Small Business Insights

VALUE must transition in 2011

2011-02-02T15:42:00.000-08:00

Value is much bigger than a $1 Hamburger, a $0.59 Taco, or a $5 Footlong. During the financial crises, we've seen many restaurants clamor to offer the next great discount. Not without some turmoil though. As companies come up with bottom basement pricing to compete, franchisees have to squeeze their margins. Burger King fought off their franchisees who claimed they were losing money on the double cheese burger. Finally they compromised and eliminated a slice of cheese to satisfy the franchisees. Do you think they lost customers when they changed it to one slice of cheese? Would they have lost customers to McD if they would have raised the price $0.10 or $0.20? I doubt it, but no one knows, thus fear dictates the rules. What about cutting the cost of the product? This is a dangerous game too. Customers are savvy to this tactic and suspicious sometimes when its not even true. Taco Bell recently was sued with allegations of using large amounts of filler in their beef to keep the prices low. The company defended itself by posting ads that share they use 88% USDA-inspected beef in all their meat. The remaining 12% is seasoning. They most likely didn't change anything, but once they offered a $0.59 taco, people got suspicious. Steak n Shake is also battling with Franchisees about pricing. In the pricing wars, there can only be so many winners. Many franchisees live off small margins so unless their traffic gain is significant, squeezing their margins means certain death. A little communication could go along ways. What if each company had a strong panel of franchisees that they actually listened to to help them with Value decisions? What if they worked together to widen the definition of Value beyond pricing?

Subway made a huge splash by re-inventing Value with its $5 Footlong. They successfully refocused a new value equation away from the dollar menu. This was a big achievement and began a revolution across America with casual brands following suit and beginning their own $5 offers. This was surely welcomed by the franchisees, right? Not by everyone. Any decision made by a company and forced on its franchisees, will come with unrest. Many Subway franchisees felt they ran the promotions too long and kept too many at $5 after the promotions ended. What if the burger giants or Subway would have offered a .25 break in royalties during these promotions. That way, neither win unless a significant increase in traffic is realized, putting everyone on the same page. Company's must learn to work side by side with their franchisees. Maybe it's not done with royalties, but it must be done with better communication.

Lets look at the movie, "You've got mail". Meg Ryan's charm wasn't enough to battle the pricing discounts of Fox Books. Perhaps her prices were set a touch too high for her customers to recognize the Value she was offering. Perhaps if she set up meetings with her book whole sellers, she could have convinced them to lower her costs, helping her remain in business and likewise protecting their sales stream to her. After all, when she closed, they lost a customer too. Of course, none of those story lines would fit in the movie.

How does the local baker use these thoughts to stay in business when the grocery giants have their own bakeries that are often more convenient. Rather than allow themselves to be squeezed out of business, many sell their bread line directly to the Grocery under their own label, introducing their brand to more people than ever before. They sell it for a whole sale price and let the volume gain justify the profitability. The second piece to this scenario is the experience the baker offers. The large grocery competes through convenience and price, but rarely can achieve the same level of charm as the local baker. Customer interaction and focused service are the ingredients the savvy small business owner has available in their back pocket. While some independents only see the stress, many successful small business owners love what they do and demonstrate that love every day to their loyal customers. Combine this, with the value of adding their brand to the grocery line up, and they win by having more people tasting their great bread than ever before.

During the last few years, as the economy has been felt directly or indirectly by all of us, the Value of a buck has become more and more relevant. Two things have happened. Either people are cutting back on frequency of visits or dollars spent per visit. What can we learn from the baker? While many consumers still define Value by price and make decisions accordingly, many others define it by the overall EXPERIENCE! If a consumer is going out to eat less, they are also choosing more wisely. Mediocre food & tolerable service will not get their repeat business regardless of price. Restaurants that offer reasonably priced high quality food with exceptional service will be chosen over and over. Value must transform once again to the Experience!!

Thousands of new restaurants were built in the US in 2010. Despite this fact, we still lost 5,551 total restaurants from 2009, with independents taking the biggest hit. In fact, Fast Casual was the only segment to show gains with an increase in restaurants of 2%. Its a balancing act to keep your customers engaged. We will all have to work hard to reverse the trend for 2011. I'm up for the challenge, how about you?

Creating my own path

2011-01-23T17:26:00.000-08:00

Ever been told you couldn't do something and found a way to do it anyway. That's the story of my life. It started when I was young and just became a pattern for me.

At 12 years old, my tenor singing voice received a lot of compliments. Enough so, that like many young children, I dreamed of being a rock star. I tried out at the end of seventh grade to become a member of a singing group called Panther Edition at McLoughlin Jr High in Pasco, WA. I made the group, but by the time my singing career would start in eighth grade, my voice transitioned to baritone. I still had the dream, but my beautiful tenor voice had abandoned me. I would never be a rock star or would I? As a Senior and student leader in a small private Christian High School, I saw an opportunity to fulfill my dream. After talking the school & church officials into doing a talent show, called the Gong Show, I immediately started organizing the event that would make me a rock star. I had written a song about the fantasy me. It boasted how tough it was to be seen in public when women were always after me. I had a friend write and record music for the song. I was a shy student, which made the song a huge hit. I had no idea and hadn't planned for what was about to happen. The girls screamed throughout the entire song and stormed the stage afterwards. We received unanimous 10's from the judges. I was indeed a rock star for 5 glorious minutes and had just learned a valuable lesson about creating my own path.

