How to Build Your Dream Franchise
Zane Tankel is a hugger. Nail the real estate.Be a good neighbor. Make changes incrementally. Don't reject; adapt.Check your criticism.Celebrate small victories.Thank happy customers.Protect the brand.
He's also a chest-puncher and a cheek pincher. Ask him for help, and he's likely to give it. But try and tell him how to do something? No way. Tankel, CEO of Apple-Metro, the company that runs all of the Applebee's in the New York City area, is a rare breed of entrepreneur — a successful franchisee with a hearty independent streak. How does he balance what's best for the chain with what's best for him? He broke it down for Inc.com's Christine Lagorio.
"The Applebee's in Times Square was a huge risk," Tankel says. A two-story Applebee's had never been built before, and, as Tankel tells it, Julia Stewart, CEO of the chain's parent company, DineEquity, was skeptical of the idea. But Tankel believed a Times Square location could become a flagship, and a destination. He was right: It's now the highest-grossing Applebee's in the country. Applebee's corporate office couldn't confirm Stewart's initial reaction, but say: "Locals and visitors have embraced the location."
As a matter of franchise policy all Applebee's are supposed to open at 11 a.m. daily. But because Tankel's Times Square location is within a block of several hotels, he wanted to open early and serve a hearty tourists' breakfast complete with fresh ingredients. "Applebee's found out we were using fresh eggs, and thought we shouldn't," he recalls. "I say, 'If it's your money, do it your way, but it's our money, and if we don't sully the brand at all, we're doing it our way.' They kind of close their eyes to it." (A spokesperson says: "We appreciate how innovative and entrepreneurial Apple-Metro is.")
Tankel wanted to change his staff uniforms, meaning they wouldn't match those at other franchises. At the Times Square location, he says: "we started with just our bartenders, putting them in black tank tops," Tankel explains. "I always say you drink and eat a lot more with a pretty girl serving you. But this isn't Hooters or anything – it has to be balanced." The new look was so well received that the entire Apple-Metro eventually redesigned its uniforms. Corporate says it's flexible on this issue: "Franchisees are encouraged to incorporate the neighborhood as they see fit, and for some, this includes a variety of uniforms styles."
When Applebee's corporate training department came up with a training initiative called Boot Camp, that didn't sound quite right to executives at Apple-Metro. But rather than fighting the idea, Tankel's team simply adapted it. "Our HR department came up with Spring Training," he recalls. "We brought along catchers' masks, and each restaurant represented a team in our World Series."
Employees at franchise restaurants tend to get a lot of feedback from their bosses — not to mention their managers and corporate bosses. All the input can take a toll on morale. Tankel refuses to pile on by telling workers what they do wrong. "People need direction and they need some delegation, but it's all about how heavy handed you are about it," he says. "Instead, you should work with people's strengths."
At Tankel's company, little victories at individual restaurants are celebrated system-wide. For example, "today we had our first board of health inspection in Riverdale, and we received an 'A,'" Tankel says. "Every manager sent a note of congratulations to the whole staff there: 'Fantastic job representing Apple-Metro.'"
Tankel deals with customer feedback in an unconventional way. For negative comments, Tankel says, "We say to customers, 'We will use this as a training example for our staff, and please come and join us again and we're sure your experience will be much better.'" But send in a glowing review, and Apple-Metro says "Thank you very much; we'd like you to come in for a free desert for taking the time to say something nice." Tankel's theory? "We want to build on the positive, not on the negative."
Despite his independent streak, Tankel says he always focuses on serving the collective interests of the Applebee's franchise. "I sit on other boards of franchises, and I make sure franchisees do exactly what they are supposed to do," he says. "You want to be very careful about what you do with the brand, because you don't want to destroy your business. I sit on both sides of that desk."