh, you have to kick me in the head that many times for me to figure it out. And then so some, but if you’re going to bring someone in, it’s not ready. Now you have to provide the support for them so that whatever you give them to do, they’re going to be successful and not overwhelm them. So you don’t ruin a great employee by putting them in a position they’re not quite ready for.

And then you’re going to have to accept there’s going to be different growing pains and it’ll take you longer to get where you want to go perhaps, but it’s a more linear path.

dan rowe (39:57.352)
Yeah.

dan rowe (40:08.458)
Yeah, that’s great. Bill, you’ve been awesome. Thanks for all these nuggets, man. I’m going to, I’m going to check in with you from time to time. Hopefully you’ll come back on the, on the podcast and keep sharing your wisdom. So thank you very much. Any, uh, any parting, any parting thoughts?

Bill Gellert (40:13.26)
Okay.

Bill Gellert (40:19.874)
Well, now thank you Dan.

Bill Gellert (40:24.882)
No, Dan, when I grow up, I want to be more like you. You’re the one that we should be doing this in reverse. I should be asking you the questions and I should be learning from you.

dan rowe (40:36.3)
Come on, come on. All right. Thank you so much. Hello to the rest of the Geller family and I will see you soon. Thank you so much.

Bill Gellert (40:41.954)
Thank you. All right, take care, Dan. Thank you.

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