At the age of 32, I decided that I wanted to play co-ed softball. Unfortunately, none of the teams in Lynnwood's recreation league were looking for a 32 year old man to join their teams. Rather than settle for this, I decided to be the coach and get my own team. Two months later I had put together a team filled with players from Denny's, the Little League, and the Boy's and Girl's Club. We played for two fun years together and even won a tournament. Of course, I organized the tournament, recruited the teams, secured the fields, and even umpired.

While I worked for Denny's, I proposed we purchase a satellite and make our lounge into a sports lounge. Denny's said "no". They didn't want to spend that kind of money. I'm not good with no, so I organized a silent auction and raised $1500 to buy a satellite on our own. Even though Denny's was ticked at me and wanted to discipline me, because our customers donated and purchased items to raise the money for the satellite, they felt trapped and decided to let me put the satellite in, calling it a "Test". Our lounge sales jumped 20%.

I 2004, Lorri and I discovered Red Mill Burgers in Seattle. They were a small 1800 square foot fast casual gourmet burgers restaurant and doing very well. Both of us thought it would be fun to buy out the company and grow it. After some research, we came to the conclusion that Red Mill was not interested in selling and wished to keep the two restaurants family owned. Not to be discouraged, two and a half years later, we developed our own brand and opened the Blazing Onion Burger Company in Mill Creek, WA. Sometimes the new path you create becomes greater than the path you were blocked from. We had no idea back then, what the Blazing Onion would become. I may have lost my tenor years ago, but I'll always be a rock star.

Financial Crisis has big effect on small business lending

2010-12-24T15:14:00.000-08:00

I'm not a banker and I don't pretend to understand the stock market. In fact, their are many elements to the financial crash of 2007 that I still don't fully understand. I do understand that many banks became greedy and made poor decisions concerning home mortgages and investments in hedge funds that they shouldn't have. The housing market collapse was followed by the stock market collapse and then many lost jobs. The larger majority of us had nothing to do with the collapse, yet all of us have to deal with the consequences.

To remedy the crisis and prevent us from the next great depression, the Federal Government created the stimulus package and bailed out the banking industry. Despite many losing their jobs and businesses filing for bankruptcy, we were now responsible to have faith in the economy and start spending money. It was now the American peoples turn. Large businesses and Small businesses like the Blazing Onion were encouraged to continue growing and provide more jobs. Wow, quite the plan.

Our company, the Blazing Onion, had remained financially strong despite the collapse. Sales were still growing over the previous year. An opportunity jumped on my radar in Gig Harbor to build a third store. After carefully researching the community, landlord, and traffic patterns, Lorri and I determined that this was a great opportunity. We prepared our strategy, updated our business plan, and prepared to ask the bank for funds. We knew things were tough so we were prepared to invest 40% of the money needed ourselves, which is twice what was required for an SBA loan. This was the strongest we had ever looked for a loan request. We were going to help the economy with this decision. Surely the loan would be approved.

I had just listened to Warren Buffett talk on CNN. He said that during these collapses in history, the rich became richer by taking advantage of business failures and buying them up. Hearing him speak, I became very determined. We are definitely not rich, but damn it, we were going to build and open a new Blazing Onion. After all, our sales were constantly improving, we had paid off several SBA loans already, and we had a great track record with our current SBA loans.

I made an appointment with our bank. Lorri and I carefully prepared our documents. This was a solid deal. I reminded the bank enthusiastically about our food, decor, service model and growth plans. I then laid out the exciting opportunity to build our third Blazing Onion with our first full service Sports Lounge in Gig Harbor. I told them how busy we were going to be. This was exciting. As is usual when I present to a bank or vendor, my enthusiasm had made our loan officer hungry for a burger. Things were feeling pretty good, right? Wrong! A week after our meeting, he called and said "Sorry, but we're not loaning money right now". They had given us 5 previous loans so it felt pretty bad.

We had already started things in motion. What now? I was determined to keep making appointments until someone said "yes". Bank after bank I visited. Each bank that told me "no", I made give me two banks that might say "yes". This behavior continued for some time. I understood from the news that many banks had been given money to survive and re-invest. It turns out, the banks took the bailout but many still weren't loaning. I had to find one that was. Remember all those bank commercials with happy people smiling that just received a loan, I went there! In the end, 10 banks said "No". One was being audited by the Feds the morning of our appointment, which made the loan officer so nervous that he whispered during the entire meeting so the Feds wouldn't know he was talking to me about a loan. They were seized and sold to another bank within days of my visit. Sterling Savings said they would loan it to me if I had the identical or greater amount of money in the bank to secure the loan. Wow? If I was that well off, I wouldn't have stopped by. Most said "It looks like a great opportunity. I'm sure you'll be very successful. I'm really sorry, but we just can't loan money right now!" Despite the constant rejection, I approached each bank with the same enthusiasm. In June of 2009, Brian Salva from Heritage Bank in Tacoma called me. I can't remember much of the call. I had heard it so many times before. Heritage was bank #11. Like Charlie Brown's teacher, it all sounded the same. Wait, what did he just say? Breaking through the grey murky cloud of polite conversation, I heard something I hadn't heard from the other banks, "... WE ARE GIVING YOU THE LOAN...". Turns out Heritage was loaning money to small businesses like Obama promised. Heritage teamed with us, helping us provide 60 new jobs for the economy. All those banks that said "I'm sure you'll be very successful!" were right, we beat all our projections at Gig Harbor. Thanks for the faith Heritage. We just went to Heritage for our fourth Blazing Onion at Alderwood Mall. It took Heritage Bank less than a week to approve us.

In life, most of us will come face to face with rejection, even being knocked off our feet. Stand back up, dust yourself off, and stay on the offensive. Don't let someone else control your destiny. Many will block your immediate path, but you have the ultimate decision to let them stop you in your tracks or begin forging a new path.

