014: Kevin King on Franchising and Advice for Entrepreneurs

014: Kevin King on Franchising and Advice for Entrepreneurs 00:00:00 I would definitely say it would be the start of the advice I'd give: be curious. Ask tons of questions. Formulate the whys and dig deep. So, definitely curiosity is imperative for us. You know, if you're constantly learning, which I believe we are. Welcome, I'm Ryan Hicks and this is Modern Business, the podcast to learn from franchise business leaders and explore new business technology. Our community is about sharing knowledge and tools that help us achieve our goals in business and beyond. Thanks for being here and welcome to Modern Business. Today we welcome to the podcast Kevin King, Chief Development Officer of Smoothie King. Prior to joining Smoothie King, he was the managing member of Project Pie in Carlsbad, California. Mr. King was the chief development officer of Papa Murphy's from 2011 until 2015. 00:01:00 And before that, he held several senior positions in operations and development throughout the years. Listen in to our phone call where we learn about Kevin King, Smoothie King, modern technology, and his advice to entrepreneurs everywhere. Kevin, welcome to the Modern Business Podcast. Thanks very much, Ryan. Ben, you are an industry veteran. You're a leader that a lot of folks look up to, and you've been in the franchise industry for quite a while. Take me back to how you got in the industry. I got in the industry really through being in the restaurant business first. You know, as a kid growing up in high school and throughout college, I worked in a local pizza shop and out of college. I went to work for Domino's. 00:01:52 And I was on the operations side and spent some time there and moved around a little bit in departments and ultimately wound up on the franchise operations side, supporting franchisees. And then as I gained more experience, the whole idea of franchising, setting up a franchise, I went to work for a regional pizza chain out of Columbus, Ohio called Donato's and set up their initial franchise program. So I kind of learned it that way as a young kid kind of out of college, started with operations, but then was curious about how does all this work and what makes a good franchise and what doesn't, what are the right rules, what's the right program. and kind of really learned it from a real grassroots way and was really intrigued by the franchise business as a whole, the model, and helping people fulfill their lifelong goal of owning their own business and doing it in maybe a little bit more successful way by giving them a leg up by being in a franchise system. 00:03:03 So that's really what interested me kind of early on in my career. Over 20 years in the franchise business, helping people get started. Excellent. On that journey, do you have any mentors that help guide you along the way? I know there's probably a lot of folks and a lot of people in that path and on that journey, but did any particular one stick out, and can you share a lesson or two that you might have learned from them? Throughout my career, I've learned from so many people. And some of them are well-established in the industry and some aren't. I worked for an entrepreneur at Donato's. His name was Jim Grody. And what I really learned from him, and why I always focus on him as a mentor, is talking about the right way to do business versus the wrong way to do business. 00:04:02 And he had such a strong moral compass that it has been instrumental in how I have acted as a business person, and how I think about franchising or development or getting somebody into business. He called it the golden rule, really, just treating others the way you want to be treated. It was so much deeper than that and so much more important than that. But I would say that was the most important. Throughout my business career, because I can point back to those lessons and those things that he talked about at a very early age in my life. So I would say that's a principal mentor. But I've met so many people and had so much influence on my career with strong leaders and people. 00:04:50 And, you know, regardless of your age, you never stop learning, and you never stop learning from others. As I'm in my 50s now, I would say now I'm learning more from younger people than I am learning from more seasoned people because you can learn so much from young people as well as new and better ways to do things. So you never stop learning. You never stop needing mentors. One of the phrases that we talk a lot about at Smoothie King is 'never stop being curious.' The whys and the hows and the what's next in business. That's good and very true. Tell us a little bit about what Smoothie King is up to these days. What's the vision? What are you working towards? So, Smoothie King is a fascinating company, and it's a great time to be here. 00:05:51 In 2012, the company was purchased by its largest franchisee, and his name is Juan Valdez. And he built 110 stores in Korea in a little over five years and came to the United States and bought the company. And what he brought was incredible passion for the business but also real focus on achieving our mission and objectives. And our mission is to inspire people to live a healthy and active lifestyle, and we do it through smoothies. And he just brought incredible focus to the business. We've had tremendous success over the past five years that he's led us. The last two years, we opened over 100 stores each year. We continue to grow. And all the while we've been growing sales, we grew our average unit volume almost 50% from 2012 or over 50% from 2012 through 2016, which sure makes franchising a whole lot easier if you can kind of put those kinds of numbers up and keep growing the business. 