For all their success, the Karmanoses have kept their small-town style, along with their original separation of roles. George is still Mr. Outside, handling deliveries and making direct-sales calls, passing out American Speedy pens to the cashiers at the supermarkets or from the Lions Club float in the annual parade. He never makes a sales call without some calendars and to-do pads to leave behind, along with a 25%-discount coupon for new customers and his letters of recommendation from grateful regulars.
Bev is Ms. Inside, responsible for shop and personnel. It was her idea to do free fliers for the sheriff department's Stranger/Danger and Just Say No campaigns -- as a mother, she takes her responsibility for the neighborhood children to heart. She's a self-proclaimed "soft touch" for charities, offering discounts or free printing to each one that asks. "The benefits are mostly personal," she says. "But it keeps our names in a favorable light, and that's important to us, too."
Neither of them had ever imagined this kind of success when they started nor had known they had the kind of skills it took to gross more than $1 million a year. But now their horizons are changing. George has become active in the larger franchise system, and Bev is at work with the line employees, struggling to find a productivity bonus system that works for all of them.
It's a future they're building, not just a business -- and not just for them, but for their employees, their community, and most of all, their kids. Their two sons, now 11 and 15, are learning to run a press, while their 8-year-old daughter has her heart set on typesetting. Bev dreams of perhaps someday opening a second unit or a third and a fourth, one for each of the children. "I'm different now," she says. "Now, I want a dynasty."
* * *
SUBWAY SANDWICHES
Fort Collins, Colo.
Operator: Steve Lauer, 23
Number of units: 8
Projected 1989 sales: $2.5 million
Sales exceed avg. by: 37%
Turnover less than avg. by: 75%
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For Subway Sandwiches franchisee Steve Lauer, life is very sweet these days.
He did well in 1988: a weekly unit average of $5,074, 18% higher than the chainwide unit average of $4,300, with net 12.8% of sales. Then he did better in 1989: a weekly unit average of $6,596, nearly a 30% increase, with a net of 14.5%.
Not bad for a 23-year-old who left college three years before. Even more impressive, he had 3 separate units to run in 1988. By the end of 1989 he will have 11, an increase of 367%.
Lauer is a phenomenon. One of the youngest Subway franchisees in the state, he's also the most successful and longest tenured. Starting by making sandwiches behind the counter at $3.35 per hour in college, he went on to run his aunt and uncle's shop as a manager, then opened his own unit in 1986 with help from his dad.
He used his experience well, finding ways to keep turnover less than 50% a year, far below the 300% that many fast-food operations suffer. Scheduling is flexible, with staff free to set their hours around another job, a family priority, or school, as Lauer did himself. Tasks are rotated to help prevent burnout, and good work is rewarded with bonuses and parties. Unit managers get 75% of salary as a percentage of sales, with free days off if they beat quarterly goals in food cost, labor cost, or volume increase.
Lauer's greatest success, however, has been as a marketer, developing good-neighbor public-relations campaigns. To help the local youth baseball league, for example, he designed a coupon book good for $20 worth of subs for the kids to sell to friends, family, and neighbors for $1 each. He turned it into a contest, throwing a party for the league's four top-ranked teams and awarding two prizes -- 10-speed bikes -- because the top two salesmen ran so close.
It worked for the league. Minus printing costs, it earned 85¢ for each book, raising more than $7,000, 60% of its annual budget.
It worked for Lauer, too. Selling 8,000 coupon books meant reaching 8,000 potential new customers, all more likely to use the coupon than if they'd gotten it in the mail, since they'd already spent a buck on it.
Lauer is always promoting. As the Subway ad rep for all of northern Colorado, he oversees a sales budget that exceeds $75,000, but the 25% to 30% targeted for public relations is his major focus. Weekly softball leagues involve 8,500 people around Fort Collins each summer; each team manager gets a Player of the Game free-sandwich coupon to award, discounts for party-size subs, and a free party sub if that team wins its league. Anyone who participates in the Great American Smokeout, the March of Dimes Walkathon, or a Red Cross blood drive gets a coupon. Elementary-school teachers get coupons to hand out to students who complete the reading list they assign.
The costs are nil: if a new customer comes in and buys just one additional item, expenses are covered. The payoff comes in word of mouth and a steady stream of new business, along with the personal satisfaction of giving something back. After all, it wasn't too long ago that Lauer was playing youth baseball himself.
* * *
THE MAIDS INTERNATIONAL
Pittsburgh
Operator: Harry Edgar, 55
Number of units: 4
Projected 1989 sales: $1 million
Profit margin: 18%
Sales exceed avg. by: 340%
* * *
When 55-year-old Harry Edgar needs more help, he goes to church. Edgar, owner of four Maids International franchises in Pittsburgh, doesn't go to to pray, though; he goes to hire.