Service on Demand?

2010-12-02T08:26:00.000-08:00

Last October, Lorri and I took a trip to Europe. We had been in that airplane for 14 hours when it finally landed at the Paris Charles De Gaulle Airport. We found a bus to Champs Elysee and from there; I thought we could walk to our hotel, which was near the Louvre. I asked Lorri what she thought of this plan and she nodded, trusting I knew what I was doing. I was excited, a new city, such magnificent architecture, I just wanted to walk through the streets and take it all in. I should have paid more attention to Lorri. She was tired. 14 hours on a plane wiped her out. She just wanted to be at the hotel, rest a moment, and then get something to eat. Instead her idiot husband was making her drag her luggage 2 miles through the city. The next hour and a half would not be prudent for me to write about so we'll skip ahead.

Finally we arrived at our hotel. We took our luggage to the room and took a small break. The Maitre D pointed us in the direction of a small cozy restaurant just around the corner from the hotel. In France, it doesn't matter that you just flew 14 hours and then walked an hour and a half to the hotel. Dinner will not be fast tonight. You will be here for the full experience. There are no half experiences on the menu. You will begin by waiting for your server, then your food, then cafe & dessert, and when they're ready, not to be confused with when you're ready, usually 90 -120 minutes later, you will receive your check and be allowed to pay.

In America, we are in a hurry. Sure, there are plenty of nice dinner houses that you can relax in, but lets face it, tradition is not our mantra. With over 160,000 fast food restaurants in America, you can start to understand the mentality in America. We work hard, we cram a ton of stuff into our lives, so sitting at a restaurant for a few hours is a luxury we don't have time for every day. In Paris, this may be a nightly tradition, but in America it has been relegated to more of a weekend event.

Enter the new restaurant food model called Fast-Casual. Created for those of us still concerned with time restraints, but want an experience closer to casual dining. Chipotle and Panera Bread are the two highest profile fast-casual restaurants in the industry, but that doesn't mean the consumer calls them fast-casual. Even Zagat calls Chipotle “the new generation of fast food” and says Panera offers “fast food with class”. 14 Percent of respondents to a recent Web-based consumer survey, told Mintel researchers that they still did not understand what fast-casual means, even after a detailed definition and multiple examples. Only 5% of consumers are even aware of the term “fast-casual. Restaurants like Wendy's are telling us, “It’s waaaay better than fast food. It’s Wendy’s.” McDonald's and Jack in the Box are building their restaurant more upscale. Are they all fast-casual now? I can tell you this, with 15% annual growth in the fast-casual segment, they would like you to think they are. Fast Casual is still a blurry field. Lets face it, with so many players claiming to be fast casual and just as many pretending to be, I couldn't even define it. I can only describe my definition of fast-casual as it relates to the Blazing Onion.

What makes us different? Atmosphere, food, and service are the quick answers. Our decor is warm and welcoming. We're not rushing you through with a red and white landscape. We don't serve your food in a brown paper bag. We don't cook your burgers in a quick toaster style oven. We don't make you sit on uncomfortable chairs that cosmetically look nice. Warm colors, brick, comfortable booths, and lots and lots of televisions adorn the restaurant. The hamburgers are fine dining style, prepped in house, made from fresh All Natural Angus 100% Ground Chuck and cooked on a broiler. Our sauces, soups, fish batter, and much more are made in house. We have 25 Gourmet Burgers on the menu. When you add the exotic choices like Wild Boar, Buffalo, and Lamb as well as the healthier options like our house made turkey burger (might be the best in the industry), chicken breast, and veggie patty, you could say we have over 125 Burgers to choose from. We do all this at prices that are less than most casual restaurants serving similar menu's such as Applebee's, Red Robin, Chili's, or Ruby Tuesday. They have all recently tried to compete for the consumers $$$ by offering more discounting. We'll just remain committed to serving quality foods and refuse to compromise, while keeping our prices reasonable.

You say, "Yeah, but you make the guest do most of the work to save labor $$$ and then call it fast-casual, Right?" The answer is "No". Look around our restaurant on any typical night. There are plenty of team members scurrying around utilizing our labor $$$. That's not what fast-casual means to us. We wanted to create a restaurant that utilized all the benefits of the fast food model while absorbing most of the service and atmosphere attributes of a casual dining model. To accomplish this, the guest must begin the process in the lobby by ordering their food. With the menu being so large, this causes some confusion for our new guest, but it doesn't take long to become a seasoned veteran. The visible benefit is for those that might be in a hurry. Their food has already started to cook as they find their way to the table or booth. They have already paid their bill and since the food will find them at the table, there is virtually no waiting for any service. While this fits all the buzz words & phrases surrounding the definition of fast casual such as, fresh food, nice atmosphere, reasonable pricing, quicker service, etc... it's not why we chose this service model.

Like many new players in the fast-casual segment, we have many twists that make us unique. It starts in the lobby. Our restaurant is split 50/50 between a fast-casual restaurant and a full service sports lounge. If you choose the lounge, you will receive traditional service. We get many enthusiastic compliments for our lounge service. Customers that go in our lounge go there for the interaction with friends and our team, the sports venue, or sometimes because they just prefer full service. We are always trying to raise the bar, establishing great service behaviors throughout our team.