00:07:01 So that's what we're focused on. The American consumers are more and more focused on their health, and our products are more and more focused on providing healthy meal solutions for them and alternatives for them to hit their fitness and health goals. And it's an exciting time to be a part of this. Well, kudos on those numbers. That is not an easy task, and that speaks a lot to the leadership team. One of my favorite things about the franchise model is you're helping folks realize the American dream or their American dream, as well as spreading the healthy and active lifestyle per your mission. That's why I love the franchise business model, and for the right folks, your system will make sense. 00:07:50 Can you share a story that might have stood out over the years as you're helping folks realize their American dream, can you think back to any particular person or group and a story that stood out when it comes to helping them get into franchising and then a success story? Sure. There are so many. You know, if you've been in the business a long time, you've seen lots of people enter the business. And you said it. Fulfilling the American dream. I've always said it as fulfilling their lifelong goal of owning their own business and, you know, in some ways controlling their own destiny. So I can remember stories back when I was at Donato's with a young, fairly recent graduate from Ohio State who came in and I wanted to be a franchisee and went out and raised a little bit of money and was able to build about 20 or 25 stores and create a really nice business and lifestyle for him and his family and a great return for his investors. 00:09:02 So that's certainly one that I remember because it was kind of one that happened early in my career. But I've really seen it in every organization that I've been a part of is seeing franchisees join the system and working hard in the early years because it's never easy. Sacrificing sometimes, you know, and some people would probably think they put their life on hold for those early couple years. But as the business grows and matures and they start succeeding financially, it's really great to have. Have a part or that and a role in it. Absolutely. And what are some of the things at Smoothie King that you look for in franchisees? So the first thing we look for is a good cultural fit. And that cultural fit is people who have a passion for promoting a healthy and active lifestyle. 00:09:57 And there's not a fit definition of that, right? It's somewhat vague in the sense that we can all define for ourselves what healthy and active lifestyle means to us. And so we don't have a, oh, you've got to be a fitness freak in order to fit in culturally, but it's just a commitment to healthy and active lifestyle and a commitment to inspiring people. So those are the first things that we look for is strong cultural fit. And then it's that energy and drive. Those are what I would always say are number two. Is we're looking for people who are hungry. They're looking for that ability to grow and develop. And then last, and I really do believe it is last, a lot of people kind of put it up front, and that's financial qualifications and experience. 00:10:54 But the very most important thing is that strong cultural fit, and then number two, that passion and drive. And if you have those two things, it's generally pretty easy to find the money that you need in order to grow. And our model and a lot of other models aren't so overly complicated that you need tons of experience in the restaurant category or in the retail category. It helps. It's nice. It makes it easier. But if you have that passion and drive and you have that strong cultural fit, a lot of times you can overcome the other hurdles. So that's why I find them to be the most important. Absolutely, and obviously you have a very scalable model, and contrary to some of the other different types of systems you can get into, you don't have to have 15 employees working at once, and it's scalable. 00:11:47 How do you use technology or modern technology to help your franchisees succeed? Because you give them a system, you're helping out with all the training. How does technology play into that? Technology is vital in a number of areas. I'll tell you about one that's incredibly important to us. We call it our recipe management engine. If you think about a smoothie, and our smoothies are highly customizable, and we encourage guests to change what's in the smoothie. As you add and subtract things to a smoothie, how do you make sure that it still fits in a cup? Because at the end of the day, it's still got to pour into a 20-ounce cup. And how do you ensure that it's going to have that right consistency, right mouthfeel, and how's it going to be sucked up through a straw? 