We set out to create a restaurant that offered great service, but allowed the guest to control the experience more. The idea of human emotion being an influence over service, makes service a continual challenge. Our restaurant was created to improve on the already established service model we have all become accustom to. If you choose the restaurant, you will get to control your experience with our "Service on Demand". First, at the register, by choosing to close your check for a quicker exit or leave it open to add more beer, cocktails, or dessert at the table. After ordering, you might notice another benefit, spotting your beer following you as you choose your table. How's that for service? At the table, if you need assistance, simply raise your 'Service Alert'. We will be there in 30 seconds or less. You do not have an assigned server, but instead the entire staff is here to see to your every need. This eliminates the waiting, waiting, waiting for service. Have you ever needed something, but your server has disappeared into the back room and everyone else is too busy to notice? How about wanting another beer, but your server just began taking an order for a party of six. Good luck. Here's my biggest pet peeve. I'm going somewhere after dinner and its time to go. I set my credit card on the table, only to have everyone ignore it because they're not my server. At the Blazing Onion, you are now in control. With our 'Service Alert' system, you can stop head turning trying to make eye contact with a server and get back to enjoying the conversation at your table. Our tips are shared by the entire team, similar to Starbuck's tip sharing, with our team members usually receiving an additional $2-4 an hour from those tips.

Lorri and I are foodies and love to experience new restaurants. Seattle is a great place to live and has many great food experiences to choose from. When we go to many of the awesome fine dining restaurants or new Chef inspired neighborhood restaurants in Seattle, service is usually top notch, with plenty of staff to offer you outstanding service, but at a premium price. When we experience casual dining, lets just say, sometimes I wish I brought my Service Alert!

The high wire balance of working with your Spouse

2010-11-16T23:30:00.000-08:00

So you want to start a business with your spouse. The title alone is intimidating. I'm sure some of you think it's full of blue birds singing and soft harp music, but most will admit, even in front of their spouses, "I couldn't do it!" They're right, it's definitely not easy. Lorri and I have been married 26 years. Good communication behaviors are the keys to a successful marriage and it's no different for working together.

After graduating college, Lorri worked her way up from public accounting to Accounting Manager, to Assistant Controller, to the Controller. She was the Controller at three different companies and in two of those, she was responsible for significant changes that helped improve the companies.

I say this only to introduce the fact that a better title to this blog might be, "Working with your spouse when you're both the Boss!" It's been over three years and we're still trying to figure it out. I have over 30 years in the restaurant industry, so while we both have every intention to share the leadership 50/50, it's not that easy. Sometimes when I think I'm sharing, the perception is the opposite. At times, we're both guilty of leading in directions that the other doesn't support. Recently I was speaking to our employee team at one of our meetings. I get really pumped up and inspired during these meetings. At some point during the meeting, I was confronted with a question which I answered. Shortly after answering it, as my eyes moved through the room and fell on Lorri, I could clearly see that she didn't agree with my answer. Welcome to Marriage Business Partnership 101.

Having said that, there is really nothing like sharing a dream with someone you love. Lorri and I balance one another and bring different strengths to the table. This is one of the reasons we are successful. This is also why we choose to run the company together. Conquering the obstacles, a marriage business partnership brings to the table, requires constant discussion and collaboration, but so does any business relationship.

So here are five keys, as I see them, to a successful Marriage/Business Partnership:
1. First and foremost, you must truly want to work with your spouse. If work is your sanctuary away from home, don't do it! If only one of you wants to work together, you are in for some stormy weather.
2. You must have defined roles. In our case, we both share equal authority at home as well as at work; however, we still have defined roles. Don't kid yourself, this is where you will get into the most trouble, defined or not. What decision is in her defined role or in mine? Can it be decided without seeking the others opinion first? I would describe this as a rocky climb with many dangerous pit falls. There is no perfect answer, because on any given day, the rules are subject to change. After all, by default, this often falls under the marriage umbrella, which doesn't necessarily share the same rules as the business umbrella.
3. You should always pre-discuss meeting agenda's a day before conducting a management meeting. It is not a good practice to disagree in front of the team, but rather, you should show up united. I would also recommend never reviewing the agenda on the way to the meeting. This is a relationship where home can be brought to work. If the discussion creates a disagreement, the emotion of this being so fresh, could make an appearance in the meeting.
Years ago, as a young married couple, Lorri and I were arguing fiercely about some subject neither of us remember now. At the tail of the argument, with emotion at it's peak, the door bell rang. We both went to the door. A family friend greeted us. Lorri immediately smiled and welcomed her into our home. We all sat at the kitchen table. The conversation lasted for some time and was both upbeat and full of laughter. At some moment in the conversation, I gently touched Lorri's hand with affection. She smiled. I thought to myself, "This is great! She's not mad at me anymore!" An hour later, we walked our friend to the door. I held Lorri close at the door. To me, the sun seemed a little brighter and I could hear birds singing songs of discovery in the distance. I had stumbled on some ancient secret to help forgive an argument. After saying good-bye and closing the door, the sun seemed to disappear completely. The birds were quick to abandoned me as if sensing some warning sign I wasn't smart enough to see coming. Immediately, Lorri pushed away from me and said, "Quit touching me!" The friend did not deserve to be in the middle of an uncomfortable situation and Lorri made sure they weren't; however, she had not yet forgotten nor forgiven my role in the argument. The moral is that it takes time to move past your emotion after a disagreement. There is no ancient secret.
4. Always be willing to compromise. Lorri and I have much different management styles. We also both have successful track records. What if we try Lorri's idea that is much different than mine? Maybe I think mine is the greatest path on earth, but in reality, Lorri's is probably just as good or maybe even better. Learn to trust one another.
5. Never be afraid to disagree. 'Yes People' have never prevented a mistake. If you cherish your company, find a way to work through this. I believe this can be the most important key to overcome. If one spouse hates conflict, poor decisions are more likely and resentment is inevitable. You must figure out how to present or hear the disagreement by respecting one another. In marriage, one doesn't always have to have a reason to have a disagreement. For example, you're driving to dinner with your spouse. One of you ask the other where they would like to eat. The response, "How about La Palmera?" The reply. "I don't want Mexican tonight" This could be because they had Mexican for lunch, but then again, it could be because they are not that hungry and the thought of Mexican just isn't doing it for them. Those of you that are married surely understand that the why is simply not necessary to investigate, nor is it usually prudent to respond with "...then, you decide?" It is a best practice to continue choosing restaurants until the other finally says OK. Business decisions; however, are more complex and should not be made based on today's emotion. At our management meeting boardroom, we welcome other opinions, but expect any disagreements to have merit and be accompanied with a well thought out alternative solution. The same idea works for disagreements between married business partners. You need to work hard to communicate your disagreements as business executives rather than a married couple. Often times, when Lorri and I still disagree, even after both supporting our thoughts with good information, we will share our disagreements packaged as 'different options' at our management meeting boardroom and let the team help make the decision.