00:12:39 Because if we don't deliver a great experience, even though you customize the drink, you're not going to love the smoothie. So our recipe management engine makes changes to the formula behind the scenes. So when you add something thick and replace it with something that was watery, we make changes in the amount of water and ice that go into the smoothie so that it still comes out great. And that's a piece of technology that all happens in the background to the guest and no one ever sees it. But what prints out at the store is the exact recipe on how to make it. So, if you came into one of our stores and ordered a similar smoothie to your buddy, the recipe could be very different if you put peanut butter in and he put 00:13:26 uh more more fruit uh because the fruit's going to have a lot more water than peanut butter so your smoothie with peanut butter needs more water and maybe a little less ice and his needs a little more ice and maybe a little less water and all that happens in the background; it's a great piece of technology, but we also have other pieces in the background too that help franchisees order food, schedule labor, and keep up on all of our systems. And technology in the future is really going to be around things like online ordering, mobile pay, and those kinds of things that a millennial guest is expecting in today's modern world. Absolutely. I did not know that. That is really neat, and it makes sense. I work out. I go to a gym. 00:14:21 And right next to the gym is Smoothie King. I actually go in there, and I've had different mixes, and you had mentioned peanut butter. You can put different things in there. That makes perfect sense. I didn't know that you had the technology to do that. You mentioned millennials, and having a focus on those folks. You also mentioned one of the early-on success stories was someone who was right out of college, and I think if you look at the millennial generation, There's 80-some-odd million millennials. Millennials are your employees. They're your customers. They're your future owners. So it's good to hear that you have a focus on that. Just switching gears, a couple of more rapid-fire questions. Do you have a favorite book? Oh, rapid-fire. Yeah, you did. I was like, wow. 00:15:20 I'm trying to think what my favorite book is. You know, I've read so many different books. I would say my favorite fiction book would have to be Angels and Demons by Dan Brown. It has nothing to do with franchising or business. That's a good one. I've read that. It's an in-depth book, and I remember reading it the first time long before the movie, and I just couldn't put it down. It was a great book. From a business perspective, I have been kind of a biography guy. I love to read biographies about successful business leaders. I think one of the most recent ones is, 'I've read some biographies on Apple, Steve Jobs, and the 10th anniversary of the iPhone. And so I find those kinds of things fascinating. So somewhere along those lines. 00:16:20 Yeah, very similar. I've read both. That Dan Brown book is quite interesting. There was one other one, and I think that was the second in a series. I can't remember what the other one was. Favorite smoothie? Well, as you mentioned, I have different purposes for my smoothies, so I kind of have a rotation. Right now, I'd say my favorite is Lean One chocolate with peanut butter. It's a great way to skip lunch or skip breakfast, depending upon what you want. It's about, in the 20-ounce serving, it's about 500 calories. It's about 24 grams of protein. So it'll definitely satiate you and keep you going through the day and not make you think about that you skipped lunch. So that's one of my favorites. That's a nice hack. I get it. 00:17:13 Then going back to what you said earlier, that is, I think the mission is the, I'm paraphrasing is to live an active and healthier lifestyle. And so this movie is a good alternative. That's, that's excellent. Well, I think that's all the questions that I have. One last question. If you were to give, and there's a, there's, we have a mixture of, of from younger entrepreneurs all the way to very seasoned entrepreneurs that listen to us. But if you were to give a kind of a mini graduation speech, to a younger entrepreneur or to a prospective Smoothie King franchisee or any franchise in general, what would be a few sentences or a few words of wisdom that you would give someone coming into the business gung-ho and ready to roll up their sleeves? 00:17:58 Well, the advice I'd give is some couple key words, and I mentioned one a few minutes ago, but I would definitely say it would be the start of the advice I'd give is be curious. Ask tons of questions. Formulate the whys and dig deep. So definitely curiosity is imperative for us. If you're constantly learning, which I believe we are, that curiosity is a huge piece. Secondly, ask for help. There are so many people in any franchise organization for sure, in almost any business, who want to help people succeed. And they love to be asked for help. And it's just simply amazing watching people go into business and seeing people who are inherently curious and definitely interested in asking for help, how much more they can achieve than somebody who thinks, Either they know it all already or they want to prove it by doing it on their own. 00:19:05 So those are the two things I would say for anybody looking at or going into business is be curious about everything and ask tons of questions. And two, ask for help because there's so many people out there willing to help and assist as you get started in the business. And you know what? It never changes. The restaurant category or the franchise category for 30 or 40 years, there's people who can help you. And there's so much that people can do. So that would be my mini graduation speech. Be curious and don't hesitate to ask for help. We appreciate it. Thank you very much for your time. And until next time. Thanks, Ryan.