Lorri and I are the first to admit that we're far from perfect at these five keys; however, understanding these keys, knowing our own short comings, and constantly communicating with one another, helps keep us on the right path. Thanks for sharing this moment with me.

David Jones, CEO/Co-Founder
Blazing Onion Burger Company

"A good problem to have!"

2010-11-06T15:26:00.000-07:00

Last week I wrote about franchising a 'solid' brand, but what if you're brand is your own? Will it be the same as opening your first store as a franchise? The answer is an emphatic "NO!". While no other franchise brand has opened more stores than Subway, any 'solid' brand has had way more trial, error, and correction than your new concept idea. Afterall, you haven't opened yet. Just to be clear, I wouldn't label a franchise brand 'solid' unless they have at a minimum: opened three stores, excel in quality and service, have excellent training programs, an excellent equipment package, good design, a product people want, and sales & profit that allow a debt service ratio and payback period around 4 years. I would also question a brand that doesn't own any company stores and especially one that has never owned any of their own brand. Now some of you reading this know that Subway doesn't own company stores, and yet I am a proud owner of 3 Subway franchises. They use to and I think they should now. A company who owns no stores themselves will occasionally make decisions that don't consider franchisee profitability, but that's another blog. We'll leave that one alone today.

Lorri and I opened our own brand in 2007. Franchising is great, but after you have more than one, unless you can work in all of them at the same time, there is very little about the franchise that is about you anymore. If you have a strong desire to plant your own seed, you'll have to open your own brand.

You already know a lot of this story from my first blog, so I will try not to repeat things. First I should tell you a little about Lorri and myself. We are both drivers. Lorri has always been very smart. She loves college and would go back to take a class every day if she had time. She is very analytical and doesn't dive into decisions without spending a lot of time on research. I am a chess player, and just like chess, I'm often planning many steps in advance. Lorri says that I am the President of the Dreams & Fantasy division of the company. I tend to make decisions quickly and dive in fearlessly. To illustrate: A few years ago, when our children were young, while waiting for everyone to get ready to go out, I turned on a Jackie Chan movie. We were heading out for a fun evening at the movie theatre with the kids. Jackie Chan's stunts and martial arts had got me excited. We all piled in the car. Lorri drove. At the stop light near the theatre, something came over me. In a race to get tickets, I opened the door and told Lorri and the kid's, "I'll meet you at the entrance". I then ran across 3 lanes of traffic and headed straight for the 8 foot tall link fence that divided the theatre from the busy highway. I jumped onto the fence and proceeded to scale it. In my mind, I was about to scale the fence, flip over the top, land on my feet, and race ahead of the car to buy the tickets. In reality, I got stuck at the top, ripped my shirt, and after some painful moments, joined my wife and kids who had already parked and were in line to enter the theatre. Lorri would have given this plan more thought before she leaped from the car. I'm always willing to jump into action and she keeps my shirt from ripping.

We had planned for 2.5 years to open this new restaurant. We knew what it would look like and most of the menu, but there were still a lot of things to do to get ready. We hired a designer, SGID. We hired my Subway contractor, PacTech Interiors. We hired Bargreen/Ellingson to design the kitchen. We hired a Chef to help solidify the recipes and train the kitchen staff. We made decisions about POS, food vendors, beef supplier, bun supplier, beer & wine, smallwares, phone service, gas service, electrical, cable, CO2, Coke, interviews, training, fabrics, floors, toilets, broilers, oven, shelving, dish machine, menu boards, brick, paint... "make him stop!". You get the idea. On paper, it was great! The Blazing Onion Burger Company was a great name. Burger Company made us seem established. This was going to be the time of our lives.

When we finally opened, we were more than a $100,000 over our budget. Somehow Lorri would keep finding somewhere else to get the credit. We decided it would be best to open quietly. A few friends knew when we would open, but we did our best to keep it a secret. Opening day was a Monday. Creekside Village was still a contruction zone. Only a few businesses had already opened. The slow beginning would help us get things figured out. Oops! On March 7, 2007, we opened our doors. OMG!! It was like someone had gone door to door letting everyone know a new burger restaurant had opened in Mill Creek. Could they smell the smoke billowing from our hoods? How did they know? Word of mouth is a powerful tool! The lobby was full, people were waiting outside to get in, and the waiting list was more than an hour long for weeks. By the way, we have now opened three Blazing Onions and all of our secret openings have been bombed from day one. We had planned to ease into business and give the model some room to learn and grow. When feeling worn down and sharing this problem with friends, they inevitably answer "That's a good problem to have!"

When marketing any campaign, the first priority is service. If you get 10,000 new customers from your campaign, but service sucks, you'll never get the return visit or establish loyalty. Sure, some tickets might be slow, but if the food taste great and the service is wonderful, they'll be back. We simply weren't ready for what was about to happen. We just didn't know it yet. The hood selected by Bargreen couldn't keep up with the volume. We were a start up company. If we did well, we might do $400,000 our first year, right? They looked at our projections of $800,000 - $1,200,000, nodded their heads politely, and said "this is the hood you need". During the first six weeks, the hoods would kick the smoke back into the cooks faces. The cooks would put on goggles to survive the smoke. Somewhere below the sea of smoke were the burgers. Some of the smoke would leave the cooks to billow out into the dining room. We would scramble to open all the doors, announcing that things were under control, we weren't on fire. After Bargreens fixed the hood repeatedly, and we established a direct link to the fire department, it finally worked. We still use Bargreens and are very happy with our relationship. This just serves as an illustration that when doing something for the first time, even a 30 year company can steer you wrong. Be ready with a plan B.

During those first six weeks we had more problems than anyone should have to deal with in their entire lives. We had to replace the hot water heater because it couldn't keep up (A good problem to have). We had to buy a new freezer, because the one we had wasn't big enough to store the onion rings and ice cream we were going through (A good problem to have). We had to rent more storage space in the parking garage, fix the fireplace several times, replace the broiler grates because they kept catching grease, call repair for 10% of the equipment, and this was only a fraction of our problems. However, the main issue we had was in our kitchen and it was NOT a good problem to have. Our chef had not trained his team very well. We should have paid more attention. No one knew the menu when we opened. Often times it took an hour just to get a burger. This was a detail that could have killed us.
Here's a typical day: Arrive at 6:00am, begin prepping for the day, clean again, get everyone pumped to open the doors and have a smooth day, open by 11:00am. Busy by 11:30am with a line out the door, Point of Sale is not sending all the tickets to the kitchen. It seems to send 1/2 of some orders while not sending others at all. I really think it might be possesed. The kitchen is having problems getting the orders correct. I apoligize to all our guest that have been served the wrong food. Things are finally beginning to slow down for the afternoon. Everyone takes a small breath, "5 minute breaks" for everyone. Jaws music starts playing, it must be 4:30 pm: Glances of horror are silently shared as we all realize dinner is coming. Dinner is not like lunch. Busy doesn't describe it. Every seat is full, the lobby is anxious, and outside the masses wonder if they'll ever get in. Some of the burgers are served burnt, others are raw, but still a few miraculously are correct. As we get busier, smoke starts building up. The cooks put on their goggles and air mask. Lorri and I brace for the fire alarms and try to console our troubled guests. A guest calls me over and chews me out for building the restaurant too small. Another one says they hate our french fries. Someone is tapping on my shoulder. I try to apoligize and ignore the tapping, but the tapping is starting to hurt and its getting louder. It now is accompanied with a chalk like piercing scream of "David! David!" This has become my least favorite name! "The kitchen broiler has caught on fire. All of the burgers are gone.", they say in a panic. We quickly learn that the kitchen has put it out, but they are starting from scratch on the 50 tickets hanging from the rail. There is also a stream of tickets still hanging from the printer. I can't help but wonder if anyone has food yet. Lorri helps the kitchen and I gather myself and go table to table apologizing. Some have already been there an hour. Slowly we start serving food. Uh Oh! Another shoulder tap. "David! We are out of icecream!" "David! We're out of buns!" "David! We're out of french fries!" "David! We're out of burgers!" Lorri is running to every store in town. Finally after buying every bun, bag of french fries, gallon of ice cream, and #'s of hamburger from our local grocery stores, things start to slow down. We've served four brands of french fries tonight. I wonder if anyone noticed? At midnight, I pour myself an ice cold Mac & Jack as we reflect on the day and plan for tomorrow. "I miss my bed!"

One morning, 14 days after we opened, while getting ready, I noticed Lorri didn't look right. I ask her if she was alright. She turned with water in her eyes and started beating my chest. She pleaded "What have you gotten us into!" We both cried and hugged one another for strength. This was probably the toughest thing we had ever experienced. We were addressing and correcting issues daily, but it would take a while. Slowly we would fix them all. Six weeks after our opening, we started hearing compliments. That was a good day. We could finally take a day off.

We had to terminate our Chef and hired an experienced General Manager instead. We had hired a Chef to help with menu and recipe when we should have hired one who specialized in burgers and restaurant openings. Darius, our new GM, was strong in restaurant openings and had a kitchen back ground. He is now our Regional Manager. Together, we all pitched in to reemphasize our core values. The kitchen team turned out to be pretty good. They just needed better training. You can battle the equipment failures and design issues, but the kitchen must be ready to function to have a successful launch. When we opened our second Blazing Onion, the kitchen rocked. Lorri and I felt unneeded. Lesson learned. We have learned to surround ourselves with managers that challenge us. 'Yes' people make you feel important, but they won't tell you when they think there might be a better option.

I hope you enjoyed this. My next blog will surely cause some tension at home. "Working with your Spouse"

David Jones, CEO/Co-Founder
Blazing Onion Burger Company

Opening our first Subway Franchise

2010-10-30T13:06:00.000-07:00

When you open your small business doors for the first time, you want everything to be fun, go smoothly, and to make a lot of money. I'm sure that's really how it goes for some, but unfortunately it has taken a while for us to realize that end.

In 1997, we ventured to West Seattle to purchase our first business. It was a large Subway with low sales. It was fairly new and had never reached it's full potential in sales or profit. Consequently, it was for sale at a bargain price. We had very little money, but just enough to give the bank a down payment. The challenges to become profitable are often daunting. If we could look forward into a crystal ball, we may have made a decision to not go forward. Thank God we didn't have one. That would have been a mistake. The problem with a crystal ball, is that you need another crystal ball just to tell you when to look into the future. Pick the wrong time, and the challenges may seem overwelming. You have to know who you are and know if you'll rise to the occasion.

When checking the value in purchasing an existing franchise, there are definate things to look for. Is the company brand solid, are their opportunities for growth, is it profitable, and how about that location? In this case, Subway, as a brand, was solid and growing. Jared had not yet become a public story. The Subway was just off a main intersection, challenged by city tree's (that can kill your visibility) and poor parking (due to high traffic at Starbucks, Windermere Real Estate, and a Drug store). The service was ok, but there were big opportunities. There were just four employees and the manager (Now a Subway owner and good friend) was tired and worked long hours. Profit was negative and sales were rock bottom. Let's recap: Location has potential, service can be improved, sales & profit suck, Lorri and I can afford it, ok... deal!

I went through Subway's testing and soon was approved by both Subway and the bank. In early September, I flew to Milford, CT for training. I remember talking to my kids on the phone. It was one of the first times away from them. My eyes filled with water. I was ready to get home and anxious to start. I came back from training ready to go. It was sandwiches. What could go wrong?

When purchasing a proven franchise, most problems have been ironed out, so it's more about meeting the customers and building a base. Not to say, we didn't have some problems. Two of my favorite stories are about gloves and having surgery.

Gloves were still new to the industry and had just been made mandatory by Subway when I returned from training. I have short stubby fingers. None of the sizes available would fit me. I would try to get the gloves on, but to no avail. Most of the time the gloves would just rip in half. Other times, I would get them on my hands, but the fingers would hang off two inches from my fingertips. One time, after finishing making a sandwich, I noticed that one of my glove fingers was missing. This raggedy Andy thing wasn't working. The customers would look at me thinking "Come on!" as I struggled by the sink. The whole spectical would take minutes from my life that I will never get back and cause panic to swim uncontrollably inside my head. It was the OJ court scene over and over. After my Subway field consultant had a good laugh watching me, Subway gave me special permission to delay wearing gloves until they had more sizes available. After that, as much as I would scub my hands, my customers wanted someone with gloves to help them. This was very embarrasing. It took a month for the company to find a size of gloves that would fit me and make them available for purchase.

After a month, things were really starting to go well. We had really stepped up service. My employees were great, my customers were spreading the word, and sales were slowly growing. That's too easy though, right? Six weeks after taking over the Subway, I woke up sick. Turns out that I needed emergency gallbladder surgery and would be out for a week. I had been working 60+ hours a week and had too small of a staff to replace myself. Lorri called her job and arranged to cover the vacant hours. Problem is, she had her own job, and hadn't had the time to learn much about the Subway. From the hospital bed phone, I coached her on opening & closing duties, how to use the POS, and in our biggest challenge, how to weave party bread and make a 6 foot sandwich. She was a trooper. When I went in for surgery, the restaurant called. They were bombed and short handed. Lorri called our daughter Justine, who was 12 years old at the time, and told her to be ready. She smiled like everything was ok as she sent me in for the surgery. The moment I was wheeled around the corner, she ran to the car, picked up Justine at home, and drove the 35 minutes to West Seattle. Quickly they caught the restaurant up, cleaned and stocked, and headed home. She dropped Justine off at the house and quickly found a place in the hospital waiting room as if she had never left. It was like a scene in a hollywood comedy. The doctor had looked for her after surgery and was a little agitated that he couldn't find her. Hey, we're small business owners. That's how we roll!

Here are two of the best things we did in West Seattle to make the Subway profitable.
Location and Signage: As I previously mentioned, we were just off a busy corner. By car, you couldn't see us at the intersection. I purchased 3 sidewalk signs for $800. Lorri had a fit. We didn't have $800. I promised her that they would make a difference. I put the sidewalk signs on the corner and even across the street. Eventually the city would tell me to knock it off. Problem, I had spent $800 on signs and wasn't about to tell Lorri I couldn't use them. I had to show her they worked. Instead, I found clever ways to defy the city and use my signs. Periodically I would put the signs out for two days and then bring them in before the city would have a chance to respond. The city doesn't want signs in front of other businesses and that makes perfect sense; however, I needed to start making some money, and politics weren't a big priority for me. City tree's are an entire different issue. The city plants tree's along the streets to beautify the neighborhood for it's residents. They also encourage new business growth to bring in tax money to help pay the city bills. The tree's are embraced and loved by the community and secretly hated by the small business owner. I shared my building with Satrbuck's and two other tenants. Everyone else had one tree, but I had two. Starbuck's tree was conveniently away from their sign, but my business was not so fortunate. My trees covered and blocked the entire store front. If you looked hard to your right or left when passing the store, you might catch a glimpse of our sign through the trees. I would call the city to trim the trees every week. They would tell me we were on the schedule. One night, I had had enough. I dressed in my darkest Ninja outfit and trimmed the tree's myself. My heart was racing the entire time, but when I was done, you could see our Subway from the intersection for the first time. My sales went up almost immediately. The tree was still beautiful, it just didn't effect my business as much. The city could have done that too. Signage is one of the best investments you can make. That $800 initial investment and my never compromising effort to insure people could see us, helped our sales improve by 30% over the previous year.

Service: Service and food are your best attributes as a small business restaurant. Subway already had the food, I just needed to keep it fresh. I was able to meet almost every guest. I wanted their business. Treating them like royalty was a natural thing for me. Teaching my employees to do likewise was more of a challenge, but surrounding yourself with people that share your values is a must. I have spoken to many struggling small business owners that droop through their day. Their not making money and the competition is killing them. The competition is usually a big box business with more dollars to advertise. Big business's often don't make those personal connections that many people crave. The small business owner has this wonderful opportunity to connect to each customer and their community. When you get that, and start making those connections, profits can soon follow.

It took us three years to become profitable at our first restaurant. Three years of hard work. We would go on to open five more Subways. Each brought new challenges. Part 2 "A Good Problem to Have" coming next week.

A small business dream

2010-10-23T14:18:00.000-07:00

Ever since Lorri and I were first married, we discussed opening our own restaurant. Back then, it was either a Cafe or a Sports Bar. We were married young and both came from humble beginnings. Lorri was raised by her mom and grand parents and I was a foster child, on my own after high school graduation. We had no money, but we had each other. Our first priority was not as much the career, but of starting a family. Five years into our marriage, we had three children. Our restaurant was no more than a dream to us back then.

It did not take long for us to decide that one of us needed a college education. I had a career job as a Denny's manager. There were going to be plenty of opportunities for me to advance with the company. Lorri embraced the idea and soon began college. Raising 3 children while obtaining a college degree, let alone keeping up with the bills, is not an easy task. After a long stint of part time classes and full time towards the end, Lorri graduated. She started her career in public accounting, but soon worked her way to becoming the Controller of Red Hook Ale Brewing. Her career ultimately launched a series of events which allowed our dream to come true.

In 1997, Lorri's career was doing well enough for me to leave my job security as a training manager for Denny's and open our first restaurant franchise. We invested all of my profit sharing savings from Denny's and our available credit to open a Subway Franchise in West Seattle. There were 81 Subways in the Northwest territory at the time and our new Subway was ranked dead last in sales volume. It was also a 35 minute commute on a good day. Having seen many small business owners work 24/7 to make ends meet, I had my doubts, but Lorri really believed in me. She pushed me out of my comfort zone.

In 2004, we had started exploring our dream again. We started a file to gather ideas. From visiting the Red Mill Burgers in Seattle, we were suddenly inspired to feature burgers. We wanted it to be fast casual like Subway and feature gourmet burgers. Every burger joint we knew was loud with fast colors. Get you in, get you out! We wanted our restaurant to be different. For several years we put photo's we liked from restaurant magazines in a file. We added menu items, recipes, and service ideas. I would research for hours to find a name. I would show Lorri, sometimes drawing it with a logo. Lorri would either answer with an emphatic "No" or just laugh. One colorful logo with a cow doing a back flip over a burger is still hidden away to give her laughter on a cloudy day.

In June of 2006, I called a "Now leasing" sign in the Mill Creek Town Center. Lorri and I had discussed it and decided to at least check it out. We thought we could afford around 2500 square feet. We were definitely not ready, but it couldn't hurt to call. Red Jacobsen answered the phone. He was a retired investment banker who had decided to become a land developer. At the time, the location I had called on was still just dirt. He ask me what kind of restaurant I planned to open. I told him burgers, beers, and desserts. This immediately got the conversation going. Turns out, the spot was going to be a 2501 sq/ft stand alone building. He had told his partner the previous day that he wished a burger restaurant would go there. The more we talked, the more it seemed like destiny. I went home and excitedly told Lorri about the conversation. Soon, we made an appointment to both speak to Red. The investment was daunting to us. The lease was the highest we had ever seen in our lives. We both agreed that we weren't ready for this, but then again, we might never be ready. After giving it considerable thought, we both decided, "Let's just do it!"

By 2007, we were the owners of six Subway franchises. Our first Subway was now ranked #71 out of the 205 Subways in sales in the NW Territory. We had managed to set aside some money to invest. We just needed a name. On a road trip to visit our daughter Jessica in Pullman, WA, Lorri and I started brain storming names. Somewhere near Vantage, Lorri threw out the word 'Blazing' and I immediately added 'Onion'. We both knew that was our name. In March of 2007, the first Blazing Onion opened its doors in the Mill Creek Town Center. Not exactly a smooth launch: There were 3 times as many customers as expected, the hoods couldn't keep up and billowed smoke throughout the dining room, the hot water heater and ice machine couldn't keep up, the back room was too small (not enough freezer, cooler, or storage space), there were too many burgers for the cooks – they struggled to keep up with the volume, and much more. After eight weeks of chaos and nightmares that would scare away most small business start ups, the equipment and team began to figure it out and the Blazing Onion started on the road to success.

You put your ideas down on paper and review them over and over. You tell your friends, the bank, or other business associates about your idea. Some will nod with approval, some even get excited. Others will listen with a smile while screaming "OMG" inside their head. Executing those ideas for the first time is tough and ultimately where success or failure will be determined. Things just don't always translate from idea to reality like you imagine. Working hard dedicating your time to quality rather than quantity, can determine how fast you overcome. In our case, we had very high service expectations and a no compromise for high quality food. We had problems, but we worked hard to fix them. In the end, our core values won the battle. Opening the Blazing Onion was the toughest thing we have ever done, but also the most rewarding thing we've ever done. We can both look back now and laugh at the stories, but there are no regrets. The trials are a core ingredient to our Brand strength and make for unforgettable lessons. Being a small business owner is a daily challenge, but it is the American Dream for a reason. Thanks for letting us be a part of your lives.

David Jones, CEO/Co-Founder
Blazing Onion BURGER COMPANY